Preliminary Copies for use of
The Securities and Exchange Commission only.
FGIC PUBLIC TRUST
SHORT-TERM U.S. GOVERNMENT
INCOME FUND
370 17th Street, Suite 2700
Denver, CO 80202
May 27, 1996
Dear Shareholders:
You are cordially invited to attend the Special Meeting of the
Short-Term U.S. Government Income Fund (the "Fund"), a series of
FGIC Public Trust (the "Trust"), which will be held on Friday,
May 31, at 11:00 a.m. at the offices of [ADDRESS]. The matters to
be acted upon are described in the attached Notice and Proxy
Statement.
Although we would like very much to have each shareholder attend
the Special Meeting, we realize this may not be possible. Whether
or not you plan to be present, we need your vote. We urge you to
complete, sign and return the enclosed proxy card or cards
promptly. A postage-paid envelope is enclosed for this purpose.
If you return your proxy promptly you can help the Fund avoid
the expense of follow-up mailings to achieve a quorum. [If your
shares in the Fund are held in street name, your bank or broker can
vote your shares, but may do so only upon receipt of your specific
instructions. Please contact the person responsible for your
account and instruct him or her to execute a proxy card today.] If
you decide between now and the meeting that you can attend the
meeting in person, you can revoke your proxy at that time and vote
your shares at the meeting.
As the date of the meeting approaches, if we have not received
your vote, you may receive a call from [AIPS Mutual Funds Services,
Inc., the Distributor and Administrator for the Fund] which will
assist shareholders in the voting process.
We look forward to seeing you at the meeting or receiving your
proxy so that your shares may be voted at the meeting.
Sincerely,
President
FGIC Public Trust
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
Preliminary Copies for use of
The Securities and Exchange Commission only.
FGIC PUBLIC TRUST
SHORT-TERM U.S. GOVERNMENT
INCOME FUND
370 17th Street, Suite 2700
Denver, CO 80202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
May 31, 1996
Notice is hereby given that a Special Meeting (the "Meeting")
of Shareholders of the Short-Term U.S. Government Income Fund (the
"Fund"), a series of FGIC Public Trust (the "Trust"), will be held
at the offices of [ADDRESS], on Friday, May 31, 1996 at 11:00
a.m., Eastern time, for the following purposes:
1. To approve an amendment to the Fund's investment
restrictions to permit the Fund to purchase securities of U.S.
government agencies and approve operating the Fund as a money
market fund.
2. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
Only shareholders of record of the Fund at the close of business
on[ ] , 1996 (the "Record Date") are entitled to receive
notice of and to vote at the Meeting and at any adjournments
thereof on matters relating to the Fund.
At the Meeting on Friday, May 31, 1996, the matter specified
in Part I of the attached Proxy Statement relating to the proposed
amendment to the Fund's investment restriction and to approve
operating the Fund as a money market fund will be voted upon. Only
shareholders of the Fund are being solicited for their proxies.
By Order of the Trustees,
Secretary
FGIC Public Trust
May 27, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. A
PROXY CARD IS ENCLOSED FOR THE FUND IF YOU DO NOT EXPECT TO ATTEND
THE MEETING. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED
PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR
SHARES WILL BE REPRESENTED AND VOTED AT THE MEETING. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING YOUR PROXY PROMPTLY.
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for signing proxy cards may be of
assistance to you and may help to avoid the time and expense
involved in validating your vote if you fail to sign your proxy
card properly.
1. Individual Accounts. Sign your name exactly as it appears
on the proxy card.
2. Joint Accounts. Either party may sign, but the name of the
party signing should conform exactly to a
name shown on the proxy card.
3. All Other Accounts. The capacity of the individual signing
the proxy card should be indicated unless
it is reflected in the name on the proxy card. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. (1) ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan
(3) John Doe, Trustee
Trust Accounts
(1) ABC Trust (1) Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
(2) Jane B. Doe
u/t/d 12/28/78
Custodial or Estate Accounts
(1) John B. Smith, Cust.
(1) John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. (2)
John B. Smith, Executor
Preliminary Copies for use of
The Securities and Exchange Commission only.
FGIC PUBLIC TRUST
SHORT-TERM U.S. GOVERNMENT
INCOME FUND
370 17th Street, Suite 2700
Denver, CO 80202
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Trustees of FGIC Public Trust (the
"Trust") on behalf of its publicly offered series portfolio, the
Short-Term U.S. Government Income Fund, (the "Fund") to be used at
the Special Meeting of shareholders of the Fund and at any
adjournments thereof (the "Meeting").
The Meeting is scheduled to be held on Friday, May 31, 1996
at 11:00 a.m. Eastern time at the offices of [ADDRESS]. This Proxy
Statement and the accompanying form of proxy are being first mailed
to shareholders of the Fund on or about May 27, 1996.
Copies of the Fund's most recent Annual Report are available
without charge upon request made to the Trust, 370 17th Street,
Suite 2700, Denver, CO 80202, (800) 298-FGIC(3442).
At the Meeting on Friday, May 31, 1996, the matter specified
in Part I of the attached Proxy Statement relating to the proposed
amendment to the Fund's investment restriction and to approve
operating the Fund as a money market fund will be voted upon. Only
shareholders of the Fund are being solicited for their proxies.
The Fund had _______ shares outstanding on ___________, 1996
(the "Record Date"):
For additional information with respect to the Meeting, the
number of shares needed for a quorum and the number of votes
necessary to approve the proposals described herein, please see
Part II of this Proxy Statement.
I. APPROVAL OR DISAPPROVAL OF THE AMENDMENT TO THE FUND'S
INVESTMENT RESTRICTION AND CHANGING THE FUND TO A MONEY MARKET
FUND
The Board of Trustees has proposed that shareholders approve an
amendment to one of the Fund's fundamental investment restrictions
and approve changing the Fund to a money market fund. The propoal
is based on recommendations prepared by FGIC Advisors, Inc., the
Fund's investment adviser (the "Adviser"), which were reviewed and
approved by the Board of Trustees, subject to shareholder approval,
at a meeting of the Fund's Board of Trustees held on [_________],
1996.
The proposed amendment to the Fund's investment restriction
seeks to change an investment restriction which currently provides
that the Fund will not purchase securities other than direct
obligations of the United States Treasury, some of which may be
subject to repurchase agreements, and repurchase agreements
collateralized to 102% by direct United States Treasury
obligations. The Trustees propose to amend this investment
restriction to permit the Fund to purchase, in addition to the
above securities, obligations issued by United States Government
agencies and instrumentalities, some of which may be subject to
repurchase agreements, and repurchase agreements collateralized to
102% by direct obligations of United States Government agencies and
instrumentalities. United States Government agency and
instrumentality obligations are debt securities issued by United
States Government sponsored enterprises and Federal agencies. Some
obligations of agencies and instrumentalities of the United States
Government are supported by the full faith and credit of the United
States or United States Treasury guarantees; others, by the right
of the issuer to borrow from the United States Treasury; others, by
discretionary authority of the United States Government to purchase
certain obligations of the agency or instrumentality; and others,
only by the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full
faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation
for ultimate repayment. United States Government agency and
instrumentality obligations include master notes issued by Federal
agencies or instrumentalities.
The primary purpose of amending the investment restriction is
to enable the Fund to take advantage of changes in the regulatory
environment in which the Fund's principal investors, primarily
municipalities, operate in. When the Fund was first initiated,
many of the Fund's target investors were prohibited from investing
in obligations of United States Government agencies and
instrumentalities. Over the years many states have liberalized
this limitation and now all of the states in which the Fund's
target investors reside permit investments in obligations of United
States Government agencies and instrumentalities. The Adviser
believes that by permitting the Fund to invest in obligations of
United States Government agencies and instrumentalities, the Fund
will be able to increase the yield of the Fund and attract new
investment into the Fund. There can be no assurance that these
results will be achieved.
The Board of Trustees is also proposing to change the Fund from
a non-money market fund to a money market fund. It is also
contemplated that the Fund will change its name to reflect the
changes to the Fund discussed in this Proxy. The primary goal of
changing the Fund to a money market fund is to attract new
investment into the Fund by offering the Fund's target investors,
primarily municipalities, a product which offers them the
opportunity for greater stability without significantly
compromising performance. There can be no assurance that these
results will be achieved.
If the proposal to operate the Fund as a money market fund is
approved by shareholders, it is contemplated that the Fund's
conversion will take place on or about __________, 1996.
At that time, the number of shares outstanding will be adjusted
is that the net asset value per share will equal $1.00.
Adjusting the shares outstanding will have no effect on the
total value of a shareholder's investment.
As a money market fund, the Fund would seek to maintain a stable
net asset value of $1.00 per share and must comply with Rule 2a-7
under the 1940 Act. Under the guidelines of Rule 2a-7, the Fund
would be required to use the amortized cost method to value its
portfolio securities. The amortized cost method involves valuing
a security at its cost and amortizing any discount or premium over
the period of maturity, regardless of the impact of fluctuating
interest rates on the market value of the security. Rule 2a-7 also
provides that the Fund must also do a "mark-to-market" analysis,
where it is determined the degree to which any variations may exist
between the amortized pricing method and the actual market price of
the securities in the Fund. If there is a deviation of 1/4 of 1% (1/4
of a cent) the Board is notified immediately. If there is a
deviation of 1/2 of 1% (1/2 of a cent) the Board will promptly consider
what action, if any, will be initiated. In the event the Board
determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, the Board will take such corrective action as it
regards as necessary and appropriate, including the sale of
portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity.
Rule 2a-7 also requires the Fund to maintain a dollar weighted
average portfolio maturity of 90 days or less and purchase
securities having remaining maturities of 13 months or less. The
Board of Trustees would review the portfolio securities monthly and
at regularly scheduled quarterly Board of Trustees meetings. There
can be no assurance that at all times the $1.00 price per share
could be maintained.
Required Vote
To be approved, the proposal must receive the affirmative vote
of "a majority of the outstanding voting securities" of the Fund,
as defined in the Investment Company Act of 1940 Act, as amended
(the "1940 Act"). Under the 1940 Act, a vote of a majority of the
outstanding voting securities of a Fund means the lesser of (a)
more than 50% of the outstanding shares of the Fund or (b) 67% or
more of the shares of the Fund represented at the Meeting if more
than 50% of the outstanding shares of the Fund are present at the
Meeting or represented by proxy.
THE TRUSTEES, INCLUDING ALL OF THE TRUSTEES WHO ARE NOT "INTERESTED
PERSONS" OF THE FUND, RECOMMEND THAT THE SHAREHOLDERS OF THE FUND
VOTE TO APPROVE THE AMENDMENT TO THE FUND'S INVESTMENT RESTRICTION
AND APPROVE OPERATING THE FUND AS A MONEY MARKET FUND.
II. MISCELLANEOUS.
Voting; Notice; Quorum
Each share of the Fund is entitled to one vote on each matter
submitted to a vote of the shareholders of the Fund at the Meeting;
no shares have cumulative voting rights. Shares held by two or more
persons (whether as joint tenants, co-fiduciaries or otherwise)
will be voted as follows unless a written instrument or court order
providing to the contrary has been filed with the Secretary of the
Trust: ( 1 ) if only one votes, his or her vote will bind all; (2)
if more than one votes, the vote of the majority will bind all; and
(3) if more than one votes and the vote is evenly divided, the
shares will be voted in accordance with the determination of a
majority of such persons and any person appointed to act by a court
of competent jurisdiction, or in the absence of such appointment,
the vote will be cast proportionately.
Shares will be voted in accordance with the specifications made
on the Proxy. If no specification is made with respect to a
particular matter, shares will be voted in accordance with the
recommendation of the Trustees. Proxies may be revoked at any time
before they are voted by a written revocation received by the
Secretary of the Trust, by properly executing a later-dated proxy
or by attending the Meeting and voting in person. The Fund will
request broker-dealer firms, custodians, nominees and fiduciaries
to forward proxy material to the beneficial owners of the shares of
record held by such persons. The Adviser will reimburse such
persons for their reasonable expenses incurred in connection with
such proxy solicitation. Votes cast by proxy or in person will be
counted by persons appointed by the Fund to act as proxies for the
Meeting.
Approval of the proposal to amend the Fund's investment
restriction and to change the Fund to a money market Fund requires
the affirmative vote of (i) 67% or more of the shares of the Fund
present in person at the Meeting or represented by proxy, if
holders of more than 50% of the shares of the Fund outstanding on
the Record Date are present, in person or by proxy, or (ii) more
than 50% of the outstanding shares of the Fund on the Record Date,
whichever is less.
The by-laws of the Fund generally provide that shareholders
entitled to vote at the special meeting must be given fifteen days
advanced written notification of such meeting unless the
shareholder attends the meeting in person or by proxy. Should the
Fund determine that any shareholder entitled to vote will not
attend the meeting, in person or by proxy, the Fund will adjourn
the meeting until fifteen days advanced notification is given to
each shareholder entitled to vote at such meeting.
A quorum for the transaction of business at the Meeting is
constituted by the presence in person or by proxy of the holders of
not less than a majority of the outstanding shares of the Fund
entitled to vote at the Meeting. If, by the time scheduled for
the Meeting, a quorum of shareholders of the Fund is not present or
if a quorum of the Fund's shareholders is present but sufficient
votes in favor of the Proposal described in this Proxy Statement
are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of
proxies from shareholders of the Fund. Any such adjournment will
require the affirmative vote of a majority of the shares of the
Fund. The persons named as proxies will vote in favor of any such
adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interests of the Fund's
shareholders. If such adjournment is for more than 120 days after
the Record Date, the Fund as to which the Meeting is being
adjourned will give notice of the adjourned Meeting to
shareholders.
In tallying shareholder votes, abstentions and broker non-votes
(i.e., proxies sent in by brokers and other nominees which cannot
be voted on a Proposal because instructions have not been received
from the beneficial owners) will be counted for purposes of
determining whether a quorum is present for purposes of convening
the Meeting. If a Proposal must be approved by a percentage of
"votes cast" on the Proposal, abstentions and broker non-votes will
not be counted as "votes cast" on the Proposal and will have no
effect on the result of the vote. If a Proposal must be approved by
(i) a percentage of voting securities present at the Meeting, or
(ii) a majority of the shares issued and outstanding (i.e.,
Proposal 1), abstentions and broker nonvotes will be considered to
be both present and issued and outstanding and, as a result, will
have the effect of being counted as votes against the Proposal.
If the accompanying form of proxy is properly executed and
returned in time to be voted at the Meeting, the shares covered
thereby will be voted in accordance with the instructions marked
thereon by the shareholder. Executed proxies that are unmarked will
be voted FOR each Proposal submitted to a vote of the shareholders.
Solicitation of Proxies
The cost of the solicitation, including the cost of the Meeting
and the cost of printing, assembling and mailing the proxy
materials, is estimated to be [$________] plus reimbursement of
expenses. The cost of proxy solicitation and expenses incurred in
connection with the preparation of this Proxy Statement and its
enclosures will be paid by the Fund.
Proxy solicitations will be made primarily by mail, but proxy
solicitations may also be made by telephone, telegraph or personal
solicitations conducted by officers and employees of ALPS Mutual
Fund Services, Inc. or their affiliates or other representatives of
the Fund (who will not be paid for their solicitation activities).
[[_______________] has been engaged by [________] to assist in
soliciting proxies, and may contact certain shareholders of the
Fund by telephone. Shareholders who are contacted by [________] may
be asked to cast their vote by telephonic proxy. Such proxies will
be recorded in accordance with the procedures set forth below.
[________] believes these procedures are reasonably designed to
ensure that the identity of the shareholder casting the vote is
accurately determined and that the voting instructions of the
shareholder are accurately reflected.]
[In all cases where a telephonic proxy is solicited, the
[________] representative will ask you for your full name, address,
social security or employer identification number, title (if you
are authorized to act on behalf of an entity, such as a
corporation), and number of shares owned. If the information
solicited agrees with the information provided to [________] by
[________], then the [________] representative will explain the
process, read the Proposals listed in the proxy card and ask for
your instructions on each Proposal. The [________] representative,
although he or she will answer questions about the process, will
not recommend to you how you should vote, other than to read the
recommendations set forth in this Proxy Statement. Within 72 hours,
[________] will send you a letter or mailgram to confirm your vote
and asking you to call [________] immediately if your instructions
are not correctly reflected in the confirmation.]
If you wish to participate in the Meeting and any adjournments
thereof, but do not wish to give your proxy by telephone, you may
still submit the proxy card included with this Proxy Statement or
attend the Meeting in person. Any proxy given by you, whether in
writing or by telephone, is revocable in the manner described
above.
Voting Securities and Principal Holders Thereof
The only voting securities of the Fund are its shares of
beneficial interest, par value $0.001 per share. As of the Record
Date, the Trustees and officers of the Trust owned as a group less
than 1% of the outstanding voting securities of the Funds.
As of the Record Date the following shareholders owned
beneficially 5% or more of the shares of the Fund:
[ INSERT 5% OWNERS ]
III. OTHER BUSINESS
The Board of Trustees knows of no other business to be brought
before the Meeting.
IV. NEXT MEETING OF SHAREHOLDERS
The Trust is not required and does not intend to hold annual or
other periodic meetings of shareholders except as required by the
1940 Act. The next meeting of the shareholders of the Trust will be
held at such time as the Board of Trustees may determine or at such
time as may be legally required. Any shareholder proposal intended
to be presented at such meeting must be received by the Trust at
its office a reasonable time prior to the meeting, as determined by
the Board of Trustees, to be included in a Fund's proxy statement
and form of proxy relating to such meeting, and must satisfy all
other legal requirements.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
FGIC PUBLIC TRUST
SHORT-TERM U.S. GOVERNMENT
INCOME FUND
PROXY SPECIAL MEETING OF SHAREHOLDERS May 31, 1996
The undersigned appoints _________________ and _________________
and each of them, attorneys and proxies of the undersigned, with
power of substitution, to vote all shares of the SHORT-TERM U.S.
INCOME FUND, which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held on Friday, May 31,
1996 at 11:00 a.m., New York time, and at any adjournment thereof.
THE BOARD OF TRUSTEES FAVORS A VOTE FOR THE PROPOSAL.
Proposal 1: Approval of Amendment to the Fund's Investment
Restrictions and Approval to Operate the Fund as a Money Market
Fund ____FOR ____AGAINST ____ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHEN
PROPERLY EXECUTED, IT SHALL BE VOTED IN THE MANNER SPECIFIED. IF NO
SPECIFICATION IS MADE, IT SHALL BE VOTED FOR THE APPROVAL OF THE
AMENDMENT TO THE FUND'S INVESTMENT RESTRICTION AND CHANGING THE FUND
TO A MONEY MARKET FUND.
Please Complete, Sign and Date on Reverse Side and Mail in
Accompanying Postpaid Envelope.
<PAGE>
NOTE: This instrument must be signed by the registered holder(s).
When signing as attorney, administrator, trustee or
guardian, please give your title as such.
_______________________________________
Date
_______________________________________
_______________________________________
Signature(s)
<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant X
Filed by a Party other than the Registrant __
Check the appropriate box:
X Preliminary Proxy Statement __ Confidential, for
Use of the Commission Only
__ Definitive Proxy Statement (as permitted by
Rule 14a-6(e)(2))
__ Definitive Additional Materials
__ Soliciting Material Purchase to sec. 240.14a-11(c) of sec.
240.14a-12
FGIC PUBLIC TRUST
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
__ $125 PER EXCHANGE ACT RULES 0-11(c)(1)(ii), OR 14a-6(i)(1),
OR 14a-6(i)(2) OR ITEM 22(a)(2) OF SCHEDULE 14A.
__ $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
__ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it is determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
__ Fee paid previously with preliminary materials.
__ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
