<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998
1933 Act File No. 33-69460
1940 Act File No. 811-8046
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 \ \
Pre-Effective Amendment No. \ \
Post-Effective Amendment No. 15 \X\
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 17 \X\
(Check appropriate box or boxes)
BERGER INVESTMENT PORTFOLIO TRUST
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(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
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Gerard M. Lavin, 210 University Boulevard, Suite 900, Denver, CO 80206
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
\X\ immediately upon filing pursuant to paragraph (b)
\ \ on (date) pursuant to paragraph (b)
\ \ 60 days after filing pursuant to paragraph (a)(1)
\ \ on (date) pursuant to paragraph (a)(1)
\ \ 75 days after filing pursuant to paragraph (a)(2)
\ \ on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
\ \ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest of
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the Berger Small Company Growth Fund, the Berger New Generation Fund, the Berger
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Balanced Fund, the Berger Select Fund and the Berger Mid Cap Growth Fund
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<PAGE>
BERGER INVESTMENT PORTFOLIO TRUST
SHARES OF BENEFICIAL INTEREST
Cross-Reference Sheet Pursuant to Rule 481
I. Berger Small Company Growth Fund, the Berger New Generation Fund, the
Berger Balanced Fund, the Berger Select Fund and the Berger Mid Cap Growth
Fund
ITEM NO. AND CAPTION IN FORM N-1A SECTION
A. PROSPECTUS
1. Cover Page Front and back cover pages
2. Synopsis Berger Funds
3. Condensed Financial Berger Funds
Information
4. General Description Berger Funds; Investment
of Registrant Techniques, Securities and the
Associated Risks; Organization of
the Berger Fund Family
5. Management of the Fund Berger Funds; Organization of the
Berger Fund Family
5A. Management's Discussion of Annual Report
Fund Performance
6. Capital Stock and Other Information on Your Account;
Securities Organization of the Berger Fund
Family; Back cover page
7. Purchase of Securities Being Information on Your Account;
Offered Organization of the Berger Fund
Family
8. Redemption or Repurchase Information on Your Account
9. Pending Legal Not Applicable
Proceedings
B. STATEMENT OF ADDITIONAL
INFORMATION
10. Cover Page Front cover page
11. Table of Contents Table of Contents
12. General Information and Section 14
History
13. Investment Objectives and Front cover page; Sections 1 and 2
Policies
14. Management of the Fund Section 3
15. Control Persons and Principal Sections 3 and 14
Holders of Securities
16. Investment Advisory and Other Sections 3, 4, 5 and 14
Services
17. Brokerage Allocation and Other Sections 1 and 6
Practices
18. Capital Stock and Other Section 14
Securities
19. Purchase, Redemption and Sections 7, 8, 10, 11 and 12
Pricing of Securities Being
Offered
20. Tax Status Section 9
21. Underwriters Sections 5 and 14
22. Calculations of Performance Section 13
Data
23. Financial Statements Financial Statements
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BERGER SELECT FUND
BERGER MID CAP GROWTH FUND
BERGER BALANCED FUND
SUPPLEMENT DATED APRIL 30, 1998
TO
PROSPECTUS DATED DECEMBER 31, 1997
The Prospectus dated December 31, 1997, is supplemented with the
following information for the Berger Select Fund (page 4), the Berger Mid Cap
Growth Fund (page 10) and the Berger Balanced Fund (page 18):
FINANCIAL HIGHLIGHTS. This information is unaudited.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FROM COMMENCEMENT OF OPERATIONS* TO MARCH 31, 1998
<TABLE>
<CAPTION>
BERGER BERGER
SELECT BERGER MID BALANCED
FUND CAP GROWTH FUND
FUND
<S> <C> <C> <C>
Net asset value, beginning of period . . . . $10.00 $10.00 $10.00
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Income (loss) from investment operations:
Net investment income (loss) . . . . . . 0.03 (0.01) 0.07
Net realized and unrealized gains
(losses) on securities . . . . . . . . 3.68 2.61 5.39
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Total from investment operations . . . . . . 3.71 2.60 5.46
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Less distributions:
Distributions (from net investment
income) . . . . . . . . . . . . . . . . 0.00 0.00 (0.06)
Distributions (from capital gains) . . . 0.00 0.00 (1.90)
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Total distributions . . . . . . . . . . . . . 0.00 0.00 (1.96)
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Net asset value, end of period . . . . . . . $13.71 $12.60 $13.50
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Total Return . . . . . . . . . . . . . . . . 37.10%3 26.00%3 58.10%3
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Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . $23,393 $3,343 $25,603
Net expenses to average net assets . . . . . 1.56%1 1.99%1 1.46%1
Net income (loss) to average net assets . . . 1.26%1 (0.29)%1 2.04%1
Gross expenses to average net assets2 . . . . 1.59%1 3.32%1 1.62%1
Portfolio turnover rate . . . . . . . . . . . 875%3,4 113%3 627%3,4
Average commission rate . . . . . . . . . . . $.0599 $.0598 $.0592
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* The Berger Select Fund and the Berger Mid Cap Growth Fund commenced
operations on December 31, 1997. The Berger Balanced Fund commenced
operations on September 30, 1997.
1. Annualized.
2. During the period, certain expenses were reduced as a result of voluntary
fee waivers, expense reimbursements, earnings credits and/or fees paid
indirectly with brokerage commissions. If such reductions had not
occurred, the ratios would have been as indicated.
3. Based on operations for the period shown and accordingly, is not
representative of a full year.
4. Portfolio turnover rates for the periods shown are significantly
higher than normally anticipated due to the short time periods presented
and active trading undertaken in pursuit of opportunities presented by
market conditions or in response to volatile markets during the initial
period of operations when the Funds' assets were still relatively small
and the Funds were not yet fully invested.
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INCORPORATION BY REFERENCE
The Berger Funds Prospectus, dated December 31, 1997, filed on December
31, 1997, as Part A of Post-Effective Amendment No. 13 to the Registrant's
Form N-1A, is hereby incorporated by reference.
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BERGER NEW GENERATION FUND
BERGER SELECT FUND
BERGER SMALL COMPANY GROWTH FUND
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
BERGER MID CAP GROWTH FUND
BERGER 100 FUND
BERGER/BIAM INTERNATIONAL FUND
BERGER GROWTH AND INCOME FUND
BERGER BALANCED FUND
STATEMENT OF ADDITIONAL INFORMATION
SHAREHOLDER SERVICES: 1-800-551-5849
This Statement of Additional Information ("SAI") is not a
prospectus. It should be read in conjunction with the Prospectus dated
December 31, 1997, as amended April 30, 1998, describing the Berger Funds
listed above (the "Funds"), which may be obtained by writing the Funds at
P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-333-1001. The Funds
are all "no-load" mutual funds, meaning that a buyer pays no commissions or
sales load when buying or redeeming shares of the Funds, although each Fund
pays certain costs of distributing its shares. See "Section 5. Expenses of
the Funds -- 12b-1 Plans" below. This SAI describes each of these Funds
which have many features in common, but may have different investment
objectives and different investment emphases.
BERGER NEW GENERATION FUND
The investment objective of the Berger New Generation Fund is capital
appreciation.
BERGER SELECT FUND
The investment objective of the Berger Select Fund is capital appreciation.
BERGER SMALL COMPANY GROWTH FUND (CLOSED TO NEW INVESTORS)
The investment objective of the Berger Small Company Growth Fund is capital
appreciation.
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
The investment objective of the Berger Small Cap Value Fund is capital
appreciation.
BERGER MID CAP GROWTH FUND
The investment objective of the Berger Mid Cap Growth Fund is capital
appreciation.
BERGER 100 FUND
The investment objective of the Berger 100 Fund is long-term capital
appreciation.
BERGER/BIAM INTERNATIONAL FUND
The investment objective of the Berger/BIAM International Fund is long-term
capital appreciation.
BERGER GROWTH AND INCOME FUND
The primary investment objective of the Berger Growth and Income Fund is
capital appreciation, and its secondary objective is to provide a moderate
level of current income.
BERGER BALANCED FUND
The investment objective of the Berger Balanced Fund is capital appreciation
and income.
DATED DECEMBER 31, 1997
AS AMENDED APRIL 30, 1998
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TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
<TABLE>
<CAPTION>
TABLE OF CONTENTS CROSS-REFERENCES TO
RELATED DISCLOSURES
IN PROSPECTUS
<S> <C>
Introduction Table of Contents
1. Portfolio Policies of the Funds Berger Funds;
Investment Techniques, Securities and
the Associated Risks
2. Investment Restrictions Berger Funds;
Investment Techniques, Securities and
the Associated Risks
3. Management of the Funds Berger Funds;
Organization of the Berger Fund Family
4. Investment Advisor Berger Funds;
Organization of the Berger Fund Family
5. Expenses of the Funds Berger Funds;
Organization of the Berger Fund Family
6. Brokerage Policy Organization of the Berger Fund Family
7. How to Purchase Shares in the Funds Information on Your Account
8. How the Net Asset Value is Information on Your Account
Determined
9. Income Dividends, Capital Gains Information on Your Account
Distributions and Tax Treatment
10. Suspension of Redemption Rights Information on Your Account
11. Tax-Sheltered Retirement Plans Information on Your Account
12. Special Purchase and Exchange Information on Your Account
Plans
13. Performance Information Organization of the Berger Fund Family
14. Additional Information Organization of the Berger Fund Family
Financial Statements Financial Highlights
</TABLE>
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INTRODUCTION
The Funds described in this SAI are all mutual funds, or open-end,
management investment companies. Although each Fund is offering only its own
shares and is not participating in the sale of the shares of the other Funds,
it is possible that a Fund might become liable for any misstatement,
inaccuracy or incomplete disclosure in the Prospectus or SAI concerning the
other Funds.
1. PORTFOLIO POLICIES OF THE FUNDS
The Prospectus describes the investment goals (objectives) of each
of the Funds and the primary policies to be employed to achieve those
objectives. This section contains supplemental information concerning the
types of securities and other instruments in which the Funds may invest, the
investment policies and portfolio strategies that the Funds may utilize and
certain risks attendant to those investments, policies and strategies. For
the Berger/BIAM International Fund, the term "Fund" in this Section 1 should
be read to mean the Berger/BIAM International Portfolio (the "Portfolio"), in
which all the investable assets of the Fund are invested.
COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership
in a company. Generally, preferred stock has a specified dividend and ranks
after bonds and before common stocks in its claim on income for dividend
payments and on assets should the company be liquidated. After other claims
are satisfied, common stockholders participate in company profits on a
pro-rata basis. Profits may be paid out in dividends or reinvested in the
company to help it grow. Increases and decreases in earnings are usually
reflected in a company's stock price, so common stocks generally have the
greatest appreciation and depreciation potential of all corporate securities.
While most preferred stocks pay dividends, any of the Funds may purchase
preferred stock where the issuer has omitted, or is in danger of omitting,
payment of its dividends. Such investments would be made primarily for their
capital appreciation potential. All investments in stocks are subject to
market risk, meaning that their prices may move up and down with the general
stock market, and that such movements might reduce their value.
DEBT SECURITIES. Debt securities (such as bonds or debentures) are
fixed-income securities which bear interest and are issued by corporations
or governments. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal on a specific maturity
date. In addition to market risk, debt securities are generally subject to
two other kinds of risk: credit risk and interest rate risk. Credit risk
refers to the ability of the issuer to meet interest or principal payments as
they come due. The lower the rating given a security by a rating service
(such as Moody's Investor Service ("Moody's") and Standard & Poor's ("S&P")),
the greater the credit risk the rating service perceives with respect to that
security. None of the Funds will purchase any nonconvertible securities
rated below investment grade (Ba or lower by Moody's, BB or lower by S&P).
In cases where the ratings assigned by more than one rating agency differ,
the Funds will consider the security as rated in the higher category. If
nonconvertible securities purchased by a Fund are downgraded to below
investment grade following purchase, the directors or trustees of the Fund,
in consultation with the Fund's advisor or sub-advisor, will determine what
action, if any, is appropriate in light of all relevant circumstances. For
a further discussion of debt security ratings, see Appendix A to this SAI.
Interest rate risk refers to the fact that the value of
fixed-income securities (like debt securities) generally fluctuates in
response to changes in interest rates. A decrease in interest rates will
generally result in an increase in the price of fixed-income securities held
by a Fund. Conversely, during periods of rising interest rates, the value of
fixed-income securities held by a Fund will generally decline. Longer-term
securities are generally more sensitive to interest rate changes and are more
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volatile than shorter-term securities, but they generally offer higher yields
to compensate investors for the associated risks.
CONVERTIBLE SECURITIES. The Funds may also purchase debt or equity
securities which are convertible into common stock when the Fund's advisor or
sub-advisor believes they offer the potential for a higher total return than
nonconvertible securities. While fixed-income securities generally have a
priority claim on a corporation's assets over that of common stock, some of
the convertible securities which the Funds may hold are high-yield/high-risk
securities that are subject to special risks, including the risk of default
in interest or principal payments which could result in a loss of income to
the Fund or a decline in the market value of the securities. Convertible
securities often display a degree of market price volatility that is
comparable to common stocks. The credit risk associated with convertible
securities generally is reflected by their ratings by organizations such as
Moody's or S&P or a similar determination of creditworthiness by the Fund's
advisor or sub-advisor. The Funds have no pre-established minimum quality
standards for convertible securities and may invest in convertible securities
of any quality, including lower rated or unrated securities. However, the
Funds will not invest in any security in default at the time of purchase, and
each of the Funds will invest less than 20% of the market value of its assets
at the time of purchase in convertible securities rated below investment
grade. If convertible securities purchased by a Fund are downgraded
following purchase, or if other circumstances cause 20% or more of a Fund's
assets to be invested in convertible securities rated below investment grade,
the directors or trustees of the Fund, in consultation with the Fund's
advisor or sub-advisor, will determine what action, if any, is appropriate in
light of all relevant circumstances. For a further discussion of debt
security ratings, see Appendix A to this SAI. Convertible securities will be
included in the 25% of total assets the Berger Balanced Fund will keep in
fixed-income senior securities. However, only that portion of their value
attributable to their fixed-income characteristics will be used in
calculating the 25%.
ZEROS/STRIPS. Certain Funds may invest in zero coupon bonds or in
"strips." Zero coupon bonds do not make regular interest payments; rather,
they are sold at a discount from face value. Principal and accreted discount
(representing interest accrued but not paid) are paid at maturity. "Strips"
are debt securities that are stripped of their interest coupon after the
securities are issued, but otherwise are comparable to zero coupon bonds.
The market values of "strips" and zero coupon bonds generally fluctuate in
response to changes in interest rates to a greater degree than do
interest-paying securities of comparable term and quality. None of the Funds
will invest in mortgage-backed or other asset-backed securities.
SECURITIES OF SMALLER COMPANIES. Each of the Funds may invest in
securities of companies with small or mid-sized market capitalizations.
Market capitalization is defined as total current market value of a company's
outstanding common stock. Investments in companies with smaller market
capitalizations may involve greater risks and price volatility (that is, more
abrupt or erratic price movements) than investments in larger, more mature
companies since smaller companies may be at an earlier stage of development
and may have limited product lines, reduced market liquidity for their
shares, limited financial resources or less depth in management than larger
or more established companies. Smaller companies also may be less
significant factors within their industries and may have difficulty
withstanding competition from larger companies. While smaller companies may
be subject to these additional risks, they may also realize more substantial
growth than larger or more established companies.
SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. Each of
the Funds may invest in securities of companies with limited operating
histories. The Funds consider these to be securities of companies with a
record of less than three years' continuous operation, even including the
operations of any predecessors and parents. (These are sometimes referred to
as "unseasoned issuers.") These companies by their nature have only a
limited operating history which can be used for evaluating the company's
growth prospects. As a result, investment decisions for these securities
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may place a greater emphasis on current or planned product lines and the
reputation and experience of the company's management and less emphasis on
fundamental valuation factors than would be the case for more mature
companies. In addition, many of these companies may also be small companies
and involve the risks and price volatility associated with smaller companies.
FOREIGN SECURITIES. Each Fund may invest in foreign securities,
which may be traded in foreign markets and denominated in foreign currency.
The Funds' investments may also include American Depositary Receipts (ADRs),
European Depositary Receipts (EDRs) which are similar to ADRs, in bearer
form, designed for use in the European securities markets, and in Global
Depositary Receipts (GDRs).
Investments in foreign securities involve some risks that are
different from the risks of investing in securities of U.S. issuers, such as
the risk of adverse political, social, diplomatic and economic developments
and, with respect to certain countries, the possibility of expropriation,
taxes imposed by foreign countries or limitations on the removal of monies or
other assets of the Funds. Moreover, the economies of individual foreign
countries will vary in comparison to the U.S. economy in such respects as
growth of gross domestic product, rate of inflation, capital reinvestment,
resources, self-sufficiency and balance of payments position. Securities of
some foreign companies, particularly those in developing countries, are less
liquid and more volatile than securities of comparable domestic companies. A
developing country generally is considered to be in the initial stages of its
industrialization cycle. Investing in the securities of developing countries
may involve exposure to economic structures that are less diverse and mature,
and to political systems that can be expected to have less stability than
developed countries.
There also may be less publicly available information about foreign
issuers and securities than domestic issuers and securities, and foreign
issuers generally are not subject to accounting, auditing and financial
reporting standards, requirements and practices comparable to those
applicable to domestic issuers. Also, there is generally less government
supervision and regulation of exchanges, brokers, financial institutions and
issuers in foreign countries than there is in the U.S. Foreign financial
markets typically have substantially less volume than U.S. markets. Foreign
markets also have different clearance and settlement procedures and, in
certain markets, delays or other factors could make it difficult to effect
transactions, potentially causing a Fund to experience losses or miss
investment opportunities.
Costs associated with transactions in foreign securities are
generally higher than with transactions in U.S. securities. A Fund will
incur greater costs in maintaining assets in foreign jurisdictions and in
buying and selling foreign securities generally, resulting in part from
converting foreign currencies into U.S. dollars. In addition, a Fund might
have greater difficulty taking appropriate legal action with respect to
foreign investments in non-U.S. courts than with respect to domestic issuers
in U.S. courts, which may heighten the risk of possible losses through the
holding of securities by custodians and securities depositories in foreign
countries.
For any Fund invested in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S.
investors are concerned. If the foreign currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
foreign currency against the U.S. dollar would adversely affect the dollar
value of the foreign securities. Foreign currency exchange rates are
determined by forces of supply and demand on the foreign exchange markets,
which are in turn affected by the international balance of payments and other
economic and financial conditions, government intervention, speculation and
other factors.
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<PAGE>
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICs). The Funds may
purchase the securities of certain foreign investment funds or trusts
considered Passive Foreign Investment Companies (PFICs) under U.S. tax laws.
In addition to bearing their proportionate share of a Fund's expenses
(management fees and operating expenses), shareholders will also indirectly
bear similar expenses of such PFIC. PFIC investments also may be subject to
less favorable U.S. tax treatment, as discussed in Section 9 below.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds (except the
Berger Small Cap Value Fund) is authorized to invest in securities which are
illiquid or not readily marketable because they are subject to restrictions
on their resale ("restricted securities") or because, based upon their nature
or the market for such securities, no ready market is available. The Berger
Small Cap Value Fund is authorized to invest in illiquid securities, but not
in restricted securities. However, none of the Funds will purchase any such
security, the purchase of which would cause the Fund to invest more than 15%
of its net assets, measured at the time of purchase, in illiquid securities.
Investments in illiquid securities involve certain risks to the extent that a
Fund may be unable to dispose of such a security at the time desired or at a
reasonable price or, in some cases, may be unable to dispose of it at all.
In addition, in order to resell a restricted security, a Fund might have to
incur the potentially substantial expense and delay associated with effecting
registration. If securities become illiquid following purchase or other
circumstances cause more than 15% of a Fund's net assets to be invested in
illiquid securities, the directors or trustees of that Fund, in consultation
with the Fund's advisor, will determine what action, if any, is appropriate
in light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to
guidelines established by the directors or trustees, a Fund's advisor or
sub-advisor will determine whether securities eligible for resale to
qualified institutional buyers pursuant to SEC Rule 144A under the Securities
Act of 1933 should be treated as illiquid investments considering, among
other things, the following factors: (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 marketplace trades (e.g., the time needed to dispose of the
security, the method of soliciting offers, and the mechanics of the
transfer). The liquidity of a Fund's investments in Rule 144A securities
could be impaired if qualified institutional buyers become uninterested in
purchasing these securities.
REPURCHASE AGREEMENTS. Each Fund may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is an agreement under which a Fund acquires a debt
security (generally a debt security issued or guaranteed by the U.S.
government or an agency thereof, a banker's acceptance or a certificate of
deposit) from a commercial bank, broker or dealer, subject to resale to the
seller at an agreed upon price and date (normally, the next business day). A
repurchase agreement may be considered a loan collateralized by securities.
The resale price reflects an agreed upon interest rate effective for the
period the instrument is held by a Fund and is unrelated to the interest rate
on the underlying instrument. In these transactions, the securities acquired
by a Fund (including accrued interest earned thereon) must have a total value
equal to or in excess of the value of the repurchase agreement and are held
by the Fund's custodian bank until repurchased. In addition, the directors
or trustees will establish guidelines and standards for review by the
investment advisor of the creditworthiness of any bank, broker or dealer
party to a repurchase agreement with a Fund. None of the Funds will enter
into a repurchase agreement maturing in more than seven days if as a result
more than 15% of the Fund's total assets would be invested in such repurchase
agreements and other illiquid securities.
These transactions must be fully collateralized at all times by
debt securities (generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance
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or a certificate of deposit), but involve certain risks, such as credit risk
to the Fund if the other party defaults on its obligation and the Fund is
delayed or prevented from liquidating the collateral. For example, if the
other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, a
Fund may incur a loss upon disposition of the security. If the other party
to the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, a court may determine
that the underlying security is collateral for a loan by a Fund not within
the control of the Fund and therefore the realization by the Fund on such
collateral may automatically be stayed and delayed. Further, it is possible
that a Fund may not be able to substantiate its interest in the underlying
security and may be deemed an unsecured creditor of the other party to the
agreement. The Funds expect that these risks can be controlled through
careful monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may
purchase and sell securities on a when-issued or delayed delivery basis.
However, none of the Funds currently intends to purchase or sell securities
on a when-issued or delayed delivery basis, if as a result more than 5% of
its total assets taken at market value at the time of purchase would be
invested in such securities. When-issued or delayed delivery transactions
arise when securities (normally, obligations of issuers eligible for
investment by a Fund) are purchased or sold by the Fund with payment and
delivery taking place in the future in order to secure what is considered to
be an advantageous price or yield. However, the yield available on a
comparable security when delivery takes place may vary from the yield on the
security at the time that the when-issued or delayed delivery transaction was
entered into. Any failure to consummate a when-issued or delayed delivery
transaction may result in a Fund missing the opportunity of obtaining a price
or yield considered to be advantageous. When-issued and delayed delivery
transactions may generally be expected to settle within one month from the
date the transactions are entered into, but in no event later than 90 days.
However, no payment or delivery is made by a Fund until it receives delivery
or payment from the other party to the transaction.
When a Fund purchases securities on a when-issued basis, it will
maintain in a segregated account with its custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the
amount of such purchase commitments, until payment is made. If necessary,
additional assets will be placed in the account daily so that the value of
the account will equal or exceed the amount of the Fund's purchase
commitments.
LENDING OF PORTFOLIO SECURITIES. Certain Funds may lend their
securities to qualified institutional investors (such as brokers, dealers or
other financial organizations) who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding
failures to deliver securities or completing arbitrage operations. Loans of
securities by a Fund will be collateralized by cash, letters of credit, or
securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities, marked-to-market on a daily basis. By lending its securities,
each of those Funds will be attempting to generate income through the receipt
of interest on the loan which, in turn, can be invested in additional
securities to pursue the Fund's investment objective. Any gain or loss in
the market price of the securities loaned that might occur during the term of
the loan would be for the account of the Fund.
Each of those Funds may lend its portfolio securities to qualified
brokers, dealers, banks or other financial institutions, so long as the
terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, or the Rules and
Regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder, which currently require that (a) the borrower
pledge and maintain with the Fund collateral consisting of cash, an
irrevocable letter of credit or securities issued or guaranteed by the United
States government having a value at all times not less than 100% of the value
of the securities loaned, (b) the borrower add to such collateral whenever
the price of the securities loaned rises (i.e., the borrower "marks to
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the market" on a daily basis), (c) the loan be made subject to termination by
the Fund at any time and (d) the Fund receives reasonable interest on the
loan, which interest may include the Fund's investing cash collateral in
interest bearing short-term investments, and (e) the Fund receives all
dividends and distributions on the loaned securities and any increase in the
market value of the loaned securities.
The Funds bear risk of loss in the event that the other party to a
securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the
collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Fund 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
transaction. None of the Funds will lend its portfolio securities if, as a
result, the aggregate value of such loans would exceed 33-1/3% of the value
of the Fund's total assets. Loan arrangements made by a Fund will comply
with all other applicable regulatory requirements, including the rules of the
New York Stock Exchange, which rules presently require the borrower, after
notice, to redeliver the securities within the normal settlement time of
three business days. All relevant facts and circumstances, including
creditworthiness of the broker, dealer or institution, will be considered in
making decisions with respect to the lending of securities, subject to review
by the Fund's trustees.
SHORT SALES. Each Fund currently is only permitted to engage in
short sales if, at the time of the short sale, the Fund owns or has the right
to acquire an equivalent kind and amount of the security being sold short at
no additional cost (i.e., short sales "against the box").
In a short sale, the seller does not immediately deliver the
securities sold and is said to have a short position in those securities
until delivery occurs. To make delivery to the purchaser, the executing
broker borrows the securities being sold short on behalf of the seller.
While the short position is maintained, the seller collateralizes its
obligation to deliver the securities sold short in an amount equal to the
proceeds of the short sale plus an additional margin amount established by
the Board of Governors of the Federal Reserve. If a Fund engages in a short
sale, the collateral account will be maintained by the Fund's custodian.
While the short sale is open, the Fund will maintain in a segregated
custodial account an amount of securities convertible into or exchangeable
for such equivalent securities at no additional cost. These securities would
constitute the Fund's long position.
Historically, a Fund could have made a short sale, as described
above, when it wanted to sell a security it owned at a current attractive
price, but also wished to defer recognition of gain or loss for Federal
income tax purposes and for purposes of satisfying certain tests applicable
to regulated investment companies under the Internal Revenue Code. However,
recent federal tax legislation eliminated the ability to defer recognition of
gain or loss in short sales against the box and accordingly, it is not
anticipated that any of the Funds will be engaging in these transactions
unless there are further legislative changes.
SPECIAL SITUATIONS. Each Fund may also invest in special
situations, that is, in common stocks of companies that have recently
experienced or are anticipated to experience a significant change in
structure, management, products or services. Examples of special situations
are companies being reorganized or merged, companies having unusual new
products, or which enjoy particular tax advantages, or companies that are run
by new management or may be probable takeover candidates. The opportunity to
invest in special situations, however, is limited and depends in part on the
market's assessment of these issuers and their circumstances. In addition,
stocks of companies in special situations may be more volatile, since the
market value of these stocks may decline if an anticipated event or benefit
does not materialize.
HEDGING TRANSACTIONS. Each Fund is authorized to make limited use
of certain types of futures, forwards and/or options, but only for the
purpose of hedging, that is, protecting against market risk due to market
movements that may adversely affect the value of a Fund's securities or the
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price of securities that a Fund is considering purchasing. The utilization
of futures, forwards and options is also subject to policies and procedures
which may be established by the directors or trustees from time to time. A
hedging transaction may partially protect a Fund from a decline in the value
of a particular security or its portfolio generally, although hedging may
also limit a Fund's opportunity to profit from favorable price movements, and
the cost of the transaction will reduce the potential return on the security
or the portfolio. Use of these instruments by a Fund involves the potential
for a loss that may exceed the amount of initial margin the Fund would be
permitted to commit to the contracts under its investment limitation, or in
the case of a call option written by the Fund, may exceed the premium
received for the option. However, a Fund is permitted to use such
instruments for hedging purposes only, and only if the aggregate amount of
its obligations under these contracts does not exceed the total market value
of the assets the Fund is attempting to hedge, such as a portion or all of
its exposure to equity securities or its holding in a specific foreign
currency. To help ensure that the Fund will be able to meet its obligations
under its futures and forward contracts and its obligations under options
written by that Fund, the Fund will be required to maintain liquid assets in
a segregated account with its custodian bank or to set aside portfolio
securities to "cover" its position in these contracts.
The principal risks of a Fund utilizing futures transactions,
forward contracts and options are: (a) losses resulting from market
movements not anticipated by the Fund; (b) possible imperfect correlation
between movements in the prices of futures, forwards and options and
movements in the prices of the securities or currencies hedged or used to
cover such positions; (c) lack of assurance that a liquid secondary market
will exist for any particular futures or options at any particular time, and
possible exchange-imposed price fluctuation limits, either of which may make
it difficult or impossible to close a position when so desired; (d) lack of
assurance that the counterparty to a forward contract would be willing to
negotiate an offset or termination of the contract when so desired; and (e)
the need for additional information and skills beyond those required for the
management of a portfolio of traditional securities. In addition, when the
Fund enters into an over-the-counter contract with a counterparty, the Fund
will assume counterparty credit risk, that is, the risk that the counterparty
will fail to perform its obligations, in which case the Fund could be worse
off than if the contract had not been entered into.
Following is additional information concerning the futures,
forwards and options which the Berger New Generation Fund, the Berger Select
Fund, the Berger Small Company Growth Fund, the Berger Mid Cap Growth Fund,
the Berger 100 Fund, the Berger Growth and Income Fund and the Berger
Balanced Fund may utilize, provided that no more than 5% of the Fund's net
assets at the time the contract is entered into may be used for initial
margins for financial futures transactions and premiums paid for the purchase
of options. In addition, those Funds may only write call options that are
covered and only up to 25% of the Fund's total assets.
Currently, the Berger/BIAM International Fund is authorized to
utilize only forward contracts for hedging purposes and is not permitted to
utilize futures or options. Consequently, the following additional
information should be read as applicable to that Fund only to the extent it
discusses forwards. If the trustees ever authorize that Fund to utilize
futures or options, such investments would be permitted solely for hedging
purposes, and the Fund would not be permitted to invest more than 5% of its
net assets at the time of purchase in initial margins for financial futures
transactions and premiums for options. In addition, the Fund's advisor or
sub-advisor may be required to obtain bank regulatory approval before that
Fund engages in futures and options transactions.
Currently, the Berger Small Cap Value Fund is authorized to utilize
only options for hedging purposes and is not permitted to utilize futures or
forwards. Consequently, the following additional information should be read
as applicable to that Fund only to the extent it discusses options. If the
trustees ever authorize that Fund to utilize futures or forwards, such
investments would be permitted solely for hedging purposes, and the Fund
would not be permitted to invest more than 5%
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of its net assets at the time of purchase in initial margins for financial
futures transactions and premiums for options.
FUTURES CONTRACTS. Financial futures contracts are
exchange-traded contracts on financial instruments (such as securities and
foreign currencies) and securities indices that obligate the holder to take
or make delivery of a specified quantity of the underlying financial
instrument, or the cash value of an index, at a future date. Although
futures contracts by their terms call for the delivery or acquisition of the
underlying instruments or a cash payment based on the mark-to-market value of
the underlying instruments, in most cases the contractual obligation will be
offset before the delivery date by buying (in the case of an obligation to
sell) or selling (in the case of an obligation to buy) an identical futures
contract. Such a transaction cancels the original obligation to make or take
delivery of the instruments.
Certain Funds may enter into contracts for the purchase or sale for
future delivery of financial instruments, such as securities and foreign
currencies, or contracts based on financial indices including indices of U.S.
Government securities, foreign government securities or equity securities.
U.S. futures contracts are traded on exchanges which have been designated
"contract markets" by the Commodity Futures Trading Commission ("CFTC") and
must be executed through a futures commission merchant (an "FCM"), or
brokerage firm, which is a member of the relevant contract market. Through
their clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange.
Both the buyer and seller are required to deposit "initial margin"
for the benefit of the FCM when a futures contract is entered into. Initial
margin deposits are equal to a percentage of the contract's value, as set by
the exchange on which the contract is traded, and may be maintained in cash
or other liquid assets. If the value of either party's position declines,
that party will be required to make additional "variation margin" payments to
the other party to settle the change in value on a daily basis. Initial and
variation margin payments are similar to good faith deposits or performance
bonds or party-to-party payments resulting from daily changes in the value of
the contract, unlike margin extended by a securities broker, and would be
released or credited to the Funds upon termination of the futures contract,
assuming all contractual obligations have been satisfied. Unlike margin
extended by a securities broker, initial and variation margin payments do not
constitute purchasing securities on margin for purposes of a Fund's
investment limitations. A Fund will incur brokerage fees when it buys or
sells futures contracts.
In the event of the bankruptcy of the FCM that holds margin on
behalf of a Fund, the Fund may be entitled to return of margin owed to the
Fund only in proportion to the amount received by the FCM's other customers.
A Fund will attempt to minimize the risk by careful monitoring of the
creditworthiness of the FCMs with which the Fund does business and by
depositing margin payments in a segregated account with the Fund's custodian
for the benefit of the FCM when practical or otherwise required by law.
Where applicable, each Fund intends to comply with guidelines of
eligibility for exclusion from the definition of the term "commodity pool
operator" with the CFTC and the National Futures Association, which regulate
trading in the futures markets. Accordingly, a Fund will not enter into any
futures contract or option on a futures contract if, as a result, the
aggregate initial margin and premiums required to establish such positions
would exceed 5% of the Fund's net assets.
Although a Fund would hold cash and liquid assets in a segregated
account with a mark-to-market value sufficient to cover the Fund's open
futures obligations, the segregated assets would be available to the Fund
immediately upon closing out the futures position.
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The acquisition or sale of a futures contract may occur, for
example, when a Fund is considering purchasing or holds equity securities and
seeks to protect itself from fluctuations in prices without buying or selling
those securities. For example, if prices were expected to decrease, the Fund
might sell equity index futures contracts, thereby hoping to offset a
potential decline in the value of equity securities in the portfolio by a
corresponding increase in the value of the futures contract position held by
the Fund and thereby preventing the Fund's net asset value from declining as
much as it otherwise would have. A Fund also could protect against potential
price declines by selling portfolio securities and investing in money market
instruments. However, the use of futures contracts as a hedging technique
allows a Fund to maintain a defensive position without having to sell
portfolio securities.
Similarly, when prices of equity securities are expected to
increase, futures contracts may be bought to attempt to hedge against the
possibility of having to buy equity securities at higher prices. This
technique is sometimes known as an anticipatory hedge. Since the
fluctuations in the value of futures contracts should be similar to those of
equity securities, a Fund could take advantage of the potential rise in the
value of equity securities without buying them until the market has
stabilized. At that time, the futures contracts could be liquidated and the
Fund could buy equity securities on the cash market.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject to
initial margin and variation margin requirements. Rather than meeting
additional variation margin requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal
price relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures market
could be reduced and prices in the futures market distorted. Third, from the
point of view of speculators, the margin deposit requirements in the futures
market are less than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may
cause temporary price distortions. Due to the possibility of the foregoing
distortions, a correct forecast of general price trends by a Fund still may
not result in a successful use of futures.
Futures contracts entail additional risks. Although a Fund will
only utilize futures contracts when it believes that use of such contracts
will benefit the Fund, if the Fund's investment judgment is incorrect, the
Fund's overall performance could be worse than if the Fund had not entered
into futures contracts. For example, if the Fund has hedged against the
effects of a possible decrease in prices of securities held in the Fund's
portfolio and prices increase instead, the Fund will lose part or all of the
benefit of the increased value of these securities because of offsetting
losses in the Fund's futures positions. In addition, if the Fund has
insufficient cash, it may have to sell securities from its portfolio to meet
daily variation margin requirements. Those sales may be, but will not
necessarily be, at increased prices which reflect the rising market and may
occur at a time when the sales are disadvantageous to the Fund. Although the
buyer of an option cannot lose more than the amount of the premium plus
related transaction costs, a buyer or seller of futures contracts could lose
amounts substantially in excess of any initial margin deposits made, due to
the potential for adverse price movements resulting in additional variation
margin being required by such positions. However, each Fund utilizing futures
contracts intends to monitor its investments closely and will attempt to
close its positions when the risk of loss to the Fund becomes unacceptably
high.
The prices of futures contracts depend primarily on the value of
their underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to a Fund will not match exactly the Fund's current or potential
investments. A Fund may buy and sell futures contracts based on underlying
instruments with
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different characteristics from the securities in which it typically invests
- -- for example, by hedging investments in portfolio securities with a futures
contract based on a broad index of securities -- which involves a risk that
the futures position will not correlate precisely with the performance of the
Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with a
Fund's investments. Futures prices are affected by such factors as current
and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the
contract. Those factors may affect securities prices differently from
futures prices. Imperfect correlations between a Fund's investments and its
futures positions may also result from differing levels of demand in the
futures markets and the securities markets, from structural differences in
how futures and securities are traded, and from imposition of daily price
fluctuation limits for futures contracts. A Fund may buy or sell futures
contracts with a value less than or equal to the securities it wishes to
hedge or is considering purchasing. If price changes in a Fund's futures
positions are poorly correlated with its other investments, its futures
positions may fail to produce desired gains or result in losses that are not
offset by the gains in the Fund's other investments.
Because futures contracts are generally settled within a day from
the date they are closed out, compared with a longer settlement period for
most types of securities, the futures markets can provide superior liquidity
to the securities markets. Nevertheless, there is no assurance a liquid
secondary market will exist for any particular futures contract at any
particular time. In addition, futures exchanges may establish daily price
fluctuation limits for futures contracts and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On
volatile trading days when the price fluctuation limit is reached, it may be
impossible for a Fund to enter into new positions or close out existing
positions. If the secondary market for a futures contract is not liquid
because of price fluctuation limits or otherwise, a Fund may not be able to
promptly liquidate unfavorable futures positions and potentially could be
required to continue to hold a futures position until the delivery date,
regardless of changes in its value. As a result, a Fund's access to other
assets held to cover its futures positions also could be impaired.
OPTIONS ON FUTURES CONTRACTS. Certain Funds may buy and write
options on futures contracts for hedging purposes. An option on a futures
contract gives a Fund the right (but not the obligation) to buy or sell a
futures contract at a specified price on or before a specified date. The
purchase of a call option on a futures contract is similar in some respects
to the purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract
upon which it is based or the price of the underlying instrument, ownership
of the option may or may not be less risky than ownership of the futures
contract or the underlying instrument. As with the purchase of futures
contracts, a Fund may buy a call option on a futures contract to hedge
against a market advance, and a Fund might buy a put option on a futures
contract to hedge against a market decline.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract.
If the futures price at the expiration of the call option is below the
exercise price, a Fund will retain the full amount of the option premium
which provides a partial hedge against any decline that may have occurred in
the Fund's portfolio holdings. If a call option a Fund has written is
exercised, the Fund will incur a loss which will be reduced by the amount of
the premium it received. Depending on the degree of correlation between
change in the value of its portfolio securities and changes in the value of
the futures positions, a Fund's losses from existing options on futures may
to some extent be reduced or increased by changes in the value of portfolio
securities.
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The purchase of a put option on a futures contract is similar in
some respects to the purchase of protective put options on portfolio
securities. For example, a Fund may buy a put option on a futures contract
to hedge the Fund's portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of
an option also entails the risk that changes in the value of the underlying
futures contract will not be fully reflected in the value of the options
bought.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward contract is
a privately negotiated agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Funds authorized to utilize
forward contracts currently intend that they will only use forward contracts
or commitments for hedging purposes and will only use forward foreign
currency exchange contracts, although a Fund may enter into additional forms
of forward contracts or commitments in the future if they become available
and advisable in light of the Funds' objectives and investment policies.
Forward contracts generally are negotiated in an interbank market conducted
directly between traders (usually large commercial banks) and their
customers. Unlike futures contracts, which are standardized exchange-traded
contracts, forward contracts can be specifically drawn to meet the needs of
the parties that enter into them. The parties to a forward contract may agree
to offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated exchange.
The following discussion summarizes the relevant Funds' principal
uses of forward foreign currency exchange contracts ("forward currency
contracts"). A Fund may enter into forward currency contracts with stated
contract values of up to the value of the Fund's assets. A forward currency
contract is an obligation to buy or sell an amount of a specified currency
for an agreed price (which may be in U.S. dollars or a foreign currency) on a
specified date. A Fund will exchange foreign currencies for U.S. dollars and
for other foreign currencies in the normal course of business and may buy and
sell currencies through forward currency contracts in order to fix a price
(in terms of a specified currency) for securities it has agreed to buy or
sell ("transaction hedge"). A Fund also may hedge some or all of its
investments denominated in foreign currency against a decline in the value of
that currency (or a proxy currency whose price movements are expected to have
a high degree of correlation with the currency being hedged) relative to the
U.S. dollar by entering into forward currency contracts to sell an amount of
that currency approximating the value of some or all of its portfolio
securities denominated in that currency ("position hedge") or by
participating in futures contracts (or options on such futures) with respect
to the currency. A Fund also may enter into a forward currency contract with
respect to a currency where the Fund is considering the purchase or sale of
investments denominated in that currency but has not yet selected the
specific investments ("anticipatory hedge").
These types of hedging minimize the effect of currency appreciation
as well as depreciation, but do not eliminate fluctuations in the underlying
U.S. dollar equivalent value of the proceeds of or rates of return on a
Fund's foreign currency denominated portfolio securities. The matching of
the increase in value of a forward contract and the decline in the U.S.
dollar equivalent value of the foreign currency denominated asset that is the
subject of the hedge generally will not be precise. Shifting a Fund's
currency exposure from one foreign currency to another limits that Fund's
opportunity to profit from increases in the value of the original currency
and involves a risk of increased losses to such Fund if its investment
manager's projection of future exchange rates is inaccurate. Unforeseen
changes in currency prices may result in poorer overall performance for a
Fund than if it had not entered into such contracts.
A Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency
underlying the forward contract or the currency being hedged.
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To the extent that a Fund is not able to cover its forward currency positions
with underlying portfolio securities, the Funds' custodian will segregate
cash or liquid assets having a value equal to the aggregate amount of such
Fund's commitments under forward contracts entered into. If the value of the
securities used to cover a position or the value of segregated assets
declines, the Fund must find alternative cover or segregate additional cash
or liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of a Fund's commitments with
respect to such contracts.
While forward contracts are not currently regulated by the CFTC,
the CFTC may in the future assert authority to regulate forward contracts.
In such event, the Funds' ability to utilize forward contracts may be
restricted. A Fund may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Fund assets. In addition, when a Fund enters into a privately
negotiated forward contract with a counterparty, the Fund assumes
counterparty credit risk, that is, the risk that the counterparty will fail
to perform its obligations, in which case the Fund could be worse off than if
the contract had not been entered into. Unlike many exchange-traded futures
contracts and options on futures, there are no daily price fluctuation limits
with respect to forward contracts and other negotiated or over-the-counter
instruments, and with respect to those contracts, adverse market movements
could therefore continue to an unlimited extent over a period of time.
However, each Fund utilizing forward contracts intends to monitor its
investments closely and will attempt to renegotiate or close its positions
when the risk of loss to the Fund becomes unacceptably high.
OPTIONS ON SECURITIES AND SECURITIES INDICES. Certain Funds may
buy or sell put or call options and write covered call options on securities
that are traded on United States or foreign securities exchanges or
over-the-counter. Buying an option involves the risk that, during the option
period, the price of the underlying security will not increase (in the case
of a call) to above the exercise price, or will not decrease (in the case of
a put) to below the exercise price, in which case the option will expire
without being exercised and the holder would lose the amount of the premium.
Writing a call option involves the risk of an increase in the market value of
the underlying security, in which case the option could be exercised and the
underlying security would then be sold by a Fund to the option holder at a
lower price than its current market value and the Fund's potential for
capital appreciation on the security would be limited to the exercise price.
Moreover, when a Fund writes a call option on a securities index, the Fund
bears the risk of loss resulting from imperfect correlation between movements
in the price of the index and the price of the securities set aside to cover
such position. Although they entitle the holder to buy equity securities,
call options to purchase equity securities do not entitle the holder to
dividends or voting rights with respect to the underlying securities, nor do
they represent any rights in the assets of the issuer of those securities.
A call option written by a Fund is "covered" if the Fund 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 deemed to be covered if a Fund holds a call on the same
security and in the same principal amount as the call written and the
exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the
call written if the difference is maintained by the Fund in liquid assets in
a segregated account with its custodian.
The writer of a call option may have no control when the underlying
securities must be sold. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in
the case of a covered call option, be offset by a decline in the market value
of the underlying security during the option period.
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The writer of an exchange-traded call option that wishes to
terminate its obligation may effect a "closing purchase transaction." This
is accomplished by buying an option of the same series as the option
previously written. The effect of the purchase is that the writer's position
will be cancelled by the clearing corporation. If a Fund desires to sell a
particular security from the Fund's portfolio on which the Fund has written a
call option, the Fund will effect a closing transaction prior to or
concurrent with the sale of the security. However, a writer may not effect a
closing purchase transaction after being notified of the exercise of an
option. An investor who is the holder of an exchange-traded option 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
bought. There is no guarantee that either a closing purchase or a closing
sale transaction can be effected.
A Fund will realize a profit from a closing transaction if the
price of the purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is more than
the premium paid to buy the option; the Fund will realize a loss from a
closing transaction if the price of the purchase transaction is more than the
premium received from writing the option or the price received from a sale
transaction is less than the premium paid to buy the option. Because
increases in the market price of a call option will generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in
part by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary market
does not exist, it might not be possible to effect closing transactions in
particular options with the result that a Fund would have to exercise the
options in order to realize any profit. If a Fund 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 the Fund delivers
the underlying security upon exercise. Reasons for the absence of a liquid
secondary market may include the following: (i) there may be insufficient
trading interest in certain options, (ii) restrictions may be imposed by a
national securities exchange on which the option is traded ("Exchange") on
opening or closing transactions or both, (iii) trading halts, suspensions or
other restrictions may be imposed with respect to particular classes or
series of options or underlying securities, (iv) unusual or unforeseen
circumstances may interrupt normal operations on an Exchange, (v) the
facilities of an Exchange or of the Options Clearing Corporation ("OCC") may
not at all times be adequate to handle current trading volume, or (vi) one or
more Exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular
class or series of options), in which event the secondary market on that
Exchange (or in that class or series of options) would cease to exist,
although outstanding options on that Exchange that had been issued by the OCC
as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.
In addition, when a Fund enters into an over-the-counter option
contract with a counterparty, the Fund assumes counterparty credit risk, that
is, the risk that the counterparty will fail to perform its obligations, in
which case the Fund could be worse off than if the contract had not been
entered into.
An option on a securities index is similar to an option on a
security except that, rather than the right to take or make delivery of a
security at a specified price, an option on a securities index gives the
holder the right to receive, on exercise of the option, an amount of cash if
the closing level of the securities index on which the option is based is
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option.
A Fund may buy call options on securities or securities indices to
hedge against an increase in the price of a security or securities that the
Fund may buy in the future. The premium paid for the call option plus any
transaction costs will reduce the benefit, if any, realized by a Fund upon
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exercise of the option, and, unless the price of the underlying security or
index rises sufficiently, the option may expire and become worthless to the
Fund. A Fund may buy put options to hedge against a decline in the value of
a security or its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by a Fund upon
exercise of the option, and, unless the price of the underlying security or
index declines sufficiently, the option may expire and become worthless to
the Fund.
An example of a hedging transaction using an index option would be
if a Fund were to purchase a put on a stock index, in order to protect the
Fund against a decline in the value of all securities held by it to the
extent that the stock index moves in a similar pattern to the prices of the
securities held. While the correlation between stock indices and price
movements of the stocks in which the Funds will generally invest may be
imperfect, the Funds utilizing put options expect, nonetheless, that the use
of put options that relate to such indices will, in certain circumstances,
protect against declines in values of specific portfolio securities or the
Fund's portfolio generally. Although the purchase of a put option may
partially protect a Fund from a decline in the value of a particular security
or its portfolio generally, the cost of a put will reduce the potential
return on the security or the portfolio.
TEMPORARY DEFENSIVE MEASURES. Each of the Funds (except the
Berger/BIAM International Fund) may increase its investment in government
securities, and other short-term, interest-bearing securities without regard
to the Fund's otherwise applicable percentage limits, policies or its normal
investment emphasis when its advisor or sub-advisor believes market
conditions warrant a temporary defensive position. Taking larger positions
in such short-term investments may serve as a means of preserving capital in
unfavorable market conditions. During these periods, a Fund may not
participate in stock or bond market advances or declines to the same extent
that it would if the Fund remained more fully invested in stocks and bonds
and it may be more difficult for the Fund to achieve its investment objective.
NON-DIVERSIFICATION. The Berger Select Fund is classified as a
"non-diversified" Fund under the Investment Company Act of 1940, which means
that the Fund is not limited by that Act in the proportion of its assets that
it may invest in the securities of a single issuer. The Fund's net asset
value may be more volatile than that of a more-widely diversified fund
because the Fund invests more of its assets in a smaller number of issuers.
Consequently, the Fund may be more vulnerable to any single economic,
political or regulatory occurrence, and the gains or losses on a single stock
will have a greater impact on the Fund's net asset value.
However, the Fund intends to conduct its operations so as to
qualify to be taxed as a "regulated investment company" under the Internal
Revenue Code, which will generally relieve the Fund of any liability for
federal income tax to the extent its earnings are distributed to
shareholders. See Section 9--Income Dividends, Capital Gains Distributions
and Tax Treatment below. To qualify as a regulated investment company, among
other requirements, the Fund will limit its investments so that, at the close
of each quarter of the taxable year, (i) not more than 25% of the market
value of the Fund's total assets will be invested in securities of a single
issuer, and (ii) with respect to 50% of the market value of its total assets,
not more than 5% of the market value of its total assets will be invested in
the securities of a single issuer and the Fund will not own more than 10% of
the outstanding voting securities of a single issuer. These limitations do
not apply to U.S. government securities.
PORTFOLIO TURNOVER. The portfolio turnover rates of each of the
Funds are shown in the Financial Highlights tables included in the
Prospectus. The annual portfolio turnover rates of some of the Funds at
times have exceeded 100%. A 100% annual turnover rate results, for example,
if the equivalent of all of the securities in the Fund's portfolio are
replaced in a period of one year. The Funds anticipate that their portfolio
turnover rates in future years may exceed 100%, and investment changes
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will be made whenever management deems them appropriate even if this results
in a higher portfolio turnover rate. In addition, portfolio turnover for all
the Funds may increase as a result of large amounts of purchases and
redemptions of shares of the Funds due to economic, market or other factors
that are not within the control of management. The annual portfolio turnover
rates for the Berger Balanced Fund and the Berger Mid Cap Growth Fund are not
expected to exceed 200%. The annual portfolio turnover rate for the Berger
Select Fund is not expected to exceed 300%.
Higher portfolio turnover will necessarily result in
correspondingly higher brokerage costs for the Funds. The existence of a
high portfolio turnover rate has no direct relationship to the tax liability
of a Fund, although sales of certain stocks will lead to realization of
gains, and, possibly, increased taxable distributions to shareholders. The
Funds' brokerage policy is discussed further below under Section 6--Brokerage
Policy, and additional information concerning income taxes is located under
Section 9--Income Dividends, Capital Gains Distributions and Tax Treatment.
2. INVESTMENT RESTRICTIONS
The investment objective of each Fund is set forth on the cover of
this SAI. The investment objective of the Berger New Generation Fund, the
Berger Select Fund, the Berger Small Company Growth Fund, the Berger Small
Cap Value Fund, the Berger Mid Cap Growth Fund, the Berger 100 Fund, the
Berger/BIAM International Fund and the Berger Balanced Fund, and the primary
investment objective of the Berger Growth and Income Fund, are considered
fundamental, meaning that they cannot be changed without a shareholders'
vote. The secondary investment objective of the Berger Growth and Income
Fund is not considered fundamental, and therefore may be changed in the
future by action of the directors without shareholder vote. However, the
Berger Growth and Income Fund will not change its secondary investment
objective without giving its shareholders such notice as may be required by
law. If the Berger Growth and Income Fund changes its secondary investment
objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial position and
needs. There can be no assurance that any of the Funds' investment
objectives will be realized.
Each Fund has adopted certain fundamental and non-fundamental
restrictions on its investments and other activities. Fundamental
restrictions may not be changed without the approval of (i) 67% or more of
the voting securities of the Fund present at a meeting of shareholders
thereof if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or (ii) more than 50% of the outstanding
voting securities of the Fund. Non-fundamental restrictions may be changed
in the future by action of the directors or trustees without shareholder
vote.
BERGER NEW GENERATION FUND, BERGER SELECT FUND, BERGER SMALL COMPANY GROWTH
FUND-Registered Trademark-, BERGER MID CAP GROWTH FUND AND BERGER BALANCED
FUND
Except as noted, the following fundamental restrictions apply to
each of the Berger New Generation Fund, the Berger Select Fund, the Berger
Small Company Growth Fund, the Berger Mid Cap Growth Fund and the Berger
Balanced Fund. The Fund may not:
1. ( Does not apply to the Berger Select Fund) With respect to
75% of the Fund's total assets, purchase the securities of any one issuer
(except U.S. government securities) if immediately after and as a result of
such purchase (a) the value of the holdings of the Fund in the securities of
such issuer exceeds 5% of the value of the Fund's total assets or (b) the
Fund owns more than 10% of the outstanding voting securities of such issuer.
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2. Invest in any one industry (other than U.S. government
securities) 25% or more (more than 25%, in the case of the Berger Small
Company Growth Fund) of the value of its total assets at the time of such
investment.
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Fund's total assets (including
the amount borrowed) taken at market value, nor pledge, mortgage or
hypothecate its assets, except to secure permitted indebtedness and then only
if such pledging, mortgaging or hypothecating does not exceed 25% of the
Fund's total assets taken at market value. When borrowings exceed 5% of the
Fund's total assets, the Fund will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the Fund
may be deemed an underwriter under the Securities Act of 1933 in disposing of
a security), issue senior securities (except to the extent permitted under
the Investment Company Act of 1940), invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in commodities
or commodity contracts except financial futures transactions, futures
contracts on securities and securities indices and options on such futures,
forward foreign currency exchange contracts, forward commitments or
securities index put or call options.
5. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the
purchase of all or a portion of an issue of publicly distributed bonds, bank
loan participation agreements, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities, to be the making of a loan.
In applying the industry concentration investment restriction (no.
2 above), each Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated. Further,
in implementing that restriction, the Berger Small Company Growth Fund
intends not to invest in any one industry 25% or more of the value of its
total assets at the time of such investment.
The trustees have adopted additional non-fundamental investment
restrictions for the Berger New Generation Fund, the Berger Select Fund, the
Berger Small Company Growth Fund, the Berger Mid Cap Growth Fund and the
Berger Balanced Fund. These limitations may be changed by the trustees
without a shareholder vote. The non-fundamental investment restrictions
include the following:
1. The Fund may not purchase securities on margin from a broker
or dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short
sales "against the box"). This limitation shall not prohibit or restrict the
Fund from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.
2. The Fund may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary
broker's commission).
3. The Fund may not invest in companies for the purposes of
exercising control of management.
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<PAGE>
4. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.
5. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put
and call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures
transactions and premiums for options. The Fund may only write call options
that are covered and only up to 25% of the Fund's total assets.
6. The Fund may not purchase or sell securities on a when-issued
or delayed delivery basis, if as a result more than 5% of its total assets
taken at market value at the time of purchase would be invested in such
securities.
BERGER SMALL CAP VALUE FUND
The following fundamental restrictions apply to the Berger Small
Cap Value Fund. The Fund may not:
1. Issue senior securities as defined in the Investment Company
Act of 1940.
2. Invest in companies for the purpose of acquiring control or
management thereof.
3. Invest or hold securities of any issuer if the officers and
trustees of the Fund and its advisor own individually more than one-half
(1/2) of 1% of the securities of such issuer or together own more than 5% of
the securities of such issuer.
4. Invest in other investment companies, except in connection
with a plan of merger, consolidation, reorganization or acquisition of
assets, or in the open market involving no commission or profit to a sponsor
or dealer (other than a customary broker's commission).
5. Participate on a joint or joint and several basis in any
trading account in securities.
6. Purchase securities of any company with a record of less than
three (3) years continuous operation (including that of predecessors) if such
purchase would cause the cost of the Fund's investments in all such companies
to exceed 5% of the Fund's total assets.
7. Invest in securities (except those of the U.S. government or
its agencies) of any issuer if immediately thereafter the Fund would then own
more than 10% of that issuer's voting securities.
8. Loan cash or portfolio securities, except in connection with
the acquisition of debt securities which the Fund's investment policies and
restrictions permit it to purchase.
9. Borrow money in excess of 5% of the value of its assets and,
then, only as a temporary measure for extraordinary or emergency purposes.
10. Pledge, mortgage or hypothecate any of its assets to secure a
debt.
11. Purchase or sell real estate or any other interests in real
estate (including real estate limited partnership interests).
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<PAGE>
12. Purchase securities on margin or sell short.
13. Invest in commodities or commodity contracts.
14. Act as an underwriter of securities of other issuers or invest
in portfolio securities which the Fund might not be free to sell to the
public without registration of such securities under the Securities Act of
1933 ("Restricted Securities").
15. Invest more than 10% of the value of its net assets in
illiquid securities, including Restricted Securities, securities which are
not readily marketable, repurchase agreements maturing in more than seven (7)
days, written over-the-counter ("OTC") options and securities used as cover
for written OTC options.
16. Invest in oil, gas or mineral leases.
17. Invest more than 5% of the value of its net assets in warrants
or more than 2% of its net assets in warrants that are not listed on the New
York Stock Exchange, the American Stock Exchange, or the NASDAQ National
Market System.
18. Invest more than 25% of the value of its assets, at the time
of purchase, in securities of companies principally engaged in a particular
industry, although the Fund may as a temporary defensive measure invest up to
100% of its total assets in obligations issued or guaranteed by the U.S.
government or its agencies.
19. With respect to 75% of the Fund's total assets, purchase the
securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value
of the Fund's total assets or (b) the Fund owns more than 10% of the
outstanding voting securities of such issuer.
In applying the Fund's industry concentration restriction (number
(18) above), the Fund uses the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated.
The trustees have adopted additional non-fundamental investment
restrictions for the Berger Small Cap Value Fund. These limitations may be
changed by the trustees without a shareholder vote. The non-fundamental
investment restrictions include the following:
1. Only for the purpose of hedging, the Fund may purchase and
sell put and call options, but no more than 5% of the Fund's net assets at
the time of purchase may be invested in premiums for options. The Fund may
only write call options that are covered and only up to 10% of the Fund's net
assets.
2. The Fund may not purchase or sell securities on a when-issued
or delayed delivery basis, if as a result more than 5% of its total assets
taken at market value at the time of purchase would be invested in such
securities.
Investment restrictions that involve a maximum percentage of
securities or assets will not be considered to be violated unless an excess
over the percentage occurs immediately after, and is caused by, an
acquisition or encumbrance of securities or assets of the Berger Small Cap
Value Fund.
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BERGER 100 FUND-Registered Trademark- AND BERGER GROWTH AND INCOME FUND
The following fundamental restrictions apply to each of the Berger
100 Fund and the Berger Growth and Income Fund. The Fund may not:
1. Purchase the securities of any one issuer (except U.S.
Government securities) if immediately after and as a result of such purchase
(a) the value of the holdings of the Fund in the securities of such issuer
exceeds 5% of the value of the Fund's total assets or (b) the Fund owns more
than 10% of the outstanding voting securities or of any class of securities
of such issuer.
2. Purchase securities of any company with a record of less than
three years' continuous operation (including that of predecessors) if such
purchase would cause the Fund's investments in all such companies taken at
cost to exceed 5% of the value of the Fund's total assets.
3. Invest in any one industry more than 25% of the value of its
total assets at the time of such investment.
4. Make loans, except that the Fund may enter into repurchase
agreements in accordance with the Fund's investment policies. The Fund does
not, for this purpose, consider the purchase of all or a portion of an issue
of publicly distributed bonds, bank loan participation agreements, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original issuance of
the securities, to be the making of a loan.
5. Borrow in excess of 5% of the value of its total assets, or
pledge, mortgage, or hypothecate its assets taken at market value to an
extent greater than 10% of the Fund's total assets taken at cost (and no
borrowing may be undertaken except from banks as a temporary measure for
extraordinary or emergency purposes). This limitation shall not prohibit or
restrict short sales or deposits of assets to margin or guarantee positions
in futures, options or forward contracts, or the segregation of assets in
connection with any of such transactions.
6. Purchase or retain the securities of any issuer if those
officers and directors of the Fund or its investment advisor owning
individually more than 1/2 of 1% of the securities of such issuer together
own more than 5% of the securities of such issuer.
7. Purchase the securities of any other investment company,
except by purchase in the open market involving no commission or profit to a
sponsor or dealer (other than the customary broker's commission).
8. Act as a securities underwriter (except to the extent the Fund
may be deemed an underwriter under the Securities Act of 1933 in disposing of
a security) or invest in real estate (although it may purchase shares of a
real estate investment trust), or invest in commodities or commodity
contracts except, only for the purpose of hedging, (i) financial futures
transactions, including futures contracts on securities, securities indices
and foreign currencies, and options on any such futures, (ii) forward foreign
currency exchange contracts and other forward commitments and (iii)
securities index put or call options.
9. Participate on a joint or joint and several basis in any
securities trading account.
10. Invest in companies for the purposes of exercising control of
management.
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In applying the industry concentration investment restriction (no.
3 above), the Funds use the industry groups used in the Data Monitor
Portfolio Monitoring System of William O'Neil & Co. Incorporated. Further,
in implementing that restriction, each Fund intends not to invest in any one
industry 25% or more of the value of its total assets at the time of such
investment.
The directors have adopted additional non-fundamental investment
restrictions for the Berger 100 Fund and the Berger Growth and Income Fund.
These limitations may be changed by the directors without a shareholder vote.
The non-fundamental investment restrictions include the following:
1. Only for the purpose of hedging, the Fund may purchase and
sell financial futures, forward foreign currency exchange contracts and put
and call options, but no more than 5% of the Fund's net assets at the time of
purchase may be invested in initial margins for financial futures
transactions and premiums for options. The Fund may only write call options
that are covered and only up to 25% of the Fund's total assets.
2. The Fund may not purchase or sell securities on a when-issued
or delayed delivery basis, if as a result more than 5% of its total assets
taken at market value at the time of purchase would be invested in such
securities.
3. The Fund may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Fund, taken at market
value at the time of purchase would be invested in such securities.
4. The Fund may not purchase securities on margin from a broker
or dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short
sales "against the box"). This limitation shall not prohibit or restrict the
Fund from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.
BERGER/BIAM INTERNATIONAL FUND
The Fund has adopted the investment policy that it may,
notwithstanding any other fundamental or non-fundamental investment policy or
restriction, invest all of its investable assets in the securities of another
open-end investment company or series thereof with substantially the same
investment objective, policies and limitations as the Fund. This arrangement
is commonly referred to as a master/feeder.
All other fundamental and non-fundamental investment policies and
restrictions of the Berger/BIAM International Fund and the Berger/BIAM
International Portfolio (the "Portfolio") are identical. Therefore, although
the following investment restrictions refer to the Portfolio, they apply
equally to the Fund.
The Portfolio has adopted certain fundamental restrictions on its
investments and other activities, and none of these restrictions may be
changed without the approval of (i) 67% or more of the voting securities of
the Portfolio present at a meeting of shareholders thereof if the holders of
more than 50% of the outstanding voting securities are present or represented
by proxy, or (ii) more than 50% of the outstanding voting securities of the
Portfolio. Whenever the Fund is requested to vote on a change in the
investment restrictions of the Portfolio, the Fund will hold a meeting of its
shareholders and will cast its votes as instructed by the shareholders.
The following fundamental restrictions apply to the Portfolio. The
Portfolio may not:
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1. With respect to 75% of the Portfolio's total assets, purchase
the securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the
holdings of the Portfolio in the securities of such issuer exceeds 5% of the
value of the Portfolio's total assets or (b) the Portfolio owns more than 10%
of the outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Portfolio's total assets
(including the amount borrowed) taken at market value, nor pledge, mortgage
or hypothecate its assets, except to secure permitted indebtedness and then
only if such pledging, mortgaging or hypothecating does not exceed 25% of the
Portfolio's total assets taken at market value. When borrowings exceed 5% of
the Portfolio's total assets, the Portfolio will not purchase portfolio
securities.
4. Act as a securities underwriter (except to the extent the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a security), issue senior securities (except to the extent
permitted under the Investment Company Act of 1940), invest in real estate
(although it may purchase shares of a real estate investment trust), or
invest in commodities or commodity contracts except financial futures
transactions, futures contracts on securities and securities indices and
options on such futures, forward foreign currency exchange contracts, forward
commitments or securities index put or call options.
5. Make loans, except that the Portfolio may enter into
repurchase agreements and may lend portfolio securities in accordance with
the Portfolio's investment policies. The Portfolio does not, for this
purpose, consider the purchase of all or a portion of an issue of publicly
distributed bonds, bank loan participation agreements, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities, to be the
making of a loan.
In applying the industry concentration investment restriction (no.
2 above), the Portfolio uses the industry groups designated by the Financial
Times World Index Service.
The trustees have adopted additional non-fundamental investment
restrictions for the Portfolio. These limitations may be changed by the
trustees without a shareholder vote. The non-fundamental investment
restrictions include the following:
1. With respect to 100% of the Portfolio's total assets, the
Portfolio may not purchase the securities of any one issuer (except U.S.
government securities) if immediately after and as a result of such purchase
(a) the value of the holdings of the Portfolio in the securities of such
issuer exceeds 5% of the value of the Portfolio's total assets or (b) the
Portfolio owns more than 10% of the outstanding voting securities of such
issuer.
2. The Portfolio may not purchase securities on margin from a
broker or dealer, except that the Portfolio may obtain such short-term
credits as may be necessary for the clearance of transactions, and may not
make short sales of securities. This limitation shall not prohibit or
restrict the Portfolio from entering into futures, forwards and options
contracts or from making margin payments and other deposits in connection
therewith.
3. The Portfolio may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary
broker's commission).
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4. The Portfolio may not invest in companies for the purposes of
exercising control of management.
5. The Portfolio may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Portfolio, taken at
market value at the time of purchase would be invested in such securities.
6. The Portfolio may not enter into any futures, forwards or
options, except that only for the purpose of hedging, the Portfolio may enter
into forward foreign currency exchange contracts with stated contract values
of up to the value of the Portfolio's assets.
7. The Portfolio may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in
such securities.
3. MANAGEMENT OF THE FUNDS
The directors or trustees and executive officers of each of the
Funds are listed below, together with information which includes their
principal occupations during the past five years and other principal business
affiliations.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT
59717, DOB: 1937. Since 1994, Dean, and from 1989 to 1994, a
member of the Finance faculty, of the College of Business, Montana
State University. Self-employed as a financial and management
consultant, and in real estate development. Formerly (1976-1989),
Chairman and Chief Executive Officer of Royal Gold, Inc. (mining).
Chairman of the Board of Berger 100 Fund and Berger Growth and
Income Fund. Chairman of the Trustees of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and
Berger Omni Investment Trust.
* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1942. President and a director of Berger 100 Fund and Berger
Growth and Income Fund, and President and a trustee of Berger
Investment Portfolio Trust and Berger Omni Investment Trust, since
February 1997. President and a trustee of Berger/BIAM Worldwide
Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their
inception in May 1996. President and a trustee of Berger
Institutional Products Trust since its inception in October 1995.
President and a director since April 1995 of Berger Associates,
Inc. Member and Chairman of the Board of Managers and Chief
Executive Officer on the Management Committee of BBOI Worldwide LLC
since November 1996. A Vice President of DST Systems, Inc. (data
processing) since July 1995. Formerly President and Chief Executive
Officer of Investors Fiduciary Trust Company (banking) from
February 1992 to March 1995 and Chief Operating Officer of
SunAmerica Asset Management Co. (money management) from January
1990 to February 1992.
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB:
1928. President, Baldwin Financial Counseling. Formerly
(1978-1990), Vice President and Denver Office Manager of Merrill
Lynch Capital Markets. Director of Berger 100 Fund and Berger
Growth and Income Fund. Trustee of Berger Investment Portfolio
Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
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* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1925. Director and, formerly, President (1974-1994) of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust since its inception in August
1993 (Chairman of the Trustees through November 1994). Trustee of
Berger Institutional Products Trust since its inception in October
1995. Trustee of Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust since their inception in May 1996.
Trustee of Berger Omni Investment Trust since February 1997.
Chairman (since 1994) and a Director (since 1973) and, formerly,
President (1973-1994) of Berger Associates.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, DOB: 1925.
President, Climate Engineering, Inc. (building environmental
systems). Director of Berger 100 Fund and Berger Growth and Income
Fund. Trustee of Berger Investment Portfolio Trust, Berger
Institutional Products Trust, Berger/BIAM Worldwide Funds Trust,
Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment
Trust.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, DOB: 1945.
Managing Principal, Sovereign Financial Services, L.L.C.
(investment consulting firm). Formerly (1981-1988), Executive Vice
President, Captiva Corporation, Denver, Colorado (private
investment management firm). Ph.D. in Finance (Arizona State
University); Chartered Financial Analyst (CFA). Director of Berger
100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios
Trust and Berger Omni Investment Trust.
* DENIS CURRAN, 20 Horseneck Lane, Greenwich, CT 06830, DOB: 1947.
President and a director since December 1994, and Senior Vice
President and a director from September 1991 to December 1994, of
Bank of Ireland Asset Management (U.S.) Limited (investment
advisory firm). Member of the Board of Managers and Chief
Executive Officer on the Management Committee of BBOI Worldwide LLC
since November 1996. Trustee of Berger/BIAM Worldwide Funds Trust
and Berger/BIAM Worldwide Portfolios Trust since November 1996.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602,
DOB: 1945. Since 1991, Chairman, President, Chief Executive
Officer and a director of Catalyst Institute (international public
policy research organization focused primarily on financial markets
and institutions). Since September 1997, President, Chief Executive
Officer and a director of DST Catalyst, Inc. (international
financial markets consulting, software and computer services
company). Prior thereto (1991 - September 1997), Chairman,
President, Chief Executive Officer and a director of Catalyst
Consulting (international financial institutions business
consulting firm). Prior thereto (1988-1991), President, Chief
Executive Officer and a director of Kessler Asher Group (brokerage,
clearing and trading firm). Director of Berger 100 Fund and Berger
Growth and Income Fund. Trustee of Berger Investment Portfolio
Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202,
DOB: 1933. Self-employed as a private investor. Formerly
(1981-1988), Senior Vice President, Rocky Mountain Region, of Dain
Bosworth Incorporated and member of that firm's Management
Committee. Director of J.D. Edwards & Co. (computer software
company) since 1995. Director of Berger 100 Fund and Berger Growth
and Income Fund. Trustee of Berger Investment Portfolio Trust,
Berger Institutional Products Trust, Berger/BIAM Worldwide Funds
Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB:
1928. President, Sinclaire Cattle Co., and private investor.
Director of Berger 100 Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust, Berger Institutional
Products
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<PAGE>
Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
* PATRICK S. ADAMS, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1960. Executive Vice President and portfolio manager
of the Berger 100 Fund and Executive Vice President and
co-portfolio manager of the Berger Growth and Income Fund since
February 1997. President and portfolio manager of the Berger
Select Fund since November 1997. President and portfolio manager of
the Berger IPT - 100 Fund and President and co-portfolio manager of
the Berger IPT - Growth and Income Fund since February 1997.
President and co-portfolio manager of the Berger Balanced Fund
since its inception in August 1997. Senior Vice President of Berger
Associates since February 1997. Formerly, Senior Vice President
from June 1996 to January 1997 with Zurich Kemper Investments,
Inc.; Portfolio Manager from March 1993 to May 1996 with Founders
Asset Management, Inc.; research analyst and portfolio manager from
January 1990 to January 1992 and Senior Portfolio Manager/Senior
Analyst from January 1992 to February 1993 with First of America
Investment Corp.; and Portfolio Manager from August 1985 to
December 1989 with Capital Management Group - Star Bank.
* KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1955. Vice President, Secretary and Treasurer of Berger 100
Fund and Berger Growth and Income Fund since October 1991, of
Berger Investment Portfolio Trust since its inception in August
1993, of Berger Institutional Products Trust since its inception in
October 1995, of Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust since their inception in May 1996, and
of Berger Omni Investment Trust since February 1997. Also, Senior
Vice President-Finance and Administration (since January 1997),
Vice President-Finance and Administration (September 1991 to
January 1997), Secretary and Treasurer (since September 1991) of
Berger Associates, and a director of Berger Distributors, Inc.,
since its inception in May 1996. Formerly, Financial Consultant
(registered representative) with Neidiger Tucker Bruner, Inc.
(broker-dealer) (October 1989 to September 1991) and Financial
Consultant with Merrill Lynch, Pierce, Fenner & Smith, Inc.
(October 1985 to October 1989).
* JOHN B. JARES, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1966. Vice President and co-portfolio manager of the Berger
Balanced Fund since its inception in August 1997. Vice President
(since October 1997) and Portfolio Manager (May 1997 to October
1997) with Berger Associates. Formerly, Research Analyst (February
1994 to December 1996) and Co-Lead Portfolio Manager (January 1997
to May 1997) with Founders Asset Management, Inc., and Research
Associate with Lipper Analytical Services, Inc. from October 1992
to February 1994.
* WILLIAM R. KEITHLER, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1952. President since November 1994 (formerly, Vice
President from December 1993 to November 1994) and portfolio
manager of the Berger Small Company Growth Fund. President and
portfolio manager of the Berger New Generation Fund since its
inception in December 1995. President and portfolio manager of the
Berger IPT -Small Company Growth Fund of the Berger Institutional
Products Trust since its inception in October 1995. Senior Vice
President-Investment Management (since January 1997) and Vice
President-Investment Management (December 1993 to January 1997) of
Berger Associates. Formerly, Senior Vice President (January 1993 to
December 1993), Vice President (January 1991 to January 1993) and
Portfolio Manager (January 1988 to January 1991) of INVESCO Trust
Company (investment management).
* SHEILA J. OHLSSON, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1966. Co-portfolio manager of the Berger Growth and
Income Fund and the Berger IPT - Growth and Income Fund since
October 1997 and Vice President of those Funds since November 1997.
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<PAGE>
Vice President (since October 1997), Senior Analyst/Portfolio
Manager (February 1997 to October 1997) and Analyst (September 1991
to February 1997) with Berger Associates.
* AMY K. SELNER, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1968. Vice President and portfolio manager of the Berger Mid
Cap Growth Fund since its inception in December 1997. Vice
President (since December 1997) and senior research analyst (April
1996 through December 1997) with Berger Associates. Formerly,
Assistant Portfolio Manager and Research Analyst with INVESCO Trust
Company from March 1991 through March 1996.
- ------------------
* Interested person (as defined in the Investment Company Act of 1940) of
one or more of the Funds and/or of the Funds' advisors or sub-advisors.
The directors or trustees of the Funds have adopted a
director/trustee retirement age of 75 years.
DIRECTOR/TRUSTEE COMPENSATION
The officers of the Funds received no compensation from the Funds
during the fiscal year ended September 30, 1997. However, directors and
trustees of the Funds who are not "interested persons" of the Funds or their
advisors or sub-advisors are compensated for their services according to a
fee schedule, allocated among the Funds. Neither the officers of the Funds
nor the directors or trustees receive any form of pension or retirement
benefit compensation from the Funds.
The following table sets forth information regarding compensation
paid or accrued during the fiscal year ended September 30, 1997, for each
director or trustee of the Funds:
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<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE COMPENSATION FROM
WITH BERGER FUNDS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
BERGER Berger BERGER BERGER Berger BERGER BERGER/ BERGER BERGER ALL
NEW Select SMALL SMALL CAP Mid Cap 100 BIAM GROWTH BALANCED BERGER
GENERATION Fund(1) COMPANY VALUE Growth FUND INTERNATION AND FUND(1) FUNDS(3)
FUND GROWTH FUND Fund(1) AL FUND(2) INCOME
FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis E. Baldwin(4) $1,488 $438 $10,590 $580 $438 $26,807 $877 $4,577 $875 $45,100
- ----------------------------------------------------------------------------------------------------------------------------------
William M.B. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Berger(4),(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Louis R. Bindner(4) $1,358 $410 $9,654 $543 $410 $24,473 $817 $4,186 $819 $41,200
- ----------------------------------------------------------------------------------------------------------------------------------
Katherine A. $1,488 $438 $10,590 $580 $438 $26,807 $877 $4,577 $875 $45,100
Cattanach(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Lucy Black $1,358 $ 0 $9,654 $543 $ 0 $24,473 $861 $4,186 $ 0 $41,244
Creighton(4),(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Denis Curran(6) N/A N/A N/A N/A N/A N/A $ 0 N/A N/A $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Paul R. Knapp(4) $1,439 $438 $10,188 $551 $438 $25,723 $841 $4,384 $875 $43,300
- ----------------------------------------------------------------------------------------------------------------------------------
Gerard M. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Lavin(4),(5),(6),(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Harry T. Lewis(4) $1,429 $438 $10,179 $546 $438 $25,751 $830 $4,394 $875 $43,300
- ----------------------------------------------------------------------------------------------------------------------------------
Michael Owen(4) $1,808 $531 $12,871 $704 $531 $32,576 $1,065 $5,562 $1,061 $54,767
- ----------------------------------------------------------------------------------------------------------------------------------
William Sinclaire(4) $1,307 $410 $9,271 $543 $410 $23,558 $811 $4,042 $819 $39,700
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-26-
<PAGE>
NOTES TO TABLE
(1) The Berger Balanced Fund did not commence operations until
September 30, 1997. The Berger Select Fund and the Berger Mid Cap Growth
Fund did not commence operations until December 31, 1997. Figures are
estimates for the Funds' first year of operations.
(2) Comprised of the portion of the trustee compensation paid by
Berger/BIAM Worldwide Portfolios to its trustees and allocated to the Fund.
(3) Includes the Berger 100 Fund, the Berger Growth and Income Fund,
the Berger Investment Portfolio Trust (including the Berger Small Company
Growth Fund and the Berger New Generation Fund), the Berger Institutional
Products Trust (four series), the Berger/BIAM Worldwide Funds Trust (three
series, including among others the Berger/BIAM International Fund), the
Berger/BIAM Worldwide Portfolios Trust (one series) and the Berger Omni
Investment Trust (including the Berger Small Cap Value Fund, which was added
to the Berger Funds in February 1997). Aggregate compensation figures do not
include first-year estimates for the Berger Balanced Fund, the Berger Select
Fund and the Berger Mid Cap Growth Fund. Of the aggregate amounts shown for
each director/trustee, the following amounts were deferred under applicable
deferred compensation plans: Dennis E. Baldwin $30,565; Louis R. Bindner
$19,445; Katherine A. Cattanach $44,468; Lucy Black Creighton $32,168;
Michael Owen $8,553; William Sinclaire $19,555. Aggregate figures also do
not include a total of $900 which was paid to the former independent trustees
of the Berger Omni Investment Trust prior to the Trust becoming part of the
Berger Funds in February 1997.
(4) Director of Berger 100 Fund and Berger Growth and Income Fund and
trustee of Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Portfolios Trust, Berger/BIAM Worldwide Funds
Trust and Berger Omni Investment Trust.
(5) Interested person of Berger Associates.
(6) Interested person of BBOI Worldwide LLC. Trustee of Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(7) President of Berger 100 Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger/BIAM Worldwide Portfolios Trust,
Berger/BIAM Worldwide Funds Trust and Berger Omni Investment Trust.
(8) Resigned as a director and trustee effective November 1997.
Directors or trustees may elect to defer receipt of all or a
portion of their fees pursuant to a fee deferral plan adopted by each of the
Funds. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger
Funds (or approved money market funds) is designated by the director or
trustee for this purpose. Pursuant to an SEC exemptive order, the Funds are
permitted to purchase shares of the designated funds in order to offset their
obligation to the directors/trustees participating in the plan. Purchases
made pursuant to the plan are excepted from any otherwise applicable
investment restriction limiting the purchase of securities of any other
investment company. A Fund's obligation to make payments of deferred fees
under the plan is a general obligation of the Fund.
As of April 22, 1998, the officers and directors/trustees of the
Funds as a group owned of record or beneficially approximately 4.65% of the
Berger Mid Cap Growth Fund, approximately 4.22% of the Berger Select Fund,
approximately 1.45% of the Berger Balanced Fund and an aggregate of less than
1% of the outstanding shares of each of the other Funds.
4. INVESTMENT ADVISORS AND SUB-ADVISORS
BERGER ASSOCIATES - INVESTMENT ADVISOR
Berger Associates, Inc. ("Berger Associates"), 210 University
Boulevard, Suite 900, Denver, CO 80206, is the investment advisor to the
Berger New Generation Fund, the Berger Select Fund, the Berger Small Company
Growth Fund, the Berger Small Cap Value Fund, the Berger Mid Cap Growth Fund,
the Berger 100 Fund, the Berger Growth and Income Fund and the Berger
Balanced Fund. Berger Associates is responsible for managing the investment
operations of these Funds and the composition of their investment portfolios.
Berger Associates also acts as each Funds'
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<PAGE>
administrator and is responsible for such functions as monitoring compliance
with all applicable federal and state laws.
Berger Associates has been in the investment advisory business for
over 20 years. It serves as investment advisor or sub-advisor to mutual
funds and institutional investors and had assets under management of more
than $3.9 billion as of September 30, 1997. Berger Associates is a
wholly-owned subsidiary of Kansas City Southern Industries, Inc. ("KCSI").
KCSI is a publicly traded holding company with principal operations in rail
transportation, through its subsidiary The Kansas City Southern Railway
Company, and financial asset management businesses. KCSI also owns
approximately 41% of the outstanding shares of DST Systems, Inc. ("DST"), a
publicly traded information and transaction processing company which acts as
the Funds' sub-transfer agent.
BBOI WORLDWIDE LLC - INVESTMENT ADVISOR
BBOI Worldwide LLC ("BBOI Worldwide"), 210 University Boulevard,
Denver, CO 80206, is the investment advisor to the Berger/BIAM International
Portfolio (the "Portfolio"), in which all the investable assets of the
Berger/BIAM International Fund are invested. BBOI Worldwide oversees,
evaluates and monitors the investment advisory services provided to the
Portfolio by the Portfolio's sub-advisor and is responsible for furnishing
general business management and administrative services to the Portfolio.
BBOI Worldwide is a Delaware limited liability company formed in
1996. Since BBOI Worldwide was only recently formed, it has only limited
prior experience as an investment advisor. However, BBOI Worldwide is a
joint venture between Berger Associates and Bank of Ireland Asset Management
(U.S.) Limited ("BIAM"), the sub-advisor to the Portfolio, which have both
been in the investment advisory business for many years.
Berger Associates and BIAM each own a 50% membership interest in
BBOI Worldwide and each have an equal number of representatives on BBOI
Worldwide's Board of Managers. Berger Associates' role in the joint venture
is to provide administrative services, and BIAM's role is to provide
international and global investment management expertise. Agreement of
representatives of both Berger Associates and BIAM is required for all
significant management decisions.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED - SUB-ADVISOR
As permitted in its Investment Advisory Agreement with the
Berger/BIAM International Portfolio, BBOI Worldwide has delegated day-to-day
investment management responsibility for the Portfolio to BIAM. As
sub-advisor, BIAM manages the investments in the Portfolio and determines
what securities and other investments will be purchased, retained, sold or
loaned, consistent with the investment objective and policies established by
the trustees. BIAM's main offices are at 26 Fitzwilliam Place, Dublin 2,
Ireland. BIAM maintains a representative office at 20 Horseneck Lane,
Greenwich, CT 06830. BIAM is an indirect wholly-owned subsidiary of Bank of
Ireland, a publicly traded, diversified financial services group with
business operations worldwide. Bank of Ireland provides investment
management services through a network of related companies, including BIAM
which serves primarily institutional clients in the United States and Canada.
Bank of Ireland and its affiliates managed assets for clients worldwide in
excess of $25 billion as of September 30, 1997.
Bank of Ireland or its affiliates may have deposit, loan or other
commercial or investment banking relationships with the issuers of securities
which may be purchased by the Portfolio, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits BIAM, in making
investment decisions, from using material non-public information in its
possession or in the possession of any of its affiliates. In addition, in
making investment decisions for the Portfolio, BIAM will not take
-28-
<PAGE>
into consideration whether an issuer of securities proposed for purchase or
sale by the Portfolio is a customer of Bank of Ireland or its affiliates.
The Glass-Steagall Act prohibits a depository institution and
certain affiliates from underwriting or distributing most securities and from
affiliating with businesses engaged in certain similar activities. BIAM
believes that it may perform the services for the Fund contemplated by the
Sub-Advisory Agreement between BBOI Worldwide and BIAM consistent with the
Glass-Steagall Act and other applicable banking laws and regulations.
However, future changes in either Federal or state statutes and regulations
concerning the permissible activities of banks and their affiliates, as well
as future judicial or administrative decisions or interpretations of present
and future statutes and regulations, might prevent BIAM from continuing to
perform those services for the Fund. If the circumstances described above
should change, the trustees of the Fund and the Portfolio would review the
relationships with BIAM and consider taking all actions appropriate under the
circumstances.
PERKINS, WOLF, MCDONNELL & COMPANY - SUB-ADVISOR
Perkins, Wolf, McDonnell & Company ("PWM"), 53 West Jackson
Boulevard, Suite 818, Chicago, Illinois 60604, has been engaged as the
investment sub-advisor for the Berger Small Cap Value Fund. PWM was
organized in 1980 under the name Mac-Per-Wolf Co. to operate as a securities
broker-dealer. In September 1983, it changed its name to Perkins, Wolf,
McDonnell & Company. PWM is a member of the National Association of
Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an
investment adviser with the SEC.
PWM was the Fund's investment advisor from the date the Fund
commenced operations in 1985 to February 1997. PWM became the investment
sub-advisor to the Fund on February 14, 1997, following shareholder approval
of a new Sub-Advisory Agreement between Berger Associates as advisor and PWM
as sub-advisor.
Robert H. Perkins is the individual who is primarily responsible
for the day-to-day management of the Fund's investments. Mr. Perkins has
held such responsibility and has been employed by PWM since the Fund
commenced operations in 1985. Mr. Perkins owns 49% of PWM's outstanding
common stock and serves as President and a director of PWM. Gregory E. Wolf
owns 20% of PWM's outstanding common stock and serves as Treasurer and a
director of PWM.
INVESTMENT ADVISORY AGREEMENTS
Under the Investment Advisory Agreements between each Fund and its
advisor, the advisor is generally responsible for furnishing continuous
advice and recommendations as to the acquisition, holding or disposition of
securities or other assets which each Fund may own or contemplate acquiring
from time to time. Under the Agreements, the advisor is compensated for its
services by the payment of a fee at the following annual rates, calculated as
a percentage of the average daily net assets of the Fund:
<TABLE>
- ------------------------------------------------------------------------------
FUND ADVISOR INVESTMENT
ADVISORY FEE
- ------------------------------------------------------------------------------
<S> <C> <C>
Berger New Generation Fund Berger Associates 0.90%(1)
- ------------------------------------------------------------------------------
Berger Select Fund Berger Associates 0.75%
- ------------------------------------------------------------------------------
Berger Small Company Growth Berger Associates 0.90%(3)
Fund
- ------------------------------------------------------------------------------
-29-
<PAGE>
- ------------------------------------------------------------------------------
Berger Small Cap Value Fund Berger Associates (2) 0.90%(2)
- ------------------------------------------------------------------------------
Berger Mid Cap Growth Fund Berger Associates 0.75%
- ------------------------------------------------------------------------------
Berger 100 Fund Berger Associates 0.75%(3)
- ------------------------------------------------------------------------------
Berger/BIAM International Fund BBOI Worldwide (4) 0.90%(4)
- ------------------------------------------------------------------------------
Berger Growth and Income Fund Berger Associates 0.75%(3)
- ------------------------------------------------------------------------------
Berger Balanced Fund Berger Associates 0.70%(5)
- ------------------------------------------------------------------------------
</TABLE>
(1) Berger Associates has voluntarily agreed to waive its advisory fee to
the extent that the Berger New Generation Fund's normal operating expenses in
any fiscal year, including the management fee and the 12b-1 fee, but
excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.90% of the Fund's average daily net assets for that fiscal year.
(2) Fund is sub-advised by PWM. See text preceding and following table.
The investment advisory fee is allocated among the Investor Shares and other
classes of the Fund on the basis of net assets attributable to each such
class.
(3) Berger Associates has voluntarily agreed to waive its advisory fee to
the extent that the Fund's normal operating expenses in any fiscal year,
including the management fee, but excluding the 12b-1 fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed 2-1/2% of the
first $30,000,000 of average daily net assets, plus 2% of the next
$70,000,000, plus 1-1/2% of the balance of the average daily net assets of
the Fund for that fiscal year.
(4) The Berger/BIAM International Fund bears its pro rata portion of the
fee paid by the Berger/BIAM International Portfolio to BBOI Worldwide as the
advisor. The Fund is sub-advised by BIAM. See text preceding and following
table. BBOI Worldwide has agreed to waive the investment advisory fee paid
by the Portfolio under the Investment Advisory Agreement to the extent that
the Portfolio's normal operating expenses in any fiscal year, including the
investment advisory fee and custodian fees, but excluding brokerage
commissions, interest, taxes and extraordinary expenses, exceed 1.00% of the
Portfolio's average daily net assets for that fiscal year. Any reduction in
the advisory fee paid by the Portfolio will also reduce the pro rata share of
the advisory fee borne indirectly by the Berger/BIAM International Fund.
(5) Berger Associates has voluntarily agreed to waive its advisory fee to
the extent that the Berger Balanced Fund's normal operating expenses in any
fiscal year, including the investment advisory fee and the 12b-1 fee, but
excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.50% of the Fund's average daily net assets for that fiscal year.
Each Fund's current Investment Advisory Agreement will continue in
effect until the last day of April, 1998 or 1999, and thereafter from year to
year if such continuation is specifically approved at least annually by the
directors or trustees or by vote of a majority of the outstanding shares of
the Fund and in either case by vote of a majority of the directors or
trustees who are not "interested persons" (as that term is defined in the
1940 Act) of the Fund or the advisor. Each Agreement is subject to
termination by the Fund or the advisor on 60 days' written notice, and
terminates automatically in the event of its assignment.
Under the Sub-Advisory Agreement between the advisor and the
sub-advisors for the Berger/BIAM International Portfolio and the Berger Small
Cap Value Fund, the sub-advisor is responsible for day-to-day investment
management. The sub-advisor manages the investments and determines what
securities and other investments will be acquired, held or disposed of,
consistent with the investment objective and policies established by the
trustees. No fees are paid directly to the sub-advisors by the Funds. PWM,
as the sub-advisor of the Berger Small Cap Value Fund, receives from the
advisor a fee at the annual rate of 0.90% of the first $75 million of average
daily net asset of the Fund, 0.50% of the next $125 million, and 0.20% of any
amounts in excess of $200 million. BIAM, as the sub-advisor of the
Berger/BIAM International Portfolio, receives from the advisor a fee at the
annual rate of 0.45% of the average daily net assets of the Portfolio.
During certain periods, BIAM may voluntarily waive all or a portion of its
fee under the Sub-Advisory Agreement, which will not affect the fee paid by
the Portfolio to the advisor.
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<PAGE>
The Sub-Advisory Agreements for the Berger Small Cap Value Fund and
the Berger/BAM International Portfolio will continue in effect until April 1998,
and thereafter from year to year if such continuation is specifically approved
at least annually by the trustees or by vote of a majority of the outstanding
shares of the Fund and in either case by vote of a majority of the trustees of
the Fund who are not "interested persons" (as that term is defined in the
Investment Company Act of 1940) of the Fund or the advisor or the sub-advisor.
The Sub-Advisory Agreements are subject to termination by the Fund or the
sub-advisor on 60 days' written notice, and terminate automatically in the
event of their assignment and in the event of termination of the related
Investment Advisory Agreement.
OTHER ARRANGEMENTS BETWEEN BERGER ASSOCIATES AND PWM
Berger Associates and PWM entered into an Agreement, dated November
18, 1996 (the "November 18 Agreement"), under which, among other things, PWM
agreed that, so long as Berger Associates acts as the advisor to the Berger
Small Cap Value Fund and PWM provides sub-advisory or other services in
connection with the Fund, PWM will not manage or provide advisory services to
any registered investment company that is in direct competition with the Fund.
The November 18 Agreement also provides that at the end of the first
five years under the Sub-Advisory Agreement for that Fund (or at such earlier
time if the Sub-Advisory Agreement is terminated or not renewed by the trustees
other than for cause), Berger Associates and PWM will enter into a consulting
agreement for PWM to provide consulting services to Berger Associates with
respect to the Fund, subject to any requisite approvals under the Investment
Company Act of 1940. Under the Consulting Agreement, PWM would provide training
and assistance to Berger Associates analysts and marketing support appropriate
to the Fund and would be paid a fee at an annual rate of 0.10% of the first $100
million of average daily net assets of the Fund, 0.05% of the next $100 million
and 0.02% on any part in excess of $200 million. No part of the consulting fee
would be borne by the Fund.
TRADE ALLOCATIONS
Investment decisions for each Fund and other accounts advised by the
Funds' advisors and sub-advisors are made independently with a view to achieving
each of their respective investment objectives and after consideration of such
factors as their current holdings, availability of cash for investment and the
size of their investments generally. However, certain investments may be
appropriate for a Fund and one or more such accounts. If a Fund and other
accounts advised by a Fund's advisor or sub-advisor are contemporaneously
engaged in the purchase or sale of the same security, the orders may be
aggregated and/or the transactions averaged as to price and allocated equitably
to the Fund and each participating account. While in some cases, this policy
might adversely affect the price paid or received by a Fund or other
participating accounts, or the size of the position obtained or liquidated, the
advisor or sub-advisor will aggregate orders if it believes that coordination of
orders and the ability to participate in volume transactions will result in the
best overall combination of net price and execution.
RESTRICTIONS ON PERSONAL TRADING
Berger Associates permits its directors, officers, employees and other
access persons (as defined below) of Berger Associates ("covered persons") to
purchase and sell securities for their own accounts in accordance with
provisions governing personal investing in Berger Associates' Code of Ethics.
The Code requires all covered persons to conduct their personal securities
transactions in a manner which does not operate adversely to the interests of
the Funds or Berger Associates' other advisory clients. Directors and officers
of Berger Associates (including those who also serve as directors or trustees of
the Funds), investment personnel and other designated covered persons deemed to
have access to current trading information ("access persons") are required to
pre-clear all transactions in securities not otherwise exempt under the Code.
Requests for authority to trade will be denied pre-clearance when, among other
reasons, the proposed personal transaction would be contrary to the
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<PAGE>
provisions of the Code or would be deemed to adversely affect any transaction
then known to be under consideration for or currently being effected on
behalf of any client account, including the Funds.
In addition to the pre-clearance requirements described above, the
Code subjects those covered persons deemed to be access persons to various
trading restrictions and reporting obligations. All reportable transactions are
reviewed for compliance with Berger Associates' Code. Those covered persons
also may be required under certain circumstances to forfeit their profits made
from personal trading. The Code is administered by Berger Associates and the
provisions of the Code are subject to interpretation by and exceptions
authorized by its board of directors.
PWM has adopted a Code of Ethics which is substantially similar to the
Code adopted by Berger Associates. BBOI Worldwide has also adopted a Code of
Ethics substantially similar to the Code adopted by Berger Associates covering
all board members, officers, employees and other access persons (as defined
below) of BBOI Worldwide who are not also covered by an approved Code of Ethics
of an affiliated person who is an investment advisor ("covered persons"). At
present, there are no persons who would be covered by BBOI Worldwide's Code of
Ethics who are not also covered by the Code of Ethics of Berger Associates or
BIAM, which are both investment advisors affiliated with BBOI Worldwide.
BIAM has adopted a Code of Ethics which restricts its officers,
employees and other staff from personal trading in specified circumstances,
including among others prohibiting participation in initial public offerings,
prohibiting dealing in a security for the seven days before and after any trade
in that security on behalf of clients, prohibiting trading in a security while
an order is pending for any client on that same security, and requiring profits
from short-term trading in securities (purchase and sale within a 60-day period)
to be forfeited. In addition, staff of BIAM must report all of their personal
holdings in securities annually and must disclose their holdings in any private
company if an investment in that same company is being considered for clients.
Staff of BIAM are required to pre-clear all transactions in securities not
otherwise exempt under the Code of Ethics and must instruct their broker to
provide BIAM with duplicate confirmations of all such personal trades.
5. EXPENSES OF THE FUNDS
ALL FUNDS EXCEPT THE BERGER/BIAM INTERNATIONAL FUND
In addition to paying an investment advisory fee to its advisor, each
Fund (other than the Berger/BIAM International Fund) pays all of its expenses
not assumed by its advisor, including, but not limited to, custodian and
transfer agent fees, legal and accounting expenses, administrative and record
keeping expenses, interest charges, federal and state taxes, costs of share
certificates, expenses of shareholders' meetings, compensation of directors or
trustees who are not interested persons of Berger Associates, expenses of
printing and distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with the
execution of its portfolio transactions, including brokerage commissions on
purchases and sales of portfolio securities, which are considered a cost of
securities of each Fund. Each Fund also pays all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing and printing prospectuses for shareholders
of the Fund.
Under a separate Administrative Services Agreement with respect to
each of such Funds, Berger Associates performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial statements and reports to
be filed with the Securities and Exchange Commission and state regulatory
authorities. Each Fund pays Berger Associates a fee at an annual rate of 0.01%
of its average daily net assets for such services. These fees are in addition
to the investment advisory fees paid under the Investment Advisory
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<PAGE>
Agreement. The administrative services fees may be changed by the directors
or trustees without shareholder approval.
The following tables show the advisory fees and administrative
services fees paid by each of such Funds to Berger Associates for the periods
indicated and the amount of such fees waived on account of excess expenses under
applicable expense limitations.
BERGER NEW GENERATION FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997 $962,000 $20,000 $ 0 $982,000
1996* $398,000 $ 4,000 $ (85,000) $317,000
</TABLE>
* Covers period from March 29, 1996 (commencement of operations) through the end
of the Fund's first fiscal year on September 30, 1996.
BERGER SELECT FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997* N/A N/A N/A N/A
</TABLE>
* Fund did not commence operations until December 31, 1997.
BERGER SMALL COMPANY GROWTH FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997 $6,831,000 $ 78,000 $ 0 $6,909,000
1996 $5,902,000 $ 66,000 $ 0 $5,968,000
1995 $3,211,000 $ 36,000 $ 0 $3,247,000
</TABLE>
BERGER SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997* $ 418,000 $ 4,000 $ 0 $422,000
1996** $ 325,000 $ 0 $ 0 $325,000
1995** $ 275,000 $ 0 $ 0 $275,000
</TABLE>
* On February 14, 1997, new fee arrangements came into effect for the Fund with
shareholder approval, at which time Berger Associates became the Fund's advisor
and PWM, the Fund's former investment advisor, became the Fund's sub-advisor.
** Under the Investment Advisory Agreement in effect for the Fund until February
14, 1997, the Fund paid an advisory fee to PWM at an annual rate of 1.00% of the
Fund's average daily net assets. The Fund's fiscal year end was changed from
December 31
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<PAGE>
to September 30 during 1997. Accordingly, the amounts shown for 1995 and
1996 were paid by the Fund during the fiscal years ended December 31, 1995,
and December 31, 1996, respectively, and the amount shown for 1997 covers the
period January 1, 1996, through September 30, 1997.
BERGER MID CAP GROWTH FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997* N/A N/A N/A N/A
</TABLE>
* Fund did not commence operations until December 31, 1997.
BERGER 100 FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997 $14,424,000 $ 192,000 $ 0 $14,616,000
1996 $15,767,000 $ 210,000 $ 0 $15,977,000
1995 $15,754,000 $ 213,000 $ 0 $15,967,000
</TABLE>
BERGER GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997 $2,442,000 $ 32,000 $ 0 $2,474,000
1996 $2,496,000 $ 33,000 $ 0 $2,529,000
1995 $2,681,000 $ 36,000 $ 0 $2,717,000
</TABLE>
BERGER BALANCED FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended Investment Administrative Advisory Fee TOTAL
September 30, Advisory Fee Service Fee Waiver
----------------- ------------ -------------- ------------ -----
1997* N/A N/A N/A N/A
</TABLE>
* Fund did not commence operations until September 30, 1997.
Each of the Funds has appointed Investors Fiduciary Trust Company
("IFTC"), 127 W. 10th Street, Kansas City, MO 64105, as its recordkeeping and
pricing agent. In addition, IFTC also serves as the Funds' custodian, transfer
agent and dividend disbursing agent. IFTC has engaged DST Systems, Inc.
("DST"), P.O. Box 419958, Kansas City, MO 64141, as sub-agent to provide
transfer agency and dividend disbursing services for the Funds. Approximately
41% of the outstanding shares of DST are owned by KCSI. The addresses and
telephone numbers for DST set forth in the Prospectus and this Statement of
Additional Information should be used for correspondence with the transfer
agent.
As recordkeeping and pricing agent, IFTC calculates the daily net
asset value of each Fund and performs certain accounting and recordkeeping
functions required by the Funds. The Funds
-34-
<PAGE>
pay IFTC a monthly base fee plus an asset-based fee. IFTC is also reimbursed
for certain out-of-pocket expenses.
IFTC, as custodian, and its subcustodians have custody and provide for
the safekeeping of the Funds' securities and cash, and receive and remit the
income thereon as directed by the management of the Funds. The custodian and
subcustodians do not perform any managerial or policy-making functions for the
Funds. For its services as custodian, IFTC receives an asset-based fee plus
certain transaction fees and out-of-pocket expenses.
As transfer agent and dividend disbursing agent, IFTC (through DST,
as sub-agent) maintains all shareholder accounts of record; assists in
mailing all reports, proxies and other information to the Funds'
shareholders; calculates the amount of, and delivers to the Funds'
shareholders, proceeds representing all dividends and distributions; and
performs other related services. For these services, IFTC receives a fee
from the Funds at an annual rate of $14.00 per open Fund shareholder account,
subject to preset volume discounts, plus certain transaction fees and fees
for closed accounts, and is reimbursed for out-of-pocket expenses, which fees
in turn are passed through to DST as sub-agent.
All of IFTC's fees are subject to reduction pursuant to an agreed
formula for certain earnings credits on the cash balances of the Funds.
Earnings credits received by each Fund can be found on the Fund's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
BERGER/BIAM INTERNATIONAL FUND
The Berger/BIAM International Fund is allocated and bears indirectly
its pro rata share of the aggregate annual operating expenses of the
Berger/BIAM International Portfolio, since all of the investable assets of
the Fund are invested in the Portfolio.
Expenses of the Portfolio include, among others, its pro rata share of
the expenses of Berger/BIAM Worldwide Portfolios Trust, of which the Portfolio
is a series, such as: expenses of registering the Trust with securities
authorities; the compensation of its independent trustees; expenses of preparing
reports to investors and to governmental offices and commissions; expenses of
meetings of investors and trustees of the Trust; legal fees; and insurance
premiums of the Trust. Expenses of the Portfolio also include, among others,
the fees payable to the advisor under the Investment Advisory Agreement;
expenses connected with the execution of portfolio transactions, including
brokerage commissions on purchases and sales of portfolio securities (which are
considered a cost of securities of the Portfolio); custodian fees; auditors'
fees; interest and taxes imposed on the Portfolio; transfer agent, recordkeeping
and pricing agent fees; and such other non-recurring and extraordinary items as
may arise from time to time.
Expenses of the Berger/BIAM International Fund include, among others,
its pro rata share of the expenses of the Berger/BIAM Worldwide Funds Trust,
of which the Fund is a series, such as: expenses of registering the Trust
with securities authorities; expenses of meetings of the shareholders of the
Trust; and legal fees. Expenses of the Fund also include, among others,
registration and filing fees incurred in registering shares of the Fund with
securities authorities; 12b-1 fees; taxes imposed on the Fund; the fee
payable to the Advisor under the Administrative Services Agreement; and such
other non-recurring and extraordinary items as may arise from time to time.
SERVICE ARRANGEMENTS FOR THE FUND. Under an Administrative Services
Agreement with the Berger/BIAM International Fund, BBOI Worldwide serves as the
administrator of the Fund. In this capacity, it is responsible for
administering and managing all aspects of the Fund's day-to-day operations,
subject to the oversight of the trustees of the Fund. BBOI Worldwide is
responsible, at its expense, for furnishing (or procuring other parties to
furnish) all administrative services reasonably necessary for the operation of
the Fund, including recordkeeping and pricing services, custodian services,
transfer agency
-35-
<PAGE>
and dividend disbursing services, tax and audit services, insurance,
printing and mailing to shareholders of prospectuses and other required
communications, and certain other administrative and recordkeeping services,
such as coordinating matters relating to the operations of the Fund,
monitoring the Fund's status as a "regulated investment company" under the
Internal Revenue Code, coordinating registration of sufficient Fund shares
under federal and state securities laws, arranging for and supervising the
preparation of registration statements, tax returns, proxy materials,
financial statements and reports for filing with regulatory authorities and
distribution to shareholders of the Fund. Under the Administrative Services
Agreement, the Fund pays BBOI Worldwide a fee at an annual rate equal to the
lesser of (i) 0.45% of its average daily net assets, or (ii) BBOI Worldwide's
annual cost to provide or procure these services (including the fees of any
services providers whose services are procured by BBOI Worldwide), plus an
additional 0.02% of the Fund's average daily net assets. The trustees of the
Fund regularly review amounts paid to and expenditures incurred by BBOI
Worldwide pursuant to the Administrative Services Agreement. In addition, in
the event that BBOI Worldwide's duties under the Administrative Services
Agreement are delegated to another party, BBOI Worldwide may take into
account, in calculating the cost of such services, only the costs incurred by
such other party in discharging the delegated duties.
Under a Sub-Administration Agreement between BBOI Worldwide and Berger
Associates, Berger Associates has been delegated the responsibility to perform
certain of the administrative and recordkeeping services required under the
Administrative Services Agreement and to procure, at BBOI Worldwide's expense,
third parties to provide the services not provided by Berger Associates. Under
the Sub-Administration Agreement, Berger Associates is paid a fee by BBOI
Worldwide of 0.25% of the Fund's average daily net assets for its services.
During certain periods, Berger Associates may voluntarily waive all or a portion
of its fee from BBOI Worldwide, which will not affect the fee paid by the Fund
to BBOI Worldwide under the Administrative Services Agreement.
IFTC has been appointed to provide recordkeeping and pricing services
to the Fund, including calculating the daily net asset value of the Fund, and to
perform certain accounting and recordkeeping functions that it requires. In
addition, IFTC has been appointed to serve as the Fund's custodian, transfer
agent and dividend disbursing agent. IFTC has engaged DST as sub-transfer agent
to provide transfer agency and dividend disbursing services for the Fund. The
fees of Berger Associates, IFTC and DST are all paid by BBOI Worldwide.
Approximately 41% of the outstanding shares of DST are owned by KCSI, which also
owns 100% of the outstanding shares of Berger Associates.
SERVICE ARRANGEMENTS FOR THE PORTFOLIO. Under the Investment Advisory
Agreement between BBOI Worldwide and the Berger/BIAM International Portfolio, in
addition to providing investment advisory services, BBOI Worldwide is
responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. BBOI Worldwide is
responsible for providing certain of these services at its own expense, such as
compliance monitoring and preparing investor communications, which have been
delegated to Berger Associates as part of the Sub-Administration Agreement
discussed above. Other services are procured from third party service providers
at the Portfolio's own expense, such as custody, recordkeeping and pricing
services.
The Portfolio has appointed IFTC as recordkeeping and pricing agent to
calculate the daily net asset value of the Portfolio and to perform certain
accounting and recordkeeping functions required by the Portfolio. In addition,
the Portfolio has appointed IFTC as its custodian and transfer agent. IFTC has
engaged State Street Bank and Trust Company ("State Street"), P.O. Box 351,
Boston, MA 02101, as sub-custodian for the Portfolio. For custodian,
recordkeeping and pricing services, the Portfolio pays fees directly to IFTC
based on a percentage of its net assets, subject to certain minimums, and
reimburses IFTC for certain out-of-pocket expenses.
For the period October 11, 1996 (commencement of operations) through
the end of the Portfolio's first fiscal year on September 30, 1997, the
Portfolio paid BBOI Worldwide $560,000 for its services under the Investment
Advisory Agreement, which was reduced by a $61,000 advisory fee
-36-
<PAGE>
waiver. The investment advisory fee paid by the Portfolio is borne
indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio. In addition, during the same period, the Fund paid BBOI Worldwide
$63,000 for its services under the Administrative Services Agreement.
As noted above with respect to the other Berger Funds, all of IFTC's
fees are subject to reduction pursuant to an agreed formula for certain earnings
credits on the cash balances maintained with it as custodian. Earnings credits
received by the Portfolio can be found on the Portfolio's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
12b-1 PLANS
Each of the Funds has adopted a 12b-1 plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, which provides for the
payment to Berger Associates of a 12b-1 fee of 0.25% per annum of the Fund's
average daily net assets to finance activities primarily intended to result in
the sale of Fund shares. The expenses paid by Berger Associates may include,
but are not limited to, payments made to, and costs incurred by, a Fund's
principal underwriter in connection with the distribution of Fund shares,
including payments made to and expenses of officers and registered
representatives of the Distributor; payments made to and expenses of other
persons (including employees of Berger Associates) who are engaged in, or
provide support services in connection with, the distribution of Fund shares,
such as answering routine telephone inquiries and processing shareholder
requests for information; compensation (including incentive compensation and/or
continuing compensation based on the amount of customer assets maintained in a
Fund) paid to securities dealers, financial institutions and other organizations
which render distribution and administrative services in connection with the
distribution of Fund shares, including services to holders of Fund shares and
prospective investors; costs related to the formulation and implementation of
marketing and promotional activities, including direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising; costs
of printing and distributing prospectuses and reports to prospective
shareholders of Fund shares; costs involved in preparing, printing and
distributing sales literature for Fund shares; costs involved in obtaining
whatever information, analyses and reports with respect to market and
promotional activities on behalf of a Fund relating to Fund shares that Berger
Associates deems advisable; and such other costs relating to Fund shares as the
Fund may from time to time reasonably deem necessary or appropriate in order to
finance activities primarily intended to result in the sale of Fund shares.
Such 12b-1 fee payments are to be made by each Fund to Berger Associates with
respect to each fiscal year of the Fund without regard to the actual
distribution expenses incurred by Berger Associates in such year; that is, if
the distribution expenditures incurred by Berger Associates are less than the
total of such payments in such year, the difference is not to be reimbursed to
the Fund by Berger Associates, and if the distribution expenditures incurred by
Berger Associates are more than the total of such payments, the excess is not to
be reimbursed to Berger Associates by the Fund.
From time to time a Fund may engage in activities which jointly
promote the sale of Fund shares and other funds that are or may in the future be
advised or administered by Berger Associates, which costs are not readily
identifiable as related to any one fund. In such cases, Berger Associates
allocates the cost of the activity among the funds involved on the basis of
their respective net assets, unless otherwise directed by the directors or
trustees.
The current 12b-1 Plans will continue in effect until the end of April
1998, and from year to year thereafter if approved at least annually by each
Fund's directors or trustees and those directors or trustees who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Plan or any related agreements by votes cast in person
at a meeting called for such purpose. The Plans may not be amended to increase
materially the amount to be spent on distribution of Fund shares without
shareholder approval.
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<PAGE>
Following are the payments made to Berger Associates pursuant to the
Plans for the fiscal year ended September 30, 1997:
<TABLE>
<CAPTION>
FUND 12B-1 PAYMENTS
-------------------------- ---------------
<S> <C>
Berger New Generation Fund $ 267,000
Berger Select Fund(1) N/A
Berger Small Company Growth Fund(2) $1,899,000
Berger Small Cap Value Fund(3) $ 36,000
Berger Mid Cap Growth Fund(1) N/A
Berger 100 Fund $4,808,000
Berger/BIAM International Fund $ 35,000
Berger Growth and Income Fund $ 814,000
Berger Balanced Fund(1) N/A
</TABLE>
(1) The Berger Balanced Fund did not commence operations until
September 30, 1997. The Berger Select Fund and the Berger Mid Cap Growth
Fund did not commence operations until December 31, 1997.
(2) See text following table.
(3) The Berger Small Cap Value Fund has adopted a 12b-1 Plan only with
respect to the Investor Shares, the class of shares of the Fund covered by this
SAI.
Effective November 17, 1997, and for so long as the Berger Small
Company Growth Fund remains closed to new investors, Berger Associates has
voluntarily agreed to waive the 12b-1 fee paid by that Fund to the extent the
fee is not utilized by Berger Associates to provide, or to compensate other
companies for providing, shareholder services to Fund shareholders in connection
with the distribution of Fund shares.
OTHER EXPENSE INFORMATION
The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed on an agency basis through DST Securities,
Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When
transactions are effected through DSTS, the commission received by DSTS is
credited against, and thereby reduces, certain operating expenses that the Fund
would otherwise be obligated to pay. No portion of the commission is retained
by DSTS. See Section 6--Brokerage Policy for further information concerning the
expenses reduced as a result of these arrangements. DSTS may be considered an
affiliate of Berger Associates due to the ownership interest of KCSI in both
DSTS and Berger Associates.
The Funds and/or their advisors have entered into arrangements with
certain brokerage firms and other companies(such as recordkeepers and
administrators) to provide administrative services (such as sub-transfer agency,
recordkeeping, shareholder communications, sub-accounting and/or other
services) to investors purchasing shares of the Funds through those firms or
companies. A Fund's advisor or a Fund (if approved by its directors or
trustees) may pay fees to these companies for their services. These companies
may also be appointed as agents for or authorized by the Funds to accept on
their behalf purchase and redemption requests that are received in good order.
Subject to Fund approval, certain of these companies may be authorized to
designate other entities to accept purchase and redemption orders on behalf of
the Funds.
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<PAGE>
DISTRIBUTOR
The distributor (principal underwriter) of each Fund's shares is
Berger Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite
900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates
for its costs in distributing the Funds' shares.
6. BROKERAGE POLICY
Although each Fund retains full control over its own investment
policies, under the terms of its Investment Advisory Agreement, the advisor is
directed to place the portfolio transactions of the Fund. A report on the
placement of brokerage business is given to the directors or trustees of each
Fund every quarter, indicating the brokers with whom Fund portfolio business was
placed and the basis for such placement. The brokerage commissions paid by the
Funds during the past three fiscal years were as follows:
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended
September 30, September 30, September 30,
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
BERGER NEW GENERATION $ 165,000 $ 939,000(1) N/A
FUND
BERGER SELECT FUND(2) N/A N/A N/A
BERGER SMALL COMPANY $1,044,000 $ 604,000 $ 487,000
GROWTH FUND
BERGER SMALL CAP VALUE $ 306,000 $ 307,000 $ 342,000
FUND (3)
BERGER MID CAP GROWTH N/A N/A N/A
FUND(2)
BERGER 100 FUND $6,671,000 $4,691,000 $4,589,000
BERGER/BIAM INTERNATIONAL $ 234,000 N/A N/A
FUND
BERGER GROWTH AND $1,124,000 $ 769,000 $ 754,000
INCOME FUND
BERGER BALANCED FUND(2) N/A N/A N/A
</TABLE>
(1) Covers period from March 29, 1996 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1996. The Fund paid more
brokerage commissions than anticipated during this period as a result of
portfolio transactions undertaken in response to volatile markets and the short
tax year for its initial period of operations.
(2) The Berger Balanced Fund did not commence operations until September 30,
1997. The Berger Select Fund and the Berger Mid Cap Growth Fund did not
commence operations until December 31, 1997.
(3) The Fund's fiscal year end was changed from December 31 to September 30
during 1997. Accordingly, the brokerage commissions shown for 1995 and 1996
were paid by the Fund during the fiscal years ended December 31, 1995, and
December 31, 1996, and the brokerage commissions shown for 1997 cover the period
January 1, 1997, through September 30, 1997.
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<PAGE>
(4) These are brokerage commissions paid by the Portfolio in which all the
Fund's investable assets are invested. Commissions paid the Portfolio are borne
indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio. Covers period November 7, 1996 (commencement of operations) through
the end of the Portfolio's first fiscal year on September 30, 1997.
The Investment Advisory Agreement each Fund has with its advisor
authorizes and directs the advisor to place portfolio transactions for the Fund
only with brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission rates.
However, each Agreement specifically authorizes the advisor to place such
transactions with a broker with whom it has negotiated a commission that is in
excess of the commission another broker or dealer would have charged for
effecting that transaction if the advisor determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such broker viewed in terms of either that
particular transaction or the overall responsibilities of the advisor.
In accordance with this provision of the Agreement, portfolio
brokerage business of each Fund may be placed with brokers who provide useful
research services to the advisor or, where applicable, the sub-advisor. Such
research services include computerized stock quotation and trading services,
fundamental and technical analysis data and software, broker and other
third-party equity research, computerized stock market and business news
services, economic research and account performance data. During the fiscal
year ended September 30, 1997, of the brokerage commissions paid by the
Funds, the following amounts were paid to brokers who agreed to provide to
the Fund selected research services prepared by the broker or subscribed or
paid for by the broker on behalf of the Fund: Berger New Generation Fund:
$14,810; Berger Small Company Growth Fund: $24,864; Berger Small Cap Value
Fund: $6,312; Berger 100 Fund: $750,126; Berger/BIAM International Fund: $0;
and Berger Growth and Income Fund: $222,188. Those services included a
service used by the independent directors or trustees of the Funds in
reviewing the Investment Advisory Agreements.
The research services received from brokers are often helpful to
the advisor or sub-advisor in performing its investment advisory
responsibilities to the Funds, but they are not essential, and the
availability of such services from brokers does not reduce the responsibility
of the advisor's or sub-advisor's advisory personnel to analyze and evaluate
the securities in which the Funds invest. The research services obtained as
a result of the Funds' brokerage business also will be useful to the advisor
or sub-advisor in making investment decisions for its other advisory
accounts, and, conversely, information obtained by reason of placement of
brokerage business of such other accounts may be used by the advisor or
sub-advisor in rendering investment advice to the Funds. Although such
research services may be deemed to be of value to the advisor or sub-advisor,
they are not expected to decrease the expenses that the advisor or
sub-advisor would otherwise incur in performing its investment advisory
services for the Funds nor will the advisory fees that are received by the
advisor from the Funds be reduced as a result of the availability of such
research services from brokers.
The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed on an agency basis through DSTS, a
wholly-owned broker-dealer subsidiary of DST. When transactions are effected
through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Fund would otherwise be
obligated to pay. No portion of the commission is retained by DSTS. DSTS may
be considered an affiliate of Berger Associates due to the ownership interest
of KCSI in both DSTS and Berger Associates.
Included in the brokerage commissions paid by the Funds during the
last three fiscal years, as stated in the preceding Brokerage Commissions
table, are the following amounts paid to DSTS, which served to reduce each
Fund's out-of-pocket expenses as follows:
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<PAGE>
DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS
<TABLE>
<CAPTION>
DSTS Reduction in DSTS Reduction in DSTS Reduction in
Commissions Expenses FYE Commissions Expenses FYE Commissions Expenses
Paid 9/30/97(1) Paid FYE 9/30/96(1) Paid FYE FYE
FYE 9/30/97 9/30/96 9/30/95 9/30/95(1)
----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Berger New Generation Fund $ 0 $ 0 $ 0 $ 0 N/A N/A
Berger Select Fund(2) N/A N/A N/A N/A N/A N/A
Berger Small Company $ 42,000(3) $ 31,000 $ 13,000 $ 10,000 $ 0 $ 0
Growth Fund
Berger Small Cap Value $ 10,000(4) $ 7,000 N/A N/A N/A N/A
Fund
Berger Mid Cap Growth N/A N/A N/A N/A N/A N/A
Fund(2)
Berger 100 Fund $527,000(5) $396,000 $278,000 $209,000 $13,000 $10,000
Berger/BIAM International $ 0 $ 0 N/A N/A N/A N/A
Fund
Berger Growth and Income $ 35,000(6) $ 26,000 $ 15,000 $ 11,000 $ 0 $ 0
Fund
Berger Balanced Fund(2) N/A N/A N/A N/A N/A N/A
</TABLE>
(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.
(2) The Berger Balanced Fund did not commence operations until September 30,
1997. The Berger Select Fund and the Berger Mid Cap Growth Fund did not
commence operations until December 31, 1997.
(3) Constitutes 4% of the aggregate brokerage commissions paid by the Berger
Small Company Growth Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Small Company Growth Fund.
(4) Constitutes 3% of the aggregate brokerage commissions paid by the Berger
Small Cap Value Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Small Cap Value Fund.
(5) Constitutes 8% of the aggregate brokerage commissions paid by the Berger
100 Fund and less than 1% of the aggregate dollar amount of transactions placed
by the Berger 100 Fund.
(6) Constitutes 3% of the aggregate brokerage commissions paid by the Berger
Growth and Income Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Growth and Income Fund.
Under the Investment Advisory Agreement in effect until February 14,
1997, for the Berger Small Cap Value Fund, the Fund's then advisor was permitted
to place the Fund's brokerage with affiliated brokers, subject to adhering to
certain procedures adopted by the trustees and subject to obtaining prompt
execution of orders at the most favorable net price. Of the brokerage
commissions shown on the Brokerage Commissions table above, the following
amounts were paid by the Fund to PWM, then the Fund's advisor, now the Fund's
sub-advisor, which is also a registered broker-dealer.
-41-
<PAGE>
BERGER SMALL CAP VALUE FUND
BROKERAGE COMMISSIONS PAID TO PWM
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
December 31, 1995 December 31, 1996 September 30, 1997(1)
- ----------------- ----------------- ---------------------
$ 342,000 $ 307,000 $ 138,000
</TABLE>
(1) The Fund's fiscal year end was changed during 1997. Covers the period
January 1, 1997, through February 14, 1997.
On February 14, 1997, new arrangements for the Berger Small Cap Value
Fund came into effect with shareholder approval and since that time, the
trustees have not authorized the Fund's brokerage to be placed with any broker
or dealer affiliated with the advisor or sub-advisor, except through DSTS under
the circumstances described above.
In selecting broker and dealers and in negotiating commissions, the
Funds' advisors and sub-advisors consider a number of factors, including
among others: the advisor's or sub-advisor's knowledge of currently available
negotiated commission rates or prices of securities currently available and
other current transaction costs; the nature of the security being traded; the
size and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the desired timing of the trade; the
activity existing and expected in the market for the particular security;
confidentiality; the quality of the execution, clearance and settlement
services; financial stability of the broker or dealer; the existence of
actual or apparent operational problems of any broker or dealer; and research
products or services provided. The directors or trustees of the Funds have
also authorized sales of shares of the Fund by a broker-dealer and the
recommendations of a broker-dealer to its customers that they purchase Fund
shares to be considered as factors in the selection of broker-dealers to
execute portfolio transactions for the Funds. In addition, payments made by
brokers to a Fund or to other persons on behalf of a Fund for services
provided to the Fund for which it would otherwise be obligated to pay may
also be considered. In placing portfolio business with any such broker or
dealer, the advisors and sub-advisors of the Funds will seek the best
execution of each transaction.
During the fiscal year ended September 30, 1997, the Berger New
Generation Fund acquired securities of Hambrecht & Quist Group, one of the
Fund's regular broker-dealers. However, as of September 30, 1997, the Fund did
not own any of those securities.
7. HOW TO PURCHASE SHARES IN THE FUNDS
Minimum Initial Investment $2,000.00
Minimum Subsequent Investment $ 50.00
To purchase shares in any of the Funds, simply complete the
application form enclosed with the Prospectus. Then mail it with a check
payable to "Berger Funds" to the Funds in care of DST Systems, Inc., the Funds'
sub-transfer agent, as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
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If a shareholder is adding to an existing account, shares may also be
purchased by placing an order by telephone call to the Funds at 1-800-551-5849
or via on-line access, and remitting payment to DST Systems, Inc. Payment for
shares ordered on-line must be made by electronic funds transfer. In order to
make sure that payment for telephone purchases is received on time, shareholders
are encouraged to remit payment by electronic funds transfer. Shareholders may
also remit payment for telephone purchases by wire or by overnight delivery.
In addition, Fund shares may be purchased through certain
broker-dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These
broker-dealers and other organizations may charge investors a transaction or
other fee for their services, may require different minimum initial and
subsequent investments than the Funds and may impose other charges or
restrictions different from those applicable to shareholders who invest in
the Funds directly. Fees charged by these organizations will have the effect
of reducing a shareholder's total return on an investment in Fund shares. No
such charge will apply to an investor who purchases Fund shares directly from
a Fund as described above.
Procedures for purchasing, selling (redeeming) and exchanging Fund
shares by telephone and on-line are described in the Prospectus. The Funds may
terminate or modify those procedures and related requirements at any time,
although shareholders of the Funds will be given notice of any termination or
material modification. Berger Associates may, at its own risk, waive certain
of those procedures and related requirements.
CLOSING OF BERGER SMALL COMPANY GROWTH FUND TO NEW INVESTORS. The
Berger Small Company Growth Fund was closed to new investors effective November
17, 1997. Due to the Fund's current size relative to the range of suitable
investments available to the Fund, the Trustees determined that it is in the
best interests of the Fund and its shareholders to restrict the Fund's growth at
this time. Currently, you may purchase shares in the Fund if:
- You are an existing shareholder in the Fund as of the closing date
and you:
- Add to your account through the purchase of additional Fund shares.
- Add to your account through the reinvestment of dividends and cash
distributions from any shares owned in the Fund.
- You purchase shares as a participant in a 401(k) or other employee
benefit plan that the Fund has approved to include shares of the Fund
as an investment alternative.
- You purchase shares as an employee of an eligible employer that
established an omnibus 403(b) account with the Fund on or before
November 17, 1997.
If you redeem or exchange all your remaining Fund shares, you will not
be permitted to buy back into the Fund so long as the Fund remains closed to new
investors. If your Fund account drops below the applicable minimum balance, all
your remaining shares will be subject to involuntary redemption by the Fund as
described in the Prospectus.
The Fund may resume sales to new investors at some future date if the
Trustees of the Fund determine that it is in the best interests of the Fund and
its shareholders. All of the other Berger Funds continue to be available to new
investors.
8. HOW THE NET ASSET VALUE IS DETERMINED
The net asset value of each Fund is determined once daily, at the
close of the regular trading session of the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., New York time, Monday through Friday) each day
that the Exchange is open. The Exchange is closed and the net asset value of
the Funds is not determined on weekends and on New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and
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Christmas Day each year. The per share net asset value of each Fund is
determined by dividing the total value of its securities and other assets,
less liabilities, by the total number of shares outstanding.
Net asset value for the Berger Small Cap Value Fund is calculated by
class, and since the Investor Shares and each other class of the Fund has its
own expenses, the per share net asset value of the Fund will vary by class.
Since the Berger/BIAM International Fund invests all of its investable
assets in the Berger/BIAM International Portfolio, the value of the Fund's
investable assets will be equal to the value of its beneficial interest in the
Portfolio. The value of securities held in the Portfolio are determined as
described below for the Funds.
In determining net asset value for each of the Funds, securities
listed or traded primarily on national exchanges, The Nasdaq Stock Market and
foreign exchanges are valued at the last sale price on such markets, or, if such
a price is lacking for the trading period immediately preceding the time of
determination, such securities are valued at the mean of their current bid and
asked prices. Securities that are traded in the over-the-counter market are
valued at the mean between their current bid and asked prices. The market value
of individual securities held by each Fund will be determined by using prices
provided by pricing services which provide market prices to other mutual funds
or, as needed, by obtaining market quotations from independent broker/dealers.
Short-term money market securities maturing within 60 days are valued on the
amortized cost basis, which approximates market value. All assets and
liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the directors or
trustees.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the Exchange. The
values of foreign securities used in computing the net asset value of the shares
of a Fund are determined as of the earlier of such market close or the closing
time of the Exchange. Occasionally, events affecting the value of such
securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities may be valued at
their fair value as determined in good faith pursuant to consistently applied
procedures established by the directors or trustees.
A Fund's securities may be listed primarily on foreign exchanges or
over-the-counter dealer markets which may trade on days when the Exchange is
closed (such as a customary U.S. holiday) and on which the Fund's net asset
value is not calculated. As a result, the net asset value of a Fund may be
significantly affected by such trading on days when shareholders cannot purchase
or redeem shares of the Fund.
9. INCOME DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAX TREATMENT
This discussion summarizes certain U.S. federal income tax issues
relating to the Funds. As a summary, it is not an exhaustive discussion of all
possible tax ramifications. Accordingly, shareholders are urged to consult with
their tax advisors with respect to their particular tax consequences.
TAX STATUS OF THE FUNDS. If a Fund meets certain investment and
distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely
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manner to shareholders. It also may be subject to an excise tax on
undistributed income if it does not meet certain timing requirements for
distributions. Each of the Funds intends to qualify as a RIC annually and to
make timely distributions in order to avoid income and excise tax liabilities.
TAX ON FUND DISTRIBUTIONS. With certain exceptions provided by law,
the Funds will report annually to the Internal Revenue Service and to each
shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by a Fund, whether received in cash or reinvested
in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.
In general, net capital gains from assets held by a Fund for more than
18 months will be subject to a maximum tax rate of 20%; net capital gains from
assets held for more than one year but no more than 18 months will be subject to
a maximum tax rate of 28%; and net capital gains from assets held for one year
or less will be taxed as ordinary income. Distributions will be subject to
these capital gains rates, regardless of how long a shareholder has held Fund
shares.
If a Fund's distributions for a taxable year exceeds its tax earnings
and profits available for distribution, all or a portion of its distributions
may be treated as a return of capital or as capital gains. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.
If a shareholder has elected to receive dividends and/or capital gain
distributions in cash and the U.S. Postal Service is unable to deliver checks to
the shareholder's address of record, or if a shareholder's checks remain
uncashed for six months, the Funds reserve the right to reinvest the amount
distributed in additional Fund shares at the then-current NAV and to convert the
shareholder's distribution option from receiving cash to having all dividend and
other distributions reinvested in additional shares. In addition, no interest
will accrue on amounts represented by uncashed distribution or redemption
checks.
TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be subject to tax
on the disposition of their Fund shares. In general, such dispositions may give
rise to a capital gain or loss, the treatment of which will depend on the
shareholder's holding period in the Fund shares. Tax laws may prevent the
deduction of a loss on the sale of Fund shares if the shareholder reinvests in
the Fund shortly before or after the sale giving rise to the loss. Any loss on
the redemption or other sale or exchange of Fund shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gain distribution received on the shares.
INCOME FROM FOREIGN SOURCES. Dividends and interest received by the
Funds on foreign securities may give rise to withholding and other taxes imposed
by foreign countries, although these taxes may be reduced by applicable tax
treaties. Foreign taxes will generally be treated as expenses of the Funds,
unless a Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, shareholders of
the Fund may be able to deduct (as an itemized deduction) or claim a foreign tax
credit for their share of foreign taxes, subject to limitations prescribed in
the tax law.
If a Fund invests in a foreign corporation that is a passive foreign
investment company (a "PFIC"), special rules apply that may affect the tax
treatment of gains from the sale of the stock and may cause a Fund to incur IRS
interest charges. The Funds may make appropriate tax elections to mitigate the
tax effects of owning PFIC stock, including elections to "mark-to-market" PFIC
shares each year. The mark-to-market regime may increase or decrease a Fund's
distributable income.
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INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Funds'
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to gain or loss that
could affect a Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles" may affect the character
and/or timing of other gains and losses of the Fund. If a Fund enters into a
transaction (such as a "short sale against the box") that reduces the risk of
loss on an appreciated financial position that it already holds, the entry into
the transaction may constitute a constructive sale and require immediate
recognition of gain.
BACKUP WITHHOLDING. In general, if a shareholder is subject to backup
withholding, a Fund will be required to withhold federal income tax at a rate of
31% from distributions to that shareholder. These payments are creditable
against the shareholder's federal income tax liability.
FOREIGN SHAREHOLDERS. Foreign shareholders of a Fund generally will
be subject to a 30% U.S. withholding tax on dividends paid by a Fund from
ordinary income and short-term capital gain, although the rate may be reduced by
a tax treaty. If a foreign shareholder dies while owning Fund shares, those
shares may be subject to U.S. estate taxes.
TAX STATUS OF THE BERGER/BIAM INTERNATIONAL PORTFOLIO. The
Berger/BIAM International Portfolio, in which the Berger/BIAM International Fund
invests all its investable assets, has in previous years been classified as a
partnership for U.S. federal income tax purposes, and it intends to retain that
classification. The Berger/BIAM International Fund is treated for various
federal tax purposes as owning a proportionate share of the Portfolio's assets
and will be taxable on its proportionate share of the Portfolio's income, gain
and loss.
10. SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended for any period during which
the New York Stock Exchange is closed or the Securities and Exchange Commission
determines that trading on the Exchange is restricted, or when there is an
emergency as determined by the Securities and Exchange Commission as a result of
which it is not reasonably practicable for a Fund to dispose of securities owned
by it or to determine the value of its net assets, or for such other period as
the Securities and Exchange Commission may by order permit for the protection of
shareholders of a Fund.
Each Fund intends to redeem its shares only for cash, although it
retains the right to redeem its shares in-kind under unusual circumstances, in
order to protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. Each Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
method of valuing securities used to make redemption in-kind will be the same as
the method of valuing portfolio securities described under Section 8.
11. TAX-SHELTERED RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for
individuals, businesses and non-profit organizations, including a Profit-Sharing
Plan, a Money Purchase Pension Plan, an Individual Retirement Account (IRA), a
Roth IRA and a 403(b) Custodial Account for adoption by employers and
individuals who wish to participate in such Plans. For information on other
types of retirement plans
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offered by the Funds, please call 1-800-333-1001 or
write to the Funds c/o Berger Associates, P.O. Box 5005, Denver, CO 80217.
PROFIT-SHARING AND MONEY PURCHASE PENSION PLANS
Employers, self-employed individuals and partnerships may make
tax-deductible contributions to the tax-qualified retirement plans offered by
the Funds. All income and capital gains accumulated in the Plans are tax free
until withdrawn. The amounts that are deductible depend upon the type of Plan
or Plans adopted.
If you, as an employer, self-employed person or partnership, adopt the
Profit-Sharing Plan, you may vary the amount of your contributions from year to
year and may elect to make no contribution at all for some years. If you adopt
the Money Purchase Pension Plan, you must commit yourself to make a contribution
each year according to a formula in the Plan that is based upon your employees'
compensation or your earned income. By adopting both the Profit-Sharing and the
Money Purchase Pension Plan, you can increase the amount of contributions that
you may deduct in any one year.
If you wish to purchase shares of any Fund in conjunction with one
or both of these tax-qualified plans, you may use an Internal Revenue Service
approved prototype Trust Agreement and Retirement Plan available from the
Funds. IFTC serves as trustee of the Plan, for which it charges an annual
trustee's fee for each Fund or Cash Account Trust Money Portfolio (discussed
below) in which the participant's account is invested. Contributions under
the Plans are invested exclusively in shares of the Funds or the Cash Account
Trust Money Market Portfolios, which are then held by the trustee under the
terms of the Plans to create a retirement fund in accordance with the tax
code.
Distributions from the Profit-Sharing and Money Purchase Pension Plans
generally may not be made without penalty until the participant reaches
age 591/2 and must begin no later than April 1 of the calendar year following
the year in which the participant attains age 701/2. A participant who is not a
5% owner of the employer may postpone such distributions to April 1 of the
calendar year following the year of retirement. This exception does not apply
to distributions from an individual retirement account (IRA). Except for
required distributions after age 701/2, periodic distributions over more than 10
years and the distribution of any after-tax contributions, distributions are
subject to 20% Federal income tax withholding unless those distributions are
rolled directly to another qualified plan or an IRA. Participants may not be
able to receive distributions immediately upon request because of certain
requirements under federal tax law. Since distributions which do not satisfy
these requirements can result in adverse tax consequences, consultation with an
attorney or tax advisor regarding the Plans is recommended. You should also
consult with your tax advisor regarding state tax law implications of
participation in the Plans.
In order to receive the necessary materials to create a
Profit-Sharing or Money Purchase Pension Plan, please write to the Funds, c/o
Berger Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call
1-800-333-1001. Trustees for 401(k) or other existing plans interested in
utilizing Fund shares as an investment or investment alternative in their
plans should contact the Funds at 1-800-333-1001.
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
If you are an individual with compensation or earned income, whether
or not you are actively participating in an existing qualified retirement plan,
you can provide for your own retirement by adopting an IRA. Under an IRA, you
can contribute each year up to the lesser of 100% of your compensation or
$2,000. If you are married and you file a joint return, you and your spouse
together may make contributions totaling up to $4,000 to two IRAs (with no more
than $2,000 being contributed to either account) if your joint income is $4,000
or more, even if one spouse has no earned income. If neither you nor your
spouse are active participants in an existing qualified retirement plan, or if
your
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income does not exceed certain amounts, the amounts contributed to your IRA
can be deducted for Federal income tax purposes whether or not your
deductions are itemized. If you or your spouse are covered by an existing
qualified retirement plan, the deductibility of your IRA contributions will
be phased out for federal income tax purposes if your income exceeds
specified amounts, although the income level at which your IRA contributions
will no longer be deductible is higher if only your spouse (but not you) is
an active participant. However, whether your contributions are deductible or
not, the income and capital gains accumulated in your IRA are not taxed until
the account is distributed.
If you wish to create an IRA to invest in shares of any Fund, you may
use the Fund's IRA custodial agreement form which is an adaptation of the form
provided by the Internal Revenue Service. Under the IRA custodial agreement,
IFTC will serve as custodian, for which it will charge an annual custodian fee
for each Fund or Cash Account Trust Money Market Portfolio in which the IRA is
invested.
Distributions from an IRA generally may not be made without penalty
until you reach age 591/2 and must begin no later than April 1 of the calendar
year following the year in which you attain age 701/2. Since distributions
which do not satisfy these requirements can result in adverse tax consequences,
consultation with an attorney or tax advisor is recommended.
In order to receive the necessary materials to create an IRA account,
please write to the Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver,
Colorado 80217, or call 1-800-333-1001.
ROTH IRA
If you are an individual with compensation or earned income, you may
contribute up to the lesser of $2,000 or 100% of your compensation to a Roth
IRA, as long as your income does not exceed a specified income level ($95,000
for single individuals, $150,000 for married individuals filing jointly). A
Roth IRA is similar in many respects to a traditional IRA, as described above.
However, the maximum amount you may contribute to a Roth IRA is phased out
between that income level and a maximum income amount ($110,000 and $160,000,
respectively), and you may not make any contribution at all to a Roth IRA if
your income exceeds the maximum income amount. Also, you can make contributions
to a Roth IRA even after you reach age 70-1/2, and you are not required to take
distributions from a Roth IRA prior to your death.
Contributions to a Roth IRA are not deductible for federal income tax
purposes. However, the income and capital gains accumulated in a Roth IRA are
not taxed while held in the IRA, and distributions can be taken tax-free if the
Roth IRA has been established for a minimum of five years and the distribution
is after age 59-1/2, for a first time home purchase, or upon death or
disability.
An individual with an income of less than $100,000 who is not married
filing separately can roll his or her existing IRA into a Roth IRA. However,
the individual must pay taxes on the taxable amount of the traditional IRA
account balance. Individuals who complete the rollover in 1998 will be
permitted to spread the tax liability over a four-year period. After 1996, all
taxes on such a rollover will be due in the year in which the rollover is made.
403(b) CUSTODIAL ACCOUNTS
If you are employed by a public school system or certain federally
tax-exempt private schools, colleges, universities, hospitals, religious and
charitable or other nonprofit organizations, you may establish a 403(b)
Custodial Account. Your employer must participate in the establishment of the
account.
If your employer participates, it will automatically deduct the amount
you designate from your gross salary and contribute it to your 403(b) Custodial
Account. The amount which you may contribute annually under a salary reduction
agreement is generally the lesser of $9,500 or your exclusion
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allowance, which is based upon a specified formula, and other Internal
Revenue Code limits apply. There is a $50 minimum investment in the 403(b)
Custodial Account. Contributions made to the account reduce the amount of
your current income subject to Federal income tax. Federal income tax is not
paid on your contribution until you begin making withdrawals. In addition,
all income and capital gains accumulated in the account are tax-free until
withdrawn.
Withdrawals from your 403(b) Custodial Agreement may begin as soon as
you reach age 59-1/2 and must begin no later than April 1 of the year following
the later of the calendar year in which you attain age 701/2 or the calendar
year in which you retire. Except for required distributions after age 701/2 and
periodic distributions over more than 10 years, distributions are subject to 20%
Federal income tax withholding unless those distributions are rolled directly to
another 403(b) account or annuity or an individual retirement account (IRA).
You may not be able to receive distributions immediately upon request because of
certain notice requirements under federal tax law. Since distributions which do
not satisfy these requirements can result in adverse tax consequences,
consultation with an attorney or tax advisor regarding the 403(b) Custodial
Account is recommended. You should also consult with your tax advisor about
state taxation of your account.
Individuals who wish to purchase shares of a Fund in conjunction with
a 403(b) Custodial Account may use a Custodian Account Agreement and related
forms available from the Funds. IFTC serves as custodian of the 403(b)
Custodial Account, for which it charges an annual custodian fee for each Fund or
Cash Account Trust Money Market Portfolio in which the participant's account is
invested.
In order to receive the necessary materials to create a 403(b)
Custodial Account, please write to the Funds, c/o Berger Associates, Inc., P.O.
Box 5005, Denver, Colorado 80217, or call 1-800-333-1001.
12. EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN
A shareholder who owns shares of any of the Funds worth at least
$5,000 at the current net asset value may establish a Systematic Withdrawal
account from which a fixed sum will be paid to the shareholder at regular
intervals by the Fund in which the shareholder is invested.
To establish a Systematic Withdrawal account, the shareholder deposits
Fund shares with the Fund and appoints the Fund as agent to redeem shares in the
shareholder's account in order to make monthly, quarterly, semi-annual or annual
withdrawal payments to the shareholder of a fixed amount. The minimum
withdrawal payment is $50.00. These payments generally will be made on the 25th
day of the month.
Withdrawal payments are not yield or income on the shareholder's
investment, since portions of each payment will normally consist of a return of
the shareholder's investment. Depending on the size of the disbursements
requested and the fluctuation in value of the Fund's portfolio, redemptions for
the purpose of making such disbursements may reduce or even exhaust the
shareholder's account.
The shareholder may vary the amount or frequency of withdrawal
payments, temporarily discontinue them, or change the designated payee or
payee's address, by notifying the Fund. The shareholder may, of course, make
additional deposits of Fund shares in the shareholder's account at any time.
Since redemption of shares to make withdrawal payments is a taxable
event, each investor should consult a tax advisor concerning proper tax
treatment of the redemption.
Any shareholder may exchange any or all of the shareholder's shares in
any of the Funds for shares of any of the other available Berger Funds or for
shares of the Money Market Portfolio, the
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Government Securities Portfolio or the Tax-Exempt Portfolio of the Berger
Cash Account Trust ("Berger CAT Portfolios"), separately managed,
unaffiliated money market funds, without charge, after receiving a current
prospectus of the other Fund or Berger CAT Portfolio. The exchange privilege
with the Berger CAT Portfolios does not constitute an offering or
recommendation of the shares of any such Berger CAT Portfolio by any of the
Funds or Berger Associates. Berger Associates is compensated for
administrative services it performs with respect to the Berger CAT
Portfolios.
Exchanges into or out of the Funds are made at the net asset value per
share next determined after the exchange request is received. Each exchange
represents the sale of shares from one Fund and the purchase of shares in
another, which may produce a gain or loss for income tax purposes. An exchange
of shares may be made by written request directed to DST Systems, Inc., via
on-line access, or simply by telephoning the Berger Funds at 1-800-551-5849.
This privilege is revocable by any of the Funds, and is not available in any
state in which the shares of the Fund or Berger CAT Portfolio being acquired in
the exchange are not eligible for sale. Shareholders automatically have
telephone and on-line privileges to authorize exchanges unless they specifically
decline this service in the account application or in writing.
13. PERFORMANCE INFORMATION
From time to time in advertisements, the Funds may discuss their
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as THE WALL STREET JOURNAL, INVESTOR'S BUSINESS DAILY, MONEY,
BARRON'S, FINANCIAL WORLD or KIPLINGER'S PERSONAL FINANCE MAGAZINE. In
addition, the Funds may compare their performance to that of recognized
broad-based securities market indices, including the Standard & Poor's 500 Stock
Index, the Dow Jones Industrial Average, the Russell 2000 Stock Index, the
Standard & Poor's 400 Mid-Cap Index, the Standard & Poor's 600 Small Cap Index,
Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index,
the Dow Jones World Index, the Standard & Poor's/BARRA Value Index, the Nasdaq
Composite Index or the Lehman Brothers Intermediate Term Government/Corporate
Bond Index, or more narrowly-based or blended indices which reflect the market
sectors in which that Fund invests.
The total return of each Fund is calculated for any specified period
of time by assuming the purchase of shares of the Fund at the net asset value at
the beginning of the period. Each dividend or other distribution paid by the
Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
Each Fund's total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the entire period. Total return
figures are based on the overall change in value of a hypothetical investment in
each Fund. Because average annual total returns for more than one year tend to
smooth out variations in a Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.
All performance figures for the Funds are based upon historical
results and do not assure future performance. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
Quotations of average annual total return for the Funds will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant
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to the following formula: P(1 + T)(n) = ERV (where P = a hypothetical
initial payment of $1,000, T = the average annual total return, n = the
number of years and ERV = the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the period). All total return
figures reflect the deduction of a proportional share of Fund expenses on an
annual basis, and assume that all dividends and distributions are reinvested
when paid.
PREDECESSOR PERFORMANCE QUOTATIONS
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM International
Portfolio (in which all the investable assets of the Berger/BIAM International
Fund are invested) commenced operations upon the transfer to the Portfolio of
assets held in a pooled trust (the "Pool") maintained by Citizens Bank New
Hampshire, for which BIAM had provided day-to-day portfolio management as
sub-advisor since the inception of the Pool. BIAM's bank holding company parent
indirectly owns a 23.5% interest in the parent of Citizens Bank New Hampshire.
The investment objective, policies, limitations, guidelines and strategies of
the Pool were materially equivalent to those of the Berger/BIAM International
Fund and the Portfolio. Assets from the Pool were transferred on October 11,
1996, to a separate "feeder" fund investing in the Portfolio which, in turn,
transferred those assets to the Portfolio in exchange for an interest in the
Portfolio. As a result of this transaction, the investment holdings in the
Portfolio were the same as the investment holdings in the portfolio of the Pool
immediately prior to the transfer, except for the seed capital provided by
Berger Associates.
The Pool was not a registered investment company since it was exempt
from registration under the Investment Company Act of 1940 (the "1940 Act").
Since, in a practical sense, the Pool constitutes the "predecessor" of the
Portfolio, the Fund calculates its performance for periods commencing prior to
the transfer of the Pool's assets to the Portfolio by including the Pool's total
return, adjusted at that time to reflect any increase in fees and expenses
applicable in operating the Fund, including the Fund's pro rata share of the
aggregate annual operating expenses, net of fee waivers, of the Portfolio.
Those fees and expenses included 12b-1 fees.
Performance data quoted for the Berger/BIAM International Fund for
periods prior to October 1996 include the performance of the Pool and include
periods before the Fund's and the Portfolio's registration statements became
effective. As noted above, the Pool was not registered under the 1940 Act and
thus was not subject to certain investment restrictions that are imposed on the
Fund and the Portfolio by the 1940 Act. If the Pool had been registered under
the 1940 Act, the Pool's performance might have been adversely affected.
BERGER SMALL CAP VALUE FUND. Shares of the Berger Small Cap Value
Fund had no class designations until February 14, 1997, when all of the
then-existing shares were designated as Institutional Shares and the Fund
commenced offering the Investor Shares covered in this Statement of Additional
Information. Performance data for the Investor Shares include periods prior to
the adoption of class designations on February 14, 1997, and therefore do not
reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Total
return of the Investor Shares and other classes of shares of the Fund will be
calculated separately. Because each class of shares is subject to different
expenses, the performance of each class for the same period will differ.
AVERAGE ANNUAL TOTAL RETURNS
The average annual total return for each of the Funds in existence for
various periods ending September 30, 1997, are shown on the following table:
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- -------------------------------------------------------------------------------
FUND 1-Year 3-Year 5-Year 10-Year Life of Fund
- -------------------------------------------------------------------------------
Berger New 31.5% N/A N/A N/A 33.9%
Generation Fund (since
3/29/96)
- -------------------------------------------------------------------------------
Berger Small 17.7% 26.8% N/A N/A 23.9%
Company Growth (since
Fund 12/30/93)
- -------------------------------------------------------------------------------
Berger Small Cap 48.3% 26.2% 25.1% N/A 16.7%
Value Fund - (since
Investor 10/21/87)(2)
Shares(1)
- -------------------------------------------------------------------------------
Berger 100 Fund 26.5% 17.9% 17.4% 17.7% 15.5%(3)
- -------------------------------------------------------------------------------
Berger/BIAM 15.7% 13.7% 13.4% N/A 13.4%
International (since
Fund(4) 7/31/89)
- -------------------------------------------------------------------------------
Berger Growth and 34.6% 19.3% 17.2% 12.7% 14.4%(3)
Income Fund
- -------------------------------------------------------------------------------
(1) Performance data for the Investor Shares include periods prior to the
Fund's adoption of class designations on February 14, 1997, and therefore do not
reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares, which
came into effect on that date.
(2) Covers the period from October 21, 1987 (date of the Fund's first public
offering) through September 30, 1997.
(3) Life of Fund covers the period from September 30, 1974 (immediately prior
to Berger Associates assuming the duties as the investment advisor for those
Funds) through September 30, 1997. Since the 12b-1 fees for the Berger 100 Fund
and the Berger Growth and Income Fund did not take effect until June 19, 1990,
the performance figures on the table do not reflect the deduction of the 12b-1
fees for the full length of the ten-year and longer periods.
(4) Data for the Berger/BIAM International Fund covering periods prior to
October 11, 1996, reflect the performance of the pool of assets transferred on
that date into the Berger/BIAM International Portfolio in which all of the
Fund's assets are invested, adjusted at that time to reflect any increase in
fees and expenses applicable in operating the Fund, including the Fund's pro
rata share of the aggregate annual operating expenses, net of fee waivers, of
the Portfolio.
The total return (not annualized) for the Berger Select Fund, the
Berger Mid Cap Growth Fund and the Berger Balanced Fund for the period from
commencement of operations through March 31, 1998, are shown on the following
table:
- -------------------------------------------------------------------------------
FUND Life of Fund
- -------------------------------------------------------------------------------
Berger Select Fund 37.1%
(since 12/31/97)
- -------------------------------------------------------------------------------
Berger Mid Cap Growth Fund 26.0%
(since 12/31/97)
- -------------------------------------------------------------------------------
Berger Balanced Fund 58.1%
(since 9/30/97)
- -------------------------------------------------------------------------------
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14. ADDITIONAL INFORMATION
FUND ORGANIZATION
BERGER 100 FUND AND BERGER GROWTH AND INCOME FUND. The Berger 100
Fund and Berger Growth and Income Fund are separate corporations which were
incorporated under the laws of the State of Maryland on March 10, 1966, as "The
One Hundred Fund, Inc." and "The One Hundred and One Fund, Inc.", respectively.
The names "Berger One Hundred Fund-Registered Trademark-", "Berger
100 Fund-Registered Trademark-", "Berger One Hundred and One Fund-Registered
Trademark-" and "Berger 101 Fund-Registered Trademark-" were adopted by the
respective Funds as service marks and trade names in November 1989. In 1990,
the shareholders of the Berger Growth and Income Fund approved changing its
formal corporate name to "Berger One Hundred and One Fund, Inc." and the Fund
began doing business under the trade name "Berger Growth and Income Fund, Inc."
in January 1996.
Each of the Berger 100 Fund and the Berger Growth and Income Fund has
only one class of securities, its Capital Stock, with a par value of one cent
per share, of which 200,000,000 shares are authorized for issue by the
Berger 100 Fund and 100,000,000 shares are authorized for issue by the
Berger Growth and Income Fund. Shares of the Funds are fully paid and
nonassessable when issued. All shares issued by a Fund participate equally in
dividends and other distributions by the Fund, and in the residual assets of the
Fund in the event of its liquidation.
BERGER SMALL COMPANY GROWTH FUND, BERGER NEW GENERATION FUND, BERGER
BALANCED FUND, BERGER SELECT FUND AND BERGER MID CAP GROWTH FUND. The
Berger Small Company Growth Fund is a separate series established on August 23,
1993, under the Berger Investment Portfolio Trust, a Delaware business trust
established under the Delaware Business Trust Act. The name "Berger Small
Company Growth Fund-Registered Trademark-" was registered as a service mark in
September 1995. The Berger New Generation Fund was the second series created
under the Berger Investment Portfolio Trust, established on December 21, 1995.
The Berger Balanced Fund was the third series created under the Berger
Investment Portfolio Trust, established on August 22, 1997. The Berger Select
Fund and the Berger Mid Cap Growth Fund were the fourth and fifth series created
under the Trust, established on November 13, 1997. The Trust is authorized to
issue an unlimited number of shares of beneficial interest in series or
portfolios. Currently, the Berger Small Company Growth Fund, the Berger New
Generation Fund, the Berger Balanced Fund, the Berger Select Fund and the Berger
Mid Cap Growth Fund are the only series established under the Trust, although
others may be added in the future. The Trust is also authorized to establish
multiple classes of shares representing differing interests in an existing or
new series. Shares of the Funds are fully paid and nonassessable when issued.
Each share has a par value of $.01. All shares issued by each Fund participate
equally in dividends and other distributions by the Fund, and in the residual
assets of the Fund in the event of its liquidation.
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM Worldwide Funds Trust
is a Delaware business trust organized on May 31, 1996. The Berger/BIAM
International Fund was established on May 31, 1996, as a series of the Trust.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest in series or portfolios. Currently, the series comprising the Fund is
one of three series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of
shares representing differing interests in an existing or new series. Shares of
the Fund are fully paid and non-assessable when issued. Each share has a par
value of $.01. All shares issued by the Fund participate equally in dividends
and other distributions by the Fund, and in the residual assets of the Fund in
the event of its liquidation.
Berger/BIAM Worldwide Portfolios Trust is also a Delaware business
trust organized on May 31, 1996. The Berger/BIAM International Portfolio (in
which all the investable assets of the Berger/BIAM International Fund are
invested) was established on May 31, 1996, as a series of that Trust. Like the
Berger/BIAM International Fund, the Portfolio is a diversified, open-end
management investment company. The Portfolio commenced operations upon the
transfer to the Portfolio of assets held in a
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<PAGE>
pooled trust. See "Performance Information -- Predecessor Performance Data
- -- Berger/BIAM International Fund" above for additional information on the
asset transfer. The Berger/BIAM Worldwide Portfolios Trust is authorized to
sell unlimited interests in series or portfolios. Interests may be divided
into classes. Currently, the series comprising the Portfolio is the only
series established under that Trust, although others may be added in the
future.
Each investor in the Portfolio, including the Fund, is entitled to
a vote in proportion to the amount of its investment in the Portfolio.
Whenever the Fund is requested to vote as an investor in the Portfolio on
matters pertaining to the Portfolio (other than a vote by the Fund to
continue the operation of the Portfolio upon the withdrawal of another
investor in the Portfolio), the Fund will hold a meeting of its shareholders
and will cast all of its votes as an investor in the Portfolio in the same
proportion as directed by the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the votes cast by the Fund at
the meeting of the Portfolio investors. The percentage of the votes
representing the Fund's shareholders who do not vote will be voted by the
Fund in the same proportion as the Fund's shareholders who do, in fact, vote.
BERGER SMALL CAP VALUE FUND. The Berger Small Cap Value Fund was
originally organized in November 1984 as a Delaware corporation. In May 1990,
the Fund was reorganized from a Delaware corporation into a Massachusetts
business trust known as The Omni Investment Fund. Pursuant to the Fund's
reorganization, the Fund as a series of the Trust assumed all of the assets and
liabilities of the Fund as a Delaware corporation, and Fund shareholders
received shares of the Massachusetts business trust equal both in number and net
asset value to their shares of the Delaware corporation. All references in this
Statement of Additional Information to the Fund and all financial and other
information about the Fund prior to such reorganization are to the Fund as a
Delaware corporation. All references after such reorganization are to the Fund
as a series of the Trust. On February 14, 1997, the name of the Trust was
changed to Berger Omni Investment Trust and the name of the Fund was changed to
the Berger Small Cap Value Fund.
The Trust is authorized to issue an indefinite number of shares of
beneficial interest having a par value of $0.01 per share, which may be issued
in any number of series. Currently, the Fund is the only series established
under the Trust, although others may be added in the future. The shares of each
series of the Trust are permitted to be divided into classes. Currently, the
Fund issues two classes of shares, although others may be added in the future.
Under the Fund's Declaration of Trust, each trustee will continue in
office until the termination of the Trust or his or her earlier death,
resignation, incapacity, retirement or removal. Vacancies will be filled by a
majority vote of the remaining trustees, subject to the provisions of the
Investment Company Act of 1940. Shareholders have the power to vote for the
election and removal of trustees, to terminate or reorganize the Trust, to amend
the Declaration of Trust, and on any other matters on which a shareholder vote
is required by the Investment Company Act of 1940, the Declaration of Trust, the
Trust's bylaws or the trustees.
DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law, shareholders
of the Funds organized as series of Delaware Business Trusts will enjoy the same
limitations on personal liability as extended to stockholders of a Delaware
corporation. Further, the Trust Instruments of those Trusts provides that no
shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for or otherwise existing with respect to,
the Trusts or any particular series (fund) of the Trusts. However, the
principles of law governing the limitations of liability of beneficiaries of a
business trust have not been authoritatively established as to business trusts
organized under the laws of one jurisdiction but operating or owning property in
other jurisdictions. In states that have adopted legislation containing
provisions comparable to the Delaware Business Trust Act, it is believed that
the limitation of liability of beneficial owners provided by Delaware law should
be respected. In those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the shareholders of the
Trusts are not entitled to the limitations of liability set forth in Delaware
law or
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<PAGE>
the Trust Instruments and, accordingly, that they may be personally liable
for the obligations of the Trusts.
In order to protect shareholders from such potential liability, the
Trust Instruments require that every written obligation of the Trusts or any
series thereof contain a statement to the effect that such obligation may only
be enforced against the assets of the Trusts or such series. The Trust
Instruments also provides for indemnification from the assets of the relevant
series for all losses and expenses incurred by any shareholder by reason of
being or having been a shareholder, and that the Trusts shall, upon request,
assume the defense of any such claim made against such shareholder for any act
or obligation of the relevant series and satisfy any judgment thereon from the
assets of that series.
As a result, the risk of a shareholder of the Funds in those Trusts
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations.
The Trusts believe that the risk of personal liability to shareholders of the
Fund is therefore remote. The trustees intend to conduct the operations of the
Trusts and the Funds so as to avoid, to the extent possible, liability of
shareholders for liabilities of the Trusts or the Funds.
MASSACHUSETTS BUSINESS TRUST INFORMATION. Under Massachusetts law,
shareholders of the Berger Small Cap Value Fund could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust of the Berger Omni Investment Trust, of which
the Fund is a series, 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 the trustees.
The Declaration of Trust provides for indemnification out of the property of the
Fund for all loss and expense of any shareholder of the Fund held personally
liable for the obligations of the Fund. Accordingly, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Trust believes that the risk of personal liability to shareholders of the Fund
is therefore remote. The trustees intend to conduct the operations of the Fund
to avoid, to the extent possible, liability of shareholders for liabilities of
the Fund.
CORPORATE GOVERNANCE INFORMATION PERTAINING TO ALL FUNDS. None of the
Funds is required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by the
directors or trustees. If shareholders owning at least 10% of the outstanding
shares of the Berger 100 Fund, the Berger Growth and Income Fund or any of the
Trusts so request, a special shareholders' meeting of that Fund or Trust will be
held for the purpose of considering the removal of a director or trustee, as the
case may be. Special meetings will be held for other purposes if the holders of
at least 25% of the outstanding shares of any of those Funds or Trusts so
request. Subject to certain limitations, the Funds/Trusts will facilitate
appropriate communications by shareholders desiring to call a special meeting
for the purpose of considering the removal of a director or trustee.
Shareholders of the Funds and, where applicable, the other series of
the same business trust, generally vote separately on matters relating to those
respective series, although they vote together and with the holders of any other
series of the same business trust in the election of trustees of the trust and
on all matters relating to the trust as a whole. Each full share of each Fund
has one vote.
Shares of the Funds have non-cumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
directors or trustees can elect 100% of the directors or trustees if they choose
to do so and, in such event, the holders of the remaining less than 50% of the
shares voting for the election of directors or trustees will not be able to
elect any person or persons as directors or trustees.
Shares of the Funds have no preemptive rights. There are no sinking
funds or arrearage provisions which may affect the rights of the Fund shares.
Fund shares have no subscription rights or
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<PAGE>
conversion rights, except that shareholders of any class of the Berger Small
Cap Value Fund may convert their shares into shares of any other class of the
Fund in the event and only in the event the shareholder ceases to be eligible
to purchase or hold shares of the original class, or becomes eligible to
purchase shares of a different class, by reason of a change in the
shareholder's status under the conditions of eligibility in effect for such
class at that time. Shares of the Funds may be transferred by endorsement,
or other customary methods, but none of the Funds is bound to recognize any
transfer until it is recorded on its books.
MORE INFORMATION ON SPECIAL FUND STRUCTURES
MULTI-CLASS. All of the Funds are permitted to divide their shares
into classes. However, currently, only the Berger Small Cap Value Fund has
divided its shares into classes and has two classes of shares outstanding, the
Investor Shares covered by this SAI and the Institutional Shares offered through
a separate Prospectus and SAI. The Berger Small Cap Value Fund implemented its
multi-class structure by adopting a Rule 18f-3 Plan under the 1940 Act
permitting it to issue its shares in classes. The Fund's Rule 18f-3 Plan
governs such matters as class features, dividends, voting, allocation of income
and expenses between classes, exchange and trustee monitoring of the Plan. Each
class is subject to such investment minimums and other conditions of eligibility
as are set forth in the relevant prospectus for the class, as it may be amended
from time to time. Institutional Shares are designed for institutional,
individual and other investors willing to maintain a higher minimum account
balance, currently set at $100,000. Information concerning Institutional Shares
is available from the Fund at 1-800-706-0539.
Subject to the Trust's Declaration of Trust and any other applicable
provisions, the trustees of the Trust have the authority to create additional
classes, or change existing classes, from time to time, in accordance with Rule
18f-3 under the Act.
MASTER/FEEDER. Unlike other mutual funds that directly acquire and
manage their own portfolios of securities, the Berger/BIAM International Fund
(referred to as a feeder fund) seeks to achieve its investment objective by
investing all of its investable assets in the Berger/BIAM International
Portfolio (referred to as a master fund). This two-tier structure is commonly
known as a master/feeder. The Fund has the same investment objective and
policies as the Portfolio. The Fund will invest only in the Portfolio, and the
Fund's shareholders will therefore acquire only an indirect interest in the
investments of the Portfolio. The master/feeder fund structure is still
relatively new and lacks a substantial history.
In addition to selling a beneficial interest to the Fund, the
Portfolio may sell beneficial interests to other mutual funds or institutional
investors (that is, other feeder funds). Such investors will invest in the
Portfolio on the same terms and conditions and will pay their proportionate
share of the Portfolio's expenses. However, the other investors investing in
the Portfolio are not required to issue their shares at the same public offering
price as the Fund due to potential differences in expense structures.
Accordingly, investors in the Fund should be aware that these differences may
result in differences in returns experienced by investors in the different funds
that invest in the Portfolio. Such differences in returns are common in this
type of mutual fund structure and are also present in other mutual fund
structures. Information concerning other investors in the Portfolio (for
example, other feeder funds) is available from the Fund at 1-800-706-0539.
Shareholders willing to maintain an account balance of not less than$1,000,000
may want to consider the International Equity Fund (designed for eligible trusts
or bank trust departments) or the Berger/BIAM International CORE Fund, which are
both other feeder funds that, like the Fund, invest all of their investable
assets in the Portfolio.
The investment objective of the Fund may not be changed without the
approval of the Fund's shareholders. The investment objective of the Portfolio
may not be changed without the approval of the investors in the Portfolio,
including the Fund. If the objective of the Portfolio changes and the
shareholders of the Fund do not approve a parallel change in the Fund's
investment objective, the
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trustees of the Trust will consider other alternatives, including seeking an
alternative investment vehicle or directly retaining the Fund's own
investment advisor.
Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a
larger fund invests or withdraws from the Portfolio, the remaining funds may
experience lower or higher pro rata operating expenses. Lower returns could
possibly result from a large withdrawal. However, this possibility also exists
for traditionally structured funds which have large or institutional investors.
Also, a fund with a greater pro rata ownership in the Portfolio could have
effective voting control over the operations of the Portfolio.
Whenever the Fund is requested to vote as an investor in the Portfolio
on matters pertaining to the Portfolio (other than a vote by the Fund to
continue the operation of the Portfolio upon the withdrawal of another investor
in the Portfolio), the Fund will hold a meeting of its shareholders and will
cast all of its votes as an investor in the Portfolio in the same proportion as
directed by the votes of the Fund's shareholders. Fund shareholders who do not
vote will not affect the votes cast by the Fund at the meeting of the Portfolio
investors. The percentage of the votes representing the Fund's shareholders who
do not vote will be voted by the Fund in the same proportion as the Fund's
shareholders who do, in fact, vote.
The Fund may withdraw its investment in the Portfolio at any time, if
the trustees of the Trust determine that it is in the best interests of the Fund
to do so. Certain changes in the Portfolio's investment objective, policies and
limitations may require the Fund to withdraw its investment in the Portfolio.
Upon any such withdrawal, the trustees would consider what action might be
taken, including investing the Fund's assets in another pooled investment entity
having the same investment objective and policies as the Fund or retaining an
investment advisor to manage the Fund's assets in accordance with the investment
policies described above with respect to the Portfolio. Any such withdrawal
could result in a distribution in-kind of portfolio securities (as opposed to a
cash distribution) from the Portfolio. If securities are distributed, the Fund
could incur brokerage, tax or other charges in converting the securities to
cash. In addition, a distribution in-kind may adversely affect the liquidity of
the Fund.
The trustees of the Berger/BIAM Worldwide Funds Trust and the
Berger/BIAM Worldwide Portfolios Trust are the same individuals. A majority of
the trustees of each of those Trusts who are not "interested persons" (as
defined in the Investment Company Act of 1940) of either Trust have adopted
written procedures reasonably appropriate to deal with potential conflicts of
interest arising from the fact that the same individuals are trustees of both
Trusts, up to and including creating a new board of trustees for one or the
other of the Trusts.
PRINCIPAL SHAREHOLDERS
Insofar as the management of the Funds is aware, as of December 17,
1997, no person owned, beneficially or of record, more than 5% of the
outstanding shares of any of the Funds, except for the following:
- -------------------------------------------------------------------------------
OWNER FUND PERCENTAGE
- -------------------------------------------------------------------------------
Charles Schwab & Co. Inc. Berger New Generation Fund 17.30%
("Schwab") ----------------------------------------------------
101 Montgomery Street Berger Small Company Growth Fund 24.57%
San Francisco, CA 94104 ----------------------------------------------------
Berger Small Cap Value Fund 25.87%
(Investor Shares)
----------------------------------------------------
Berger 100 Fund 24.80%
----------------------------------------------------
Berger/BIAM International Fund 23.96%
- -------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------
Berger Growth and Income Fund 27.82%
Berger Balanced Fund 9.52%
- -------------------------------------------------------------------------------
National Financial Berger New Generation Fund 8.48%
Services Corporation ----------------------------------------------------
("Fidelity") Berger Small Company Growth Fund 7.68%
82 Devonshire Street, ----------------------------------------------------
R20A Berger Small Cap Value Fund 22.37%
Boston, MA 02109 (Investor Shares)
- -------------------------------------------------------------------------------
In addition, Schwab owns of record 24.09%, and Fidelity owns of record
7.68%, of all the outstanding shares of the Berger Investment Portfolio Trust,
of which the Berger New Generation Fund, the Berger Select Fund, the Berger
Small Company Growth Fund, the Berger Mid Cap Growth Fund and the Berger
Balanced Fund are outstanding series. Schwab also owns of record 13.94%, and
Fidelity owns of record 12.05%, of all the outstanding shares of the Berger
Omni Investment Trust, of which the Berger Small Cap Value Fund - Investor
Share class is one of two outstanding classes in the only outstanding series.
Schwab also owns of record 20.41% of all the outstanding shares of the
Berger/BIAM Worldwide Funds Trust, of which the Berger/BIAM International Fund
is one of three outstanding series.
According to information provided by Schwab and Fidelity, Schwab and
Fidelity hold such shares as nominee for the beneficial owners of such shares
(none of whom own more than 5% of any of the Fund's outstanding shares), and
with respect to such shares, Schwab and Fidelity have no investment discretion
and, as nominee holders, only limited discretionary voting power.
DISTRIBUTION
Berger Distributors, Inc., as the Funds' Distributor, is the principal
underwriter of all the Funds' shares. The Distributor is a wholly-owned
subsidiary of Berger Associates. The Distributor is a registered broker-dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The Distributor acts as the agent of a
Fund in connection with the sale of the Fund's shares in all states in which the
shares are eligible for sale and in which the Distributor is qualified as a
broker-dealer.
Each of the Funds and the Distributor are parties to a Distribution
Agreement that continues through April 1998 or 1999, and thereafter from year to
year if such continuation is specifically approved at least annually by the
directors or trustees or by vote of a majority of the outstanding shares of the
Fund and in either case by vote of a majority of the directors or trustees who
are not "interested persons" (as that term is defined in the Investment Company
Act of 1940) of the Fund or the Distributor. The Distribution Agreement is
subject to termination by the Fund or the Distributor on 60 days' prior written
notice, and terminates automatically in the event of its assignment. Under the
Distribution Agreement, the Distributor continuously offers shares of the Funds
and solicits orders to purchase Fund shares at net asset value. The Distributor
is not compensated for its services under the Distribution Agreement, but may be
reimbursed by Berger Associates for its costs in distributing Fund shares.
OTHER INFORMATION
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado,
acts as counsel to the Funds.
Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, acted
as independent accountants for each Fund then in existence for the fiscal year
ended September 30, 1997.
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The Funds have each filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities of the Funds of which this Statement of
Additional Information is a part. If further information is desired with respect
to any of the Funds or such securities, reference is made to the Registration
Statements and the exhibits filed as a part thereof.
YEAR 2000
Mutual funds and businesses around the world depend on smooth
functioning computer systems. Many of those systems need to be modified to
distinguish the difference between the year 1900 and the year 2000. The
adviser, distributor, shareholder servicing and transfer agent, custodian and
certain other service providers to the Funds have reported that each expects to
modify its systems, as necessary, prior to January 1, 2000, to address the
so-called "year 2000 problem." However, there can be no assurance that the
problems will be corrected in all respects and that the Funds' operations and
services provided to shareholders will not be adversely affected.
FINANCIAL INFORMATION
The statements of assets and liabilities, including the schedules of
investments at September 30, 1997, and the related statements of operations for
the fiscal year/period ended September 30, 1997, and of changes in net assets
and the financial highlights for the Funds for each of the periods indicated,
and in each case the Report of Independent Accountants thereon dated November
11, 1997, are incorporated by reference into this Statement of Additional
Information from the Annual Report to Shareholders dated September 30, 1997, for
each of the Funds. A copy of the 1997 Annual Report for each of the Funds is
enclosed with this Statement of Additional Information.
The unaudited statements of assets and liabilities, including the
schedules of investments at March 31, 1998, and the related statements of
operations for the period ended March 31, 1998, and of changes in net assets and
the financial highlights for the Berger Balanced Fund, the Berger Select Fund
and the Berger Mid Cap Growth Fund for each of the periods indicated, are
incorporated by reference into this Statement of Additional Information from the
Semi-Annual Report to Shareholders dated March 31, 1998, for each of those
Funds. A copy of the March 31, 1998 Semi-Annual Report for each of those Funds
is enclosed with this Statement of Additional Information.
The reports of the Funds' prior independent accountants, to the extent
they cover the financial highlights for any of the Funds for either of the years
ended September 30, 1994 or 1993, or for the Berger Small Cap Value Fund, the
statement of changes in net assets for the year ended December 31, 1996, are
incorporated by reference into this Statement of Additional Information from the
Annual Report to Shareholders for each of those Funds covering those periods. A
copy of those Annual Reports may be obtained upon request without charge by
calling the Funds at 1-800-333-1001.
-59-
<PAGE>
APPENDIX A
HIGH-YIELD/HIGH-RISK SECURITIES
Each of the Funds may invest in convertible securities of any quality,
including unrated securities or securities rated below investment grade (Ba or
lower by Moody's, BB or lower by S&P). However, a Fund will not purchase any
security in default at the time of purchase. None of the Funds will invest more
than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade.
Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade securities are generally less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds. In the event of an
unanticipated default, a Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.
Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in a Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by a Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
director or trustees of the Fund, in consultation with the Fund's advisor, will
determine what action, if any, is appropriate in light of all relevant
circumstances.
Relying in part on ratings assigned by credit agencies in making
investments will not protect a Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.
Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.
Expenses incurred in recovering an investment in a defaulted security
may adversely affect a Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of a Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard &
Poor's are a generally accepted measurement of credit risk. However, they are
subject to certain limitations. Ratings are generally based upon historical
events and do not necessarily reflect the future. In addition, there is a
period of time
-60-
<PAGE>
between the issuance of a rating and the update of the rating, during which
time a published rating may be inaccurate.
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A-Bonds which are rated A 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 which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa 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.
Ba-Bonds which are rated Ba 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 good and bad times over the future. Uncertainty of position
characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
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.
Caa-Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca-Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system.
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
category.
-61-
<PAGE>
KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are out-weighed by the large uncertainties or major risk
exposures to adverse conditions.
C1-The rating C1 is reserved for income bonds on which no interest is
being paid.
D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
-62-
<PAGE>
BERGER INVESTMENT PORTFOLIO TRUST
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) FINANCIAL STATEMENTS.
In Part A of the Registration Statement (Prospectus):
1. Audited Financial Highlights for the periods indicated for the
Berger Small Company Growth Fund and the Berger New Generation
Fund.
2. Unaudited Financial Highlights for the periods indicated for the
Berger Select Fund, the Berger Mid Cap Growth Fund and the Berger
Balanced Fund.
Incorporated by reference into Part B of the Registration Statement
(Statement of Additional Information) from the September 30, 1997
Annual Report, for the Berger Small Company Growth Fund, the Berger
New Generation Fund and the Berger Balanced Fund:
1. Report of Independent Accountants, dated November 11, 1997
2. Statements of Assets and Liabilities as of September 30, 1997
3. Schedules of Investments as of September 30, 1997
4. Statements of Operations for the Year Ended September 30, 1997,
for the Berger Small Company Growth Fund and Berger New
Generation Fund
5. Statements of Changes in Net Assets for the Years Ended
September 30, 1997 and 1996, for the Berger Small Company Growth
Fund; for the Year Ended September 30, 1997, and the Period Ended
September 30, 1996, for the Berger New Generation Fund; and for
the Period Ended September 30, 1997 for the Berger Balanced Fund
6. Notes to Financial Statements, September 30, 1997
7. Financial Highlights for the periods indicated.
Incorporated by reference into Part B of the Registration Statement
(Statement of Additional Information) from the
C-1
<PAGE>
March 31, 1998 Semi-Annual Report, for the Berger Balanced Fund, the
Berger Select Fund and the Berger Mid Cap Growth Fund is the
following unaudited information:
1. Statements of Assets and Liabilities as of March 31, 1998
2. Schedules of Investments as of March 31, 1998
3. Statements of Operations for the Period Ended March 31, 1998
4. Statements of Changes in Net Assets for the Period Ended March
31, 1998
5. Notes to Financial Statements, March 31, 1998
6. Financial Highlights for the periods indicated.
In Part C of the Registration Statement:
None.
(b) EXHIBITS.
The Exhibit Index following the signature pages below is incorporated
herein by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders of shares of beneficial interest in the
Registrant as of April 22, 1998, as follows:
<TABLE>
<CAPTION>
(1) (2)
Number of
Title of Class Record Holders
----------------------------- --------------
<S> <C>
Shares of Beneficial 109,069
Interest in Berger Small
Company Growth Fund
Shares of Beneficial 24,578
Interest in Berger New
Generation Fund
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Shares of Beneficial 1,945
Interest in Berger
Balanced Fund
Shares of Beneficial 686
Interest in Berger
Select Fund
Shares of Beneficial 239
Interest in Berger
Mid Cap Growth Fund
</TABLE>
Item 27. INDEMNIFICATION
Article IX, Section 2 of the Trust Instrument for Berger Investment
Portfolio Trust (the "Trust"), of which the Fund is a series, provides for
indemnification of certain persons acting on behalf of the Trust to the
fullest extent permitted by the law. In general, trustees, officers,
employees and agents will be indemnified against liability and against all
expenses incurred by them in connection with any claim, action, suit or
proceeding (or settlement thereof) in which they become involved by virtue of
their Trust office, unless their conduct is determined to constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of their
duties, or unless it has been determined that they have not acted in good
faith in the reasonable belief that their actions were in or not opposed to
the best interests of the Trust. The Trust also may advance money for these
expenses, provided that the trustees, officers, employees or agents undertake
to repay the Trust if their conduct is later determined to preclude
indemnification. The Trust has the power to purchase insurance on behalf of
its trustees, officers, employees and agents, whether or not it would be
permitted or required to indemnify them for any such liability under the
Trust Instrument or applicable law, and the Trust has purchased and maintains
an insurance policy covering such persons against certain liabilities
incurred in their official capacities.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The business of Berger Associates, Inc., the investment adviser of the
Funds, is described in the Prospectus under the heading "Organization of the
Berger Fund Family -- Fund Organization and Expenses" and in the Statement of
Additional Information in Section 4 which are included in this Registration
Statement. Information relating to the business and other connections of the
officers and directors of Berger Associates (current and for the past two
years) is listed in Schedules A and D of Berger Associates' Form ADV as filed
with the Securities and
C-3
<PAGE>
Exchange Commission (File No. 801-9451, dated March 27, 1998), which
information from such schedules is incorporated herein by reference.
Item 29. PRINCIPAL UNDERWRITERS
(a) Investment companies (other than the Registrant) for which the
Registrant's principal underwriter also acts as principal underwriter:
The One Hundred Fund, Inc.
Berger One Hundred and One Fund, Inc.
Berger Omni Investment Trust
- --Berger Small Cap Value Fund
Berger Institutional Products Trust
- --Berger IPT - 100 Fund
- --Berger IPT - Growth and Income Fund
- --Berger IPT - Small Company Growth Fund
- --Berger/BIAM IPT - International Fund
Berger/BIAM Worldwide Funds Trust
- --Berger/BIAM International Fund
- --International Equity Fund
- --Berger/BIAM International CORE Fund
(b) For Berger Distributors, Inc.:
<TABLE>
<CAPTION>
Name Positions and Positions and
Offices with Offices with
Underwriter Registrant
- ----------------- ----------------- -------------------
<S> <C> <C>
Edgar F. Allison President and None
Director
David G. Mertens Vice President and None
Registrant
David J. Schultz Chief Financial Assistant Treasurer
Officer
Brian S. Ferrie Vice President and None
Chief Compliance
Officer
Kevin R. Fay Director Vice President,
Secretary and
Treasurer
</TABLE>
The principal business address of Mr. Mertens is 1850 Parkway Place, Suite
420, Marietta, GA 30067. The principal business address of each of the other
persons in the table above is 210 University Blvd., Suite 900, Denver, CO 80206.
C-4
<PAGE>
(c) Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's sub-transfer
agent, DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141;
(b) Accounting records relating to cash and other money balances; asset,
liability, reserve, capital, income and expense accounts; portfolio
securities; purchases and sales; and brokerage commissions are
maintained by the Registrant's Recordkeeping and Pricing Agent,
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105. Other records of the Registrant relating
to purchases and sales; the Trust Instrument, minute books and other
trust records; brokerage orders; performance information and other
records are maintained at the offices of the Registrant at
210 University Boulevard, Suite 900, Denver, Colorado 80206.
Item 31. MANAGEMENT SERVICES
The Registrant has no management-related service contract which is not
discussed in Parts A and B of this form. See Section 5 of the Statement of
Additional Information for a discussion of the Recordkeeping and Pricing Agent
Agreement entered into between the Registrant and IFTC and the Administrative
Services Agreement entered into between the Registrant and Berger Associates,
Inc., investment adviser to the Funds.
Item 32. UNDERTAKINGS
(a) The Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest annual report to shareholders,
upon request and without charge.
(b) Registrant undertakes to comply with the following policy with respect
to calling meetings of shareholders for the purpose of voting upon the removal
of any Trustee of the Registrant and facilitating shareholder communications
related to such meetings:
C-5
<PAGE>
1. The Trustees will promptly call a meeting of shareholders for the
purpose of voting upon the removal of any Trustee of the Registrant when
requested in writing to do so by the record holders of at least 10% of the
outstanding shares of the Registrant.
2. Whenever ten or more shareholders of record who have been shareholders
of the Registrant for at least six months, and who hold in the aggregate either
shares having a net asset value of at least $25,000 or at least 1% of the
outstanding shares of the Registrant, whichever is less, apply to the Trustees
in writing stating that they wish to communicate with other shareholders with a
view to obtaining signatures to request such a meeting, and deliver to the
Trustees a form of communication and request which they wish to transmit, the
Trustees within 5 business days after receipt of such application either will
(i) give such applicants access to a list of the names and addresses of all
shareholders of record of the Registrant, or (ii) inform such applicants of the
approximate number of shareholders of record and the approximate cost of mailing
the proposed communication and form of request.
3. If the Trustees elect to follow the course specified in clause (ii),
above, the Trustees, upon the written request of such applicants accompanied by
tender of the material to be mailed and the reasonable expenses of the mailing,
will, with reasonable promptness, mail such material to all shareholders of
record, unless within 5 business days after such tender the Trustees shall mail
to such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material requested to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
4. If the Commission enters an order either refusing to sustain any of
the Trustees' objections or declaring that any objections previously sustained
by the Commission have been resolved by the applicants, the Trustees will cause
the Registrant to mail copies of such material to all shareholders of record
with reasonable promptness after the entry of such order and the renewal of such
tender.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of Denver, and
State of Colorado, on the 30th day of April, 1998.
BERGER INVESTMENT PORTFOLIO TRUST
(Registrant)
By/s/ Gerard M. Lavin
--------------------------------------
Name: Gerard M. Lavin
---------------------------------
Title: President
--------------------------------
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Gerard M. Lavin President (Principal April 30, 1998
- ------------------------ Executive Officer)
Gerard M. Lavin and Director
Kevin R. Fay Vice President, April 30, 1998
- ------------------------ Secretary and Treasurer
Kevin R. Fay (Principal Financial
and Accounting Officer)
/s/ Dennis E. Baldwin Trustee April 30, 1998
- ------------------------
Dennis E. Baldwin*
/s/ William M.B. Berger Trustee April 30, 1998
- ------------------------
William M.B. Berger*
/s/ Louis R. Bindner Trustee April 30, 1998
- ------------------------
Louis R. Bindner*
C-7
<PAGE>
/s/ Katherine A. Cattanach Trustee April 30, 1998
- ------------------------
Katherine A. Cattanach*
/s/ Paul R. Knapp Trustee April 30, 1998
- ------------------------
Paul R. Knapp*
/s/ Harry T. Lewis, Jr. Trustee April 30, 1998
- ------------------------
Harry T. Lewis, Jr.*
/s/ Michael Owen Trustee April 30, 1998
- ------------------------
Michael Owen*
/s/ William Sinclaire Trustee April 30, 1998
- ------------------------
William Sinclaire*
Gerard M. Lavin
- ------------------------
*By Gerard M. Lavin
Attorney-in-Fact
C-8
<PAGE>
BERGER INVESTMENT PORTFOLIO TRUST
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ------------- ---------- --------------------------
<S> <C> <C>
* Exhibit 1 EX-99.B1 Trust Instrument
* Exhibit 2 EX-99.B2 Bylaws
Exhibit 3 Not applicable
Exhibit 4 Not applicable
* Exhibit 5.1 EX-99.B5.1 Form of Investment Advisory Agreement
for Berger Small Company Growth Fund
(7) Exhibit 5.2 Form of Investment Advisory Agreement
for Berger New Generation Fund
(9) Exhibit 5.3 Form of Investment Advisory Agreement
for Berger Balanced Fund
(12) Exhibit 5.4 Form of Investment Advisory Agreement
for Berger Select Fund
(12) Exhibit 5.5 Form of Investment Advisory Agreement
for Berger Mid Cap Growth Fund
** Exhibit 5.6 EX-99.B5.6 Form of Investment Advisory Agreement
for Berger Mid Cap Value Fund
** Exhibit 5.7 EX-99.B5.7 Form of Sub-Advisory Agreement for
Berger Mid Cap Value Fund
(9) Exhibit 6 Form of Distribution Agreement between
the Trust and Berger Distributors, Inc.
Exhibit 7 Not applicable
(6) Exhibit 8 Form of Custody Agreement
(11) Exhibit 9.1 New Account Application
* Exhibit 9.2.1 EX-99.B9.2.1 Form of Administrative Services
Agreement for Berger Small Company
Growth Fund
(7) Exhibit 9.2.2 Form of Administrative Services
Agreement for Berger New Generation Fund
(9) Exhibit 9.2.3 Form of Administrative Services
Agreement for Berger Balanced Fund
(12) Exhibit 9.2.4 Form of Administrative Services
Agreement for Berger Select Fund
(12) Exhibit 9.2.5 Form of Administrative Services
Agreement for Berger Mid Cap Growth Fund
<PAGE>
** Exhibit 9.2.6 EX-99.B9.2.6 Form of Administrative Services
Agreement for Berger Mid Cap Value Fund
* Exhibit 9.3 EX-99.B9.3 Form of Recordkeeping and Pricing Agent
Agreement
* Exhibit 9.4 EX-99.B9.4 Form of Agency Agreement
(16) Exhibit 9.5.1 Amendment No. 4 to Services Agreement
between Berger Associates, Inc., Charles
Schwab & Co., Inc. and Berger Investment
Portfolio Trust on behalf of Berger
Small Company Growth Fund, effective
February 1, 1994
(8) Exhibit 9.5.2 Amendment No. 5 to Services Agreement
between Berger Associates, Inc., Charles
Schwab & Co., Inc. and Berger Investment
Portfolio Trust on behalf of Berger New
Generation Fund, effective March 29,
1996
(13) Exhibit 9.5.3 Amendment No. 8 to Services Agreement
between Berger Associates, Inc., Charles
Schwab & Co., Inc. and Berger Investment
Portfolio Trust on behalf of Berger
Balanced Fund, effective September 30,
1997
(14) Exhibit 9.5.4 Amendment No. 9 to Services Agreement
between Berger Associates, Inc., Charles
Schwab & Co., Inc. and Berger Investment
Portfolio Trust on behalf of Berger
Select Fund, effective December 31, 1997
(15) Exhibit 9.5.5 Amendment No. 10 to Services Agreement
between Berger Associates, Inc., Charles
Schwab & Co., Inc. and Berger Investment
Portfolio Trust on behalf of Berger Mid
Cap Growth Fund, effective December 31,
1997
** Exhibit 10 EX-99.B10 Opinion and consent of Davis, Graham &
Stubbs LLP for Berger Mid Cap Value Fund
* Exhibit 11 EX-99.B11 Consent of Price Waterhouse LLP
Exhibit 12 Not applicable
* Exhibit 13 EX-99.B13 Investment Letter from Initial
Stockholder
<PAGE>
(10) Exhibit 14.1 IRA Account Application, Form 5305-A
Individual Retirement Custodial Account
and Related Documents
(2) Exhibit 14.2 Investment Company Institute Prototype
Money Purchase Pension and Profit
Sharing Plan Basic Document #01 and
Related Documents
(2) Exhibit 14.3 403(b)(7) Plan Custodial Account
Agreement and Related Documents
* Exhibit 15.1 EX-99.B15.1 Rule 12b-1 Plan for Berger Small Company
Growth Fund
(7) Exhibit 15.2 Rule 12b-1 Plan for Berger New
Generation Fund
(9) Exhibit 15.3 Rule 12b-1 Plan for Berger Balanced Fund
(12) Exhibit 15.4 Rule 12b-1 Plan for Berger Select Fund
(12) Exhibit 15.5 Rule 12b-1 Plan for Berger Mid Cap
Growth Fund
** Exhibit 15.6 EX-99.B15.6 Rule 12b-1 Plan for Berger Mid Cap Value
Fund
* Exhibit 16 EX-99.B16 Schedule for Computation of Performance
Data
(12) Exhibit 17.1 Financial Data Schedule for Berger Small
Company Growth Fund
(12) Exhibit 17.2 Financial Data Schedule for Berger New
Generation Fund
* Exhibit 17.3 EX-27.3 Financial Data Schedule for Berger
Balanced Fund
* Exhibit 17.4 EX-27.4 Financial Data Schedule for Berger
Select Fund
* Exhibit 17.5 EX-27.5 Financial Data Schedule for Berger Mid
Cap Growth Fund
*** Exhibit 17.6 Financial Data Schedule for Berger Mid
Cap Value Fund
Exhibit 18 Not Applicable
</TABLE>
- ---------------------------
* Filed herewith.
** To be filed by amendment.
*** Not required to be filed until financial statements for Fund are
filed.
(1) Previously filed on September 23, 1993, with Registrant's
original Registration Statement on Form N-1A and incorporated
herein by reference.
(2) Previously filed on November 30, 1993, with Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
<PAGE>
(3) Previously filed on December 28, 1993, with Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(4) Previously filed on June 28, 1994, with Post-Effective Amendment
No. 1 to the Registrant's Registration Statement on Form N-1A and
incorporated herein by reference.
(5) Previously filed on April 27, 1995, with Post-Effective Amendment
No. 5 to the Registrant's Registration Statement on Form N-1A and
incorporated herein by reference.
(6) Previously filed on November 27, 1995, with Post-Effective
Amendment No. 6 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(7) Previously filed on February 23, 1996, with Post-Effective
Amendment No. 8 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(8) Previously filed on October 30, 1996, with Post-Effective
Amendment No. 9 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(9) Previously filed on August 28, 1997, with Post-Effective
Amendment No. 11 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(10) Previously filed on December 31, 1997, as Exhibit 14.1 to
Post-Effective Amendment No. 58 to the Registration Statement on
Form N-1A of The One Hundred Fund, Inc., and incorporated herein
by reference.
(11) Previously filed on December 31, 1997, as Exhibit 9.1 to
Post-Effective Amendment No. 58 to the Registration Statement on
Form N-1A of The One Hundred Fund, Inc., and incorporated herein
by reference.
(12) Previously filed on December 31, 1997, with Post-Effective
Amendment No. 13 to the Registrant's Registration Statement on
Form N-1A and incorporated herein by reference.
(13) This Agreement is identical to the agreement previously filed on
October 30, 1996, as Exhibit 9.5.2 to Post-Effective Amendment
No. 9 to the Registrant's Registration Statement on Form N-1A and
incorporated herein by reference with the following changes: the
effective date is September 30, 1997, and the Fund name is Berger
Balanced Fund.
(14) This Agreement is identical to the agreement previously filed on
October 30, 1996, as Exhibit 9.5.2 to Post-Effective Amendment
No. 9 to the Registrant's Registration Statement on Form N-1A and
incorporated herein by reference with the following changes: the
effective date is December 31, 1997, and the Fund name is Berger
Select Fund.
(15) This Agreement is identical to the agreement previously filed on
October 30, 1996, as Exhibit 9.5.2 to Post-Effective Amendment
No. 9 to the Registrant's Registration Statement on Form N-1A and
incorporated herein by reference with the following changes: the
effective date is December 31, 1997, and the Fund name is Berger
Mid Cap Growth Fund.
(16) This Agreement is identical to the agreement previously filed
on October 30, 1996, as Exhibit 9.5.2 to Post-Effective Amendment
No. 9 to the Registrant's Registration Statement on Form N-1A
and incorporated herein by reference with the following
changes: the effective date is February 1, 1994, and the Fund
name is Berger Small Company Growth Fund.
<PAGE>
EXHIBIT 1
BERGER INVESTMENT PORTFOLIO TRUST
(A Delaware Business Trust)
TRUST INSTRUMENT
Dated August 23, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. Management of the Trust. . . . . . . . . . . . . . . . . . 2
Section 2. Initial Trustees and Number of Trustees. . . . . . . . . . 2
Section 3. Term of Office of Trustees . . . . . . . . . . . . . . . . 2
Section 4. Vacancies; Appointment of Trustees . . . . . . . . . . . . 3
Section 5. Temporary Vacancy or Absence . . . . . . . . . . . . . . . 3
Section 6. Chairman . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7. Action by the Trustees . . . . . . . . . . . . . . . . . . 3
Section 8. Ownership of Trust Property. . . . . . . . . . . . . . . . 4
Section 9. Effect of Trustees Not Serving . . . . . . . . . . . . . . 4
Section 10. Trustees, Etc. as Shareholders . . . . . . . . . . . . . . 4
ARTICLE III POWERS OF THE TRUSTEES . . . . . . . . . . . . . . . . . . 5
Section 1. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2. Certain Transactions . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV SERIES; CLASSES; SHARES. . . . . . . . . . . . . . . . . . 8
Section 1. Establishment of Series or Classes . . . . . . . . . . . . 8
Section 2. Shares of Beneficial Interest. . . . . . . . . . . . . . . 9
Section 3. Investment in the Trust. . . . . . . . . . . . . . . . . . 9
Section 4. Assets and Liabilities of Series . . . . . . . . . . . . . 10
Section 5. Ownership and Transfer of Shares . . . . . . . . . . . . . 11
Section 6. Status of Shares: Limitation of
Shareholder Liability . . . . . . . . . . . . . . . . . . 11
ARTICLE V DISTRIBUTIONS AND REDEMPTIONS. . . . . . . . . . . . . . . . 11
Section 1. Distributions. . . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Redemptions. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3. Determination of Net Asset Value . . . . . . . . . . . . . 12
Section 4. Suspension of Right of Redemption. . . . . . . . . . . . . 13
Section 5. Redemptions Necessary for Qualification
as Regulated Investment Company . . .. . . . . . . . . . . 13
ARTICLE VI SHAREHOLDERS' VOTING POWERS AND MEETINGS . . . . . . . . . . 13
Section 1. Voting Powers. . . . . . . . . . . . . . . . . . . . . . 13
Section 2. Meetings of Shareholders . . . . . . . . . . . . . . . . . 14
Section 3. Quorum; Required Vote. . . . . . . . . . . . . . . . . . . 14
ARTICLE VII CONTRACTS WITH SERVICE PROVIDERS . . . . . . . . . . . . . . . 15
Section 1. Investment Adviser . . . . . . . . . . . . . . . . . . . . 15
Section 2. Principal Underwriter. . . . . . . . . . . . . . . . . . . 15
i
<PAGE>
PAGE
Section 3. Transfer Agency, Shareholder Services
and Administration Agreements. . . . . . . . . . . . . . . 15
Section 4. Custodian. . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5. Parties to Contracts with Service Providers. . . . . . . . 16
ARTICLE VIII EXPENSES OF THE TRUST AND SERIES .. . . . . . . . . . . . . . 16
ARTICLE IX LIMITATION OF LIABILITY AND INDEMNIFICATION. . . . . . . . . . 17
Section 1. Limitation of Liability. . . . . . . . . . . . . . . . . . 17
Section 2. Indemnification. . . . . . . . . . . . . . . . . . . . . . 18
Section 3. Indemnification of Shareholders. . . . . . . . . . . . . . 19
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . .. . . . . . . . 20
Section 1. Trust Not a Partnership. . . . . . . . . . . . . . . . . . 20
Section 2. Trustee Action; Expert Advice; No Bond
or Surety . . . . .. . . . . . . . . . . . . . . . . . . . 20
Section 3. Record Dates . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4. Termination of the Trust . . . . . . . . . . . . . . . . . 20
Section 5. Reorganization; Merger; Consolidation. . . . . . . . . . . 21
Section 6. Trust Instrument . . . . . . . . . . . . . . . . . . . . . 22
Section 7. Applicable Law . . . . . . . . . . . . . . . . . . . . . . 22
Section 8. Amendments . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10. Severability . . . . . . . . . . . . . . . . . . . . . . . 23
Section 11. Use of the Name "Berger". . . . . . . . . . . . . . . . . 24
</TABLE>
ii
<PAGE>
BERGER INVESTMENT PORTFOLIO TRUST
TRUST INSTRUMENT
----------------
This TRUST INSTRUMENT is made on August 23, 1993, by the Trustees, to
establish a business trust for the investment and reinvestment of funds
contributed to the Trust by investors. The Trustees declare that all money
and property contributed to the Trust shall be held and managed in trust
pursuant to this Trust Instrument. The name of the Trust created by this
Trust Instrument is Berger Investment Portfolio Trust.
ARTICLE I
---------
DEFINITIONS
-----------
Unless otherwise provided or required by the context:
(a) "Bylaws" means the Bylaws of the Trust adopted by the
Trustees, which Bylaws are incorporated by reference herein in their
entirety, as amended from time to time;
(b) "Class" means any class of Shares of a Series established
pursuant to Article IV;
(c) "Commission," "Interested Person," and "Principal
Underwriter" have the meanings provided in the 1940 Act;
(d) "Covered Person" means a person so defined in Article IX,
Section 2;
(e) "Delaware Act" means the Delaware Business Trust Act, 12
Del.C. Section 3801 et seq., as amended from time to time;
(f) "Majority Shareholder Vote" means "the vote of a majority of
the outstanding voting securities" as defined in the 1940 Act;
(g) "Net Asset Value" means the net asset value of each Series of
the Trust, determined as provided in Article V, Section 3;
(h) "Outstanding Shares" means Shares shown in the books of the
Trust or its transfer agent as then issued and outstanding, but does not
include Shares which have been repurchased or redeemed by the Trust and which
are held in the treasury of the Trust;
(i) "Series" means a series of Shares established pursuant to
Article IV;
(j) "Shareholder" means a record owner of Outstanding Shares;
<PAGE>
(k) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is
divided from time to time (including whole Shares and fractions of Shares);
(l) "Trust" means Berger Investment Portfolio Trust established
hereby, and reference to the Trust, when applicable to one or more Series,
refers to that Series;
(m) "Trustees" means the persons who have signed this Trust
Instrument, so long as they shall continue in office in accordance with the
terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with Article II, in all cases
in their capacities as Trustees hereunder;
(n) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any
Series or the Trustees on behalf of the Trust or any Series;
(o) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
----------
THE TRUSTEES
------------
SECTION 1. MANAGEMENT OF THE TRUST. The business and affairs of
the Trust shall be managed by or under the direction of the Trustees, and
they shall have all powers necessary or desirable to carry out that
responsibility. The Trustees may execute all instruments and take all action
they deem necessary or desirable to promote the interests of the Trust. Any
determination made by the Trustees in good faith as to what is in the
interests of the Trust shall be conclusive.
SECTION 2. INITIAL TRUSTEES AND NUMBER OF TRUSTEES.
The initial Trustees shall be the persons signing this Trust Instrument. The
exact number of Trustees (other than the initial Trustees) shall be fixed from
time to time by a majority of the Trustees, provided, that there shall be at
least two (2) Trustees. Other than the initial Trustees and Trustees appointed
to fill vacancies pursuant to Section 4 of this Article, the Shareholders shall
elect the Trustees by a plurality vote on such dates as the Trustees may fix
from time to time.
SECTION 3. TERM OF OFFICE OF TRUSTEES. Each Trustee shall hold
office for life or until his successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees or
to any Trust officer a written resignation effective upon such delivery or a
later date specified therein; (b) any Trustee who requests to be retired, or
who has
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<PAGE>
become physically or mentally incapacitated or is otherwise unable to serve, may
be retired by a written instrument signed by a majority of the other Trustees,
specifying the effective date of retirement; (c) any Trustee shall be retired or
removed with or without cause at any time upon the unanimous written request of
the remaining Trustees; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
SECTION 4. VACANCIES; APPOINTMENT OF TRUSTEES. Whenever a vacancy
shall exist, regardless of the reason for such vacancy, the remaining
Trustees shall appoint any person as they determine in their sole discretion
to fill that vacancy, consistent with the limitations under the 1940 Act.
Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded
in the records of the Trust, specifying the effective date of the
appointment. The Trustees may appoint a new Trustee as provided above in
anticipation of a vacancy expected to occur because of the retirement,
resignation or removal of a Trustee, or an increase in number of Trustees,
provided that such appointment shall become effective only at or after the
expected vacancy occurs. As soon as any such Trustee has accepted his or her
appointment in writing, the Trust estate shall vest in the new Trustee,
together with the continuing Trustees, without any further act or conveyance,
and he or she shall be deemed a Trustee hereunder.
SECTION 5. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in
the Trustees shall occur, until such vacancy is filled, or while any Trustee
is absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not to exceed six (6)
months, unless otherwise extended for one or more additional consecutive six
(6) month periods, to any other Trustee or Trustees.
SECTION 6. CHAIRMAN. The Trustees shall appoint one of their
number to be Chairman of the Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust.
SECTION 7. ACTION BY THE TRUSTEES. The Trustees shall act by
majority vote at a meeting duly called (including at a telephonic meeting at
which all participants can hear one another, unless the 1940 Act requires
that a particular action be taken only at a meeting of the Trustees in
person) at which a quorum is present or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law)
without a meeting. A majority of the Trustees shall constitute a quorum at
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<PAGE>
any meeting. Meetings of the Trustees may be called orally or in writing by the
Chairman of the Trustees or by any two other Trustees. Notice of the time, date
and place of all Trustees meetings shall be given to each Trustee by telephone,
facsimile or other electronic mechanism sent to his home or business address at
least twenty-four hours in advance of the meeting or by written notice mailed to
his home or business address at least seventy-two hours in advance of the
meeting. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before, at or after the meeting. Subject to the requirements of the 1940 Act,
the Trustees by majority vote may delegate to any Trustee or Trustees authority
to approve particular matters or take particular actions on behalf of the Trust.
Any written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.
SECTION 8. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now
or hereafter held in any capacity other than as Trustee hereunder by the
Trustees or any successor Trustees. All of the Trust Property and legal
title thereto shall at all times be considered as vested in the Trust,
provided that the Trustees may cause legal title to any Trust Property to be
held by or in the name of the Trustees acting on behalf of the Trust, or in
the name of any person as nominee. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or
any right of partition or possession thereof, but each Shareholder shall
have, as provided in Article IV, a proportionate undivided beneficial
interest in the Trust or Series represented by Shares. The Trust or the
Trustees on behalf of the Trust shall be deemed to hold legal and beneficial
ownership of any income earned on securities held by the Trust issued by any
business entity formed, organized or existing under the laws of any
jurisdiction other than a state, commonwealth, possession or colony of the
United States or the laws of the United States.
SECTION 9. EFFECT OF TRUSTEES NOT SERVING. The death,
resignation, retirement, removal, incapacity or inability or refusal to serve
of the Trustees, or any one of them, shall not operate to annul the Trust or
to revoke any existing agency created pursuant to the terms of this Trust
Instrument.
SECTION 10. TRUSTEES, ETC. AS SHAREHOLDERS. Subject to any
restrictions in the Bylaws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the same
extent as any other Shareholder; the Trustees may issue and sell Shares to
and buy Shares from any such person or any firm or company in which such
person is interested, subject only to any general limitations herein.
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<PAGE>
ARTICLE III
-----------
POWERS OF THE TRUSTEES
----------------------
SECTION 1. POWERS. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way
be bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes
of the Trust. The Trustees may exercise all of their powers without recourse
to any court or other authority. Subject to any applicable limitation herein
or in the Bylaws or resolutions of the Trust, the Trustees shall have power
and authority, without limitation:
(a) To invest and reinvest cash and other property, and to
hold cash or other property uninvested, without in any event being bound or
limited by any current or future law or custom concerning investments by
trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the Trust Property; to invest in obligations,
securities and assets of any kind, and without regard to whether they may mature
before or after the possible termination of the Trust; and without limitation to
invest all or any part of its cash and other property in securities issued by a
registered investment company or series thereof, subject to the provisions of
the 1940 Act;
(b) To operate as and carry on the business of an
investment company, and exercise all the powers necessary and proper to conduct
such a business;
(c) To adopt Bylaws not inconsistent with this Trust
Instrument providing for the conduct of the business of the Trust and to amend
and repeal them to the extent such right is not reserved to the Shareholders;
(d) To elect and remove such officers and appoint and
terminate such agents as they deem appropriate;
(e) To employ as custodian of any assets of the Trust,
ct to any provisions herein or in the Bylaws, one or more banks, trust
companies or companies that are members of a national securities exchange, or
other entities permitted by the Commission to serve as such;
(f) To retain one or more transfer agents and Shareholder
servicing agents, or both;
(g) To provide for the distribution of Shares, either
through a Principal Underwriter or distributor as provided
-5-
<PAGE>
herein, or by the Trust itself, or both, or pursuant to a distribution plan of
any kind;
(h) To set record dates in the manner provided for herein
or in the Bylaws;
(i) To delegate such authority as they consider desirable
to any officers of the Trust and to any agent, subagent, independent contractor,
manager, investment adviser, custodian or underwriter;
(j) To sell or exchange any or all of the assets of the
Trust, subject to Article X, Section 4;
(k) To vote or give assent, or exercise any rights of
ownership, with respect to securities or other property; and to execute and
deliver powers of attorney delegating such power to other persons;
(l) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(m) To hold any security or other property (i) in a form
not indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies;
(n) To establish separate and distinct Series with
separately defined investment objectives and policies and distinct investment
purposes, and with separate Shares representing beneficial interests in such
Series, and to establish separate Classes, all in accordance with the provisions
of Article IV;
(o) To the full extent permitted by Section 3804 of the
Delaware Act, to allocate assets, liabilities and expenses of the Trust to a
particular Series and assets, liabilities and expenses to a particular Class or
to apportion the same between or among two or more Series or Classes, provided
that any liabilities or expenses incurred by a particular Series or Class shall
be payable solely out of the assets belonging to that Series or Class as
provided for in Article IV, Section 4;
(p) To consent to or participate in any plan for the
liquidation, reorganization, consolidation or merger of any corporation or
concern whose securities are held by the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or concern;
and to pay calls or subscriptions with respect to any security held by the
Trust;
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<PAGE>
(q) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(r) To make distributions of income and of capital gains to
Shareholders in the manner provided for in this Trust Instrument or in the
Bylaws;
(s) To borrow money and in connection therewith to issue
notes or other evidences of indebtedness and to pledge or grant security
interests in Trust Property as security therefor;
(t) To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider proper;
(u) To issue, sell, repurchase, redeem, cancel, retire,
acquire, hold, resell, reissue, dispose of and otherwise deal in Shares; to
establish terms and conditions regarding the issuance, sale, repurchase,
exchange, redemption, cancellation, retirement, acquisition, holding, resale,
reissuance, disposition of or dealing in Shares; and, subject to Articles IV and
V, to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust or of the particular
Series with respect to which such Shares are issued;
(v) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(w) To endorse or guarantee the payment of any notes or
other obligations of any person or to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof;
(x) 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;
(y) To join with other security holders 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; and
(z) To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything
-7-
<PAGE>
necessary or desirable to accomplish any purpose or to further any of the
foregoing powers, and to take every other action incidental to the foregoing
business or purposes, objects or powers.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Trust Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
SECTION 2. CERTAIN TRANSACTIONS. Except as prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any
Trustee or officer of the Trust or any firm of which any such Trustee or
officer is a member acting as principal, or have any such dealings with any
investment adviser, administrator, distributor or transfer agent for the
Trust or with any Interested Person of such person. The Trust may employ any
such person or entity in which such person is an Interested Person, as
broker, legal counsel, registrar, investment adviser, administrator,
distributor, transfer agent, dividend disbursing agent, custodian or in any
other capacity upon customary terms.
ARTICLE IV
----------
SERIES; CLASSES; SHARES
-----------------------
SECTION 1. ESTABLISHMENT OF SERIES OR CLASSES. The Trust shall
consist of one or more Series. The Trustees hereby establish the Series
listed in Schedule A attached hereto and made a part hereof. Each additional
Series shall be established by the adoption of a resolution of the Trustees.
The Trustees may divide the Shares of any Series into Classes. In such case
each Class of a Series shall represent interests in the assets of that
Series. The Trustees by resolution may designate the relative rights and
preferences of the Shares of each Series or Class. The Trust shall maintain
separate and distinct records for each Series and hold and account for the
assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares and need not issue Shares.
Each Share of a Series shall represent an equal beneficial interest in the
net assets of such Series. Each holder of Shares of a Series or Class shall
be entitled to receive his pro rata share of all distributions made with
respect to such Series or Class. Upon redemption of his Shares, such
Shareholder shall be paid solely out of the funds and property of such
Series. The Trustees may change the name of any
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<PAGE>
Series or Class. At any time that there are no Shares outstanding of any
particular Series (or Class) previously established and designated, the Trustees
may by a majority vote abolish that Series (or Class) and rescind the
establishment and designation thereof.
SECTION 2. SHARES OF BENEFICIAL INTEREST. The beneficial interest
in the Trust shall be divided into Shares of one or more separate and
distinct Series or Classes established by the Trustees. The number of Shares
of each Series and Class is unlimited and each Share shall have a par value,
or be without par value, as determined by resolution of the Trustees. All
Shares issued hereunder shall be fully paid and nonassessable. Shareholders
shall have no preemptive or other right to subscribe to any additional Shares
or other securities issued by the Trust or any Series. The Trustees shall
have full power and authority, in their sole discretion and without obtaining
Shareholder approval: to issue original or additional Shares at such times
and for the amount and type of consideration and on such terms and conditions
as they deem appropriate; to issue fractional Shares and Shares held in the
treasury; to establish and to change in any manner Shares of any Series or
Classes with such preferences, terms of conversion, voting powers, rights and
privileges as the Trustees may determine (but without a vote of a majority of
the Outstanding Shares of the Series or Class, as the case may be, voting as
a class, the Trustees may not change Outstanding Shares in a manner
materially adverse to the Shareholders of such Shares); to divide or combine
the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes into one
or more Series or Classes of Shares; to abolish any one or more Series or
Classes of Shares; to issue Shares to acquire other assets (including assets
subject to, and in connection with, the assumption of liabilities) and
businesses; and to take such other action with respect to the Shares as the
Trustees may deem desirable. Shares held in the treasury shall not confer
any voting rights on the Trustees and shall not be entitled to any dividends
or other distributions declared with respect to the Shares.
SECTION 3. INVESTMENT IN THE TRUST. The Trustees shall accept
investments in any Series from such persons and on such terms as they may
from time to time authorize. At the Trustees discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article V, Section
3. Investments in a Series shall be credited to each Shareholder's account
in the form of full or fractional Shares at the Net Asset Value per Share
next determined after the investment is received or accepted as may be
determined by the Trustees; provided, however, that the Trustees may, in
their sole discretion, (a) impose a sales charge upon investments in any
Series or Class or (b) determine the Net Asset Value per Share of the initial
capital contribution. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.
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<PAGE>
SECTION 4. ASSETS AND LIABILITIES OF SERIES. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof (including any
proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be), shall be held and accounted for separately
from the other assets of the Trust and every other Series and are referred to
as "assets belonging to" that Series. The assets belonging to a particular
Series shall belong only to that Series for all purposes, and to no other
Series, subject only to the rights of creditors of that particular Series.
Any assets, income, earnings, profits and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any particular
Series shall be allocated by the Trustees between and among one or more
Series as the Trustees deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all Series for all
purposes, and such assets, earnings, income, profits or funds, or payments
and proceeds thereof shall be referred to as assets belonging to that Series.
The assets belonging to a Series shall be so recorded upon the books of the
Trust, and shall be held by the Trustees in trust for the benefit of the
Shareholders of that Series. The assets belonging to a Series shall be
charged with the liabilities of that Series and all expenses, costs, charges
and reserves attributable to that Series, except that liabilities and
expenses allocated solely to a particular Class shall be borne by that Class.
Any general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular Series or
Class shall be allocated and charged by the Trustees between or among any one
or more of the Series or Classes or, if appropriate, between or among any one
or more of the Series or Classes and any other investment company advised by
the same investment adviser, in each case in such manner as the Trustees deem
fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of the Trust generally or of any other Series. Notice of this
contractual limitation on liabilities among Series may, in the Trustees
discretion, be set forth in the certificate of trust of the Trust (whether
originally or by amendment) as filed or to be filed in the Office of the
Secretary of State of the State of Delaware pursuant to the Delaware Act, and
upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations on
liabilities among Series (and the statutory effect under
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Section 3804 of setting forth such notice in the certificate of trust) shall
become applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, liability, obligation or
expense incurred, contracted for or otherwise existing with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim
on or any right to any assets allocated or belonging to any other Series. No
Shareholder or former Shareholder of any particular Series shall have any claim
or right to institute suit against or in the right of the Trust or any Series
with respect to any matter that does not directly affect that particular Series.
SECTION 5. OWNERSHIP AND TRANSFER OF SHARES. The Trust shall
maintain a register containing the names and addresses of the Shareholders of
each Series and Class thereof, the number of Shares of each Series and Class
held by such Shareholders, and a record of all Share transfers. The register
shall be conclusive as to the identity of Shareholders of record and the
number of Shares held by them from time to time. The Trustees may authorize
the issuance of certificates representing Shares and adopt rules governing
their use. The Trustees may make rules governing the transfer of Shares,
whether or not represented by certificates.
SECTION 6. STATUS OF SHARES: LIMITATION OF SHAREHOLDER LIABILITY.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Trust Instrument. Every Shareholder, by virtue of
having acquired a Share, shall be held expressly to have assented to and
agreed to be bound by the terms of this Trust Instrument. No Shareholder
shall be personally liable for the debts, liabilities, obligations and
expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death of a Shareholder during the existence of
the Trust shall not operate to terminate the Trust, 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 entitles
such representative only to the rights of said deceased Shareholder under the
Trust. Neither the Trust nor the Trustees shall have any power to bind any
Shareholder personally or to demand payment from any Shareholder for
anything, other than as agreed by the Shareholder. Shareholders shall have
the same limitation of personal liability as is extended to shareholders of a
private corporation for profit incorporated in the State of Delaware. Every
written obligation of the Trust or any Series shall contain a statement to
the effect that such obligation may only be enforced against the assets of
the Trust or such Series; however, the omission of such statement shall not
operate to bind or create personal liability for any Shareholder or Trustee.
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ARTICLE V
---------
DISTRIBUTIONS AND REDEMPTIONS
-----------------------------
SECTION 1. DISTRIBUTIONS. The Trustees may declare and pay
dividends and other distributions from the assets belonging to each Series.
The amount and payment of dividends or distributions and their form, whether
they are in cash, Shares or other Trust Property, shall be determined by the
Trustees. Dividends and other distributions may be paid pursuant to a
standing resolution adopted once or more often as the Trustees determine.
All dividends and other distributions on Shares of a particular Series shall
be distributed pro rata to the Shareholders of that Series in proportion to
the number of Shares of that Series they held on the record date established
for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such
Series. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or similar plans as the
Trustees deem appropriate.
SECTION 2. REDEMPTIONS. Each Shareholder of a Series shall have
the right at such times as may be permitted by the Trustees to require the
Series to redeem all or any part of his Shares at a redemption price per
Share equal to the Net Asset Value per Share. In the absence of such
resolution, the redemption price per Share shall be the Net Asset Value next
determined after receipt by the Series of a request for redemption in proper
form less such charges as are determined by the Trustees and described in any
required disclosure document. The Trustees may specify conditions, prices
and places of redemption, and may specify binding requirements for the proper
form or forms of requests for redemption. Payment of the redemption price
may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be
in cash. Following redemption, Shares may be reissued from time to time. The
Trustees may require Shareholders to redeem Shares for any reason under terms
set by the Trustees, including the failure of a Shareholder to supply a
personal identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of
any redemption of Shares required by them for payment of amounts due and
owing by a Shareholder to the Trust or any Series or Class. Notwithstanding
the foregoing, the Trustees may postpone payment of the redemption price and
may suspend the right of the Shareholders to require any Series or Class to
redeem Shares during any period of time when and to the extent permissible
under the 1940 Act.
SECTION 3. DETERMINATION OF NET ASSET VALUE. The Trustees shall
cause the Net Asset Value of Shares of each Series or Class to be determined
from time to time in a manner consistent with applicable laws and
regulations. The Trustees may delegate
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the power and duty to determine Net Asset Value per Share to one or more
Trustees or officers of the Trust or to a custodian, depository or other agent
appointed for such purpose. The Net Asset Value of Shares shall be determined
separately for each Series or Class at such times as may be prescribed by the
Trustees or, in the absence of action by the Trustees, as of the close of the
regular trading session on the New York Stock Exchange on each day for all or
part of which such Exchange is open for unrestricted trading.
SECTION 4. SUSPENSION OF RIGHT OF REDEMPTION. If, as referred to
in Section 2 of this Article, the Trustees postpone payment of the redemption
price and suspend the right of Shareholders to redeem their Shares, such
suspension shall take effect at the time the Trustees shall specify, but not
later than the close of business on the business day next following the
declaration of suspension. Thereafter Shareholders shall have no right of
redemption or payment until the Trustees declare the end of the suspension.
If the right of redemption is suspended, a Shareholder may either withdraw
his request for redemption or receive payment based on the Net Asset Value
per Share next determined after the suspension terminates.
SECTION 5. REDEMPTIONS NECESSARY FOR QUALIFICATION AS REGULATED
INVESTMENT COMPANY. If the Trustees shall determine that direct or indirect
ownership of Shares of any Series has or may become concentrated in any
person to an extent which would disqualify any Series as a regulated
investment company under the Internal Revenue Code, then the Trustees shall
have the power (but not the obligation) by lot or other means they deem
equitable to (a) call for redemption by any such person of a number, or
principal amount, of Shares sufficient to maintain or bring the direct or
indirect ownership of Shares into conformity with the requirements for such
qualification and (b) refuse to transfer or issue Shares to any person whose
acquisition of Shares in question would, in the Trustees judgment, result in
such disqualification. Any such redemption shall be effected at the
redemption price and in the manner provided in this Article. Shareholders
shall upon demand disclose to the Trustees in writing such information
concerning direct and indirect ownership of Shares as the Trustees deem
necessary to comply with the requirements of any taxing authority.
ARTICLE VI
----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
SECTION 1. VOTING POWERS. The Shareholders shall have power to
vote only with respect to (a) the election of Trustees as provided in Section
2 of this Article; (b) the removal of Trustees as provided in Article II,
Section 3(d); (c) any investment advisory or management contract as provided
in Article VII, Section 1; (d) any termination of the Trust as provided in
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Article X, Section 4; (e) the amendment of this Trust Instrument to the extent
and as provided in Article X, Section 8; and (f) such additional matters
relating to the Trust as may be required by law, this Trust Instrument, or the
Bylaws or any registration of the Trust with the Commission or any State, or as
the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted by individual Series or Class, except (a) when required by the
1940 Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
affected Series or Classes shall be entitled to vote thereon. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote,
and each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy or in any manner provided for in the Bylaws. The
Bylaws may provide that proxies may be given by any electronic or
telecommunications device or in any other manner, but if a proposal by anyone
other than the officers or Trustees is submitted to a vote of the Shareholders
of the Trust or of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series are issued, as to that Series the Trustees may exercise all rights
of Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Trust Instrument or the Bylaws.
SECTION 2. MEETINGS OF SHAREHOLDERS. Special meetings of the
Shareholders of any Series or Class may be called by the Trustees and shall
be called by the Trustees upon the written request of Shareholders owning at
least twenty-five percent (25%) of the Outstanding Shares of such Series or
Class entitled to vote. Shareholders shall be entitled to at least fifteen
days notice of any meeting, given as determined by the Trustees.
SECTION 3. QUORUM; REQUIRED VOTE. One-third of the Outstanding
Shares of each Series or Class, or one-third of the Outstanding Shares of the
Trust, entitled to vote in person or by proxy shall be a quorum for the
transaction of business at a Shareholders meeting with respect to such Series
or Class, or with respect to the entire Trust, respectively. Except when a
larger vote is required by law, this Trust Instrument or the Bylaws, at any
meeting at which a quorum is present, a majority of the Shares voted in
person or by proxy shall decide any matters to be voted upon with respect to
the entire Trust and a plurality of such Shares shall elect a Trustee;
provided, that if this Trust Instrument or applicable law permits or requires
that Shares be voted on any matter by individual Series or Classes, then a
majority of the Shares of that Series or Class (or, if required by law, a
Majority Shareholder Vote of that Series or Class) voted in
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person or by proxy on the matter shall decide that matter insofar as that Series
or Class is concerned.
Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such greater amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be. If the consents of all Shareholders entitled to vote
have not been solicited in writing and if the unanimous written consent of all
such Shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the Shareholders without a meeting.
Notwithstanding any other provision herein or in the Bylaws, any
meeting of Shareholders, whether or not a quorum is present, may be adjourned
from time to time by the vote of the majority of the Shares represented at that
meeting, either in person or by proxy. Any adjourned session of a meeting of
Shareholders may be held within a reasonable time without further notice.
ARTICLE VII
-----------
CONTRACTS WITH SERVICE PROVIDERS
--------------------------------
SECTION 1. INVESTMENT ADVISER. Subject to a Majority Shareholder
Vote, the Trustees may enter into one or more investment advisory contracts
on behalf of the Trust or any Series, providing for investment advisory
services, statistical and research facilities and services, and other
facilities and services to be furnished to the Trust or Series on terms and
conditions acceptable to the Trustees. Any such contract may provide for the
investment adviser to effect purchases, sales or exchanges of portfolio
securities or other Trust Property on behalf of the Trustees or may authorize
any officer or agent of the Trust to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser. The
Trustees may authorize the investment adviser to employ one or more
sub-advisers. Any reference in this Trust Instrument to the investment
adviser shall be deemed to include such sub-advisers, unless the context
otherwise requires.
SECTION 2. PRINCIPAL UNDERWRITER. The Trustees may enter into
contracts with another party on behalf of the Trust or any Series or Class,
providing for the distribution and sale of Shares by such other party, either
directly or as sales agent, on terms and conditions acceptable to the
Trustees. The Trustees may adopt a plan or plans of distribution with
respect to Shares of any Series or Class and enter into any related
agreements, whereby the Series or Class finances directly or indirectly any
activity that is primarily intended to result in sales of its Shares, subject
to the requirements of Section 12 of the 1940 Act, Rule 12b-1 thereunder, and
other applicable rules and regulations.
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SECTION 3. TRANSFER AGENCY, SHAREHOLDER SERVICES AND
ADMINISTRATION AGREEMENTS. The Trustees, on behalf of the Trust or any
Series or Class, may enter into transfer agency agreements, Shareholder
service agreements and administration and management agreements with any
party or parties on terms and conditions acceptable to the Trustees.
SECTION 4. CUSTODIAN. The Trustees shall at all times place and
maintain the securities and similar investments of the Trust and of each
Series in custody meeting the requirements of Section 17(f) of the 1940 Act
and the rules thereunder. The Trustees, on behalf of the Trust or any
Series, may enter into an agreement with a custodian on terms and conditions
acceptable to the Trustees, providing for the custodian, among other things,
to (a) hold the securities owned by the Trust or any Series and deliver the
same upon written order or oral order confirmed in writing, (b) receive and
receipt for any moneys due to the Trust or any Series and deposit the same in
its own banking department or elsewhere, (c) disburse such funds upon orders
or vouchers, and (d) employ one or more sub-custodians.
SECTION 5. PARTIES TO CONTRACTS WITH SERVICE PROVIDERS. The
Trustees may enter into any contract referred to in this Article with any
entity, although one or more of the Trustees or officers of the Trust may be
an officer, director, trustee, partner, shareholder or member of such entity,
and no such contract shall be invalidated or rendered void or voidable
because of such relationship. No person having such a relationship shall be
disqualified from voting on or executing a contract in his capacity as
Trustee and/or Shareholder, or be liable merely by reason of such
relationship for any loss or expense to the Trust with respect to such a
contract or accountable for any profit realized directly or indirectly
therefrom.
Any contract referred to in Sections 1 and 2 of this Article shall be
consistent with and subject to the applicable requirements of Section 15 of
the 1940 Act and the rules and orders thereunder with respect to its
continuance in effect, its termination and the method of authorization and
approval of such contract or renewal. No amendment to a contract referred to
in Section 1 of this Article shall be effective unless assented to in a
manner consistent with the requirements of Section 15 of the 1940 Act, and
the rules and orders thereunder.
ARTICLE VIII
------------
EXPENSES OF THE TRUST AND SERIES
--------------------------------
Subject to Article IV, Section 4, the Trust or a particular Series
shall pay, or shall reimburse the Trustees from the Trust estate or the assets
belonging to the particular Series, for their expenses and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of pricing Trust portfolio securities; expenses of issue,
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repurchase and redemption of Shares; certain insurance premiums; applicable
fees, interest charges and expenses of third parties, including the Trust's
investment advisers, managers, administrators, distributors, custodians,
transfer agents and fund accountants; fees of pricing, interest, dividend,
credit and other reporting services; costs of membership in trade
associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional
information and Shareholder reports and delivering them to Shareholders;
expenses of meetings of Shareholders and proxy solicitations therefor; costs
of maintaining books and accounts; costs of reproduction, stationery and
supplies; fees and expenses of the Trustees; compensation of the Trust's
officers and employees and costs of other personnel performing services for
the Trust or any Series; costs of Trustee meetings; Commission registration
fees and related expenses; state or foreign securities laws registration fees
and related expenses; and for such non-recurring items as may arise,
including litigation to which the Trust or a Series (or a Trustee or officer
of the Trust acting as such) is a party, and for all losses and liabilities
by them incurred in administering the Trust. The Trustees shall have a lien
on the assets belonging to the appropriate Series, or in the case of an
expense allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto, for the
reimbursement to them of such expenses, disbursements, losses and
liabilities. This Article shall not preclude the Trust from directly paying
any of the aforementioned fees and expenses.
ARTICLE IX
----------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
SECTION 1. LIMITATION OF LIABILITY. All persons contracting with
or having any claim against the Trust or a particular Series shall look only
to the assets of the Trust or such Series for payment under such contract or
claim; and neither the Trustees nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Every written instrument or obligation on behalf of the Trust or any Series
shall contain a statement to the foregoing effect, but the absence of such
statement shall not operate to make any Trustee or officer of the Trust
liable thereunder. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best interest
of the Trust, the Trustees and officers of the Trust shall not be responsible
or liable for any act or omission or for neglect or wrongdoing of them or any
officer, agent, employee, investment adviser or independent contractor of the
Trust, but nothing contained in this Trust Instrument or in the Delaware Act
shall protect any Trustee or officer of the Trust against liability to the
Trust or to Shareholders to which he would otherwise be subject
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by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
SECTION 2. INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in
subsection (b) below:
(i) every person who is, or has been, a Trustee,
officer, employee or agent of the Trust (including persons who serve at the
Trust's request as directors, trustees, officers or agents of another
organization in which the Trust has any interest as a shareholder, creditor or
otherwise) ("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by such person in connection
with any claim, action, suit or proceeding in which such person becomes involved
as a party or otherwise by virtue of being or having been a Covered Person and
against amounts paid or incurred by such person in the settlement thereof,
whether or not such person is a Covered Person at the time such expenses are
incurred;
(ii) as used herein, the words "claim," "action,"
"suit," or "proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorney's fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a
Covered Person:
(i) Who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be 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 his office, or (B)
not to have acted in good faith in the reasonable belief that his action was in
or not opposed to the best interests of the Trust; or
(ii) In the event of a settlement, unless there has
been a determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office: (A) by the court or other body approving
the settlement; (B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter based upon a
review of readily available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry).
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(c) To the maximum extent permitted by applicable law,
expenses in connection with the preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in subsection (a)
of this Section may be paid by the Trust or applicable Series from time to time
prior to final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over by such person
to the Trust or applicable Series if it is ultimately determined that such
person is not entitled to indemnification under this Section; provided, however,
that either (i) such Covered Person shall have provided appropriate security for
such undertaking, (ii) the Trust is insured against losses arising out of any
such advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(d) The rights of indemnification herein provided shall be
severable, shall not be exclusive of or affect any other rights to which any
Covered Person may now or hereafter be entitled, and shall inure to the
benefit of the heirs, executors and administrators of a Covered Person.
(e) By action of the Trustees, and notwithstanding any interest of
the Trustees in the action, the Trust shall have power to purchase and
maintain insurance, in such amounts as the Trustees deem appropriate, on
behalf of any Covered Person, whether or not such person is indemnified
against such liability or expense under the provisions of this Article IX and
whether or not the Trust would have the power or would be required to
indemnify such person against such liability under the provisions of this
Article IX or of the Delaware Act or by any other applicable law, subject
only to any limitations imposed by the 1940 Act.
(f) Any repeal or modification of this Article IX by the
Shareholders of the Trust, or adoption or modification of any other provision
of the Trust Instrument or Bylaws inconsistent with this Article, shall be
prospective only, to the extent that such repeal or modification would, if
applied retrospectively, adversely affect any limitation on the liability of
any Covered Person or indemnification available to any Covered Person with
respect to any act or omission which occurred prior to such repeal,
modification or adoption.
SECTION 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of being or having been a Shareholder and not because of acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
such person's heirs, executors, administrators or other legal representatives
or in the case of any entity, its general successor) shall be entitled
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out of the assets belonging to the applicable Series to be held harmless from
and indemnified against all loss and expense arising from such liability.
The Trust, on behalf of the affected Series, shall, upon request by such
Shareholder, assume the defense of any such claim made against such
Shareholder for any act or obligation of the Series and satisfy any judgment
thereon from the assets of the Series.
ARTICLE X
---------
MISCELLANEOUS
-------------
SECTION 1. TRUST NOT A PARTNERSHIP. This Trust Instrument creates
a trust and not a partnership. No Trustee shall have any power to bind
personally either the Trust's officers or any Shareholder.
SECTION 2. TRUSTEE ACTION; EXPERT ADVICE; NO BOND OR SURETY. The
exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of
Article IX, the Trustees shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Trust Instrument,
and subject to the provisions of Article IX, shall not be liable for any act
or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is obtained.
SECTION 3. RECORD DATES. The Trustees may fix in advance a date up
to ninety (90) days before the date of any Shareholders meeting, or the date
for the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect
of any such change, conversion or exchange of Shares. 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.
SECTION 4. TERMINATION OF THE TRUST.
(a) This Trust shall have perpetual existence. Subject to
a Majority Shareholder Vote of the Trust or of each Series to be affected, the
Trustees may:
(i) Sell and convey all or substantially all of the
assets of the Trust or any affected Series to another Series or to another
entity which is an open end investment company as
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defined in the 1940 Act, or is a series thereof, for adequate consideration,
which may include the assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Trust or any affected
Series, and which may include shares of or interests in such Series, entity
or series thereof; or
(ii) At any time sell and convert into money all or
substantially all of the assets of the Trust or any affected Series.
Upon making reasonable provision for the payment of all known
liabilities of the Trust or any affected Series in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining proceeds or
assets (as the case may be) ratably among the Shareholders of the Trust or any
affected Series; however, the payment to any particular Class of such Series may
be reduced by any fees, expenses or charges allocated to that Class or Series.
(b) The Trustees may take any of the actions specified in
subsection (A)(i) and (ii) above without obtaining a Majority Shareholder Vote
of the Trust or any Series if a majority of the Trustees determines that the
continuation of the Trust or Series is not in the best interests of the Trust,
such Series, or their respective Shareholders as a result of factors or events
adversely affecting the ability of the Trust or such Series to conduct its
business and operations in an economically viable manner. Such factors and
events may include the inability of the Trust or a Series to maintain its assets
at an appropriate size, changes in laws or regulations governing the Trust or
the Series or affecting assets of the type in which the Trust or Series invests,
or economic developments or trends having a significant adverse impact on the
business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining
proceeds or assets pursuant to subsection (a), the Trust or affected Series
shall terminate and the Trustees and the Trust shall be discharged of any and
all further liabilities and duties hereunder with respect thereto and the right,
title and interest of all parties therein shall be canceled and discharged.
Upon termination of the Trust, following completion of winding up of its
business, the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
SECTION 5. REORGANIZATION; MERGER; CONSOLIDATION.
(a) Notwithstanding anything else herein, to change the Trust's
form of organization the Trustees may, without Shareholder approval, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed
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to or assume the Trust's registration under the 1940 Act, (ii) cause the
Shares to be exchanged under or pursuant to any state or federal statute to
the extent permitted by law, or (iii) cause the Trust to incorporate under
the laws of Delaware. Any agreement of merger or consolidation or
certificate of merger may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be valid.
(b) Any merger or consolidation of the Trust other than
those described in Section 5(a) hereof may be approved by the affirmative vote
of both a majority of the Trustees voting at a duly constituted meeting of
Trustees at which a quorum is present and the holders of one-half (1/2) of the
Outstanding Shares of the Trust entitled to vote thereon.
(c) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Act, an agreement of merger or consolidation
approved in accordance with this Section 5 may effect any amendment to the
governing instrument of the Trust or effect the adoption of a new trust
instrument of the Trust if it is the surviving or resulting trust in the merger
or consolidation.
SECTION 6. TRUST INSTRUMENT. The original or a copy of this Trust
Instrument and of each amendment hereto or Trust Instrument supplemental
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Trust
Instrument or any such amendments or supplements and as to any matters in
connection with the Trust. The masculine gender herein shall include the
feminine and neuter genders. Headings herein are for convenience only and
shall not affect the construction of this Trust Instrument. This Trust
Instrument may be executed in any number of counterparts, each of which shall
be deemed an original.
SECTION 7. APPLICABLE LAW. This Trust Instrument and the Trust
created hereunder are governed by and construed and administered according to
the Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or
this Trust Instrument (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of
real or personal property, (iv) fees or other sums payable to trustees,
officers, agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on the
permissible nature, amount or concentration of trust investments or
requirements relating to the titling,
-22-
<PAGE>
storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees, which are inconsistent with
the limitations on liabilities or authority and powers of the Trustees set
forth or referenced in this Trust Instrument. The Trust shall be of the type
commonly called a Delaware business trust, and, without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust under Delaware law. The Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
trusts or actions that may be engaged in by trusts under the Delaware Act,
and the absence of a specific reference herein to any such power, privilege
or action shall not imply that the Trust may not exercise such power or
privilege or take such actions.
SECTION 8. AMENDMENTS. The Trustees may, without any Shareholder
vote, amend or otherwise supplement this Trust Instrument by making an
amendment, a Trust Instrument supplemental hereto or an amended and restated
trust instrument; provided, that Shareholders shall have the right to vote on
any amendment (a) which would affect the voting rights of Shareholders
granted in Article VI, Section I, (b) to this Section 8, (c) required to be
approved by Shareholders by law or by the Trust's registration statement(s)
filed with the Commission, and (d) submitted to them by the Trustees in their
discretion. Any amendment submitted to Shareholders which the Trustees
determine would affect the Shareholders of any Series shall be authorized by
vote of the Shareholders of such Series and no vote shall be required of
Shareholders of a Series not affected.
Notwithstanding anything else herein, any amendment to Article IX
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence, shall each require the affirmative vote of the holders of two-thirds
(2/3) of the Outstanding Shares of the Trust entitled to vote thereon.
SECTION 9. FISCAL YEAR. The fiscal year of the Trust shall end on
the date set in the manner specified in the Bylaws. The Trustees may change
the fiscal year of the Trust without Shareholder approval.
SECTION 10. SEVERABILITY. The provisions of this Trust Instrument
are severable. If the Trustees determine, with the advice of counsel, that
any provision hereof conflicts with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of this Trust Instrument; provided, however, that such
determination shall not affect any of the
-23-
<PAGE>
remaining provisions of this Trust Instrument or render invalid or improper
any action taken or omitted prior to such determination. If any provision
hereof shall be held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Trust
Instrument.
SECTION 11. USE OF THE NAME "BERGER". Berger Associates, Inc.
("Berger") has consented to and granted a non-exclusive license for the use
by the Trust and by each Series thereof to the identifying word "Berger" in
the name of the Trust and of each Series. Such consent is conditioned upon
the Trust's employment of Berger as investment adviser to the Trust and to
each Series. As between Berger and the Trust, Berger shall control the use
of such name insofar as such name contains the identifying word "Berger."
Berger may from time to time use the identifying word "Berger" in other
connections and for other purposes, including without limitation in the names
of other investment companies, corporations or businesses that it may manage,
advise, sponsor or own or in which it may have a financial interest. Berger
may require the Trust or any Series to cease using the identifying word
"Berger" in the name of the Trust or any Series if the Trust or Series ceases
to employ Berger or affiliate thereof as investment adviser.
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees, have executed this Trust Instrument as of the date first above
written.
-----------------------------------
William M.B. Berger, as
Trustee and not individually
-----------------------------------
Rodney L. Linafelter, as
Trustee and not individually
-----------------------------------
Dennis E. Baldwin, as
Trustee and not individually
-----------------------------------
Louis R. Bindner, as
Trustee and not individually
-----------------------------------
Lucy Black Creighton, as
Trustee and not individually
-24-
<PAGE>
-----------------------------------
Harry T. Lewis, Jr., as
Trustee and not individually
-----------------------------------
Michael Owen, as
Trustee and not individually
----------------------------------
William Sinclaire, as
Trustee and not individually
-25-
<PAGE>
SCHEDULE A
SERIES OF THE TRUST
-------------------
Berger Small Company Growth Fund
-26-
<PAGE>
EXHIBIT 2
BERGER INVESTMENT PORTFOLIO TRUST
(A Delaware Business Trust)
BYLAWS
August 23, 1993
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I NAME OF TRUST, PRINCIPAL OFFICE AND SEAL. . . . . . . . . . 1
Section 1. Principal Office. . . . . . . . . . . . . . . . . . . . 1
Section 2. Delaware Office . . . . . . . . . . . . . . . . . . . . 1
Section 3. Seal. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II MEETINGS OF TRUSTEES. . . . . . . . . . . . . . . . . . . . 1
Section 1. Meetings. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Action Without a Meeting. . . . . . . . . . . . . . . . 2
Section 3. Compensation of Trustees. . . . . . . . . . . . . . . . 2
ARTICLE III COMMITTEES. . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1. Organization. . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Executive Committee . . . . . . . . . . . . . . . . . . 2
Section 3. Nominating Committee. . . . . . . . . . . . . . . . . . 2
Section 4. Audit Committee . . . . . . . . . . . . . . . . . . . . 2
Section 5. Other Committees. . . . . . . . . . . . . . . . . . . . 3
Section 6. Proceedings and Quorum. . . . . . . . . . . . . . . . . 3
Section 7. Compensation of Committee Members . . . . . . . . . . . 3
ARTICLE IV OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. Election, Tenure and Qualifications of Officers . . . . 3
Section 3. Vacancies and Newly Created Offices . . . . . . . . . . 3
Section 4. Removal and Resignation . . . . . . . . . . . . . . . . 4
Section 5. Chairman. . . . . . . . . . . . . . . . . . . . . . . . 4
Section 6. President . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7. Vice President. . . . . . . . . . . . . . . . . . . . . 4
Section 8. Treasurer and Assistant Treasurers. . . . . . . . . . . 5
Section 9. Secretary and Assistant Secretaries . . . . . . . . . . 5
Section 10. Subordinate Officers. . . . . . . . . . . . . . . . . . 5
Section 11. Compensation of Officers. . . . . . . . . . . . . . . . 6
Section 12. Surety Bond . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V MEETINGS OF SHAREHOLDERS. . . . . . . . . . . . . . . . . . 6
Section 1. Annual Meetings . . . . . . . . . . . . . . . . . . . . 6
Section 2. Special Meetings. . . . . . . . . . . . . . . . . . . . 6
Section 3. Notice of Meetings. . . . . . . . . . . . . . . . . . . 6
Section 4. Validity of Proxies . . . . . . . . . . . . . . . . . . 7
Section 5. Place of Meeting. . . . . . . . . . . . . . . . . . . . 8
Section 6. Action Without a Meeting. . . . . . . . . . . . . . . . 8
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VI SHARES OF BENEFICIAL INTEREST . . . . . . . . . . . . . . . 8
Section 1. Share Certificates. . . . . . . . . . . . . . . . . . . 8
Section 2. Transfer of Shares. . . . . . . . . . . . . . . . . . . 9
Section 3. Lost, Stolen or Destroyed Certificates. . . . . . . . . 9
ARTICLE VII CUSTODY OF SECURITIES . . . . . . . . . . . . . . . . . . . 9
Section 1. Employment of a Custodian . . . . . . . . . . . . . . . 9
Section 2. Termination of Custodian Agreement. . . . . . . . . . . 10
Section 3. Other Arrangements. . . . . . . . . . . . . . . . . . . 10
ARTICLE VIII FISCAL YEAR AND ACCOUNTANT. . . . . . . . . . . . . . . . . 10
Section 1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . 10
Section 2. Accountant. . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IX AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE X NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. Determination of Net Asset Value. . . . . . . . . . . . 10
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1. Inspection of Books . . . . . . . . . . . . . . . . . . 11
Section 2. Severability. . . . . . . . . . . . . . . . . . . . . . 11
Section 3. Headings. . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
(ii)
<PAGE>
BYLAWS
OF
BERGER INVESTMENT PORTFOLIO TRUST
(A Delaware Business Trust)
These Bylaws of Berger Investment Portfolio Trust (the "Trust"), a
Delaware business trust, are subject to the Trust Instrument of the Trust dated
August 23, 1993, as from time to time amended, supplemented or restated (the
"Trust Instrument"). Capitalized terms used herein have the same meaning as in
the Trust Instrument.
ARTICLE I
---------
NAME OF TRUST, PRINCIPAL OFFICE AND SEAL
----------------------------------------
SECTION 1. PRINCIPAL OFFICE. The principal office of the Trust
shall be located in Denver, Colorado, or such other location as the Trustees
may from time to time determine. The Trust may establish and maintain other
offices and places of business as the Trustees may from time to time
determine.
SECTION 2. DELAWARE OFFICE. The Trustees shall establish a
registered office in the State of Delaware and shall appoint as the Trust's
registered agent for service of process in the State of Delaware an
individual resident of the State of Delaware or a Delaware corporation or a
corporation authorized to transact business in the State of Delaware and in
any case the business office of such registered agent for service of process
shall be identical with the registered Delaware office of the Trust.
SECTION 3. SEAL. The Trustees may adopt a seal which shall be in
such form and have such inscription as the Trustees may from time to time
determine. Any Trustee or officer of the Trust shall have authority to affix
the seal to any document, provided that the failure to affix the seal shall
not affect the validity or effectiveness of any document.
ARTICLE II
----------
MEETINGS OF TRUSTEES
--------------------
SECTION 1. MEETINGS. Meetings of the Trustees may be held at such
places and such times as the Trustees may from time to time determine. Such
meetings may be called orally or in writing by the Chairman of the Trustees
or by any two other Trustees. Each
<PAGE>
Trustee shall be given notice of any meeting as provided in Article II,
Section 7, of the Trust Instrument.
SECTION 2. ACTION WITHOUT A MEETING. Actions may be taken by the
Trustees without a meeting or by a telephone meeting, as provided in Article
II, Section 7, of the Trust Instrument.
SECTION 3. COMPENSATION OF TRUSTEES. Each Trustee may receive
such compensation from the Trust for his or her services and reimbursement
for his or her expenses as may be fixed from time to time by the Trustees.
ARTICLE III
-----------
COMMITTEES
----------
SECTION 1. ORGANIZATION. The Trustees may designate one or more
committees of the Trustees. The Chairmen of such committees shall be elected
by the Trustees. The number composing such committees and the powers
conferred upon the same shall be determined by the vote of a majority of the
Trustees. All members of such committees shall hold office at the pleasure
of the Trustees. The Trustees may abolish any such committee at any time in
their sole discretion. Any committee to which the Trustees delegate any of
their powers shall maintain records of its meetings and shall report its
actions to the Trustees. The Trustees shall have the power to rescind any
action of any committee, but no such rescission shall have retroactive
effect. The Trustees shall have the power at any time to fill vacancies in
the committees. The Trustees may delegate to these committees any of its
powers, except the power to declare a dividend or distribution on Shares,
authorize the issuance of Shares, recommend to Shareholders any action
requiring Shareholders' approval, amend these Bylaws, approve any merger or
Share exchange, approve or terminate any contract with an Investment Adviser,
Transfer Agent, Custodian or Principal Underwriter, or to take any other
action required by applicable law to be taken by the Trustees or to be
approved by Shareholders.
SECTION 2. EXECUTIVE COMMITTEE. The Trustees may elect from their
own number an Executive Committee which shall have any or all the powers of
the Trustees when the Trustees are not in session.
SECTION 3. NOMINATING COMMITTEE. The Trustees may elect from
their own number a Nominating Committee which shall have the power to select
and nominate Trustees who are not Interested Persons, and shall have such
other powers and perform such other duties as may be assigned to it from time
to time by the Trustees.
SECTION 4. AUDIT COMMITTEE. The Trustees may elect from their own
number an Audit Committee which shall have the power to review and evaluate
the audit function, including recommending
-2-
<PAGE>
independent certified public accountants, and shall have such other powers and
perform such other duties as may be assigned to it from time to time by the
Trustees.
SECTION 5. OTHER COMMITTEES. The Trustees may appoint other
committees whose members need not be Trustees. Each such committee shall
have such powers and perform such duties as may be assigned to it from time
to time by the Trustees, but shall not exercise any power which may lawfully
be exercised only by the Trustees or a committee thereof.
SECTION 6. PROCEEDINGS AND QUORUM. In the absence of an
appropriate resolution of the Trustees, each committee may adopt such rules
and regulations governing its proceedings, quorum and manner of acting as it
shall deem proper and desirable. In the event any member of any committee is
absent from any meeting, the members present at the meeting, whether or not
they constitute a quorum, may appoint a member of the Trustees to act in the
place of such absent member.
SECTION 7. COMPENSATION OF COMMITTEE MEMBERS. Each committee
member may receive such compensation from the Trust for his or her services
and reimbursement for his or her expenses as may be fixed from time to time
by the Trustees.
ARTICLE IV
----------
OFFICERS
--------
SECTION 1. GENERAL. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and may include a Chairman of the
Trustees, one or more Vice Presidents, Assistant Treasurers or Assistant
Secretaries, and such other officers as the Trustees may from time to time
elect. It shall not be necessary for any Trustee or other officer to be a
Shareholder of the Trust.
SECTION 2. ELECTION, TENURE AND QUALIFICATIONS OF OFFICERS. The
officers of the Trust, except those appointed as provided in Section 10 of
this Article, shall be elected by the Trustees. Each officer elected by the
Trustees shall hold office until his or her successor shall have been elected
and qualified or until his or her earlier resignation. Any person may hold
one or more offices of the Trust except that no one person may serve
concurrently as both President and Secretary. A person who holds more than
one office in the Trust may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed,
acknowledged or verified by more than one officer. Except for the Chairman
and the President, no officer need be a Trustee.
SECTION 3. VACANCIES AND NEWLY CREATED OFFICES. Whenever a vacancy
shall occur in any office, regardless of the reason for such vacancy, or if
any new office shall be created,
-3-
<PAGE>
such vacancies or newly created offices may be filled by the Trustees or, in
the case of any office created pursuant to Section 10 of this Article, by any
officer upon whom such power shall have been conferred by the Trustees.
SECTION 4. REMOVAL AND RESIGNATION. Any officer may be removed
from office by the Trustees. In addition, any officer or agent appointed in
accordance with the provisions of Section 10 of this Article may be removed,
with or without cause, by any officer upon whom such power of removal shall
have been conferred by the Trustees. Any officer may resign from office at
any time by delivering a written resignation to the Trustees, the President,
the Secretary, or any Assistant Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.
SECTION 5. CHAIRMAN. The Chairman of the Trustees, if such an
officer is elected by the Trustees, shall preside at all meetings of the
Trustees and at all meetings of the Shareholders, and shall exercise and
perform such other powers and duties as may be from time to time assigned to
the Chairman by the Trustees or prescribed by these Bylaws.
SECTION 6. PRESIDENT. The President shall be the chief executive
officer of the Trust. The President must be a Trustee. Subject to the
direction of the Trustees, the President shall have general charge of the
business affairs, policies and property of the Trust and general supervision
over its officers, employees and agents. In the absence of the Chairman of
the Trustees or if no Chairman of the Trustees has been elected, the
President shall preside at all Shareholders' meetings and at all meetings of
the Trustees and shall in general exercise the powers and perform the duties
of the Chairman of the Trustees. Except as the Trustees may otherwise order,
the President shall have the power to grant, issue, execute or sign such
powers of attorney, proxies, agreements or other documents as may be deemed
advisable or necessary in the furtherance of the interests of the Trust or
any Series or Class thereof. The President also shall have the power to
employ attorneys, accountants and other advisers and agents for the Trust.
The President shall exercise such other powers and perform such other duties
as the Trustees may from time to time assign to the President.
SECTION 7. VICE PRESIDENT. The Trustees may from time to time
elect one or more Vice Presidents who shall have such powers and perform such
duties as may from time to time be assigned to them by the Trustees or the
President. At the request or in the absence or disability of the President,
the Vice President (or, if there are two or more Vice Presidents, then the
first appointed of the Vice Presidents present and able to act) may perform
all the duties of the President and, when so acting, shall have all the
powers of and be subject to all the restrictions upon the President.
-4-
<PAGE>
SECTION 8. TREASURER AND ASSISTANT TREASURERS. The Treasurer
shall be the principal financial and accounting officer of the Trust and
shall have general charge of the finances and books of the Trust. The
Treasurer shall deliver all funds and securities of the Trust to such company
as the Trustees shall retain as custodian in accordance with the Trust
Instrument, these Bylaws, and applicable law. The Treasurer shall make
annual reports regarding the business and financial condition of the Trust as
soon as possible after the close of the Trust's fiscal year. The Treasurer
also shall furnish such other reports concerning the business and financial
condition of the Trust as the Trustees may from time to time require. The
Treasurer shall perform all acts incidental to the office of Treasurer,
subject to the supervision of the Trustees, and shall perform such additional
duties as the Trustees may from time to time designate.
Any Assistant Treasurer may perform such duties of the Treasurer as
the Trustees or the Treasurer may assign, and, in the absence of the
Treasurer, may perform all the duties of the Treasurer.
SECTION 9. SECRETARY AND ASSISTANT SECRETARIES. The Secretary
shall record all votes and proceedings of the meetings of Trustees and
Shareholders in books to be kept for that purpose. The Secretary shall be
responsible for giving and serving of all notices of the Trust. The
Secretary shall have custody of any seal of the Trust. The Secretary shall
be responsible for the records of the Trust, including the Share register and
such other books and papers as the Trustees may direct and such books,
reports, certificates and other documents required by law. All of such
records and documents shall at all reasonable times be kept open by the
Secretary for inspection by any Trustee for any proper Trust purpose. The
Secretary shall perform all acts incidental to the office of Secretary,
subject to the supervision of the Trustees, and shall perform such additional
duties as the Trustees may from time to time designate.
Any Assistant Secretary may perform such duties of the Secretary as
the Trustees or the Secretary may assign, and, in the absence of the
Secretary, may perform all the duties of the Secretary.
SECTION 10. SUBORDINATE OFFICERS. The Trustees may appoint from
time to time such other officers and agents as they may deem advisable, each
of whom shall have such title, hold office for such period, have such
authority and perform such duties as the Trustees may determine. The
Trustees may delegate from time to time to one or more officers or committees
of Trustees the power to appoint any such subordinate officers or agents and
to prescribe their respective rights, terms of office, authorities and
duties. Any officer or agent appointed in accordance with the provisions of
this Section 10 may be removed, either with or without cause, by any officer
upon whom such power of removal shall have been conferred by the Trustees.
-5-
<PAGE>
SECTION 11. COMPENSATION OF OFFICERS. Each officer may receive
such compensation from the Trust for services and reimbursement for expenses
as may be fixed from time to time by the Trustees.
SECTION 12. SURETY BOND. The Trustees may require any officer or
agent of the Trust to execute a bond (including, without limitation, any bond
required by the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission) to the Trust in such sum and with
such surety or sureties as the Trustees may determine, conditioned upon the
faithful performance of his or her duties to the Trust, including
responsibility for negligence and for the accounting of any of the Trust's
property, funds or securities that may come into his or her hands.
ARTICLE V
---------
MEETINGS OF SHAREHOLDERS
------------------------
SECTION 1. ANNUAL MEETINGS. There shall be no annual
Shareholders' meetings except as required by law or as hereinafter provided.
SECTION 2. SPECIAL MEETINGS. Special meetings of Shareholders of
the Trust or of any Series or Class shall be called by the President, Vice
President or Secretary whenever ordered by the Trustees, and shall be held at
such time and place as may be stated in the notice of the meeting.
Special meetings of the Shareholders of the Trust or of any Series
or Class shall be called by the Secretary upon the written request of
Shareholders owning at least twenty-five percent (25%) of the Outstanding
Shares entitled to vote at such meeting, provided that (1) such request shall
state the purposes of such meeting and the matters proposed to be acted on,
and (2) the Shareholders requesting such meeting shall have paid to the Trust
the reasonably estimated cost of preparing and mailing the notice thereof,
which the Secretary shall determine and specify to such Shareholders.
If the Secretary fails for more than thirty days to call a special
meeting, the Trustees or the Shareholders requesting such a meeting may, in
the name of the Secretary, call the meeting by giving the required notice.
If the meeting is a meeting of Shareholders of any Series or Class, but not a
meeting of all Shareholders of the Trust, then only a special meeting of
Shareholders of such Series or Class need be called and, in such case, only
Shareholders of such Series or Class shall be entitled to notice of and to
vote at such meeting.
SECTION 3. NOTICE OF MEETINGS. Except as provided in Section 2 of
this Article, the Secretary shall cause written notice
-6-
<PAGE>
of the place, date and time, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called. Notice shall be given
as determined by the Trustees at least fifteen days before the date of the
meeting. The written notice of any meeting may be delivered or mailed,
postage prepaid, to each Shareholder entitled to vote at such meeting. If
mailed, notice shall be deemed to be given when deposited in the United
States mail directed to the Shareholder at his or her address as it appears
on the records of the Trust. Notice of any Shareholders' meeting need not be
given to any Shareholder if a written waiver of notice, executed before, at
or after such meeting, is filed with the record of such meeting, or to any
Shareholder who is present at such meeting in person or by proxy unless the
Shareholder is present solely for the purpose of objecting to the call of the
meeting. Notice of adjournment of a Shareholders' meeting to another time or
place need not be given, if such time and place are announced at the meeting
at which the adjournment is taken and the adjourned meeting is held within a
reasonable time after the date set for the original meeting. At the
adjourned meeting the Trust may transact any business which might have been
transacted at the original meeting. If after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to Shareholders of record entitled to vote at such meeting.
Any irregularities in the notice of any meeting or the nonreceipt of any such
notice by any of the Shareholders shall not invalidate any action otherwise
properly taken at any such meeting.
SECTION 4. VALIDITY OF PROXIES. Subject to the provisions of the
Trust Instrument, Shareholders entitled to vote may vote either in person or
by proxy, provided that either (1) a written instrument authorizing such
proxy to act has been signed and dated by the Shareholder or by his or her
duly authorized attorney, or (2) the Trustees adopt by resolution an
electronic, telephonic, computerized or other alternative to execution of a
written instrument authorizing the proxy to act, but if a proposal by anyone
other than the officers or Trustees is submitted to a vote of the
Shareholders of the Trust or of any Series or Class, or if there is a proxy
contest or proxy solicitation or proposal in opposition to any proposal by
the officers or Trustees, Shares may be voted only in person or by written
proxy. Unless the proxy provides otherwise, it shall not be valid if
executed more than eleven months before the date of the meeting. All proxies
shall be delivered to the Secretary or other person responsible for recording
the proceedings before being voted. A proxy with respect to Shares held in
the name of two or more persons shall be valid if executed by one of them
unless at or prior to exercise of such proxy the Trust receives a specific
written notice to the contrary from any one of them. Unless otherwise
specifically limited by their terms, proxies shall entitle the Shareholder to
vote at any adjournment of a Shareholders meeting. At every meeting of
Shareholders, unless the voting is conducted by inspectors, all questions
concerning the qualifications of voters, the validity of proxies, and the
acceptance or rejection of votes, shall be decided by the chairman of the
meeting. Subject to the provisions of the
-7-
<PAGE>
Trust Instrument or these Bylaws, all matters concerning the giving, voting
or validity of proxies shall be governed by the General Corporation Law of
the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Shareholders
were shareholders of a Delaware corporation.
SECTION 5. PLACE OF MEETING. All special meetings of Shareholders
shall be held at the principal place of business of the Trust or at such
other place as the Trustees may from time to time designate.
SECTION 6. ACTION WITHOUT A MEETING. Any action to be taken by
Shareholders may be taken without a meeting if a majority (or such other
amount as may be required by law) of the Outstanding Shares entitled to vote
on the matter consent to the action in writing and such written consents are
filed with the records of the Shareholders' meetings. Such written consent
shall be treated for all purposes as a vote at a meeting of the Shareholders
held at the principal place of business of the Trust. If the unanimous
written consent of all Shareholders entitled to vote shall not have been
received, the Secretary shall give prompt notice of the action approved by
the Shareholders without a meeting.
ARTICLE VI
----------
SHARES OF BENEFICIAL INTEREST
-----------------------------
SECTION 1. SHARE CERTIFICATES. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
authorize from time to time. The Trustees may issue certificates to a
Shareholder of any Series or Class for any purpose and the issuance of a
certificate to one or more Shareholders shall not require the issuance of
certificates to all Shareholders. If the Trustees authorize the issuance of
Share certificates, then such certificates shall be in the form prescribed
from time to time by the Trustees and shall be signed by the President or a
Vice President and by the Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary of the Trust. Such signatures may be facsimiles if the
certificate is signed by a transfer agent or Shareholder servicing agent or
by a registrar, other than a Trustee, officer or employee of the Trust. If
any officer who has signed any such certificate or whose facsimile signature
has been placed thereon shall have ceased to be such an officer before the
certificate is issued, then such certificate may be issued by the Trust with
the same effect as if he or she were such an officer at the date of issue.
The Trustees may at any time discontinue the issuance of Share certificates
and may, by written notice to each Shareholder, require the surrender of
Share certificates to the Trust for cancellation. Such surrender and
cancellation shall not affect the ownership of Shares in the Trust.
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In lieu of issuing certificates of Shares, the Trustees or the
transfer agent or Shareholder servicing agent may either issue receipts or
may keep accounts upon the books of the Trust for record holders of such
Shares. In either case, the record holders shall be deemed, for all
purposes, to be holders of certificates for such Shares as if they accepted
such certificates and shall be held to have expressly consented to the terms
thereof.
SECTION 2. TRANSFER OF SHARES. The Shares of the Trust shall be
transferable only by a transfer recorded on the books of the Trust by the
Shareholder of record in person or by his or her duly authorized attorney or
legal representative. The Shares of the Trust may be freely transferred, and
the Trustees may, from time to time, adopt rules and regulations regarding
the method of transfer of such Shares. The Trust shall be entitled to treat
the holder of record of any Share or Shares as the absolute owner for all
purposes, and shall not be bound to recognize any legal, equitable or other
claim or interest in such Share or Shares on the part of any other person
except as otherwise expressly provided by law.
Shares of any portfolio of the Trust that are repurchased or
redeemed by the Trust will be held in the treasury. Shares which are held in
the treasury may be reissued and sold by the Trust.
SECTION 3. LOST, STOLEN OR DESTROYED CERTIFICATES. If any Share
certificate should become lost, stolen or destroyed, a duplicate Share
certificate may be issued in place thereof, upon such terms and conditions as
the Trustees may prescribe, including, but not limited to, requiring the
owner of the lost, stolen or destroyed certificate to give the Trust a bond
or other indemnity, in such form and in such amount as the Trustees may
direct and with such surety or sureties as may be satisfactory to the
Trustees sufficient to indemnify the Trust against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VII
-----------
CUSTODY OF SECURITIES
---------------------
SECTION 1. EMPLOYMENT OF A CUSTODIAN. The Trust shall at all
times place and maintain all funds, securities and similar investments of the
Trust and of each Series in the custody of a Custodian, including any
sub-custodian for the Custodian (the "Custodian"). The Custodian shall be
one or more banks or trust companies of good standing having an aggregate
capital surplus, and undivided profits of not less than two million dollars
($2,000,000), or such other financial institutions or other entities as shall
be permitted by rule or order of the Securities
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<PAGE>
and Exchange Commission. The Custodian shall be appointed from time to time
by the Trustees, who shall determine its remuneration.
SECTION 2. TERMINATION OF CUSTODIAN AGREEMENT. Upon termination
of the Custodian Agreement or inability of the Custodian to continue to
serve, the Trustees shall promptly appoint a successor Custodian, but in the
event that no successor Custodian can be found who has the required
qualifications and is willing to serve, the Trustees shall promptly call a
special meeting of the Shareholders to determine whether the Trust shall
function without a Custodian or shall be liquidated. If so directed by
resolution of the Trustees or by vote of a majority of Outstanding Shares of
the Trust, the Custodian shall deliver and pay over all property of the Trust
or any Series held by it as specified in such vote.
SECTION 3. OTHER ARRANGEMENTS. The Trust may make such other
arrangements for the custody of its assets (including deposit arrangements)
as may be required by any applicable law, rule or regulation.
ARTICLE VIII
------------
FISCAL YEAR AND ACCOUNTANT
--------------------------
SECTION 1. FISCAL YEAR. The fiscal year of the Trust shall be as
determined by the Trustees.
SECTION 2. ACCOUNTANT. The Trust shall employ independent
certified public accountants as its accountant ("Accountant") to examine the
accounts of the Trust and to sign and certify financial statements filed by
the Trust. The Accountant's certificates and reports shall be addressed both
to the Trustees and to the Shareholders.
ARTICLE IX
----------
AMENDMENTS
----------
SECTION 1. GENERAL. All Bylaws of the Trust shall be subject to
amendment, alteration or repeal, and new Bylaws may be made by the
affirmative vote of a majority of either: (1) the Outstanding Shares of the
Trust entitled to vote at any meeting; or (2) the Trustees at any meeting.
ARTICLE X
---------
NET ASSET VALUE
---------------
SECTION 1. DETERMINATION OF NET ASSET VALUE. The term "Net Asset
Value" of any Series shall mean that amount by which the assets belonging to
that Series exceed its liabilities, all as
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determined by or under the direction of the Trustees. Such value per Share
shall be determined separately for each Series and shall be determined on
such days and at such times as the Trustees may determine. Such
determination shall be made with respect to securities for which market
quotations are readily available, at the market value of such securities; and
with respect to other securities and assets, at the fair value as determined
in good faith by the Trustees, provided, however, that the Trustees, without
Shareholder approval, may alter the method of appraising portfolio securities
insofar as permitted under the Investment Company Act of 1940 and the rules,
regulations and interpretations thereof promulgated or issued by the
Securities and Exchange Commission or insofar as permitted by any order of
the Securities and Exchange Commission applicable to the Series. The
Trustees may delegate any of their powers and duties under this Section 1
with respect to appraisal of assets and liabilities. At any time the
Trustees may cause the Net Asset Value per Share last determined to be
determined again in a similar manner and may fix the time when such
redetermined values shall become effective.
ARTICLE XI
----------
MISCELLANEOUS
-------------
SECTION 1. INSPECTION OF BOOKS. The Trustees shall from time to
time determine whether and to what extent, and at what times and places, and
under what conditions the accounts and books of the Trust or any Series or
Class shall be open to the inspection of Shareholders. No Shareholder shall
have any right to inspect any account or book or document of the Trust except
as conferred by law or otherwise by the Trustees.
SECTION 2. SEVERABILITY. The provisions of these Bylaws are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the Investment Company Act of 1940, the
regulated investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations the conflicting provision shall be
deemed never to have constituted a part of these Bylaws; provided, however,
that such determination shall not affect any of the remaining provisions of
these Bylaws or render invalid or improper any action taken or omitted prior
to such determination. If any provision hereof shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision only in such jurisdiction and shall not affect
any other provision of these Bylaws.
SECTION 3. HEADINGS. Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.
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<PAGE>
EXHIBIT 5.1
INVESTMENT ADVISORY AGREEMENT
BERGER SMALL COMPANY GROWTH FUND
(A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST)
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this
_____ day of October, 1994, between BERGER ASSOCIATES, INC., a Delaware
corporation ("Berger Associates"), and BERGER INVESTMENT PORTFOLIO TRUST, a
Delaware business trust (the "Trust") with respect to BERGER SMALL COMPANY
GROWTH FUND, a series of the Trust (the "Fund").
W I T N E S S E T H:
-------------------
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has registered it shares for public offering under the
Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate series of
shares, each with its own separate investment portfolio, one of such series
created by the Trust being the Fund; and
WHEREAS, the Trust and Berger Associates deem it mutually
advantageous that Berger Associates should assist the Trustees and officers
of the Trust in the management of the securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. MANAGEMENT FUNCTIONS. In addition to the expenses which
Berger Associates may incur in the performance of its investment advisory
functions under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Trust or
otherwise, Berger Associates shall incur and pay the following expenses
relating to the Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the
Trust's officers and its Trustees (the "Trustees"), except for
such Trustees who are not interested persons of Berger
Associates;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the Fund, other
than expenses incurred in complying with federal and state laws
and the law of any foreign country or territory or other
jurisdiction applicable to the issue, offer or sale of shares of
the Fund including without limitation registration fees and
costs, the costs of preparing the registration statement
relating to the Fund and
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<PAGE>
amendments thereto, and the costs and expenses of preparing,
printing, and mailing prospectuses (and statements of additional
information) to persons other than shareholders of the Fund.
2. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser to the Fund, Berger Associates shall have the following
responsibilities:
(a) To furnish continuous advice and recommendations to the Fund
as to the acquisition, holding or disposition of any or all
of the securities or other assets which the Fund may own or
contemplate acquiring from time to time, giving due consideration
to the investment policies and restrictions and the other
statements concerning the Fund in the Trust's Trust Instrument,
Bylaws, and registration statements under the 1940 Act and the
1933 Act, and to the provisions of the Internal Revenue Code, as
amended from time to time, applicable to the Fund as a regulated
investment company;
(b) To cause its officers to attend meetings and furnish oral or
written reports, as the Trust may reasonably require, in order
to keep the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment portfolio of the
Fund, the investment recommendations of Berger Associates, and
the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities as directed
by the appropriate officers of the Trust.
3. OBLIGATIONS OF TRUST. The Trust shall have the following
obligations under this Agreement:
(a) To keep Berger Associates continuously and fully informed as
to the composition of the investment portfolio of the Fund and
the nature of all of the Fund's assets and liabilities from time
to time;
(b) To furnish Berger Associates with a certified copy of any
financial statement or report prepared for the Fund by certified
or independent public accountants and with copies of any
financial statements or reports made to the Fund's shareholders
or to any governmental body or securities exchange;
(c) To furnish Berger Associates with any further materials or
information which Berger Associates
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<PAGE>
may reasonably request to enable it to perform its function
under this Agreement; and
(d) To compensate Berger Associates for its services and reimburse
Berger Associates for its expenses incurred hereunder in
accordance with the provisions of paragraph 4 hereof.
4. COMPENSATION. The Trust shall pay to Berger Associates for
its services under this Agreement a monthly fee, payable on the last day of
each month during which or part of which this Agreement is in effect, of 1/12
of 0.9% of the average daily closing net asset value of the Fund for such
month. For the month during which this Agreement becomes effective and the
month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar
days of such month during which this Agreement is effective.
5. EXPENSES PAID BY THE TRUST. The Trust assumes and shall pay
all expenses incidental to its operations and business not specifically
assumed or agreed to be paid by Berger Associates pursuant to Section 1
hereof, including, but not limited to, investment adviser fees; any
compensation, fees or reimbursements which the Trust pays to its Trustees who
are not interested persons of Berger Associates; compensation of the Fund's
custodian, transfer agent, registrar and dividend disbursing agent; legal,
accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including
any appropriate commissions paid to Berger Associates or its affiliates for
effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses
of delivering such certificates to the purchasers thereof; expenses of local
representation in Delaware; expenses of shareholders' meetings and of
preparing, printing and distributing proxy statements, notices, and reports
to shareholders; expenses of preparing and filing reports and tax returns
with federal and state regulatory authorities; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer or sale of shares of the Fund, including, but
not limited to, all costs involved in the registration or qualification of
shares of the Fund for sale in any jurisdiction, the costs of portfolio
pricing services and systems for compliance with blue sky laws, and all costs
involved in preparing, printing and mailing prospectuses and statements of
additional information of the Fund; and all fees, dues and other expenses
incurred by the Trust in connection with the membership of the Trust in any
trade association or other investment company organization. To the extent
that Berger Associates shall perform any of the above described
administrative and clerical functions, including transfer agency, registry,
dividend disbursing, recordkeeping, bookkeeping, accounting and blue sky
monitoring and
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<PAGE>
registration functions, and the preparation of reports and returns, the Trust
shall pay to Berger Associates compensation for, or reimburse Berger
Associates for its expenses incurred in connection with, such services as
Berger Associates and the Trust shall agree from time to time, any other
provision of this Agreement notwithstanding.
6. TREATMENT OF INVESTMENT ADVICE. The Trust shall treat the
investment advice and recommendations of Berger Associates as being advisory
only, and shall retain full control over its own investment policies.
However,the Trustees may delegate to the appropriate officers of the Trust,
or to a committee of the Trustees, the power to authorize purchases, sales or
other actions affecting the portfolio of the Fund in the interim between
meetings of the Trustees.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement,
brokerage commissions paid by the Fund upon the purchase or sale of its
portfolio securities shall be considered a cost of securities of the Fund and
shall be paid by the Fund. Berger Associates is authorized and directed to
place Fund portfolio transactions only with brokers and dealers who render
satisfactory service in the execution of orders at the most favorable prices
and at reasonable commission rates, provided, however, that Berger Associates
may pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if Berger Associates
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer viewed in terms of either that particular transaction or the
overall responsibilities of Berger Associates. Berger Associates is also
authorized to consider sales of Fund shares as a factor in selecting
broker-dealers to execute Fund portfolio transactions. In placing portfolio
business with such broker-dealers, Berger Associates shall seek the best
execution of each transaction. Subject to the terms of this Agreement and the
applicable requirements and provisions of the law, including the Investment
Company Act of 1940 and the Securities Exchange Act of 1934, as amended, and
in the event that Berger Associates or an affiliate is registered as a
broker-dealer, Berger Associates may select a broker or dealer with which it
or the Fund is affiliated. Berger Associates or such affiliated
broker-dealer may effect or execute Fund portfolio transactions, whether on a
securities exchange or in the over-the-counter market, and receive separate
compensation from the Fund therefor. Notwithstanding the foregoing, the Trust
shall retain the right to direct the placement of all portfolio transactions,
and the Trustees of the Trust may establish policies or guidelines to be
followed by Berger Associates in placing portfolio transactions for the Trust
pursuant to the foregoing provisions. Berger Associates shall report on the
placement of portfolio transactions in the prior fiscal quarter at each
quarterly meeting of such Trustees.
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<PAGE>
8. TERMINATION. This Agreement may be terminated at any time,
without penalty, by the Trustees of the Trust, or by the shareholders of the
Trust acting by vote of at least a majority of its outstanding voting
securities, provided in either case that sixty (60) days' advance written
notice of termination be given to Berger Associates at its principal place of
business. This Agreement may be terminated by Berger Associates at any time,
without penalty, by giving sixty (60) days' advance written notice of
termination to the Trust, addressed to its principal place of business. The
Trust agrees that, consistent with the terms of the Trust's Trust Instrument,
the Trust shall cease to use the name "Berger" in connection with the Fund as
soon as reasonably practicable following any termination of this Agreement if
Berger Associates does not continue to provide investment advice to the Fund
after such termination.
9. ASSIGNMENT. This Agreement shall terminate automatically in
the event of any assignment of this Agreement.
10. TERM. This Agreement shall continue in effect until the last
day of April, 1995, unless sooner terminated in accordance with its terms,
and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority of the
outstanding voting securities of the Trust. The annual approvals provided
for herein shall be effective to continue this Agreement from year to year if
given within a period beginning not more than sixty (60) days prior to the
last day of April of each applicable year, notwithstanding the fact that more
than three hundred sixty-five (365) days may have elapsed since the date on
which such approval was last given.
11. AMENDMENTS. This Agreement may be amended by the parties only
if such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons of Berger
Associates and, if required by applicable law, (ii) by the affirmative vote
of a majority of the outstanding voting securities of the Fund.
12. ALLOCATION OF EXPENSES. The Trustees shall determine the
basis for making an appropriate allocation of the Trust's expenses (other
than those directly attributable to the Fund) between the Fund and any other
series of the Trust and between the Fund and other investment companies
managed by Berger Associates.
13. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that
the Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of
State of the State of Delaware. All parties to this Agreement acknowledge
and agree that
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<PAGE>
the Trust is a series trust and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets held with respect
to such series only, and not against the assets of the Trust generally or
against the assets held with respect to any other series and further that no
trustee, officer or holder of shares of beneficial interest of the Trust
shall be personally liable for any of the foregoing.
14. LIMITATION OF LIABILITY OF BERGER ASSOCIATES. Berger
Associates shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission taken
with respect to the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder and except to the extent
otherwise provided by law. As used in this Section 14, "Berger Associates"
shall include any affiliate of Berger Associates performing services for the
Trust contemplated hereunder and directors, officers and employees of Berger
Associates and such affiliates.
15. ACTIVITIES OF BERGER ASSOCIATES. The services of Berger
Associates to the Trust hereunder are not to be deemed to be exclusive, and
Berger Associates and its affiliates are free to render services to other
parties. It is understood that trustees, officers and shareholders of the
Trust are or may become interested in Berger Associates as directors,
officers and shareholders of Berger Associates, that directors, officers,
employees and shareholders of Berger Associates are or may become similarly
interested in the Trust, and that Berger Associates may become interested in
the Trust as a shareholder or otherwise.
16. CERTAIN DEFINITIONS. The terms "vote of a majority of the
outstanding voting securities", "assignment" and "interested persons" when
used herein, shall have the respective meanings specified in the 1940 Act, as
now in effect or hereafter amended, and the rules and regulations thereunder,
subject to such orders, exemptions and interpretations as may be issued by
the Securities and Exchange Commission under said Act and as may be then in
effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of the date and
year first above written.
BERGER ASSOCIATES, INC.
By
---------------------------------
Title:
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<PAGE>
BERGER INVESTMENT PORTFOLIO TRUST
By
---------------------------------
Title:
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<PAGE>
EXHIBIT 9.2.1
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement") is entered into
effective as of the _______ day of __________________, 1993, by and between
Berger Associates, Inc. ("Berger Associates"), and Berger Investment
Portfolio Trust (the "Trust"), with respect to Berger Small Company Growth
Fund, a series of the Trust (the "Fund").
RECITALS
A. The Trust is a Delaware business trust and an open-end, management
investment company registered under the Investment Company Act of 1940.
B. The Fund is a series of the Trust for which Berger Associates acts
as investment adviser.
C. The parties desire that in addition to its duties as investment
adviser, Berger Associates provide certain administrative and record keeping
services to the Trust with respect to the Fund, on the terms and conditions
set forth herein.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Berger Associates shall perform all administrative and record
keeping services (excluding transfer agent, dividend disbursing agent and
related shareholder services) for the Fund not otherwise provided for and
described in the Recordkeeping and Pricing Agent Agreement between the Trust
and Investors Fiduciary Trust Company, dated ___________________, 1993,
including the preparation of financial statements and reports to be filed
with the Securities and Exchange Commission and state regulatory authorities,
and the maintenance and preservation of all such statements and reports, and
any supporting documentation as may be required by the Investment Company Act
of 1940 and other applicable federal and state laws and regulations.
2. The Trust shall pay to Berger Associates a monthly fee for
performing such services, payable on the last day of each month during all or
part of which this Agreement is in effect, of one-twelfth (1/12) of one
one-hundredth of one percent (.01%) of the average daily closing net assets
of the Fund for such month.
3. In performing the services described in Section 1, Berger
Associates shall at all times comply with the applicable provisions of the
Investment Company Act of 1940 and any other federal or state securities laws.
<PAGE>
4. This Agreement shall continue until terminated at the end of any
month by either party upon at least 60 days' notice in writing to the other
party. This Agreement may not be assigned by either party without the written
consent of the other party.
5. NOTICE IS HEREBY GIVEN that the Trust is a business trust organized
under the Delaware Business Trust Act pursuant to a Certificate of Trust
filed in the office of the Secretary of State of the State of Delaware. All
parties to this Agreement acknowledge and agree that the Trust is a series
trust and all debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular series
shall be enforceable against the assets held with respect to such series
only, and not against the assets of the Trust generally or against the assets
held with respect to any other series and further that no trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally
liable for any of the foregoing.
6. This Agreement may be amended by the parties, provided that all
such amendments shall be subject to the approval of the Trustees of the Trust.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the date first set forth above.
BERGER INVESTMENT PORTFOLIO TRUST
By:
---------------------------
Title:
BERGER ASSOCIATES, INC.
By:
---------------------------
Title:
2
<PAGE>
EXHIBIT 9.3
RECORDKEEPING AND PRICING AGENT AGREEMENT
THIS AGREEMENT made to be effective as of this ___ day of ____________,
199__ , by and between BERGER INVESTMENT PORTFOLIO TRUST, a Delaware business
trust, referred to as the "Fund," consisting of separate portfolios
represented by separate series of shares of beneficial interest, (referred to
herein, together with any such portfolios hereafter constituted, where
appropriate, individually as a "Portfolio," and collectively as the
"Portfolios"), having its place of business at 210 University Boulevard,
Suite 900, Denver, Colorado 80206 ("Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a state chartered trust company organized and existing under the
laws of the State of Missouri, having its principal place of business at 127
West 10th Street, Kansas City, Missouri, 64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Recordkeeping and Pricing Agent
and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, mutually covenant and agree
as follows:
1. APPOINTMENT OF RECORDKEEPING AND PRICING AGENT
Fund hereby constitutes and appoints IFTC as Recordkeeping and Pricing
Agent to calculate the daily net asset value of each Portfolio and to
perform certain accounting and recordkeeping functions required of Fund
as a registered investment company under the Investment Company Act of
1940, as amended (the "Act"); to provide certain information
necessary for Fund to file financial and other reports; to prepare,
maintain and preserve certain required books, accounts and records as
the basis for such reports; to perform certain daily functions in
connection with such accounts and records; and, upon request, to act as
liaison with the Fund's independent auditors.
<PAGE>
2. DELIVERY OF CORPORATE DOCUMENTS
Fund shall deliver to IFTC prior to the effective date of this
Agreement copies of a resolution of the Trustees of Fund certified by
the Secretary or Assistant Secretary of the Fund, appointing IFTC as
Recordkeeping and Pricing Agent for Fund and approving the form of this
Agreement. Fund shall also deliver a resolution of the Trustees of the
Fund designating certain persons to give instructions on behalf of the
Fund to IFTC, and authorizing IFTC to rely upon written instructions
over his/her/their signatures.
3. REPRESENTATIONS AND WARRANTIES OF FUND
A. Fund represents and warrants that it is a business trust duly
organized as an investment company and existing and in good
standing under the laws of the State of Delaware;
B. Fund represents and warrants that it has the power and authority
under applicable laws, its Trust Instrument and bylaws, and has
taken all action necessary to enter into and perform this
Agreement, including appropriate authorization from the Fund's
Trustees;
C. Fund represents and warrants that it has determined that the
automated data processing system on which IFTC shall prepare,
maintain and preserve the books and records of the Fund (the
"Portfolio System") is suitable for its needs;
D. Fund acknowledges that IFTC, as Licensee, and DST Systems, Inc.,
as Licensor ("Licensor"), have proprietary rights in and to the
Portfolio System and that the Portfolio System and the programs,
documentation, books, records, lists, pricing schedules, designs,
plans and other information relating to the Portfolio System or
the business of IFTC ("IFTC Confidential Information") are
confidential and constitute trade secrets of IFTC;
E. During the term of this Agreement and for a period of five years
after termination of this Agreement, Fund shall preserve the
confidentiality of the IFTC Confidential Information and prevent
its disclosure to persons other than its own employees and agents
who reasonably have a need to know or have access to the
IFTC Confidential Information pursuant to this Agreement, and
shall take appropriate action to protect the rights of IFTC and
Licensor as to the IFTC Confidential Information, including,
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<PAGE>
but not limited to notification to all employees and agents of
the Fund of the necessity to maintain the confidentiality of IFTC
Confidential Information, provided, that IFTC shall be solely
responsible for protecting any trademarks, patents, copyrights
and licenses against unauthorized use and infringement by parties
other than the Fund, its employees and agents.
4. REPRESENTATION AND WARRANTIES OF IFTC
A. IFTC is a trust company duly organized and existing and in good
standing under the laws of the State of Missouri.
B. IFTC has the power and authority under applicable laws, its
charter and bylaws, and has taken all action necessary, to enter
into this Agreement and perform the services contemplated herein,
and this Agreement constitutes a legal, valid and binding
obligation of IFTC, enforceable in accordance with its terms.
C. IFTC has obtained and shall maintain throughout the term of this
Agreement all necessary proprietary rights and approvals, licenses
and permits which are required for IFTC to perform its duties and
obligations hereunder and to use the Portfolio System.
D. IFTC presently has, and shall maintain throughout the term of
this Agreement, facilities, equipment, computer hardware and
software, and personnel necessary to perform its duties and
obligations under this Agreement, and shall maintain or otherwise
have readily available, reasonable back-up facilities and
equipment to ensure that there is no material interruption in the
services contemplated by this Agreement, except as provided in
Section 7 hereof.
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5. DUTIES AND RESPONSIBILITIES OF IFTC
A. DELIVERY OF RECORDS.
Fund shall turn over to IFTC all of Fund's accounts and records
previously maintained relating to the services to be provided by
IFTC hereunder. IFTC shall be entitled to rely conclusively on
the completeness and correctness of the accounts and records
turned over to it by Fund or its previous service provider and
Fund shall indemnify and hold IFTC harmless of and from any and
all costs, expenses, damages, losses and liabilities whatsoever,
including attorney's fees (collectively, "Damages"), arising out
of or in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of Fund
or its previous service provider to provide any portion of such
account and records or to provide any information needed by IFTC
to perform its function hereunder.
B. ACCOUNTING AND PORTFOLIO DUTIES.
IFTC shall perform the duties specified on Schedule A attached
hereto.
C. ACCOUNTS AND RECORDS
1. IFTC, with the direction of the Fund, its accountants and/or
its advisors, shall prepare, maintain and preserve all books,
records, ledgers, journals, accounts and other documents,
containing such information as may be required from time to
time under the Act relating to the activities performed by
IFTC pursuant to Schedule A (the "Records"); preserve the
Records in an readily accessible location for at least the
periods required under the Act, at all times during the term
of this Agreement and, as may be reasonably necessary,
following the termination of this Agreement, make the Records
available for examination by the Securities and Exchange
Commission, the Fund, the Fund's accountants and such other
persons as the Fund may deem appropriate; and maintain
facilities and equipment necessary for producing readable
projections or hard copies of Records. Notwithstanding the
terms of this Section C.1. as heretofore provided, IFTC shall
not be responsible for maintaining or furnishing such Records
after termination of the Agreement to the extent that such
Records have been forwarded to the Fund or its agent.
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<PAGE>
Hard copies of Records will be furnished to the Fund without
additional cost unless such requests for Records are unusual,
repetitive, require special handling, or otherwise reasonably
warrant the Fund's reimbursement for the costs associated
therewith. The Fund shall pay for the costs of maintaining
microfiche records.
2. It shall be the responsibility of Fund to furnish IFTC
with the declaration, record and payment dates and amounts of
any dividends or other distributions, other special actions,
and the value or price of the securities in Fund's portfolio
to the extent such information is not available from generally
accepted securities industry services or publications. IFTC
shall incur no liability and Fund shall indemnify and hold
IFTC harmless from any liability in connection with the Fund's
furnishing of such information.
3. The accounts, books and records prepared, maintained and
preserved by IFTC pursuant to this Agreement shall be the
property of the Fund and shall be made available to the Fund
for inspection or reproduction promptly upon demand.
4. IFTC shall assist Fund's independent accountants, and upon
instruction from Fund or upon proper demand, shall assist any
court or regulatory body, in any requested review of Fund's
accounts and records prepared and maintained by IFTC. Fund
shall reimburse IFTC for all reasonable expenses and employee
time associated with any such review which is not part of
routine or normal periodic reviews, unless such expenses are
incurred as a result of a breach of this Agreement by IFTC or
IFTC's negligence or willful misconduct. For purposes of this
Agreement, routine or normal periodic reviews include the
annual audit of the Fund and routine interim audits or reviews
by the Fund's independent accountants and the routine reviews
by the Securities and Exchange Commission (SEC).
5. IFTC shall provide Fund with information for tax returns,
questionnaires, and periodic reports to shareholders and such
other reports and information as Fund may request in
conjunction with IFTC's stated duties hereunder. IFTC
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<PAGE>
shall provide such information as soon as reasonably
practicable following the Fund's request or as may be
otherwise agreed to by the parties.
6. IFTC and Fund may from time to time adopt procedures as they
may agree upon, and IFTC may conclusively assume that any
procedure approved by Fund, or directed by Fund in the manner
prescribed by Section 6.B., does not conflict with or violate
any requirements of Fund's prospectus, Trust Instrument,
bylaws, or any law, rule or regulation applicable to Fund.
Fund shall be responsible to notify IFTC of any changes in its
prospectus, Trust Instrument, bylaws, or policies applicable
to the Fund which may necessitate changes in IFTC's
responsibilities or procedures. The Fund may conclusively
assume that any procedure adopted by IFTC does not conflict
with or violate any requirements of IFTC's charter, bylaws, or
any law, rule or regulation applicable to IFTC. IFTC shall be
responsible to notify the Fund of any changes in its charter,
bylaws, or policies which may affect the Fund's
responsibilities or procedures.
7. IFTC will calculate Portfolio's daily closing net asset value,
in accordance with the Fund's prospectus. IFTC will prepare
and maintain a daily valuation of securities held in the
Portfolios for which market quotations are available by the
use of outside services normally used and contracted for this
purpose; all other securities will be valued in accordance
with Fund's instructions.
6. LIMITATION OF LIABILITY OF IFTC
A. IFTC shall not be liable for any loss or damage resulting from its
action or omission to act or otherwise, except for any loss or damage
arising from any breach of this Agreement or any negligent act or
omission or willful misconduct of IFTC and IFTC shall indemnify and
hold harmless Fund from and against any Damages arising from such
breach, negligence or willful misconduct. Without limiting the
generality of the foregoing, IFTC will use best efforts to resolve to
the satisfaction of the Fund the effect on shareowners of any IFTC
error which causes an incorrect calculation of the net asset value of
the Portfolios and which effect is considered material, as such term
is generally used by accountants in the mutual fund industry. IFTC
shall not be
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liable for consequential, special, or punitive damages. IFTC may
request and obtain the advice and opinion of counsel for Fund or its
own counsel at the reasonable expense of Fund with respect to
questions or matters of law relating to its performance of this
Agreement, and it shall be without liability to Fund for any action
taken or omitted by it in good faith, in conformity with such advice
or opinion.
B. IFTC may rely, and be protected in acting in reliance upon any
instruction, advice, notice, consent, resolution, opinion,
certificate or other written instrument appearing to be genuine and
properly executed by an authorized representative of the Fund or
any oral instruction from an authorized representative of the Fund
("Instruction"), except trade instructions and adjustments to the
Fund's trial balance sheet, general ledger or balance sheet, which
must be in writing executed by two authorized representatives of
the Fund, unless IFTC has actual knowledge that any such
Instruction is incorrect or unauthorized.
C. IFTC shall be entitled to receive and Fund agrees to pay to IFTC,
on demand, reimbursement for such cash disbursements, costs and
expenses as may be agreed upon in writing from time to time by IFTC
and Fund.
D. During the term of this Agreement and for a period of five years
after termination of this Agreement, IFTC shall not use and shall
preserve the confidentiality of all accounting and financial
information, investment portfolio records including, but not limited
to, transactional information, share subscription and redemption
records, and other records made available to or created by IFTC
under the terms of this Agreement ("Fund Confidential Information"),
other than for purposes of complying with its duties and
responsibilities under this Agreement or as specifically authorized
by Fund in writing. IFTC shall prevent disclosure of Fund
Confidential Information to persons other than its own agents and
employees who reasonably have a need to know or have access to Fund
Confidential Information pursuant to this Agreement, and shall take
appropriate action to protect the rights of Fund in such Fund
Confidential Information including, but not limited to, notification
to all its employees and agents of the necessity to maintain the
confidentiality of Fund Confidential Information, provided, that
Fund shall be solely responsible for
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<PAGE>
protecting any trademarks, patents, copyrights and licenses against
unauthorized use and infringement by parties other than IFTC, its
employees and agents.
7. FORCE MAJEURE
IFTC shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including without limitation any interruption, loss or
malfunction of any utility, transportation, computer (hardware or
software) or communication service; or inability to obtain labor,
material, equipment or transportation; nor shall any such failure or
delay give Fund any additional right to terminate this Agreement.
8. ADDITIONAL FUNDS
IFTC shall act as Recordkeeping and Pricing Agent for additional
Portfolios upon 30 days notice to IFTC provided that IFTC consents in
writing in advance to such arrangement. Rates or charges for serving as
Recordkeeping and Pricing Agent for any such additional Portfolios
shall be as agreed to by IFTC and Fund in writing.
9. COMPENSATION
Fund shall pay to IFTC such compensation at such time as may from time
to time be agreed upon in writing by IFTC and Fund. The initial
compensation schedule is attached hereto as Schedule B.
10. TERMINATION
Either party to this Agreement may terminate same by notice in writing
received by the other party not less than sixty (60) days prior to the
date upon which such termination shall take effect. Upon termination of
this Agreement, Fund shall pay to IFTC such compensation for its
reimbursable disbursements, costs and expenses paid or incurred to such
date and Fund shall use its best efforts to obtain a successor agent.
IFTC shall, upon termination of this Agreement, deliver to the
successor so specified or appointed, or to Fund, at IFTC's office, all
books, records, ledgers, accounts, journals and other documents and
information then held by IFTC hereunder, all money, instruments and
other funds and other properties of Fund deposited with or held by IFTC
hereunder. In the event no written order designating a successor (which
may be Fund) shall have been delivered to IFTC on or before the date
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<PAGE>
when such termination shall become effective, then IFTC shall deliver
such records, funds and properties of Fund to a bank or trust company
at the selection of IFTC having not less than $2,000,000 aggregate
capital, surplus and undivided profits as shown by its most recent
published report, and meeting the requirements of the Act, or if a
satisfactory successor cannot be obtained, IFTC may deliver the assets
to the Fund, at IFTC's offices or as otherwise agreed to between the
parties. Thereafter the Fund or such bank or trust company shall be the
successor under this Agreement and shall be entitled to reasonable
compensation for its services. Notwithstanding the foregoing
requirement as to delivery upon termination of this Agreement, IFTC may
make any other delivery of the records, funds and property of Fund
which shall be permitted by the Act and Fund's Trust Instrument or
bylaws then in effect.
11. NOTICES
Notices, requests, instructions and other writings received by Fund at
210 University Boulevard, Suite 900, Denver, Colorado 80206, or at such
address as Fund may have designated to IFTC in writing, shall be deemed
to have been properly given to Fund hereunder; and notices, requests,
instructions and other writings received by IFTC at its offices at 127
West 10th Street, Kansas City, Missouri 64105, or to such other address
as it may have designated to Fund in writing, shall be deemed to have
been properly given to IFTC hereunder.
12. LIMITATION OF LIABILITY.
Notice is hereby given that the Fund is a business trust organized
under the Delaware Business Trust Act pursuant to a Certificate of
Trust filed in the office of the Secretary of State of the State of
Delaware. All parties to this Agreement acknowledge and agree that the
Fund is a series Fund and all debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to
a particular series shall be enforceable against the assets held with
respect to such series only, and not against the assets of the Fund
general or against the assets held with respect to any other series;
and further that no trustee, officer or holder of shares of beneficial
interest of the Fund shall be personally liable for any of the
foregoing.
13. MISCELLANEOUS
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<PAGE>
A. This Agreement is executed and delivered in the State of Missouri
and shall be governed by the laws of said state.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by both parties hereto.
D. The captions in the Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts
held to be illegal, in conflict with any law or otherwise
invalid, the remaining portion or portions shall be considered
severable and not be affected, and the rights and obligations of
the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be
illegal or invalid.
G. This Agreement may not be assigned by either party without prior
written consent of the other party.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized corporate or trust officers.
BERGER INVESTMENT PORTFOLIO TRUST
By:
---------------------------------------
Title:
------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By:
---------------------------------------
Title:
------------------------------------
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<PAGE>
Schedule - A
ACCOUNTING AND PORTFOLIO DUTIES
In its capacity as the Recordkeeping and Pricing Agent for the Fund, IFTC
shall perform the following responsibilities:*
A. ON A DAILY BASIS.
1. Prepare available cash forecasts and communicate balances to the
Fund.
2. Review investment portfolio for cash and stock dividends and stock
splits.
3. Prepare compliance reports including data necessary to monitor
compliance with limitations prescribed by the Investment
Company Act of 1940 with respect to the types and amounts
of securities held in the Portfolio.
4. Review failed security transaction report; investigate failed
transactions and report status to Fund.
5. Prepare overdraft report with explanation of overdraft.
6. Post Fund share receivables and payables to the Fund's general
ledger; send general ledger reflecting all the day's activities
to Fund preferably by 3:30 p.m. Mountain time but in no event
later than 8 a.m. Mountain time the next day.
7. Reconcile ending share balance from transfer agent reports to
general ledger; report differences to Fund and resolve with the
transfer agent.
8. Enter security transactions reported by the Fund.
9. Post bank activity to general ledger; account for all items on
bank statements, and prepare and complete daily bank
reconciliations, including documentation of reconciling items.
10. Post manual journal entries to the general ledger.
11. Review current daily security transactions for dividends, splits
and other corporate activity.
12. Prepare Net Asset Value rollforward.
13. Review individual components of the change in each Portfolio's Net
Asset Value for accuracy and reasonableness.
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<PAGE>
14. Enter manual prices.
15. Review pricing stratification report for unusual price movements
in individual securities; investigate and trace items to the
particular pricing sources; and consult with Fund. Review pricing
report for detection of stock splits and dividends, cash
dividends and corporate action. Review NAV for incorrect CUSIP
numbers or ticker symbols or incorrectly posted purchases and
sales of securities. Review income and expense accruals and
posting of gains and losses for proper recording. Send Fund
complete pricing sheet for the Fund's Portfolios preferably by
3:30 p.m. Mountain time but in no event later that 8:00 a.m.
Mountain time the next day.
16. Review for ex-dividend items indicated by pricing sources.
17. Communicate required pricing information to Fund,
quotation/publication services and to transfer agents.
Communicate NAV to newspapers and quotation services in time for
publication and to the transfer agent in time to run the
shareowner accounts by the beginning of the next day. Communicate
the NAV and corresponding worksheet to the Fund preferably by
3:30 p.m. Mountain time but in no event later that 8:00 a.m.
Mountain time the next day.
18. Attend to routine matters in connection with the calculation of the
net asset value and aggregate asset value of each Portfolio.
B. ON A PERIODIC BASIS.
1. Provide information prepared by IFTC during the performance of its
duties hereunder for Fund's semiannual reports within 15 calendar
days after March 31st and September 30th or the end of the
reporting period of the Fund, as applicable.
2. As agreed upon, deliver information to Fund on days when the NYSE
is not open.
*Information shall be provided by IFTC's normal means as acceptable to the
Fund. Costs for communicating routine information shall be borne by IFTC;
costs other than routine information, including microfiche, shall be borne by
the Fund.
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EXHIBIT 9.4
AGENCY AGREEMENT
THIS AGREEMENT made as of the day of this ___________ , 19__ , by and
between BERGER INVESTMENT PORTFOLIO TRUST, a Delaware business trust,
referred to as the "Fund," consisting of separate portfolios represented by
separate series of shares of beneficial interest (referred to herein,
together with any such portfolios hereafter constituted, where appropriate,
individually as a "Portfolio," or collectively as the "Portfolios,") having
its principal place of business at 210 University Boulevard, Suite 900,
Denver, Colorado 80206, and INVESTORS FIDUCIARY TRUST COMPANY, a state
chartered trust company organized and existing under the laws of the State of
Missouri, having its principal place of business at 127 West 10th Street,
Kansas City, Missouri 64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Transfer Agent and Dividend
Disbursing Agent, and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. DOCUMENTS TO BE FILED WITH APPOINTMENT.
In connection with the appointment of IFTC as Transfer Agent and Dividend
Disbursing Agent for Fund, there will be filed with IFTC the following
documents:
A. A certified copy of the resolutions of the Trustees of the Fund
appointing IFTC as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain persons
to sign beneficial interest certificates, if any, and give written
instructions and requests on behalf of Fund;
B. A certified copy of the Trust Instrument of Fund and all amendments
thereto;
C. A certified copy of the Bylaws of Fund;
D. Copies of Registration Statements and amendments thereto, filed with
the Securities and Exchange Commission.
E. Specimens of all forms of outstanding shares of beneficial interest,
in the forms approved by the Trustees of Fund, with a certificate of
the Secretary of Fund, as to such approval;
<PAGE>
F. Specimens of the signatures of the officers of the Fund authorized to
sign beneficial interest certificates and individuals authorized to
sign written instructions and requests;
G. An opinion of counsel for Fund with respect to:
(1) Fund's organization and existence under the laws of its state of
organization,
(2) The status of all shares of beneficial interest of Fund covered
by the appointment under the Securities Act of 1933, as amended,
and any other applicable federal or state statute, and
(3) That all issued shares are, and all unissued shares will be, when
issued, validly issued, fully paid and nonassessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF IFTC. IFTC represents and
warrants to Fund that:
A. It is a trust company duly organized and existing and in good standing
under the laws of Missouri.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Trust Instrument and
bylaws to enter into and perform the services contemplated in this
Agreement.
D. It is registered as a transfer agent to the extent required under the
Securities Exchange Act of 1934.
E. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF FUND. Fund represents and
warrants to IFTC that:
A. It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
B. It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
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<PAGE>
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of Fund being
offered for sale.
D. All requisite steps have been or will be taken to register Fund's
shares for sale in all applicable states.
E. Fund is empowered under applicable laws and by its Trust Instrument
and bylaws to enter into and perform this Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions set forth in this Agreement, Fund hereby
employs and appoints IFTC as Transfer Agent and Dividend Disbursing
Agent.
B. IFTC hereby accepts such employment and appointment and agrees that it
will act as Fund's Transfer Agent and Dividend Disbursing Agent. IFTC
agrees that it will also act as agent in connection with each
Portfolio's periodic withdrawal payment accounts and other open
accounts or similar plans for shareholders, if any.
C. IFTC agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in
accordance with industry practice.
D. Fund agrees to use its best efforts to deliver to IFTC in Kansas City,
Missouri, as soon as they are available, all of its shareholder
account records.
E. Subject to the provisions of Sections 19. and 20. hereof, IFTC agrees
that it will perform all of the usual and ordinary services of
Transfer Agent and Dividend Disbursing Agent and as Agent for the
various shareholder accounts, including, without limitation, the
following: issuing, transferring and cancelling beneficial interest
certificates, if any, maintaining all shareholder accounts, preparing
shareholder meeting lists, mailing proxies, receiving and tabulating
proxies, mailing shareholder reports and prospectuses, withholding
taxes on nonresident alien and foreign corporation accounts, for
pension and deferred income, backup withholding or other instances
agreed upon by the parties, preparing and mailing checks for
disbursement of redemptions, income dividends and capital gains
distributions, preparing and filing U.S. Treasury Department Form 1099
for all shareholders, preparing and mailing confirmation forms to
shareholders and dealers with respect to all purchases and redemptions
of Fund shares and other transactions in shareholder
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accounts for which confirmations are required, recording reinvestments
of dividends and distributions in Fund shares, and cooperating with
broker-dealers and financial intermediaries who represent shareholders
of the Fund.
5. LIMIT OF AUTHORITY. Unless otherwise expressly limited by the resolution of
appointment or by subsequent action by the Fund, the appointment of IFTC as
Transfer Agent will be construed to cover the full amount of authorized
shares of beneficial interest of the class or classes for which IFTC is
appointed as the same will, from time to time, be constituted, and any
subsequent increases in such authorized amount. In case of such increase
Fund will file with IFTC:
A. If the appointment of IFTC was theretofore expressly limited, a
certified copy of a resolution of the Trustees of Fund increasing the
authority of IFTC;
B. A certified copy of the amendment to the Trust Instrument of Fund
authorizing the increase of shares of beneficial interest;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of the
increased shares of beneficial interest, and an opinion of counsel
that the order or consent of no other governmental or regulatory
authority is required;
D. Opinion of counsel for Fund stating:
(1) The status of the additional shares of beneficial interest of
Fund under the Securities Act of 1933, as amended, and any other
applicable federal or state statute; and
(2) That the additional shares are, or when issued will be, validly
issued, fully paid and nonassessable.
6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, Fund will pay to IFTC from time to time a
reasonable compensation for all services rendered as Agent, and also,
all its reasonable out-of-pocket expenses, charges, counsel fees, and
other disbursements (Compensation and
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<PAGE>
Expenses) incurred in connection with the agency. Such compensation is
set forth in a separate schedule, a copy of which is attached hereto
and incorporated herein by reference. IFTC shall make reasonable
efforts to bill the Fund as soon as practicable after the end of each
calendar month for the Compensation and Expenses due for that month
and said billing shall be detailed in accordance with the such
schedule. If the Fund has not paid such Compensation and Expenses to
IFTC within a reasonable time, IFTC may charge against any monies held
under this Agreement, the amount of any Compensation and/or Expenses
for which it shall be entitled to reimbursement under this Agreement.
B. Fund agrees to promptly reimburse IFTC for all reasonable
out-of-pocket expenses or advances incurred by IFTC in connection with
the performance of services under this Agreement, for postage (and
first class mail insurance in connection with mailing share
certificates), envelopes, check forms, continuous forms, forms for
reports and statements, stationery, and other similar items, telephone
and telegraph charges incurred in answering inquiries from dealers or
shareholders, microfilm used each year to record the previous year's
transactions in shareholder accounts and computer tapes used for
permanent storage of records and cost of insertion of materials in
mailing envelopes by outside firms. IFTC will provide to Fund no less
often than monthly a detailed accounting of all such expenses on
behalf of the Fund.
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7. OPERATION OF IFTC SYSTEM.
A. In connection with the performance of its services under this
Agreement, IFTC is responsible for such items as: (1) The accuracy of
entries in IFTC's records reflecting orders and instructions received
by IFTC from dealers, shareholders, Fund or its principal underwriter;
(2) The availability and the accuracy of shareholder lists,
shareholder account verifications, confirmations and other
shareholder account information to be produced from its records
or data;
(3) The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from Fund;
(4) The accuracy of redemption transactions and payments in
accordance with redemption instructions received from dealers,
shareholders or Fund;
(5) The deposit daily in Fund's appropriate special bank account of
all checks and payments received from dealers or shareholders for
investment in shares;
(6) The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
legality of transfers, redemptions and other shareholder account
transactions, all in conformance with IFTC's and the Fund's
present procedures with such changes as may be required or
approved by Fund; and
(7) The maintenance of a current duplicate set of Fund's essential
records at a secure distant location, in a form available and
usable forthwith in the event of any breakdown or disaster
disrupting its main operation.
8. INDEMNIFICATION.
A. IFTC will not be responsible for, and Fund will hold harmless and
indemnify IFTC from and against any loss by or liability to the Fund
or a third party, including reasonable attorney's fees, in connection
with any claim or suit asserting any such liability arising out of or
attributable to actions taken or omitted by IFTC pursuant to this
Agreement, unless IFTC has acted negligently or in bad faith. The
matters covered by this indemnification include but are not limited to
those of Section 14. hereof. Fund will be responsible for, and will
have the right to conduct or control the defense of any litigation
asserting liability, including reasonable attorney's fees, against
which IFTC is indemnified hereunder. IFTC will not be under any
obligation to prosecute or defend any action or suit in respect of the
agency relationship hereunder, which, in its opinion, may involve it
in expense or liability, unless Fund will, as often as requested,
furnish IFTC with reasonable, satisfactory security and indemnity
against such expense or liability.
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<PAGE>
B. IFTC will hold harmless and indemnify Fund from and against any loss
or liability arising out of IFTC's negligence or bad faith in
performing its duties under this Agreement, including reasonable
attorney's fees.
9. CERTAIN COVENANTS OF IFTC AND FUND.
A. All requisite steps will be taken by Fund from time to time when and
as necessary to register the Fund's shares for sale in all states in
which Fund's shares shall at the time be offered for sale and require
registration. If at any time Fund will receive notice of any stop
order or other proceeding in any such state affecting such
registration or the sale of Fund's shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale
of Fund's shares, Fund will give prompt notice thereof to IFTC.
B. IFTC hereby agrees to perform such transfer agency functions as are
set forth in Section 4.E. above and establish and maintain facilities
and procedures reasonably acceptable to Fund for safekeeping of shares
of beneficial interest certificates, check forms, and facsimile
signature imprinting devices, if any; and for the preparation or use,
and for keeping account of, such certificates, forms and devices, and
to carry such insurance as it considers adequate and reasonably
available and not to substantially reduce such level of insurance
without prior notice to the Fund.
C. To the extent required by Section 31 of the Investment Company Act of
1940 as amended and Rules thereunder, IFTC agrees that all records
maintained by IFTC relating to the services to be performed by IFTC
under this Agreement are the
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property of Fund and will be preserved and will be surrendered
promptly to Fund on request.
D. IFTC agrees to furnish Fund semiannual reports of its financial
condition, consisting of a balance sheet, earnings statement and any
other financial information reasonably requested by Fund. The annual
financial statements will be certified by IFTC's certified public
accountants.
E. IFTC represents and agrees that it will use its best efforts to keep
current on the trends of the investment company industry relating to
shareholder services and will use its best efforts to continue to
modernize and improve.
F. IFTC will permit Fund and its authorized representatives to make
periodic inspections of its operations as such would involve the Fund
at reasonable times during business hours.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of Fund requiring a change in the form of beneficial
interest certificates, IFTC will issue or register certificates in the new
form in exchange for, or in transfer of, the outstanding certificates in
the old form, upon receiving:
A. Written instructions from an officer of Fund;
B. Certified copy of the amendment to the Trust Instrument or other
document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the
beneficial interest certificate in the new form, and an opinion of
counsel that the order or consent of no other government or regulatory
authority is required;
D. Specimens of the new certificates in the form approved by the Trustees
of Fund, with a certificate of the Secretary of Fund as to such
approval;
E. Opinion of counsel for Fund stating:
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<PAGE>
(1) The status of the shares of beneficial interest of Fund in the
new form under the Securities Act of 1933, as amended and any
other applicable federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. BENEFICIAL INTEREST CERTIFICATES.
Fund will furnish IFTC with a sufficient supply of blank beneficial
interest certificates and from time to time will renew such supply upon the
request of IFTC. Such certificates will be signed manually or by facsimile
signatures of the officers of Fund authorized by law and by bylaws to sign
such certificates, and if required, will bear the corporate seal or
facsimile thereof.
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
Fund will file promptly with IFTC written notice of any change in the
officers authorized to sign certificates, written instructions or requests,
together with two signature cards bearing the specimen signature of each
newly authorized officer. In case any officer of Fund who will have signed
manually or whose facsimile signature will have been affixed to blank
certificates will die, resign, or be removed prior to the issuance of such
certificates, IFTC may issue or register such certificates as the
certificates of Fund notwithstanding such death, resignation, or removal,
until specifically directed to the contrary by Fund in writing. In the
absence of such direction, Fund will file promptly with IFTC such approval,
adoption, or ratification as may be required by law.
13. FUTURE AMENDMENTS OF TRUST INSTRUMENT AND BYLAWS.
Fund will promptly file with IFTC copies of all material amendments to its
Trust Instrument or bylaws made after the date of this Agreement.
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.
At any time IFTC may apply to any person authorized by the Fund to give
instructions to IFTC, and may with the approval of a Fund officer consult
with legal counsel for Fund or its own legal counsel at the expense of
Fund, with respect to any matter arising in connection with the agency and
it will not be liable for any action taken or omitted by it in good faith
in reliance upon such instructions or upon the opinion of such counsel.
IFTC will be
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<PAGE>
protected in acting upon any paper or document reasonably believed by it
to be genuine and to have been signed by the proper person or persons and
will not be held to have notice of any change of authority of any person,
until receipt of written notice thereof from Fund. It will also be
protected in recognizing beneficial interest certificates which it
reasonably believes to bear the proper manual or facsimile signatures of
the officers of Fund, and the proper countersignature of any former
Transfer Agent or Registrar, or of a co-Transfer Agent or co-Registrar.
15. PAPERS SUBJECT TO APPROVAL OF COUNSEL.
The acceptance by IFTC, of its appointment as Transfer Agent and Dividend
Disbursing Agent and all documents filed in connection with such
appointment and thereafter in connection with the agencies, will be subject
to the approval of legal counsel for IFTC (which approval will be not
unreasonably withheld).
16. CERTIFICATION OF DOCUMENTS.
The required copy of the Trust Instrument of Fund and copies of all
amendments thereto will be certified by the Secretary of State (or other
appropriate official) of the State of Certification, and if such Trust
Instrument and amendments is required by law to be also filed with a
county, city or other officer of official body, a certificate of such
filing will appear on the certified copy submitted to IFTC. A copy of the
order or consent of each governmental or regulatory authority required by
law to the issuance of the beneficial interest certificate will be
certified by the Secretary or Clerk of such governmental or regulatory
authority, under proper seal of such authority. The copy of the Bylaws and
copies of all amendments thereto, and copies of resolutions of the Trustees
of Fund, will be certified by the Secretary or an Assistant Secretary of
Fund under the Fund's seal.
17. RECORDS.
IFTC will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained pursuant
to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 for the period and
in the manner prescribed by Rule 31a-2 under the Investment Company Act of
1940, if any.
18. DISPOSITION OF BOOKS, RECORDS AND CANCELLED CERTIFICATES.
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<PAGE>
IFTC will send periodically to Fund, or to where designated by the
Secretary or an Assistant Secretary of Fund, all books, documents, and all
records no longer deemed needed for current purposes and beneficial
interest certificates which have been cancelled in transfer or in exchange,
upon the understanding that such books, documents, records, and beneficial
interest certificates will not be destroyed by Fund without the consent of
IFTC (which consent will not be unreasonably withheld), but will be safely
stored for possible future reference.
19. PROVISIONS RELATING TO IFTC AS TRANSFER AGENT.
A. IFTC will make original issues of beneficial interest certificates
upon written request of an officer of Fund and upon being furnished
with a certified copy of a resolution of the Trustees authorizing such
original issue, an opinion of counsel as outlined in paragraphs 1.D.
and G. of this Agreement, any documents required by paragraphs 5. or
10. of this Agreement, and necessary funds for the payment of any
original issue tax.
B. Before making any original issue of certificates Fund will furnish
IFTC with sufficient funds to pay all required taxes on the original
issue of the shares of beneficial interest, if any. Fund will furnish
IFTC such evidence as may be required by IFTC to show the actual value
of such shares. If no taxes are payable IFTC will be furnished with an
opinion of outside counsel to that effect.
C. Shares of beneficial interest will be transferred and new certificates
issued in transfer, or shares of beneficial interest accepted for
redemption and funds remitted therefor, upon surrender of the old
certificates in form deemed by IFTC properly endorsed for transfer or
redemption accompanied by such documents as IFTC may deem necessary to
evidence that authority of the person making the transfer or
redemption, and bearing satisfactory evidence of the payment of any
applicable transfer taxes. IFTC reserves the right to refuse to
transfer or redeem shares until it is satisfied that the endorsement
or signature on the certificate or any other document is valid and
genuine, and for that purpose it may require a guaranty of signature
by a financial institution as permitted by the Fund's prospectus or as
otherwise required by applicable law. IFTC also reserves the right to
refuse to transfer or redeem shares
-11-
<PAGE>
until it is satisfied that the requested transfer or redemption is
legally authorized, and it will incur no liability for the refusal in
good faith to make transfers or redemptions which, in its judgment,
are improper or unauthorized. IFTC may, in effecting transfers or
redemptions, rely upon Simplification Acts or other statutes which
protect it and Fund in not requiring complete fiduciary documentation.
In cases in which IFTC is not directed or otherwise required to
maintain the consolidated records of shareholder's accounts, IFTC will
not be liable for any loss which may arise by reason of not having
such records, provided that such loss could not have been prevented by
the exercise of ordinary diligence.
D. When mail is used for delivery of beneficial interest certificates
IFTC will forward certificates in "nonnegotiable" form by first class
or registered mail and certificates in "negotiable" form by registered
mail, all such mail deliveries to be covered while in transit to the
addressee by insurance arranged for by IFTC.
E. IFTC will issue and mail subscription warrants, certificates
representing dividends, exchanges or split ups, or act as Conversion
Agent upon receiving written instructions from any officer of Fund and
such other documents as IFTC deems necessary.
F. IFTC will issue, transfer, and split up certificates and will issue
certificates of beneficial interest representing full shares upon
surrender of scrip certificates aggregating one full share or more
when presented to IFTC for that purpose upon receiving written
instructions from an officer of Fund and such other documents as IFTC
may deem necessary.
G. IFTC may issue new certificates in place of certificates represented
to have been lost, destroyed, stolen or otherwise wrongfully taken
upon receiving instructions from Fund and indemnity satisfactory to
IFTC and Fund, and may issue new certificates in exchange for, and
upon surrender of, mutilated certificates. Such instructions from Fund
will be in such form as will be approved by the Trustees of Fund and
will be in accordance with the provisions of law and the bylaws of
Fund governing such matter.
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<PAGE>
H. IFTC will supply a shareholder's list to Fund for its annual meeting
upon receiving a request from an officer of Fund. It will also supply
lists at such other times as may be requested by an officer of Fund.
I. Upon receipt of written instructions of an officer of Fund, IFTC will
address and mail notices to shareholders.
J. In case of any request or demand for the inspection of the shareholder
records of Fund or any other books in the possession of IFTC, IFTC
will endeavor to notify Fund and to secure instructions as to
permitting or refusing such inspection. IFTC reserves the right,
however, to exhibit the shareholder records or other books to any
person in case it is advised by its counsel that it may be held
responsible for the failure to exhibit the shareholder records or
other books to such person.
K. In the event that any check or other order for the payment of money is
returned unpaid for any reason, IFTC will: (i) within three days give
written notice of such return to the Fund or its designee; (ii) place
a stop transfer order against all Fund shares issued in certificate
form as a result of such check or order or cancel the purchase of Fund
shares issued in book-entry form as a result of such check or order,
(iii) take such other steps as IFTC may, in its discretion, deem
appropriate or as the Fund or its designee may instruct.
L. Upon receipt of all necessary information and documentation relating
to a redemption, IFTC will issue to the Fund's custodian an advice
setting forth the number of shares of the Fund received by IFTC for
redemption. IFTC shall, upon notification that the custodian has
transferred funds for the redemption of shares to a redemption account
at IFTC or at another bank, pay such moneys to the shareholder, his
authorized agent or legal representative.
M. IFTC is authorized to review and process transfers of shares of the
Fund and exchanges between the Fund and other mutual funds for which
IFTC acts as transfer agent as permitted in the prospectus for the
Fund, on the records of the Fund maintained by IFTC. If shares to be
transferred are represented by outstanding certificates, IFTC shall,
upon surrender to it of the certificates in proper form for transfer,
and upon cancellation thereof, countersign and issue new certificates
for a
-13-
<PAGE>
like number of shares (if so requested by the registered holder
thereof) and deliver the same. If the shares to be transferred are not
represented by outstanding certificates, IFTC shall upon an order
thereof by or on behalf of the registered holder thereof in proper
form, credit the same to the transferee on its books. If shares are to
be exchanged for shares of another mutual fund, IFTC will process such
shares exchanged in the same manner as a redemption and sale of
shares, except that it may in its discretion waive requirements for
information and documentation.
N. Unless otherwise instructed by the Fund, IFTC shall maintain records
showing for each investor's account the following: (i) names,
addresses, tax identifying numbers and assigned account numbers; (ii)
numbers of shares held; (iii) historical information regarding the
account of each shareholder, including dividends paid and date and
price of all transactions on a shareholder's account; (iv) any stop or
restraining order placed against a shareholder's account or on lost
and/or replaced certificates; (v) information with respect to
withholdings in the case of a foreign account; (vi) any capital gain
or dividend reinvestment order, account application, dividend address
and correspondence relating to the current maintenance of a
shareholder's account; (vii) certificate numbers and denominations for
any shareholders holding certificates; and (viii) any information
required in order to permit the Fund to confirm that IFTC has properly
performed the calculations contemplated or required by this Agreement.
O. IFTC will maintain records necessary to reflect the crediting of
dividends which are reinvested in shares of the Fund.
P. IFTC will investigate all shareholder inquiries related to shareholder
accounts and respond promptly to correspondence from shareholders.
Q. If requested and as directed by the Fund, IFTC will address and mail
all communications to shareholders or their nominees, including proxy
material and periodic reports to shareholders.
R. In connection with special and annual meetings of shareholders, IFTC
will prepare shareholder lists, mail and certify as to the mailing of
proxy materials, process and tabulate returned proxy cards, report on
proxies voted and received by IFTC prior to
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<PAGE>
meetings as stated in the proxy statement, and certify to the
Secretary of the Fund shares to be voted at meetings.
S. In addition to the duties expressly provided for herein, IFTC shall
perform such other duties and functions as are set forth in the
Compensation and Expenses schedule hereto from time to time.
20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.
A. IFTC will maintain one or more deposit accounts as Agent for the Fund,
into which the funds for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder will be
deposited, and against which checks for the foregoing purposes will be
drawn (Accounts).
B. Upon the receipt of proper instructions, as described below, which may
be continuing instructions when deemed appropriate by the parties,
IFTC shall pay out monies of the Fund in such Accounts in the
following cases only:
1. For the redemption of Fund shares according to the Fund's then
current prospectus;
2. For the payment of any dividends declared by the Fund or other
distributions to shareholders of the Fund; and
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<PAGE>
3. For any other proper purpose, but only upon receipt of proper
instructions specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
IFTC shall disburse funds from such Accounts as directed upon receipt
of instructions from the Fund. All instructions shall be given only by
persons designated in writing to IFTC by the Fund to be authorized to
give instructions to IFTC under this Agreement. Instructions may be in
writing executed by an authorized representative of the Fund or, if
IFTC reasonably believes such instructions to be by an authorized
representative of the Fund, via telecommunications.
C. The Fund will promptly notify IFTC of the declaration of any dividend
or distribution. The Fund shall furnish to IFTC a written document
specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount
payable per share to shareholders of record as of that date, and the
total amount payable to IFTC on the payment date.
D. IFTC will, on or before the payable date of any dividend or
distribution, notify the Fund's custodian and the Fund of the
estimated amount of cash required to pay said dividend or
distribution. On or before the mailing date of such dividend or
distribution, Fund shall instruct the custodian to place in a dividend
disbursing account at IFTC or another bank, funds equal to the cash
amount to be paid out. IFTC will calculate, prepare and mail checks
to, or (where appropriate) credit such dividend or distribution to the
account of, Fund shareholders, and maintain and safeguard all required
underlying records.
E. As directed by the Fund, IFTC shall prepare and mail to each Fund
shareholder such information with respect to each dividend or
distribution as is required by applicable federal income tax laws and
regulations and by the Investment Company Act of 1940.
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<PAGE>
F. As directed by the Fund, IFTC shall file such appropriate information
returns concerning the payment of dividends and capital gain
distributions with the proper federal authorities as are required by
federal law to be filed by the Fund and shall withhold such sums as
are required to be withheld by federal law.
G. IFTC will, at the expense of the Fund, provide a special form of check
containing the imprint of any device or other matter desired by Fund.
Such form of checks must, however, be compatible with the equipment
employed by IFTC and its agents.
H. If the Fund desires to include additional printed matter, financial
statements, etc. with the dividend checks, the same will be furnished
to IFTC within a reasonable time prior to the date of mailing of the
dividend checks, at the expense of the Fund.
I. If the Fund desires that its distributions be mailed in any special
form of envelopes, a sufficient supply of the same will be furnished
to IFTC, but the size and form of said envelopes will be subject to
the approval of IFTC. If stamped envelopes are used, they must be
furnished by Fund or, if postage stamps are to be affixed to the
envelopes, the stamps or the cash necessary for such stamps must be
furnished by the Fund prior to mailing.
J. IFTC is authorized and directed to stop payment of checks
theretofore issued hereunder, but not presented for payment, when
the payees thereof allege either that they have not received the
checks or that such checks have been mislaid, lost, stolen,
destroyed or through no fault of theirs, are otherwise beyond their
control, and cannot be produced by them for presentation and
collections, and, to issue and deliver duplicate checks in
replacement thereof upon receipt of properly executed affidavits.
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<PAGE>
21. ASSUMPTION OF DUTIES BY THE FUND.
The Fund may assume certain duties and responsibilities of IFTC or those
usual and ordinary services of Transfer Agent and Dividend Disbursement
Agent as those terms are referred to in Section 4.E. of this Agreement
including but not limited to accepting shareholder instructions and
transmitting orders based on such instructions to IFTC, preparing and
mailing confirmations, obtaining certified TIN numbers, and disbursing
monies of the Fund. To the extent the Fund or its agent or affiliate
assumes such duties and responsibilities, IFTC shall be relieved from all
responsibility and liability therefor.
22. TERMINATION OF AGREEMENT.
A. This Agreement may be terminated by either party upon receipt of sixty
(60) days written notice from the other party.
B. Fund, in addition to any other rights and remedies, shall have the
right to terminate this Agreement forthwith upon the occurrence at any
time of any of the following events:
(1) Any interruption or cessation of operations by IFTC or its
assigns which materially interferes with the business operation
of Fund;
(2) The bankruptcy of IFTC or its assigns or the appointment of a
receiver for IFTC or its assigns;
(3) Any merger, consolidation or sale of substantially all the assets
of IFTC or its assigns;
(4) The acquisition of a controlling interest in IFTC or its assigns,
by any broker, dealer, investment adviser or investment company
except as may presently exist; or
(5) Failure by IFTC or its assigns to perform its duties in
accordance with the Agreement, which failure materially adversely
affects the business operations of Fund and which failure
continues for thirty (30) days after receipt of written notice
from Fund.
C. In the event of termination, Fund will promptly pay IFTC all amounts
due to IFTC hereunder.
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<PAGE>
D. In the event of termination, IFTC will use its best efforts to
transfer the books and records of the Fund to the designated successor
transfer agent and to provide other information relating to its
service provided hereunder for reasonable compensation therefor.
23. ASSIGNMENT.
A. Neither this Agreement nor any rights or obligations hereunder may be
assigned by IFTC without the written consent of Fund; provided,
however, no assignment will relieve IFTC of any of its obligations
hereunder. IFTC may, however, employ agents to assist it in performing
its duties hereunder.
B. This Agreement will inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
24. CONFIDENTIALITY.
A. IFTC agrees that, except as provided in the last sentence of Section
19.J hereof, or as otherwise required by law, IFTC will keep
confidential all records of and information in its possession relating
to Fund or its shareholders or shareholder accounts and will not
disclose the same to any person except at the request or with the
consent of Fund.
B. Fund agrees to keep confidential all financial statements and other
financial records (other than statements and records relating solely
to Fund's business dealings with IFTC) and all manuals, systems and
other technical information and data, not publicly disclosed, relating
to IFTC's operations and programs furnished to it by IFTC pursuant to
this Agreement and will not disclose the same to any person except at
the request or with the consent of IFTC.
C. The Fund acknowledges that IFTC and DST Systems, Inc. (DST) have
proprietary rights in and to the computerized data processing
recordkeeping system used by IFTC to perform services hereunder
including, but not limited to the maintenance of shareholder accounts
and records, processing of related information and generation of
output (the MFS System), including, without limitation any changes or
modifications of the MFS System and any other IFTC or DST programs,
data bases, supporting documentation, or procedures ("collectively
IFTC Protected
-19-
<PAGE>
Information") which the Fund's access to the MFS System or computer
hardware or software may permit the Fund or its employees or agents to
become aware of or to access and that the IFTC Protected Information
constitutes confidential material and trade secrets of IFTC. The Fund
agrees to maintain the confidentiality of the IFTC Protected
Information. The Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of IFTC Protected Information which is
confidential as provided by law, or which is a trade secret, residing
or existing internal or external to a computer, computer system, or
computer network, or the knowing and unauthorized accessing or causing
to be accessed of any computer, computer system, or computer network,
may be subject to civil liabilities and criminal penalties under
applicable state law. The Fund will advise all of its employees and
agents who have access to any IFTC Protected Information or to any
computer equipment capable of accessing IFTC or DST hardware or
software of the foregoing. IFTC and DST are intended to be, and shall
be, third party beneficiaries of the Fund's obligations and
undertakings contained in this Section.
25. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties by either party herein contained will
survive the execution and delivery of this Agreement.
26. LIMITATION OF LIABILITY.
Notice is hereby given that the Fund is a business trust organized under
the Delaware Business Trust Act pursuant to a Certificate of Trust filed in
the office of the Secretary of State of the State of Delaware. All parties
to this Agreement acknowledge and agree that the Fund is a series Fund and
all debts, liabilities, obligations and expenses incurred, contracted for
or otherwise existing with respect to a particular series shall be
enforceable against the assets held with respect to such series only, and
not against the assets of the Fund generally or against the assets held
with respect to any other series and further that no trustee, officer or
holder of shares of beneficial interest of the Fund shall be personally
liable for any of the foregoing.
27. MISCELLANEOUS.
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<PAGE>
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
---------------------------------
Title:
------------------------------
BERGER INVESTMENT PORTFOLIO TRUST
By:
---------------------------------
Title:
------------------------------
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<PAGE>
EXHIBIT B
INSURANCE COVERAGE
Minimum Insurance Coverages:
DESCRIPTION OF POLICY:
BROKERS BLANKET BOND, STANDARD FORM 14
Covering losses caused by dishonesty of employees, physical loss of
securities on or outside of premises while in possession of
authorized person, loss caused by forgery or alteration of checks or
similar instruments.
Minimum Coverage: $75,000,000
ERRORS AND OMISSIONS INSURANCE
Indemnifies against loss in providing shareholder accounting
services by reason of neglect, error or omission.
Minimum Coverage: $10,000,000
MAIL INSURANCE (APPLIES TO ALL FULL SERVICE OPERATIONS)
Provides indemnity for security lost in the mails.
Minimum Coverage:
$10,000,000 per envelope nonnegotiable securities mailed to domestic
locations via registered mail.
$1,000,000 per envelope nonnegotiable securities mailed to domestic
locations via first-class or certified mail.
$1,000,000 per envelope nonnegotiable securities mailed to foreign
locations via registered mail.
$1,000,000 per envelope negotiable securities mailed to all locations
via registered mail.
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<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 15 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated November 11, 1997, relating to the financial
statements and financial highlights appearing in the September 30, 1997 Annual
Report to Shareholders of Berger Investment Portfolio Trust, which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Other Information" in the Statement of Additional
Information.
Price Waterhouse LLP
Denver, Colorado
April 30, 1998
<PAGE>
EXHIBIT 13
SUBSCRIPTION AGREEMENT FOR SHARES
OF BERGER INVESTMENT PORTFOLIO TRUST
The undersigned hereby subscribes for the purchase of 40,000 shares of
beneficial interest of Berger Investment Portfolio Trust, Berger Small
Company Growth Fund series, par value $.01 per share, at the subscription
price of $2.50 per share (the "Shares"). Submitted herewith in consideration
for the Shares is a check payable to Berger Investment Portfolio Trust, in
the amount of $100,000.00.
I hereby represent to the Trust that the Shares are being acquired by me
solely for investment, for my sole account, and not with a view to
distribution within the meaning of the Securities Act of 1933 (the ""Act'')
and the rules and regulations thereunder. I further hereby represent to the
Trust, as an inducement for the Shares to be issued to me that my present and
anticipated financial position permits me to purchase the Shares and to hold
them for investment purposes. I am thoroughly familiar with the proposed
business of the Trust and have made all investigations which I deem necessary
or desirable in connection with my purchase. I am a resident of the State of
Colorado. I have been advised that the availability of the exemption from
registration under the Securities Act of 1933 relied upon by the Trust in
issuing these Shares is dependent in part upon the truth of the foregoing
representations.
Prior to making a commitment to purchase the Shares, the Trust has
informed me:
(1) that the Shares are not registered under the Act and must be held by
me indefinitely unless they are subsequently so registered or unless an
exemption from such registration is available;
(2) that Rule 144 under the Act is presently not applicable to the
Shares and that, therefore, such securities may be resold only pursuant to
compliance with some other exemption from registration under the Act;
(3) that the Trust is under no obligation to register the Shares under
any circumstances or to attempt to make available any exemption from
registration under the Act, at my expense or otherwise;
(4) that any certificate representing the Shares will bear a legend in
customary form drawing attention to the restrictions on its transferability.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement effective as of the 14th day of December, 1993.
BERGER ASSOCIATES, INC.
By: Kevin R. Fay
--------------------------------
Name: Berger Associates, Inc.
Kevin R. Fay, Vice President
Address: 210 University Blvd. #900
Denver, CO 80206
2
<PAGE>
EXHIBIT 15.1
RULE 12b-1 PLAN OF
BERGER SMALL COMPANY GROWTH FUND
(A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST)
1. THE PLAN. Berger Investment Portfolio Trust, a Delaware
business trust (the "Trust"), hereby adopts this Rule 12b-1 Plan (the
"Plan") pursuant to the terms of Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act"), with respect to the shares of the
Trust's series known as Berger Small Company Growth Fund (the "Fund"). In
accordance with the terms of this Plan, the Trust may act as the distributor
of shares of the Fund.
2. AUTHORIZED PAYMENTS. During each fiscal year of the Fund, the
Trust is hereby authorized to pay out of the assets of the Fund on a monthly
basis, an amount computed at a rate of twenty-five one-hundredths of one
percent (.25%) of the average daily net assets of the Fund during such fiscal
year to Berger Associates, Inc. ("Berger Associates") to finance activities
primarily intended to result in the sale of the Fund's shares, which shall
include, but not be limited to: payments made to and expenses of persons
(including employees of Berger Associates) who are engaged in, or provide
support services in connection with, the distribution of Fund shares, such as
answering routine telephone inquiries and processing prospective investor
requests for information; compensation paid to securities dealers, financial
institutions and other organizations which render distribution and
administrative services in connection with the distribution of the Fund's
shares; costs related to the formulation and implementation of marketing and
promotional activities, including direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; costs of
printing and distributing prospectuses and reports to prospective
shareholders of the Fund; costs involved in preparing, printing and
distributing sales literature for the Fund; costs involved in obtaining
whatever information, analyses and reports with respect to market and
promotional activities on behalf of the Fund that Berger Associates deems
advisable; and such other costs as may from time to time be agreed upon by
the Fund. Such payments shall be made by the Trust to Berger Associates with
respect to each fiscal year of the Fund without regard to the actual
distribution expenses incurred by Berger Associates in such year; I.E.,
distribution expenditures incurred by Berger Associates which are less than
the total of such payments in such year shall not be reimbursed to the Trust
by Berger Associates, and distribution expenditures incurred by Berger
Associates which are more than the total of such payments shall not be
reimbursed to Berger Associates by the Trust.
3. SHAREHOLDER APPROVAL. This Plan shall not take effect until it
has been approved by a vote of at least a majority (as defined in the Act) of
the outstanding voting securities of the Fund.
<PAGE>
4. TRUSTEE APPROVAL. This Plan shall not take effect until it has
been approved, together with any related agreements, by votes of a majority
of both (a) the Trustees of the Trust and (b) those Trustees of the Trust who
are not "interested persons" of the Trust and the Fund (as defined in the
Act) and have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it (the "Rule 12b-1 Trustees"), cast
in person at a meeting (or meetings) called for the purpose of voting on this
Plan and such related agreements.
5. ANNUAL REAPPROVAL. Unless sooner terminated pursuant to
paragraph 6, this Plan shall continue in effect for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in paragraph 4.
6. TERMINATION OF PLAN. This Plan may be terminated at any time
by a vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority
of the Fund's outstanding shares.
7. AMENDMENTS. This Plan may not be amended to increase
materially the amount of distribution expenses provided for in paragraph 2
hereof unless such amendment is approved in the manner provided for
shareholder approval in paragraph 3 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval in
paragraph 4 hereof.
8. QUARTERLY REPORTS. Any person authorized to direct the
disposition of monies paid or payable by the Fund pursuant to this Plan or
any related agreements shall provide to the Trustees of the Trust, and the
Trustees shall review at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made. Unless
directed otherwise by the Trustees with respect to a particular expenditure
or type of expenditure, any expenditure made by Berger Associates which
jointly promotes the sale of shares of the Fund and the sale of shares of
other investment companies for which Berger Associates serves as investment
adviser, and which expenditures are not readily identifiable as related to
the Fund or one or more of such other investment companies, shall be
allocated to the Fund and such other investment companies on a basis such
that the Fund will be allocated only its proportional share of such
expenditures based upon the relative net assets of the Fund as compared to
the net assets of all such other investment companies thus promoted.
9. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in
effect, the selection and nomination of Trustees who are not interested
persons (as defined in the Act) of the Fund shall be committed to the
discretion of the Trustees who are not interested persons of the Fund.
-2-
<PAGE>
10. RECORDS. The Fund shall preserve copies of this Plan and any
related agreements and all reports made pursuant to paragraph 8 hereof for a
period of not less than six years from the date of this Plan, or the
agreements or such reports, as the case may be, and shall preserve the Plan,
agreement or report the first two years in an easily accessible place.
11. LIMITATION ON PERSONAL LIABILITY. NOTICE IS HEREBY GIVEN that
the Trust is a business trust organized under the Delaware Business Trust Act
pursuant to a Certificate of Trust filed in the office of the Secretary of
State of the State of Delaware. The Trust is a series trust and all debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets held with respect to such series only, and not against the assets of
the Trust generally or against the assets held with respect to any other
series and further that no trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the foregoing.
IN WITNESS WHEREOF, the Trust has executed this 12b-1 Plan with
respect to the Fund as of the day and year set forth below in Denver, Colorado.
Date: ____________, 1993
BERGER INVESTMENT PORTFOLIO TRUST
ATTEST:
By
- ---------------------------- ---------------------------------
Rodney A. Linafelter, President
-3-
<PAGE>
EXHIBIT 16
The total return of the Fund is calculated for any specified period of time
by assuming the purchase of shares of the Fund at the net asset value at the
beginning of the period. Each dividend of other distribution paid by the
Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
Formula for calculating Total Return:
P (1 + T) = ERV
P = $1,000 initial payment
T = average annual total return
ERV = ending redeemable value
Total Return reported for the Fund for the period of December 30, 1993 to
May 31, 1994, was -0.8% as calculated below:
P (1 + T) = ERV
1,000 (1 + T) = 992
T = 992 - 1
---
1000
T = -0.008
The Average Annual Total Return for the Fund will be expressed in terms of
average annual compounded rates of return for periods in excess of one year.
The Average Annual Total Return formula as prescribed by Item 22 of Form N-1A
is as follows:
P (1 + T)(to the Nth power) = ERV
P = $1,000 initial payment
T = average annual total return
N = number of years
ERV = ending redeemable value
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> BERGER BALANCED FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 24,541,232
<INVESTMENTS-AT-VALUE> 25,620,994
<RECEIVABLES> 4,466,827
<ASSETS-OTHER> 939
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,088,760
<PAYABLE-FOR-SECURITIES> 4,435,137
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,021
<TOTAL-LIABILITIES> 4,486,158
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,290,015
<SHARES-COMMON-STOCK> 1,895,883
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,183
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,213,642
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,079,762
<NET-ASSETS> 25,602,602
<DIVIDEND-INCOME> 24,209
<INTEREST-INCOME> 284,876
<OTHER-INCOME> 0
<EXPENSES-NET> 128,884
<NET-INVESTMENT-INCOME> 180,202
<REALIZED-GAINS-CURRENT> 5,748,751
<APPREC-INCREASE-CURRENT> 1,079,762
<NET-CHANGE-FROM-OPS> 7,008,716
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 161,020
<DISTRIBUTIONS-OF-GAINS> 2,535,109
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,676,033
<NUMBER-OF-SHARES-REDEEMED> 731,033
<SHARES-REINVESTED> 204,699
<NET-CHANGE-IN-ASSETS> 18,140,758
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 61,844
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 143,357
<AVERAGE-NET-ASSETS> 17,739,987
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 5.40
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.50
<EXPENSE-RATIO> 1.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> BERGER SELECT FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 20,605,375
<INVESTMENTS-AT-VALUE> 20,901,280
<RECEIVABLES> 8,213,193
<ASSETS-OTHER> 562
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,115,035
<PAYABLE-FOR-SECURITIES> 5,686,136
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 35,998
<TOTAL-LIABILITIES> 5,722,134
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,977,526
<SHARES-COMMON-STOCK> 1,706,468
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 45,748
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,073,723
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 295,904
<NET-ASSETS> 23,392,901
<DIVIDEND-INCOME> 11,806
<INTEREST-INCOME> 90,551
<OTHER-INCOME> 0
<EXPENSES-NET> 56,609
<NET-INVESTMENT-INCOME> 45,748
<REALIZED-GAINS-CURRENT> 4,073,723
<APPREC-INCREASE-CURRENT> 295,904
<NET-CHANGE-FROM-OPS> 4,415,375
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,824,870
<NUMBER-OF-SHARES-REDEEMED> 118,403
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 23,392,901
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 27,149
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 57,753
<AVERAGE-NET-ASSETS> 14,730,254
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 3.68
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.71
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 051
<NAME> BERGER MID CAP GROWTH FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 3,231,496
<INVESTMENTS-AT-VALUE> 3,482,357
<RECEIVABLES> 207,790
<ASSETS-OTHER> 72
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,690,219
<PAYABLE-FOR-SECURITIES> 334,472
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,970
<TOTAL-LIABILITIES> 347,442
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,895,850
<SHARES-COMMON-STOCK> 265,327
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,381
<ACCUMULATED-NET-GAINS> 197,446
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 250,861
<NET-ASSETS> 3,342,777
<DIVIDEND-INCOME> 1,173
<INTEREST-INCOME> 7,025
<OTHER-INCOME> 0
<EXPENSES-NET> 9,579
<NET-INVESTMENT-INCOME> (1,381)
<REALIZED-GAINS-CURRENT> 197,446
<APPREC-INCREASE-CURRENT> 250,861
<NET-CHANGE-FROM-OPS> 446,927
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 311,610
<NUMBER-OF-SHARES-REDEEMED> 42,283
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,342,777
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,591
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,969
<AVERAGE-NET-ASSETS> 1,953,164
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 2.60
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.60
<EXPENSE-RATIO> 3.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
