<PAGE>
As Filed with the Securities and Exchange Commission on August 28, 1997
Registration Nos. 33-72424
811-8194
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 7 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / /
AMENDMENT NO. 9
(Check appropriate box or boxes) /X/
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Financial Investors Trust
(Exact Name of Registrant as Specified in Charter)
370 Seventeenth Street, Suite 2700
Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 623-2577
W. Robert Alexander
370 Seventeenth Street, Suite 2700
Denver, Colorado 80202
(Name and Address of Agent for Service)
Copy to:
Steven R. Howard, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
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)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a) of Rule 485
Registrant has elected to register an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment Company Act of
1940 and filed the Notice required by Rule 24f-2 for the fiscal year ended April
30, 1997 on June 25, 1997.
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed
Title of Securities Number of Maximum Proposed Amount
Being Registered Shares Offering Maximum of
Being Price Per Aggregate Offering Registration
Registered* Unit** Price*** Fee
<S> <C> <C> <C> <C>
Financial Investors Trust-
U.S. Treasury Money 46,160,154 $1.00 $0 $0
Market Fund
Financial Investors Trust-
U.S. Government Money 46,160,154 $1.00 $0 $0
Market Fund
</TABLE>
* Registrant continues its election to register an indefinite number of
shares of beneficial interest pursuant to rule 24f-2 under the Investment
Company Act of 1940.
** Unless otherwise indicated, amount represents the maximum offering price
per unit as of August 21, 1997
*** The calculation of the maximum aggregate offering price is made pursuant to
rule 24e-2(a) under the Investment Company Act of 1940 and is based on the
following: the total amount of securities of the Registration's series
being registered (as indicated above) reduced by the amount of securities
redeemed or repurchased during the fiscal year ended April 30, 1997
(reduced by the amount of securities used in a reduction made by the issuer
with respect to such shares pursuant to paragraph (c) of section 24f-2
during the current fiscal year) which amounted to 92,192,355 shares of the
Financial Investors Trust - U.S. Treasury Money Market Fund and 0 shares of
the Financial Investors Trust - U.S. Government Money Market Fund. The
total value of these shares was $92,320,308. No fee is required for the
registration of these shares.
<PAGE>
FINANCIAL INVESTORS TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
U.S. TREASURY MONEY MARKET FUND
PART A PROSPECTUS CAPTION
Item 1. Cover Page . . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . . Expense Summary
Item 3. Condensed Financial Information. . . . Financial Highlights
Item 4. General Description of
Registrant. . . . . . . . . . . . . . Fund Operations
Item 5. Management of the Fund . . . . . . . . Management of the Fund;
Item 6. Capital Stock and Other
Securities. . . . . . . . . . . . . . Fund Operations; Taxes; Other
Information
Item 7. Purchase of Securities
Being Offered . . . . . . . . . . . . Fund Operations; How to Invest
in the Fund; Shareholder
Services
Item 8. Redemption or Repurchase . . . . . . . How to Redeem Shares
Item 9. Pending Legal Proceedings. . . . . . . Not Applicable
U.S. GOVERNMENT MONEY MARKET FUND
PART A PROSPECTUS CAPTION
Item 1. Cover Page . . . . . . . . . . . . . . Cover Page
- i -
<PAGE>
Item 2. Synopsis . . . . . . . . . . . . . . . Expense Summary
Item 3. Condensed Financial Information. . . . Financial Highlights
Item 4. General Description of
Registrant. . . . . . . . . . . . . . Fund Operations
Item 5. Management of the Fund . . . . . . . . Management of the Fund
Item 6. Capital Stock and Other
Securities. . . . . . . . . . . . . . Fund Operations; Taxes; Other
Information
Item 7. Purchase of Securities
Being Offered . . . . . . . . . . . . Fund Operations; How to Invest
in the Fund; Shareholder
Services
Item 8. Redemption or Repurchase . . . . . . . How to Redeem Shares
Item 9. Legal Proceedings. . . . . . . . . . . Not Applicable
- ii -
<PAGE>
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
PART B . . . . . . . . . . . . . . . . . . . . STATEMENT OF ADDITIONAL
INFORMATION CAPTION
Item 10. Cover Page . . . . . . . . . . . . . . . Cover Page
Item 11. Table of Contents. . . . . . . . . . . . Table of Contents
Item 12. General Information and
History . . . . . . . . . . . . . . . . Not Applicable
Item 13. Investment Objective and
Policies. . . . . . . . . . . . . . . . Investment Policies;
Investment Restrictions
Item 14. Management of the
Registrant. . . . . . . . . . . . . . . Management
Item 15. Control Persons and Principal
Holders of Securities . . . . . . . . . Management; Shares of
Beneficial Interest
Item 16. Investment Advisory and
Other Services. . . . . . . . . . . . . Management; Custodian;
Experts
Item 17. Brokerage Allocation and Other Practices Portfolio Transactions
Item 18. Capital Stock and Other
Securities. . . . . . . . . . . . . . . Shares of Beneficial
Interest
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . . . . . . How to Invest in the Fund
(Part A); Redemptions; How
to Redeem Shares (Part A);
Determination of Net Asset
Value; Exchange Privilege
Item 20. Tax Status . . . . . . . . . . . . . . . Fund Operations; Federal
Income Taxes
Item 21. Underwriters . . . . . . . . . . . . . . Management
- iii -
<PAGE>
Item 22. Calculation of Performance
Data. . . . . . . . . . . . . . . . . . Calculation of Yields and
Performance Information
Item 23. Financial Statements . . . . . . . . . . Financial Statements
- iv -
<PAGE>
FINANCIAL INVESTORS TRUST AUGUST 28, 1997
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202-5627
For additional information, call (800) 298-3442
U.S. TREASURY MONEY MARKET FUND
This Prospectus describes the U.S. Treasury Money Market Fund (the "Fund"),
a diversified no-load money market fund offered to institutional investors and
high net worth individuals by Financial Investors Trust (the "Trust"), a
Delaware business trust. Shares of the Fund are sold without the imposition of
Rule 12b-1 fees or other sales-related charges.
The Fund seeks to provide investors with as high a level of current income
as is consistent with the preservation of capital and liquidity by investing
exclusively in U.S. Treasury bills, notes and other direct obligations of the
U.S. Treasury and repurchase agreements collateralized to 102% by U.S. Treasury
obligations. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.
Shares of the Fund are sold generally to municipal investors, including
municipalities, counties and state agencies, as well as other institutional
investors such as broker/dealers, corporations, investment advisers, credit
unions, banks, insurance companies and other financial institutions.
The Fund is sponsored and distributed by ALPS Mutual Funds Services, Inc.
("ALPS" or the "Administrator" or "Distributor") and is advised by GE Investment
Management Incorporated ("GEIM"or the "Adviser").
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY OR INSURER AND THEY MAY INVOLVE INVESTMENT RISKS
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information you should consider
before investing in the Fund. Please read this Prospectus and keep it for
future reference. Additional information about the Fund is contained in a
Statement of Additional Information (the "Statement of Additional Information")
which has been filed with the Securities and Exchange Commission and is
available upon request without charge by writing to or calling the Trust at the
address and telephone number listed above. The Statement of Additional
Information bears the same date as this Prospectus and is incorporated herein by
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED
BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE
TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
1
<PAGE>
TABLE OF CONTENTS
Page
----
EXPENSE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FUND OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SUITABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 9
HOW TO INVEST IN THE FUND. . . . . . . . . . . . . . . . . . . . . . . . . .9
HOW TO REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2
<PAGE>
EXPENSE SUMMARY
The summary below shows shareholder transaction expenses imposed by the
Fund and annual Fund operating expenses based on the actual operating expenses
for the fiscal year ended April 30, 1997, adjusted to reflect current fees of
the Fund. A hypothetical example based on the summary is also shown.
"Shareholder Transaction Expenses" are charges you pay when buying or selling
shares of the Fund whereas "Annual Fund Operating Expenses" are paid out of the
Fund's assets and include fees for portfolio management, Fund administration and
other services.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load on
Purchases of Fund Shares None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
The Management Fees described in the table below are based upon the average
daily net assets of the Fund for the fiscal year ended April 30, 1997, adjusted
to reflect new servicing agreements. Management Fees may be higher to the extent
the Fund's average net assets exceed $500 million. Please read the following
Annual Fund Operating Expenses summary and accompanying footnotes carefully
before investing.
Management Fees(1) 0.05%
12b-1 Fees None
All Other Expenses(2)
(Net of Fee Waivers and Reimbursements) 0.28%
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Total Fund Operating Expenses
(Net of Fee Waivers and Reimbursements)(2) 0.33%
-----
-----
(1) The Fund is obligated to pay management fees to GEIM at the maximum
annual rate of 0.15% of the Fund's average net assets. Under its Investment
Advisory Agreement with the Fund, GEIM is entitled to receive management fees of
0.05% on the first $500 million of average net assets of the Fund, 0.075% on the
next $500 million, 0.10% on average net assets in excess of $1 billion but not
exceeding $1.5 billion, and 0.15% on average net assets in excess of $1.5
billion.
(2) The amount for "All Other Expenses" includes administration fees
payable to the Administrator calculated daily and payable monthly, at an annual
rate of the greater of $750,000 or 0.18% of average daily net assets of the Fund
up to $500 million, 0.15% of average daily net assets of the Fund in excess of
$500 million up to $1 billion and 0.12% of average daily net assets of the Fund
in excess of $1 billion. The Administrator has stated that it will voluntarily
waive a portion of the administration fees otherwise payable by the Fund, as
well as voluntarily assume a portion of Fund expenses to the extent necessary
for the Fund to maintain a total expense ratio of not more than 0.33% of the
average net assets of the Fund. Without this voluntary fee waiver and assumption
of expenses, and assuming payment of the maximum management and administration
fees, All Other Expenses and Total Fund Operating Expenses would be 0.39% and
0.54%, respectively, of the average net assets of the Fund. The Administrator
reserves the right to modify or terminate its fee waiver and assumption of
expenses at any time.
3
<PAGE>
THE FOLLOWING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. THE EXPENSES SET FORTH ABOVE AND THE EXAMPLE SET FORTH BELOW REFLECT
THE NON-IMPOSITION OF CERTAIN FEES AND EXPENSES. ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.
EXAMPLE:
Based upon the above summary of expenses and assuming a 5% annual return,
redemption at the end of each time period and the reinvestment of all dividends
and distributions, you would pay the following expenses on a $100,000 investment
in the Fund:
1 YEAR $ 338
3 YEARS $1,063
5 YEARS $1,857
10 YEARS $4,188
OTHER INFORMATION
The Expense Summary and Example are intended to help you understand the
expenses you would bear either directly (as with the Shareholder Transaction
Expenses) or indirectly (as with the Annual Fund Operating Expenses) as a Fund
shareholder. As stated above, the Fund does not impose any sales-related charges
in connection with purchases of its shares, although certain service
institutions may charge their clients fees in connection with purchases and
sales for the accounts of their clients. These fees are in addition to the
expenses shown in the Expense Summary and Example. For a more complete
description of the Fund's operating expenses, see "Management of the Fund" in
this Prospectus and the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
The financial highlights have been derived from the Fund's financial
statements for the fiscal year ended April 30, 1997, which have been audited by
Deloitte & Touche LLP, independent auditors. Their report on the financial
statements and the financial highlights of the Fund is included in the Annual
Report. The financial statements and financial highlights are incorporated by
reference into the Fund's Statement of Additional Information. You should read
the financial highlights with the financial statements and related notes.
Further information about the performance of the Fund is available in the Annual
Report. You may obtain both the Statement of Additional Information and the
Annual Report free of charge by calling or writing to the Trust at the telephone
number or address listed on the first page.
THE FINANCIAL HIGHLIGHTS CONTINUE ON PAGE 5.
4
<PAGE>
U.S. TREASURY MONEY MARKET FUND
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIOD INDICATED(1):
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended For the Period Ended
April 30, 1997 April 30, 1996 April 30, 1995 (2)
-----------------------------------------------------------
<S> <C> <C> <C>
Net asset value - beginning of period $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.05 0.04
- ---------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.05) (0.05) (0.04)
- ---------------------------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------
Total return 5.15% 5.44% 4.71%(3)
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $167,692 $316,364 $109,055
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.30% 0.30% 0.50%(3)
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 5.02% 5.36% 4.87%(3)
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 0.67% 0.71% 1.32%(3)
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 4.65% 4.95% 4.05%(3)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The financial highlights prior to March 24, 1997 reflect the operations of
the Fund while the Fund's investment adviser was FGIC Advisors, Inc. GEIM was
approved as the Fund's investment adviser at a special meeting of the
shareholders of the Fund on March 21, 1997.
(2) Operations commenced on May 25, 1994.
(3) Annualized.
5
<PAGE>
FUND OPERATIONS
INVESTMENT OBJECTIVE
The Adviser will use its best efforts to achieve the investment objective
of the Fund as described below, although the achievement of the investment
objective, of course, cannot be assured. You should not consider the Fund, by
itself, to be a complete investment program. The Fund is a diversified, open-end
management investment company.
The Fund's investment objective is to seek as high a level of current
income as is consistent with preservation of capital and liquidity. The
securities held by the Fund have remaining maturities of thirteen months or
less. The average weighted maturity of the securities held by the Fund will not
exceed 90 days. The Fund's investment objective may not be changed without
approval of a majority of the Fund's outstanding shares.
In seeking to achieve its investment objective, the Fund invests
exclusively in direct obligations of the U.S. Treasury, such as Treasury bills
and notes and repurchase agreements with respect to such obligations. The Board
of Trustees shall make a determination that all portfolio securities purchased
by the Fund present minimal credit risk.
Securities issued by the U.S. Treasury have historically involved little
risk of default. However, due to fluctuations in interest rates, the market
value of such securities may vary during the period a shareholder owns shares of
the Fund. The Fund will seek to maintain a stable net asset value at $1.00 per
share. There is no assurance that the Fund will meet its investment objective.
Neither the United States, nor any agency or instrumentality thereof, has
guaranteed, sponsored or approved the Fund or its shares.
INVESTMENT POLICIES
Securities held by the Fund may be subject to repurchase agreements. A
repurchase agreement is a transaction in which the Fund agrees to purchase
portfolio securities from financial institutions, such as banks and
broker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon time and price. Although the securities subject to a repurchase
agreement might bear maturities exceeding thirteen months, the Fund presently
intends only to enter into repurchase agreements with maturities in excess of
seven days in cases where a liquidity feature, such as a put option, permits the
Fund to liquidate or terminate the repurchase agreement within seven days. The
seller under a repurchase agreement will be required to maintain the value of
the securities subject to the repurchase agreement at not less than 102% of the
principal value of the repurchase agreement, including any accrued interest
earned on the repurchase agreement. The Fund's custodian or subcustodian will
take possession of such collateral. The seller will collateralize the repurchase
agreement with U.S. Treasury obligations. Default by or bankruptcy of the seller
may, however, expose the Fund to possible loss because of adverse market action
or delay or transaction costs in connection with the disposition of the
underlying obligations. The Fund may enter into agreements with a single
counterparty that constitutes more than 5% of Fund assets.
The Fund may, in certain cases, calculate the maturity of a security with a
floating or variable rate or a demand feature in the manner specified in Rule
2a-7 under the Investment Company Act, with the effect that the maturity is
deemed to be shorter than its final date.
The Fund intends to purchase U.S. Treasury securities at auction from the
Federal Reserve.
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment restrictions which reflect
self-imposed standards as well as federal regulatory limitations. These
limitations are designed to minimize certain risks associated with investing in
specified types of securities or engaging in certain transactions. The
investment restrictions may be changed only by a vote of a majority of the
Fund's outstanding shares.
The Fund may not:
1) Purchase securities other than direct obligations of the U.S. Treasury,
some of which may be subject to repurchase agreements, and repurchase agreements
collateralized to 102% by direct U.S. Treasury obligations.
2) Make loans, except that the Fund may purchase or hold debt instruments,
and enter into repurchase agreements in accordance with its investment objective
and policies.
6
<PAGE>
3) Borrow money or issue senior securities, except that the Fund may borrow
from banks for temporary purposes in amounts up to 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowings and in amounts not in
excess of the dollar amounts borrowed or 10% of the value of the Fund's assets
at the time of borrowing. The Fund may not purchase securities while its
borrowings are outstanding.
4) With respect to more than 10% of Fund assets, enter into repurchase
agreements providing for settlement more than seven days after notice without a
liquidity feature such as a put option, permitting the Fund to liquidate or
terminate the repurchase agreement within seven days.
5) Purchase municipal bonds issued by an issuer any of whose outstanding
bonds are insured by Financial Guarantee Insurance Corporation ("FGIC").
6) Purchase collateralized mortgage obligations, inverse floaters or any
other securities commonly known as "derivatives".
7) Purchase illiquid securities, except for fully collateralized
repurchase agreements that, because of term limitations, are deemed to be
illiquid.
8) Hold securities with remaining maturities exceeding thirteen months.
9) Purchase reverse repurchase agreements.
DETERMINATION OF NET ASSET VALUE
The value of the Fund's shares is referred to as "net asset value". Net
asset value per share for purposes of pricing purchases and redemptions is
calculated by adding the value of all securities and other assets belonging to
the Fund, subtracting its liabilities, and dividing the result by the number of
the Fund's outstanding shares. Net asset value is determined as of 5:00 p.m.
Eastern Time on each day the New York Federal Reserve and the New York Stock
Exchange are open for business and as of 12:00 noon Eastern Time on any day the
Public Securities Association ("PSA") recommends an early close (each such day
referred to as a "Half Day"). Currently, either the New York Federal Reserve or
the New York Stock Exchange is closed on New Years Day, Martin Luther King Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day. An early close
is currently recommended by the PSA on the Business Day before each day that
either the New York Federal Reserve or the New York Stock Exchange observes a
holiday, except for Good Friday. Additionally, the PSA recommends an early close
on the Business Day following Independence Day and Thanksgiving Day. A "Business
Day" is any day on which the New York Federal Reserve and the New York Stock
Exchange are open for business.
The Board of Trustees has established procedures designed to maintain a
stable net asset value of $1.00 per share, to the extent reasonably possible.
The Board of Trustees has approved and adopted procedures under Rule 2a-7 under
the Investment Company Act of 1940, as amended, which was enacted by the SEC
with the intent of stabilizing money market funds at $1.00 per share. Under the
guidelines of Rule 2a-7, the Fund uses 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. 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, purchase securities having remaining
maturities of 13 months or less and invest only in securities determined by the
Trust's Board of Trustees to be "eligible securities" and that present minimal
credit risks. The Board of Trustees or its delegate reviews 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
can be maintained. See the Statement of Additional Information for more details.
7
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund's net income is declared daily as a dividend at the close of
business on the day of declaration. Your shares begin earning dividends on the
day you purchase them, and continue to earn dividends through and including the
day before you redeem them. See "How to Invest in the Fund". The Fund pays
dividends not later than five business days after the end of each month in the
form of additional shares of the Fund, unless you elect prior to the date of
distribution to receive payment in cash. Reinvested dividends and distributions
receive the same tax treatment as those paid in cash. If you redeem all of your
shares in the Fund, the Fund will pay your dividends in cash not later than five
business days after the redemption.
SUITABILITY
The Fund is designed as an economical and convenient professionally managed
investment vehicle for institutional investors and high net worth individuals
with cash balances or cash reserves who seek as high a level of current income
as is consistent with the preservation of capital and liquidity. The Fund is
designed to meet the specific cash management needs of institutional investors
such as Municipal Investors, broker/dealers, corporations, investment advisers,
credit unions, banks, insurance companies and other institutional investors.
"Municipal Investors" include any State, county, municipality, school district,
special district or political subdivision in the United States. The Fund may
also be suitable for institutions seeking an investment vehicle for daily cash
sweep or liquidity purposes on behalf of their clients.
Legislation in each state sets forth guidelines and limitations with
respect to investments by Municipal Investors located within the state. In
addition, Municipal Investors may be subject to local laws or have their own
guidelines and policies prescribing acceptable investments for cash management
purposes. Each Municipal Investor planning to invest in the Fund must
independently verify that the Fund meets all of the criteria of investment
policies and guidelines applicable to such Municipal Investor.
Future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations could prevent a Municipal Investor from continuing its investment in
the Fund. Each Municipal Investor should therefore remain aware of any changes
in the applicable regulation of permitted investments.
The Fund offers the advantages of purchasing power efficiencies and
diversification of risk. Generally, in purchasing debt instruments from dealers,
the percentage difference between the bid and asked price tends to decrease as
the size of the transaction increases. The Fund also offers investors the
opportunity to participate in a portfolio of U.S. Treasury obligations which is
more diversified in terms of issues and maturities than a portfolio a single
investor may otherwise be able to invest in.
Investment in the Fund relieves the investor of money management and
administrative burdens usually associated with the direct purchase and sale of
U.S. Treasury debt instruments. These include the selection of the portfolio
investments; surveying the market for the best terms at which to buy and sell;
scheduling and monitoring maturities and reinvestments; receipt, delivery and
safekeeping of securities; and portfolio recordkeeping.
The Fund qualifies as an eligible investment for federally chartered credit
unions pursuant to Sections 107 of the Federal Credit Union Act and Part 703 of
the National Credit Union Administration Rules and Regulations. The Fund intends
to review changes in the applicable laws, rules and regulations governing
eligible investments for federally chartered credit unions, and take such action
as may be necessary so that the investments of the Fund qualify as eligible
investments under the Federal Credit Union Act and the regulations thereunder.
Shares of the Fund, however, may or may not qualify as eligible investments for
particular state chartered credit unions. The Fund encourages each state
chartered credit union to consult qualified legal counsel concerning whether the
Fund is a permissible investment under the laws applicable to it.
8
<PAGE>
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
At a meeting held on January 20, 1997, the Trustees approved a new
Investment Advisory Agreement with GEIM. The new Investment Advisory Agreement
was submitted to shareholders for their consideration pursuant to a Proxy
Statement dated March 3, 1997 and subsequently approved by a majority of the
shareholders at a Special Meeting held on March 21, 1997. The Adviser is a
wholly-owned subsidiary of General Electric Company ("GE"). The principal
address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM wholly-owned by GE, collectively provide investment management
services to various institutional accounts with total assets, as of June 30,
1997, in excess of $65 billion, including $1.5 billion in money market funds.
Pursuant to the Investment Advisory Agreement, the Adviser has agreed to
provide a continuous investment program for the Fund, including investment
research and management with respect to the assets of the Fund. GEIM is entitled
to receive management fees of 0.05% on the first $500 million of the average net
assets of the Fund, 0.075% on the next $500 million, 0.10% in excess of $1
billion but not exceeding $1.5 billion and 0.15% on average net assets in excess
of $1.5 billion.
ADMINISTRATOR AND BOOKKEEPING AND PRICING AGENT
ALPS serves as the Fund's Administrator. As Administrator, ALPS has agreed
to: assist in maintaining the Fund's office; furnish the Fund with clerical and
certain other services; compile data for and prepare notices and semi-annual
reports to the Securities and Exchange Commission; prepare filings with state
securities commissions; coordinate Federal and state tax returns; monitor the
Fund's expense accruals; monitor compliance with the Fund's investment policies
and limitations; and generally assist in the Fund's operations. ALPS is entitled
to receive a fee from the Fund for its administrative services computed daily
and payable monthly, at the annual rate of the greater of $750,000 or 0.18% of
average daily net assets of the Fund up to $500 million, 0.15% of average daily
net assets of the Fund in excess of $500 million up to $1 billion and 0.12% of
average daily net assets of the Fund in excess of $1 billion. ALPS has stated
that it will voluntarily waive a portion of the administration fees otherwise
payable by the Fund, as well as voluntarily assume a portion of the Fund
expenses, to the extent necessary for the Fund to maintain a total expense ratio
of not more than 0.33% of the average net assets of the Fund. ALPS reserves the
right to modify or terminate its fee waiver and assumption of expenses at any
time. ALPS may also pay third parties from time to time for rendering services
to the Fund and/or shareholders.
ALPS also serves as the Fund's Bookkeeping and Pricing Agent. In this
capacity, ALPS has agreed to maintain the financial accounts and records of the
Fund and to compute the net asset value and certain other financial information
relating to the Fund.
CUSTODIAN
State Street Bank and Trust Company of Connecticut, N.A., located at 750
Main Street, Suite 1114, Hartford, Connecticut 06103, serves as Custodian for
the Fund.
SUB-CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company, located at P.O. Box 1978, Boston,
Massachusetts 02015, serves as Sub-Custodian and Transfer Agent for the Fund.
HOW TO INVEST IN THE FUND
Shares in the Fund are distributed on a continuous basis by ALPS, the
Fund's Sponsor and Distributor. ALPS has its principal office at 370 Seventeenth
Street, Suite 2700, Denver, Colorado 80202 and may be reached at (800) 298-3442.
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GENERAL PROCEDURES
You may purchase Fund shares through ALPS or the Fund's Transfer Agent. You
may pay for your purchase of Fund shares by check, money order or by using the
Federal Reserve Wire System. The check or money order must be payable in U.S.
dollars to the Fund and be drawn on a bank located within the United States.
Shares of the Fund may be purchased at the net asset value next determined after
an order is received and accepted. The Fund does not impose any sales-related
charges in connection with purchases of shares. The Fund may discontinue
offering its shares in any state without notice to shareholders.
An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. The application should be forwarded to:
Financial Investors Trust
P.O. Box 1978
Boston, Massachusetts 02015
Purchases by telephone or facsimile can be made after an account has been
established by the Transfer Agent as described below. The Trust reserves the
right to reject any purchase order.
PURCHASE PRICE
Your purchase of Fund shares will be effected at the net asset value next
determined after the Fund receives your purchase order in proper form and
payment in the form of Federal Funds. If you pay by check, Federal Funds will
generally be available to the Fund two Business Days after the Fund receives
your check. If your order is accompanied by Federal Funds, or is converted into
Federal Funds by 5:00 p.m. Eastern Time on a Business Day or 12:00 noon Eastern
Time on a Half Day, it will be executed on that day. If the Fund receives your
order and payment in the form of Federal Funds after 5:00 p.m. Eastern Time on a
Business Day or after 12:00 noon Eastern Time on a Half Day, your order will be
processed the next Business Day.
TELEPHONE AND FACSIMILE PURCHASES
You can purchase Fund shares by telephone or facsimile once you have
established your account with the Fund and selected facsimile and/or telephone
privileges on your Account Application. In order to qualify for dividends on the
day of purchase, telephone or facsimile orders must be placed and Federal Funds
must be in the Fund's custody account by 5:00 p.m. Eastern Time on Business
Days. In order to qualify for dividends on the day of purchase on Half Days,
telephone or facsimile orders must be placed and Federal Funds must be in the
Fund's custody account by 12:00 noon that day. If Federal Funds arrive in the
Fund's custody account after the stated deadlines for both Business Days and
Half Days, the account will be credited the next Business Day.
MINIMUM INVESTMENT AND ACCOUNT BALANCES
The minimum initial investment in the Fund is $100,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If an account balance falls below $25,000 due to
redemptions or exchanges, the account may be closed and the proceeds wired to
the bank account of record, or a check will be issued and sent to the party of
record. An investor will be given 30 days notice that the account will be closed
unless an additional investment is made to increase the account balance to the
$25,000 minimum.
STATEMENTS AND REPORTS
The Trust will send you a statement of your account after every transaction
that affects your share balance or your account registration. A statement with
tax information and an annual statement will be mailed to you by January 31 of
each year and also will be filed with the IRS. At least twice a year, you will
receive financial statements in the form of Annual and Semi-Annual Reports of
the Fund.
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HOW TO REDEEM SHARES
GENERAL PROCEDURES
Shareholders may redeem all or any part of the value of their account(s) on
any Business Day. You may redeem by mail, check, telephone or facsimile if you
have established that capability with the Fund. Redemption orders are processed
at the net asset value per share next determined after the Fund receives your
order. If the Fund receives your redemption order before 1:00 P.M. Eastern Time,
on a Business Day other than a Half Day, or by 11:00 A.M. Eastern Time on a Half
Day, the Fund will generally pay for your redeemed shares on that day.
Otherwise, the Fund will generally pay for your redeemed shares on the next
Business Day. The Fund reserves the right to pay for redeemed shares within
seven days after receiving your redemption order if, in the judgment of the
Adviser, an earlier payment could adversely affect the Fund.
REGULAR REDEMPTION
You may redeem shares by sending a written request to Financial Investors
Trust, P.O. Box 1978, Boston, Massachusetts 02015. You must sign a redemption
request. (All individuals with authority on the account must co-sign.) Your
written redemption request must:
(i) state the number of shares to be redeemed;
(ii) identify your shareholder account number; and
(iii) provide your tax identification number.
Each signature must be guaranteed by either a bank that is a member of the
FDIC, a trust company or a member firm of a national securities exchange or
other eligible guarantor institution. The Fund will not accept guarantees from
notaries public. Guarantees must be signed by an authorized person at the
guarantor institution, and the words "Signature Guaranteed" must appear with the
signature. A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.
When the Fund wires your redemption proceeds, the wire must be paid to the
same bank and account as designated on the Fund's Account Application or in your
written instructions to the Fund. If your bank is not a member of the Federal
Reserve System, your redemption proceeds will be wired to a correspondent bank.
Immediate notification by the correspondent bank to your bank will be necessary
to avoid a delay in crediting the funds to your bank account.
TELEPHONE AND FACSIMILE REDEMPTION
You may redeem shares by telephone or facsimile. Shareholders must check
the appropriate box on the Account Application to activate facsimile and/or
telephone redemption privileges. Shares may be redeemed by telephoning the Fund
at (800) 298-3442 (or sending a facsimile transmission to the Fund at (617)
985-9626) and giving the account name, account number, Personal Identification
Number (PIN#), name of Fund and amount of redemption. Proceeds from redemptions
may be wired or mailed directly to your account at a commercial bank within the
United States or mailed to you at your address on the Fund's books.
In order to arrange for facsimile and/or telephone redemptions after you
have opened your account, or to change the bank account or address designated to
receive redemption proceeds, send a written request to the Fund at the address
listed under "Regular Redemption". The request must be signed by you and each
other shareholder of the account involved, with the signatures guaranteed as
described above. The Trust may modify or terminate procedures for redeeming
shares by telephone but will not materially change or terminate it without
giving shareholders 60 days' written notice.
During periods of substantial economic or market change, telephone or
facsimile redemptions may be difficult to complete. If you are unable to
contact the Fund by telephone or facsimile, you may redeem your shares by mail
as described above under "Regular Redemption".
By electing the facsimile and/or telephone redemption option, you may be
giving up a measure of security which you might have had if you were to redeem
in writing. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone or facsimile are genuine, such as
recording telephone calls, providing written confirmation of transactions, or
requiring a form of personal identification prior to acting on instructions
received by telephone or facsimile. To the extent the Trust does not employ
reasonable procedures, it and/or its service
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<PAGE>
contractors may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Trust, the Transfer Agent nor ALPS will be liable for
following instructions communicated by telephone or facsimile that are
reasonably believed to be genuine. Accordingly, you, as a result of this policy,
may bear the risk of fraudulent telephone or facsimile redemption transactions.
CHECK REDEMPTION
You may request on your account application or by written request to the
Fund that the Fund provide redemption checks drawn on your account. In order to
establish the checkwriting option, you must manually sign a signature card that
includes all authorized individuals. Checks will be sent only to the registered
owner(s) of the account and only to the address of record. Checks may be made
payable to the order of any person. When a check is presented to the Transfer
Agent for payment, the Transfer Agent, as your agent, will cause the Fund to
redeem a sufficient number of your Fund shares to cover the amount of the check.
Shares earn dividends through the day the redemption is processed. There is no
charge to you for the use of the checks; however, the Transfer Agent will impose
a charge for stopping payment of a check upon your request, or if the Transfer
Agent cannot honor a check due to insufficient funds or other valid reasons. A
request to reverse a stop payment order must be received in writing.
Checks may not be written to redeem shares purchased by check until the
date that good funds are credited to the Fund's custodian by its correspondent
bank. If the amount of the check is greater than the value of the shares in your
account, the check will be returned marked "Insufficient Funds". Checks written
on amounts subject to the hold described above will be returned marked
"Uncollected". If your check does not clear, you will be responsible for any
loss the Fund, Custodian or Transfer Agent may incur.
A check may not be used to close an account. Checkwriting is not available
to holders of shares in certificate form or if you are subject to Internal
Revenue Service backup withholding. It is also inadvisable for you to write a
check for an amount close to the total value of your account. The Trust reserves
the right to terminate or alter the checkwriting service at any time.
GENERAL REDEMPTION INFORMATION
Except for the presence of certain exceptional circumstances as described
in the Investment Company Act of 1940, the Fund will pay for redeemed shares by
mail within seven days after the Fund receives your order and supporting
documents in proper form (except as provided by the rules of the Securities and
Exchange Commission). Where payment is to be made by wire via the Federal
Reserve Wire System, the Fund will wire redemption proceeds on the same day
after receiving your redemption order, provided it is made before 1:00 P.M.
Eastern Time on Business Days and 11:00 a.m. Eastern Time on Half Days. However,
if any of the shares were purchased by check, the Fund may delay the payment of
redemption proceeds until the Transfer Agent is reasonably satisfied that the
check has been collected, which could take up to 15 days from the purchase date.
There is no charge for share redemptions. The Fund may redeem an account
that has a balance of less than $25,000 if the shareholder does not increase the
amount of the account to at least $25,000 upon 30 days' notice.
Please direct questions concerning the proper form for redemption requests
to the Fund at (800) 298-3442.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
You may sell your Fund shares and buy shares of the U.S. Government Money
Market Fund, another investment portfolio of the Trust, in exchange by written
request. There are no fees or commissions for exchanging Fund shares. If you
have established the privilege on your Account Application, you may also
initiate exchanges by telephone or facsimile. Exchange requests should be
directed to the Fund at (800) 298-3442.
Exchange transactions must be for amounts of $1,000 or more. Because
exchanges may have tax consequences, you should consult your tax adviser for
further information. The U.S. Government Money Market Fund or other investment
portfolio must be registered for sale in your state and must meet the investment
criteria for your institution. See "Suitability" in the U.S. Government Money
Market Fund's prospectus. Prior to requesting an exchange of Fund
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<PAGE>
shares, you should call the Fund at (800) 298-3442. You should read the current
prospectus for the U.S. Government Money Market Fund before investing. Each Fund
has its own minimum balance requirements which must be adhered to.
During periods of significant economic or market change, telephone
exchanges may be difficult to complete. If you are unable to contact the Fund by
telephone or facsimile, you may also mail the exchange request to the Fund at
the address listed under "Regular Redemption". Neither the Trust, the Transfer
Agent nor ALPS will be responsible for the authenticity of exchange instructions
received by telephone or facsimile except as set forth under "How to Redeem
Shares - Telephone and Facsimile Redemption."
The Trust can provide you with information concerning certain limitations
on the exchange privilege, including those related to frequency. The Trust may
modify or terminate the exchange privilege but will not materially change or
terminate it without giving shareholders 60 days' written notice.
TAXES
While municipal investors are generally exempt from Federal income taxes,
each investor should independently ascertain its tax status. With respect to
investors who are not exempt from Federal income taxes, dividends derived from
net investment income and short term capital gains are taxable as ordinary
income distributions and are taxable when paid, whether investors receive
distributions in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if paid on
December 31. The Fund will send to non-exempt investors an IRS Form 1099-DIV
showing their taxable distributions for the past calendar year.
The Fund has qualified and intends to continue to qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). This qualification will relieve the Fund of liability for Federal
income taxes to the extent its earnings are distributed in accordance with the
Code and it meets other requirements for qualification as set forth in the Code.
The information above is only a summary of some of the federal tax
consequences generally affecting the Fund and its shareholders, and no attempt
has been made to discuss individual tax consequences. In addition to Federal
taxes, investors may be subject to state or local taxes on their investment.
Investors should consult their tax advisor to determine whether a Fund is
suitable to their particular tax situation.
When investors sign their account application, they will be asked to
certify that their social security or taxpayer identification number is correct
and that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require the
Fund to withhold 31% of taxable distributions and redemptions.
The Fund declares dividends from net investment income daily and pays such
dividends monthly. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders within each
calendar year as well as on a fiscal year basis.
Since all of the Fund's net investment income is expected to be derived
from earned interest, it is anticipated that all dividends paid by the Fund will
be taxable as ordinary income to those shareholders who are not exempt from
Federal income taxes, and that no part of any distribution will be eligible for
the dividends received deduction for corporations.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Delaware business trust on November 30, 1993,
and consists of two separate portfolios or series, one of which is offered in
this Prospectus. The Board of Trustees may establish additional series in the
future. The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest with a par value of $0.001 each. When issued,
shares of the Trust are fully paid and non-assessable.
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Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a series of the Trust but only to
the extent of the shareholder's investment in such series. However, the Trust
Instrument disclaims liability of the shareholders, Trustees or officers of the
Trust for acts or obligations of the Trust, which are binding only on the assets
and property of each series of the Trust and requires that notice of the
disclaimer be given in each contract or obligations entered into or executed by
the Trust or the Trustees. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and should be considered remote
and is limited to the amount of the shareholder's investment in the Fund.
VOTING
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which, by law or under the provisions of the Trust
Instrument, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders and does not intend to do so.
Shareholders of the Fund may vote separately on items which affect only the
Fund.
The Trust Instrument provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting of shareholders for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust or Fund.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of the Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy; or (2) more than 50% of the outstanding shares of the Fund.
PERFORMANCE INFORMATION
From time to time, the Fund may quote its "yield" and "effective yield" in
advertisements or in communications to shareholders. BOTH YIELD FIGURES ARE
BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. The "yield" quoted in advertisements refers to the income generated
by an investment in the Fund over a specified seven-day period. This income is
then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of the assumed reinvestment.
Additionally, the yield of the Fund may be compared in advertisements or in
reports to shareholders to those of other mutual funds with similar investment
objectives and to other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the Funds' yields may be compared to
the IBC/DONOGHUE'S MONEY FUND AVERAGE, which is an average compiled by
IBC/DONOGHUE'S MONEY FUND REPORT. In addition, yields may be compared to the
average yields reported by the BANK RATE MONITOR for money market deposit
accounts offered by the 50 leading banks and thrift institutions in the top five
standard metropolitan statistical areas.
Yield data as reported in national financial publications, including MONEY
MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL and THE NEW YORK TIMES, or
in publications of a local or regional nature, may also be used in comparing the
yields of the Fund.
Since yields fluctuate, you cannot necessarily use yield data to compare an
investment in the Fund's shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed yield
for a stated period of time. Yield is generally a function of the kind and
quality of the instruments held in a portfolio, portfolio maturity, operating
expenses and market conditions. Any fees charged by service institutions
directly to their customer accounts in connection with investments in shares of
the Fund will not be included in the Fund's calculations of yield.
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<PAGE>
INQUIRIES
Please write or call the Trust at the address or telephone number listed on
the cover of this Prospectus with any inquiries you may have regarding the Fund
or any other investment portfolios of the Trust that are not offered by this
Prospectus.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
16
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FINANCIAL INVESTORS TRUST AUGUST 28, 1997
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202-5627
For additional information, call (800) 298-3442
U.S. GOVERNMENT MONEY MARKET FUND
This Prospectus describes the U.S. Government Money Market Fund (the
"Fund"), a diversified no-load money market fund offered to institutional
investors and high net worth individuals by Financial Investors Trust ( the
"Trust"), a Delaware business trust. Shares of the Fund are sold without the
imposition of Rule 12b-1 fees or other sales-related charges.
The Fund seeks to provide investors with as high a level of current income
as is consistent with the preservation of capital and liquidity by investing
exclusively in obligations issued or guaranteed as to principal and interest by
the U.S. Government or by any of its agencies or instrumentalities and
repurchase agreements collateralized to 102% by U.S. Treasury obligations and
other direct obligations of the U.S. Government or its agencies or
instrumentalities. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.
Shares of the Fund are sold generally to municipal investors, including
municipalities, counties and state agencies, as well as other institutional
investors such as broker/dealers, corporations, investment advisers, credit
unions, banks, insurance companies and other financial institutions.
The Fund is sponsored and distributed by ALPS Mutual Funds Services, Inc.
("ALPS" or the "Administrator" or "Distributor") and is advised by GE Investment
Management Incorporated ("GEIM" or the "Adviser").
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY OR INSURER AND THEY MAY INVOLVE INVESTMENT RISKS
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information you should consider
before investing in the Fund. Please read this Prospectus and keep it for future
reference. Additional information about the Fund is contained in a Statement of
Additional Information (the "Statement of Additional Information") which has
been filed with the Securities and Exchange Commission and is available upon
request without charge by writing to or calling the Trust at the address and
telephone number listed above. The Statement of Additional Information bears the
same date as this Prospectus and is incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THE FUND IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
1
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TABLE OF CONTENTS
Page
----
EXPENSE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FINANCIAL HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FUND OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SUITABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT OF THE FUND. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
HOW TO INVEST IN THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . 10
HOW TO REDEEM SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SHAREHOLDER SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2
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EXPENSE SUMMARY
The summary below shows shareholder transaction expenses imposed by the
Fund and annual Fund operating expenses based on the actual operating expenses
for the fiscal year ended April 30, 1997, adjusted to reflect current fees of
the Fund. A hypothetical example based on the summary is also shown.
"Shareholder Transaction Expenses" are charges you pay when buying or selling
shares of the Fund whereas "Annual Fund Operating Expenses" are paid out of the
Fund's assets and include fees for portfolio management, Fund administration and
other services.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load on Purchases
of Fund Shares None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
The Management Fees described in the table below are based upon the average
daily net assets of the Fund for the fiscal year ended April 30, 1997, adjusted
to reflect new servicing agreements. Management Fees may be higher to the extent
the Fund's average net assets exceed $500 million. Please read the following
Annual Fund Operating Expenses summary and accompanying footnotes carefully
before investing.
Management Fees (1) 0.04%
12b-1 Fees None
All Other Expenses(2) 0.16%
-----
(Net of Fee Waivers and Reimbursements)
Total Fund Operating Expenses
(Net of Fee Waivers and Reimbursements)(2) 0.20%
-----
-----
(1) The Fund is obligated to pay management fees to GEIM at the maximum
annual rate of 0.08% of the Fund's average net assets. Under its Investment
Advisory Agreement with the Fund, GEIM is entitled to receive management fees of
0.04% on the first $500 million of average net assets of the Fund, 0.06% on the
next $500 million and 0.08% on average net assets in excess of $1 billion.
(2) The amount for "All Other Expenses" includes administration fees
payable to the Administrator calculated daily and payable monthly, at an annual
rate of the greater of $90,000 or 0.18% of average daily net assets of the Fund
up to $500 million, 0.15% of average daily net assets of the Fund in excess of
$500 million up to $1 billion and 0.12% of average daily net assets of the Fund
in excess of $1 billion. The Administrator has stated that it will voluntarily
waive a portion of the administration fees otherwise payable by the Fund, as
well as voluntarily assume a portion of the Fund expenses, to the extent
necessary for the Fund to maintain a total expense ratio of not more than 0.20%
of the average net assets of the Fund. Without this voluntary fee waiver and
assumption of expenses, and assuming payment of the maximum management and
administration fees, All Other Expenses and Total Fund Operating Expenses would
be 0.55% and 0.63%, respectively, of the average net assets of the Fund. The
Administrator reserves the right to modify or terminate the fee waiver and
assumption of expenses at any time.
3
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THE FOLLOWING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. THE EXPENSES SET FORTH ABOVE AND THE EXAMPLE SET FORTH BELOW REFLECT
THE NON-IMPOSITION OF CERTAIN FEES AND EXPENSES. ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.
EXAMPLE:
Based upon the above summary of expenses and assuming a 5% annual return,
redemption at the end of each time period and the reinvestment of all dividends
and distributions, you would pay the following expenses on a $1,000,000
investment in the Fund:
1 YEAR $ 2,050
3 YEARS $ 6,450
5 YEARS $11,281
10 YEARS $25,539
OTHER INFORMATION:
The Expense Summary and Example are intended to help you understand the
expenses you would bear either directly (as with the Shareholder Transaction
Expenses) or indirectly (as with the Annual Fund Operating Expenses) as a Fund
shareholder. As stated above, the Fund does not impose any sales-related charges
in connection with purchases of its shares, although certain service
institutions may charge their clients fees in connection with purchases and
sales for the accounts of their clients. These fees are in addition to the
expenses shown in the Expense Summary and Example. For a more complete
description of the Fund's operating expenses, see "Management of the Fund" in
this Prospectus and the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
The financial highlights have been derived from the Fund's financial
statements for the fiscal year ended April 30, 1997, which have been audited by
Deloitte & Touche LLP, independent auditors. Their report on the financial
statements and the financial highlights of the Fund is included in the Annual
Report. The financial statements and financial highlights are incorporated by
reference into the Fund's Statement of Additional Information. You should read
the financial highlights with the financial statements and related notes.
Further information about the performance of the Fund is available in the Annual
Report. You may obtain both the Statement of Additional Information and the
Annual Report free of charge by calling or writing to the Trust at the telephone
number or address listed on the first page.
THE FINANCIAL HIGHLIGHTS CONTINUE ON PAGE 5.
4
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
Selected data for a share of beneficial interest outstanding throughout the
period indicated(1):
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended For the Period Ended
April 30, 1997 April 30, 1996 April 30, 1995 (2)
-------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value - beginning of period $9.97 $9.97 $10.00
- ------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.14 0.55 0.44
Net realized and unrealized gain (loss)
on investments 0.00 0.00 (0.03)
- ------------------------------------------------------------------------------------------------------------------------
Total income from investment operations (0.14) 0.55 0.41
- ------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.14) (0.55) (0.44)
Stock Split (5) (8.97) 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (9.11) (0.55) (0.44)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $9.97 $9.97
- ------------------------------------------------------------------------------------------------------------------------
Total return 5.23% 5.65% 4.73%(4)
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $87,416 $31,082 $41,893
- ------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.23% 0.60% 0.45%(4)
- ------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 5.13% 5.38% 5.23%(4)
- ------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 0.39% 0.85% 0.65%(4)
- ------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets without fee waivers 4.97% 5.12% 5.03%(4)
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate n/a(3)(5) 0.00% 827.35%(4)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The financial highlights prior to July 10, 1996 reflect the operations of
the Fund as the Short-Term U.S. Government Income Fund when it was not a money
market fund and had different investment policies and expenses, and a
fluctuating net asset value not maintained at $1.00 per share. The Fund changed
to a money market fund on July 10, 1996 following a Special Meeting of the
Fund's shareholders on June 27, 1996. The financial highlights prior to March
24, 1997 also reflect the operations of the Fund while the Fund's investment
adviser was FGIC Advisors, Inc. GEIM was approved as the Fund's investment
adviser at a Special Meeting of the shareholders of the Fund on March 21, 1997.
(2) Operations commenced on June 7, 1994.
(3) A portfolio turnover rate is calculated for non-money market funds and is
therefore no longer applicable for the U.S. Government Money Market Fund.
(4) Annualized.
(5) At a Special Meeting of the U.S. Government Money Market Fund (the "Fund")
(formerly the Short-Term U.S. Government Income Fund) held on June 27, 1996,
shareholders of the Fund approved an amendment to a fundamental investment
restriction of the Fund to allow for the purchase of United States Government
agency and instrumentality obligations as well as repurchase agreements
collateralized to 102% by direct obligations of United States Government
agencies and instrumentalities. The shareholders also approved that the Fund
change from a non-money market fund to a money market fund and that the Fund
change its name to the U.S. Government Money Market Fund to reflect these
changes. After the close of business on July 9, 1996, the changes approved by
the shareholders of the Fund were implemented. As a money market fund, the Fund
seeks to maintain a net asset value of $1.00 for purposes of purchases and
redemptions. In order to bring the net asset value of the Fund to $1.00, the
Fund executed a stock split of 9.97 to 1 after the close of business on July 9,
1996.
5
<PAGE>
FUND OPERATIONS
INVESTMENT OBJECTIVE
The Adviser will use its best efforts to achieve the investment objective
of the Fund as described below, although the achievement of the investment
objective, of course, cannot be assured. You should not consider the Fund, by
itself, to be a complete investment program. The Fund is a diversified, open-end
management investment company.
The Fund's investment objective is to seek as high a level of current
income as is consistent with preservation of capital and liquidity. The
securities held by the Fund have remaining maturities of thirteen months or
less. The average weighted maturity of the securities held by the Fund will not
exceed 90 days. The Fund's investment objective may not be changed without
approval of a majority of the Fund's outstanding shares.
In seeking to achieve its investment objective, the Fund will invest
exclusively in obligations issued or guaranteed as to principal and interest by
the U.S. Government or by any of its agencies or instrumentalities, and may
engage in repurchase agreement transactions with respect to such obligations.
The Board of Trustees shall make a determination that all portfolio securities
purchased by the Fund present minimal credit risk.
U.S. Government securities are high quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
Government. Not all U.S. Government securities are backed by the full faith and
credit of the United States. Some U.S. Government securities, such as those
issued by the Federal National Mortgage Association, are supported by an
instrumentality's or agency's right to borrow money from the U.S. Treasury under
certain circumstances. Other U.S. Government securities may be supported only by
the credit of the entity that issues them. Due to fluctuations in interest
rates, the market value of such securities may vary during the period a
shareholder owns shares of the Fund. Neither the United States, nor any agency
or instrumentality thereof, has guaranteed, sponsored or approved the Fund or
its shares. The Fund will seek to maintain a stable net asset value at $1.00 per
share. There is no assurance that the Fund's investment objectives will be
achieved.
The Fund, may, consistent with its respective investment objective and
policies, invest in mortgage-related securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
Mortgage-related securities represent pools of mortgage loans assembled for
sale to investors by various governmental agencies such as the Government
National Mortgage Association and government-related organizations such as the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, as well as by nongovernmental issuers such as commercial banks,
savings and loan institutions, mortgage bankers, and private mortgage insurance
companies. Although certain mortgage-related securities are guaranteed by a
third party or otherwise similarly secured, the market value of the security,
which may fluctuate, is not so secured. If the Fund purchases a mortgage-related
security at a premium, that portion may be lost if there is a decline in the
market value of the security whether resulting from changes in interest rates or
prepayments in the underlying mortgage collateral. To an even greater extent
than other interest-bearing securities, the prices of such securities may be
extremely sensitive to, and inversely affected by, changes in interest rates.
However, though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Fund. Lower than estimated prepayments from an increase in interest rates
might alter the expected average life of such securities and increase
volatility. In addition, regular payments received in respect of
mortgage-related securities include both interest and principal. No assurance
can be given as to the return that the Fund will receive when these amounts are
reinvested.
INVESTMENT POLICIES
Securities held by the Fund may be subject to repurchase agreements. A
repurchase agreement is a transaction in which the Fund agrees to purchase
portfolio securities from financial institutions, such as banks and
broker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon time and price. Although the securities subject to a repurchase
agreement might bear maturities exceeding thirteen months, the Fund presently
intends only to enter into repurchase agreements with maturities in excess of
seven days in cases where a liquidity feature, such as a put option, permits the
Fund to liquidate or terminate the repurchase agreement within seven days. The
seller under a repurchase
6
<PAGE>
agreement will be required to maintain the value of the securities subject to
the repurchase agreement at not less than 102% of the principal value of the
repurchase agreement, including any accrued interest earned on the repurchase
agreement. The Fund's custodian or subcustodian will take possession of such
collateral. The seller will collateralize the repurchase agreement with U.S.
Treasury obligations and other direct obligations of the U.S. Government or its
agencies or instrumentalities. Default by or bankruptcy of the seller may,
however, expose the Fund to possible loss because of adverse market action or
delay or transaction costs in connection with the disposition of the underlying
obligations. The Fund may enter into agreements with a single counterparty that
constitutes more than 5% of Fund assets.
The Fund may, in certain cases, calculate the maturity of a security with a
floating or variable rate or a demand feature in the manner specified in Rule
2a-7 under the Investment Company Act, with the effect that the maturity is
deemed to be shorter than its final date.
The Fund intends to purchase U.S. Treasury securities at auction from the
Federal Reserve.
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment restrictions which reflect
self-imposed standards as well as federal regulatory limitations. These
limitations are designed to minimize certain risks associated with investing in
specified types of securities or engaging in certain transactions. The
investment restrictions may be changed only by a vote of a majority of the
Fund's outstanding shares.
The Fund may not:
1) Purchase securities other than direct obligations of the U.S.
Government or its agencies or instrumentalities, some of which may be subject
to repurchase agreements, and repurchase agreements collateralized to 102% by
direct obligations of the U.S. Government or its agencies or
instrumentalities.
2) Make loans, except that the Fund may purchase or hold debt instruments,
and enter into repurchase agreements in accordance with its investment objective
and policies.
3) Borrow money or issue senior securities, except that the Fund may borrow
from banks for temporary purposes in amounts up to 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowings and in amounts not in
excess of the dollar amounts borrowed or 10% of the value of the Fund's assets
at the time of borrowing. The Fund may not purchase securities while its
borrowings are outstanding.
4) With respect to more than 10% of Fund assets, enter into repurchase
agreements providing for settlement more than seven days after notice without a
liquidity feature such as a put option, permitting the Fund to liquidate or
terminate the repurchase agreement within seven days.
5) Purchase municipal bonds issued by an issuer any of whose outstanding
bonds are insured by Financial Guarantee Insurance Corporation ("FGIC").
6) Purchase collateralized mortgage obligations, inverse floaters or any
other securities commonly known as "derivatives".
7) Purchase illiquid securities, except for fully collateralized repurchase
agreements that, because of term limitations, are deemed to be illiquid.
8) Hold securities with remaining maturities exceeding thirteen months.
9) Purchase reverse repurchase agreements.
DETERMINATION OF NET ASSET VALUE
The value of the Fund's shares is referred to as "net asset value". Net
asset value per share for purposes of pricing purchases and redemptions is
calculated by adding the value of all securities and other assets belonging to
the Fund, subtracting its liabilities, and dividing the result by the number of
the Fund's outstanding shares. Net asset value
7
<PAGE>
is determined as of 5:00 p.m. Eastern Time on each day the New York Federal
Reserve and the New York Stock Exchange are open for business and as of 12:00
noon Eastern Time on any day the Public Securities Association ("PSA")
recommends an early close (each such day referred to as a "Half Day").
Currently, either the New York Federal Reserve or the New York Stock Exchange is
closed on New Years Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas Day. An early close is currently recommended by
the PSA on the Business Day before each day that either the New York Federal
Reserve or the New York Stock Exchange observes a holiday, except for Good
Friday. Additionally, the PSA recommends an early close on the Business Day
following Independence Day and Thanksgiving Day. A "Business Day" is any day on
which the New York Federal Reserve and the New York Stock Exchange are open for
business.
The Board of Trustees has established procedures designed to maintain a
stable net asset value of $1.00 per share, to the extent reasonably possible.
The Board of Trustees has approved and adopted procedures under Rule 2a-7 under
the Investment Company Act of 1940, as amended, which was enacted by the SEC
with the intent of stabilizing money market funds at $1.00 per share. Under the
guidelines of Rule 2a-7, the Fund uses 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. 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, purchase securities having remaining
maturities of 13 months or less and invest only in securities determined by the
Trust's Board of Trustees to be "eligible securities" and that present minimal
credit risks. The Board of Trustees or its delegate reviews 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
can be maintained. See the Statement of Additional Information for more
details.
DIVIDENDS AND DISTRIBUTIONS
The Fund's net income is declared daily as a dividend at the close of
business on the day of declaration. Your shares begin earning dividends on the
day you purchase them, and continue to earn dividends through and including the
day before you redeem them. See "How to Invest in the Fund". The Fund pays
dividends not later than five business days after the end of each month in the
form of additional shares of the Fund, unless you elect prior to the date of
distribution to receive payment in cash. Reinvested dividends and distributions
receive the same tax treatment as those paid in cash. If you redeem all of your
shares in the Fund, the Fund will pay your dividends in cash not later than five
business days after the redemption.
SUITABILITY
The Fund is designed as an economical and convenient professionally managed
investment vehicle for institutional investors and high net worth individuals
with cash balances or cash reserves who seek as high a level of current income
as is consistent with the preservation of capital and liquidity. The Fund is
designed to meet the specific cash management needs of institutional investors
such as Municipal Investors, broker/dealers, corporations, investments advisers,
credit unions, banks, insurance companies and other institutional investors.
"Municipal Investors" include any State, county, municipality, school district,
special district or political subdivision in the United States. The Fund may
also be suitable for institutions seeking an investment vehicle for daily cash
sweep or liquidity purposes on behalf of their clients.
Legislation in each state sets forth guidelines and limitations with
respect to investments by Municipal Investors located within the state. In
addition, Municipal Investors may be subject to local laws or have their own
guidelines and policies prescribing acceptable investments for cash management
purposes. Each Municipal Investor planning to invest in the Fund must
independently verify that the Fund meets all of the criteria of investment
policies and guidelines applicable to such Municipal Investor.
8
<PAGE>
Future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations could prevent a Municipal Investor from continuing its investment in
the Fund. Each Municipal Investor should therefore remain aware of any changes
in the applicable regulation of permitted investments.
The Fund offers the advantages of purchasing power efficiencies and
diversification of risk. Generally, in purchasing debt instruments from dealers,
the percentage difference between the bid and asked price tends to decrease as
the size of the transaction increases. The Fund also offers investors the
opportunity to participate in a portfolio of U.S. government obligations which
is more diversified in terms of issues and maturities than a portfolio a single
investor may otherwise be able to invest in.
Investment in the Fund relieves the investor of money management and
administrative burdens usually associated with the direct purchase and sale of
U.S. government debt instruments. These include the selection of the portfolio
investments; surveying the market for the best terms at which to buy and sell;
scheduling and monitoring maturities and reinvestments; receipt, delivery and
safekeeping of securities; and portfolio recordkeeping.
The Fund qualifies as an eligible investment for federally chartered credit
unions pursuant to Sections 107 of the Federal Credit Union Act and Part 703 of
the National Credit Union Administration Rules and Regulations. The Fund intends
to review changes in the applicable laws, rules and regulations governing
eligible investments for federally chartered credit unions, and take such action
as may be necessary so that the investments of the Fund qualify as eligible
investments under the Federal Credit Union Act and the regulations thereunder.
Shares of the Fund, however, may or may not qualify as eligible investments for
particular state chartered credit unions. The Fund encourages each state
chartered credit union to consult qualified legal counsel concerning whether the
Fund is a permissible investment under the laws applicable to it.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
At a meeting held on January 20, 1997, the Trustees approved a new
Investment Advisory Agreement with GEIM. The new Investment Advisory Agreement
was submitted to shareholders for their consideration pursuant to a Proxy
Statement dated March 3, 1997 and subsequently approved by a majority of the
shareholders at a Special Meeting held on March 21, 1997. The Adviser is a
wholly-owned subsidiary of General Electric Company ("GE"). The principal
address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM wholly-owned by GE, collectively provide investment management
services to various institutional accounts with total assets, as of June 30,
1997, in excess of $65 billion, including $1.5 billion in money market funds.
Pursuant to the Investment Advisory Agreement, the Adviser has agreed to
provide a continuous investment program for the Fund, including investment
research and management with respect to the assets of the Fund. GEIM is entitled
to receive management fees of 0.04% on the first $500 million of average net
assets of the Fund, 0.06% on the next $500 million and 0.08% on average net
assets in excess of $1 billion.
ADMINISTRATOR AND BOOKKEEPING AND PRICING AGENT
ALPS serves as the Fund's Administrator. As Administrator, ALPS has agreed
to: assist in maintaining the Fund's office; furnish the Fund with clerical and
certain other services; compile data for and prepare notices and semi-annual
reports to the Securities and Exchange Commission; prepare filings with state
securities commissions; coordinate Federal and state tax returns; monitor the
Fund's expense accruals; monitor compliance with the Fund's investment policies
and limitations; and generally assist in the Fund's operations. ALPS is entitled
to receive a fee from the Fund for its administrative services computed daily
and payable monthly, at the annual rate of the greater of $90,000 or 0.18% of
average daily net assets of the Fund up to $500 million, 0.15% of average daily
net assets of the Fund in excess of $500 million up to $1 billion and 0.12% of
average daily net assets of the Fund in excess of $1 billion. ALPS has stated
that it will voluntarily waive a portion of the administration fees otherwise
payable by the Fund, as well as voluntarily assume a portion of the Fund
expenses, to the extent necessary for the Fund to maintain a total expense ratio
of not more than
9
<PAGE>
0.20% of the average net assets of the Fund. ALPS reserves the right to modify
or terminate the fee waiver and assumption of expenses at any time. ALPS may
also pay third parties from time to time for rendering services to the Fund
and/or shareholders.
ALPS also serves as the Fund's Bookkeeping and Pricing Agent. In this
capacity, ALPS has agreed to maintain the financial accounts and records of the
Fund and to compute the net asset value and certain other financial information
relating to the Fund.
CUSTODIAN
State Street Bank and Trust Company of Connecticut, N.A., located at 750
Main Street, Suite 1114, Hartford, Connecticut 06103, serves as Custodian for
the Fund.
SUB-CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company, located at P.O. Box 1978, Boston,
Massachusetts 02015, serves as Sub-Custodian and Transfer Agent for the Fund.
HOW TO INVEST IN THE FUND
Shares in the Fund are distributed on a continuous basis by ALPS, the
Fund's Sponsor and Distributor. ALPS has its principal office at 370 Seventeenth
Street, Suite 2700, Denver, Colorado 80202 and may be reached at (800) 298-3442.
GENERAL PROCEDURES
You may purchase Fund shares through ALPS or the Fund's Transfer Agent.
Investors shall pay for their purchase of Fund shares by using the Federal
Reserve Wire System. Shares of the Fund may be purchased at the net asset value
next determined after an order is received and accepted. The Fund does not
impose any sales-related charges in connection with purchases of shares. The
Fund may discontinue offering its shares in any state without notice to
shareholders.
An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. The application should be forwarded to:
Financial Investors Trust
P.O. Box 1978
Boston, Massachusetts 02015
Purchases by telephone or facsimile can be made after an account has been
established by the Transfer Agent as described below. The Trust reserves the
right to reject any purchase order.
PURCHASE PRICE
Your purchase of Fund shares will be effected at the net asset value next
determined after the Fund receives your purchase order in proper form and
payment in the form of Federal Funds. If your order is accompanied by Federal
Funds, or is converted into Federal Funds by 5:00 p.m. Eastern Time on a
Business Day or 12:00 noon Eastern Time on a Half Day, it will be executed on
that day. If the Fund receives your order and payment in the form of Federal
Funds after 5:00 p.m. Eastern Time on a Business Day or after 12:00 noon Eastern
Time on a Half Day, your order will be processed the next Business Day.
TELEPHONE AND FACSIMILE PURCHASES
You can purchase Fund shares by telephone or facsimile once you have
established your account with the Fund and selected facsimile and/or telephone
privileges on your Account Application. In order to qualify for dividends on the
day of purchase, telephone or facsimile orders must be placed and Federal Funds
must be in the Fund's custody account by 5:00 p.m. Eastern Time on Business
Days. In order to qualify for dividends on the day of purchase on Half
10
<PAGE>
Days, telephone or facsimile orders must be placed and Federal Funds must be in
the Fund's custody account by 12:00 noon that day. If Federal Funds arrive in
the Fund's custody account after the stated deadlines for both Business Days and
Half Days, the account will be credited the next Business Day.
MINIMUM INVESTMENT AND ACCOUNT BALANCES
The minimum initial investment in the Fund is $1,000,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If an account balance falls below $200,000 due to
redemptions or exchanges, the account may be closed and the proceeds wired to
the bank account of record, or a check will be issued and sent to the party of
record. An investor will be given 30 days notice that the account will be closed
unless an additional investment is made to increase the account balance to the
$200,000 minimum.
STATEMENTS AND REPORTS
The Trust will send you a statement of your account after every transaction
that affects your share balance or your account registration. A statement with
tax information and an annual statement will be mailed to you by January 31 of
each year, and also will be filed with the IRS. At least twice a year, you will
receive financial statements in the form of Annual and Semi-Annual Reports of
the Fund.
HOW TO REDEEM SHARES
GENERAL PROCEDURES
Shareholders may redeem all or any part of the value of their account(s) on
any Business Day. You may redeem by mail, telephone or facsimile if you have
established that capability with the Fund. Redemption orders are processed at
the net asset value per share next determined after the Fund receives your
order. If the Fund receives your redemption order before 1:00 p.m. Eastern Time,
on a Business Day other than a Half Day, or by 11:00 a.m. Eastern Time on a Half
Day, the Fund will generally pay for your redeemed shares on that day.
Otherwise, the Fund will generally pay for your redeemed shares on the next
Business Day. The Fund reserves the right to pay for redeemed shares within
seven days after receiving your redemption order if, in the judgment of the
Adviser, an earlier payment could adversely affect the Fund.
REGULAR REDEMPTION
You may redeem shares by sending a written request to Financial Investors
Trust, P.O. Box 1978, Boston, Massachusetts 02015. You must sign a redemption
request. (All individuals with authority on the account must co-sign.) Your
written redemption request must:
(i) state the number of shares to be redeemed;
(ii) identify your shareholder account number; and
(iii) provide your tax identification number.
Each signature must be guaranteed by either a bank that is a member of the
FDIC, a trust company or a member firm of a national securities exchange or
other eligible guarantor institution. The Fund will not accept guarantees from
notaries public. Guarantees must be signed by an authorized person at the
guarantor institution, and the words "Signature Guaranteed" must appear with the
signature. A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.
When the Fund wires your redemption proceeds, the wire must be paid to the
same bank and account as designated on the Fund's Account Application or in your
written instructions to the Fund. If your bank is not a member of the Federal
Reserve System, your redemption proceeds will be wired to a correspondent bank.
Immediate notification by the correspondent bank to your bank will be necessary
to avoid a delay in crediting the funds to your bank account.
TELEPHONE AND FACSIMILE REDEMPTION
You may redeem shares by telephone or facsimile. Shareholders must check
the appropriate box on the Account Application to activate facsimile and/or
telephone redemption privileges. Shares may be redeemed by telephoning the
11
<PAGE>
Fund at (800) 298-3442 (or sending a facsimile transmission to the Fund at (617)
985-9626) and giving the account name, account number, Personal Identification
Number (PIN#), name of Fund and amount of redemption. Proceeds from redemptions
will be wired directly to your account at a commercial bank within the United
States.
In order to arrange for facsimile and/or telephone redemptions after you
have opened your account, or to change the bank account or address designated
to receive redemption proceeds, send a written request to the Fund at the
address listed under "Regular Redemption". The request must be signed by you and
each other shareholder of the account involved, with the signatures guaranteed
as described above. The Trust may modify or terminate procedures for redeeming
shares by telephone but will not materially change or terminate it without
giving shareholders 60 days' written notice.
During periods of substantial economic or market change, telephone or
facsimile redemptions may be difficult to complete. If you are unable to contact
the Fund by telephone or facsimile, you may redeem your shares by mail as
described above under "Regular Redemption".
By electing the facsimile and/or telephone redemption option, you may be
giving up a measure of security which you might have had if you were to redeem
in writing. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone or facsimile are genuine, such as
recording telephone calls, providing written confirmation of transactions, or
requiring a form of personal identification prior to acting on instructions
received by telephone or facsimile. To the extent the Trust does not employ
reasonable procedures, it and/or its service contractors may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Trust, the
Transfer Agent nor ALPS will be liable for following instructions communicated
by telephone or facsimile that are reasonably believed to be genuine.
Accordingly, you, as a result of this policy, may bear the risk of fraudulent
telephone or facsimile redemption transactions.
GENERAL REDEMPTION INFORMATION
Except for the presence of certain exceptional circumstances as described
in the Investment Company Act of 1940, the Fund will pay for redeemed shares by
mail within seven days after the Fund receives your order and supporting
documents in proper form (except as provided by the rules of the Securities and
Exchange Commission). Where payment is to be made by wire via the Federal
Reserve Wire System, the Fund will wire redemption proceeds on the same day
after receiving your redemption order, provided it is made before 1:00 P.M.
Eastern Time on Business Days and 11:00 a.m. Eastern Time on Half Days.
There is no charge for share redemptions. The Fund may redeem an account
that has a balance of less than $200,000 if the shareholder does not increase
the amount of the account to at least $200,000 upon 30 days' notice.
Please direct questions concerning the proper form for redemption requests
to the Fund at (800) 298-3442.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
You may sell your Fund shares and buy shares of the U.S. Treasury Money
Market Fund, another investment portfolio of the Trust, in exchange by written
request. There are no fees or commissions for exchanging Fund shares. If you
have established the privilege on your Account Application, you may also
initiate exchanges by telephone or facsimile. Exchange requests should be
directed to the Fund at (800) 298-3442.
Exchange transactions must be for amounts of $1,000 or more. Exchanges may
have tax consequences, so you should consult your tax adviser for further
information. The U.S. Treasury Money Market Fund or other investment portfolio
must be registered for sale in your state and must meet the investment criteria
for your institution. See "Suitability" in the U.S. Treasury Money Market Fund's
prospectus. Prior to requesting an exchange of Fund shares you should call the
Fund at (800) 298-3442. You should read the current prospectus for the U.S.
Treasury Money Market Fund before investing. Each Fund has its own minimum
balance requirements which must be
adhered to.
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During periods of significant economic or market change, telephone or
facsimile exchanges may be difficult to complete. If you are unable to contact
the Fund by telephone or facsimile, you may also mail the exchange request to
the Fund at the address listed under "Regular Redemption". Neither the Trust,
the Transfer Agent nor ALPS will be responsible for the authenticity of exchange
instructions received by telephone or facsimile except as set forth under "How
to Redeem Shares - Telephone and Facsimile Redemption".
The Trust can provide you with information concerning certain limitations
on the exchange privilege, including those related to frequency. The Trust may
modify or terminate the exchange privilege but will not materially change or
terminate it without giving shareholders 60 days' written notice.
TAXES
While municipal investors are generally exempt from Federal income taxes,
each investor should independently ascertain its tax status. With respect to
investors who are not exempt from Federal income taxes, dividends derived from
net investment income and short term capital gains are taxable as ordinary
income distributions and are taxable when paid, whether investors receive
distributions in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if paid on
December 31. The Fund will send to non-exempt investors an IRS Form 1099-DIV
showing their taxable distributions for the past calendar year.
The Fund has qualified and intends to continue to qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). This qualification will relieve the Fund of liability for Federal
income taxes to the extent its earnings are distributed in accordance with the
Code and it meets other requirements for qualification as set forth in the Code.
The information above is only a summary of some of the federal tax
consequences generally affecting the Fund and its shareholders, and no attempt
has been made to discuss individual tax consequences. In addition to Federal
taxes, investors may be subject to state or local taxes on their investment.
Investors should consult their tax advisor to determine whether the Fund is
suitable to their particular tax situation.
When investors sign their account application, they will be asked to
certify that their social security or taxpayer identification number is correct
and that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require the
Fund to withhold 31% of taxable distributions and redemptions.
The Fund declares dividends from net investment income daily and pays such
dividends monthly. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders within each
calendar year as well as on a fiscal year basis.
Since all of the Fund's net investment income is expected to be derived
from earned interest, it is anticipated that all dividends paid by the Fund will
be taxable as ordinary income to those shareholders who are not exempt from
Federal income taxes, and that no part of any distribution will be eligible for
the dividends received deduction for corporations.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Delaware Business Trust on November 30, 1993
and consists of two separate portfolios or series, one of which is offered in
this Prospectus. The Board of Trustees may establish additional series in the
future. The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest with a par value of $0.001 each. When issued,
shares of the Trust are fully paid and non-assessable.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a series of the Trust but only to
the extent of the shareholder's investment in such series. However, the Trust
Instrument disclaims liability of the shareholders, Trustees or Officers of the
Trust for acts or obligations of the Trust, which are binding only on the assets
and property of each series of the Trust and requires that notice of the
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<PAGE>
disclaimer be given in each contract or obligations entered into or executed by
the Trust or the Trustees. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and should be considered remote
and is limited to the amount of the shareholder's investment in the Fund.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Trust
Instrument, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders and does not intend to do
so. Shareholders of the Fund may vote separately on items which affect only
the Fund.
The Trust Instrument provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting of shareholders for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust or the Fund.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of the Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy: or (2) more than 50% of the outstanding shares of the Fund.
PERFORMANCE INFORMATION
From time to time, the Fund may quote its "yield" and "effective yield" in
advertisements or in communications to shareholders. BOTH YIELD FIGURES ARE
BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. The "yield" quoted in advertisements refers to the income generated
by an investment in the Fund over a specified seven-day period. This income is
then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of the assumed reinvestment.
Additionally, the yield of the Fund may be compared in advertisements or in
reports to shareholders to those of other mutual funds with similar investment
objectives and to other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the Funds' yields may be compared to
the IBC/DONOGHUE'S MONEY FUND AVERAGE, which is an average compiled by
IBC/DONOGHUE'S MONEY FUND REPORT. In addition, yields may be compared to the
average yields reported by the BANK RATE MONITOR for money market deposit
accounts offered by the 50 leading banks and thrift institutions in the top five
standard metropolitan statistical areas.
Yield data as reported in national financial publications, including MONEY
MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL and THE NEW YORK TIMES, or
in publications of a local or regional nature, may also be used in comparing the
yields of the Fund.
Since yields fluctuate, you cannot necessarily use yield data to compare an
investment in the Funds' shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed yield
for a stated period of time. Yield is generally a function of the kind and
quality of the instruments held in a portfolio, portfolio maturity, operating
expenses and market conditions. Any fees charged by service institutions
directly to their customer accounts in connection with investments in shares of
the Fund will not be included in the Fund's calculations of yield.
INQUIRIES
Please write or call the Trust at the address or telephone number listed on
the cover of this Prospectus with any inquiries you may have regarding the Fund
or any other investment portfolios of the Trust that are not offered by this
Prospectus.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
16
<PAGE>
FINANCIAL INVESTORS TRUST
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
370 Seventeenth Street, Suite 2700
Denver, Colorado 80202
August 28, 1997
General Information: (800) 298-3442
STATEMENT OF ADDITIONAL INFORMATION
Financial Investors Trust (the "Trust") is an open-end, diversified
management investment company with multiple investment portfolios, including the
U.S. Treasury Money Market Fund (the "Treasury Fund") and the U.S. Government
Money Market Fund, (the "Government Fund") (collectively, the "Funds").
THE TREASURY FUND seeks to provide investors with as high a level of
current income as is consistent with preservation of capital and liquidity by
investing exclusively in U.S. Treasury bills, notes and other direct obligations
of the U.S. Treasury and repurchase agreements fully collateralized by direct
U.S. Treasury obligations. The Fund is required to maintain a dollar-weighted
average portfolio maturity of 90 days or less and seeks to maintain its net
asset value per share at $1.00 for purposes of purchases and redemptions.
THE GOVERNMENT FUND seeks to provide investors with as high a level of
current income as is consistent with the preservation of capital and liquidity
by investing exclusively in obligations of the U.S. Government, its agencies and
instrumentalities and repurchase agreements fully collateralized by such
obligations. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.
Shares of the Funds are offered for sale by ALPS Mutual Funds Services,
Inc., the Sponsor and Distributor, as an investment vehicle for institutional
and high net worth investors.
This Statement of Additional Information is not a prospectus and is only
authorized for distribution when preceded or accompanied by the Funds'
Prospectuses dated August 28, 1997. This Statement of Additional Information
contains additional and more detailed information than that set forth in each
Prospectus and should be read in conjunction with the Prospectuses, additional
copies of which may be obtained without charge from the Trust.
1
<PAGE>
Table of Contents
Page No.
Investment Policies. . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . .4
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Calculation of Yields and Performance Information. . . . . . . . . .9
Determination of Net Asset Value . . . . . . . . . . . . . . . . . 10
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . 11
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . 11
Redemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Income Taxes . . . . . . . . . . . . . . . . . . . . . . . 12
Shares of Beneficial Interest. . . . . . . . . . . . . . . . . . . 13
Other Information. . . . . . . . . . . . . . . . . . . . . . . . . 15
Custodian and Sub-Custodian. . . . . . . . . . . . . . . . . . . . 15
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 15
2
<PAGE>
INVESTMENT POLICIES
The following information supplements the discussion of the investment
objective and policies of the Funds found under "Investment Objective" and
"Investment Policies" in each Prospectus.
U.S. TREASURY OBLIGATIONS. Each Fund may invest, and the Treasury Fund
invests exclusively, in direct obligations of the United States Treasury which
have remaining maturities of 13 months or less and related repurchase
agreements. The United States Treasury issues various types of marketable
securities consisting of bills, notes, bonds and other debt securities. They
are direct obligations of the United States Government and differ primarily in
the length of their maturity. Treasury bills, the most frequently issued
marketable United States Government security, have a maturity of up to one year
and are issued on a discount basis.
U.S. GOVERNMENT AGENCIES. (Government Fund only) The Government Fund may
invest in obligations issued or guaranteed by the United States Government or
its agencies or instrumentalities which have remaining maturities not exceeding
thirteen months. Agencies and instrumentalities which issue or guarantee debt
securities and which have been established or sponsored by the United States
Government include the Banks for Cooperatives, the Export-Import Bank, the
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home Loan
Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal Land
Banks, the Federal National Mortgage Association and the Student Loan Marketing
Association. United States Government agency and instrumentality obligations
include master notes issued by these entities but do not include obligations of
the World Bank, The Inter-American Development Bank or the Asian Development
Bank.
MORTGAGE-RELATED SECURITIES. (Government Fund only) The Government Fund,
may, consistent with its respective investment objective and policies, invest in
mortgage-related securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.
Mortgage-related securities, for purposes of the Fund's Prospectus and this
SAI, represent pools of mortgage loans assembled for sale to investors by
various governmental agencies such as the Government National Mortgage
Association and government-related organizations such as the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation, as well as
by nongovernmental issuers such as commercial banks, savings and loan
institutions, mortgage bankers, and private mortgage insurance companies.
Although certain mortgage-related securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Fund purchases a mortgage-related security
at a premium, that portion may be lost if there is a decline in the market value
of the security whether resulting from changes in interest rates or prepayments
in the underlying mortgage collateral. To an even greater extent than other
interest-bearing securities, the prices of such securities may be extremely
sensitive to, and inversely affected by, changes in interest rates. However,
though the value of a mortgage-related security may decline when interest rates
rise, the converse is not necessarily true since in periods of declining
interest rates the mortgages underlying the securities are prone to prepayment.
For this and other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages and, therefore,
it is not possible to predict accurately the security's return to the Fund.
Lower than estimated prepayments from an increase in interest rates might alter
the expected average life of such securities and increase volatility. In
addition, regular payments received in respect of mortgage-related securities
include both interest and principal. No assurance can be given as to the return
a Fund will receive when these amounts are reinvested.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities created
by the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest and such guarantee is backed by
the full faith and credit of the United States. GNMA is a wholly-owned U.S.
Government corporation within the Department of Housing and Urban Development.
GNMA certificates also are supported by the authority of GNMA to borrow funds
from the U.S. Government to make payments under its guarantee. Mortgage-related
securities issued by the Federal National Mortgage Association ("FNMA") include
FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes")
which are solely the obligations of the FNMA and are not backed by or entitled
to the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private stock-holders.
Fannie Maes are guaranteed as to timely payment of the principal and interest by
FNMA. Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates (also
known as ("Freddie Macs" or "PCs"). The FHLMC is a corporate instrumentality of
the United States, created pursuant to an Act of Congress, which is owned
entirely by Federal Home
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Loan Banks. Freddie Macs are not guaranteed by the United States or by any
Federal Home Loan Banks and do not constitute a debt or obligation of the United
States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to
timely payment of interest, which is guaranteed by the FHLMC. The FHLMC
currently guarantees timely payment of interest and either timely payment of
principal or eventual payment of principal, depending upon the date of issue.
When the FHLMC does not guarantee timely payment of principal, FHLMC may remit
the amount due on account of its guarantee of ultimate payment of principal at
any time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.
REPURCHASE AGREEMENTS. Each Fund may invest in securities pursuant to
repurchase agreements, whereby the seller agrees to repurchase such securities
at the Fund's cost plus interest within a specified time (generally one day).
The securities underlying the repurchase agreements will consist exclusively of
U.S. Government obligations in which the Funds are otherwise permitted to
invest. While repurchase agreements involve certain risks not associated with
direct investments in the underlying securities, the Funds will follow
procedures designed to minimize such risks. These procedures include effecting
repurchase transactions only with large, well-capitalized banks and registered
broker-dealers having creditworthiness determined by the Adviser to be
substantially equivalent to that of issuers of debt securities rated investment
grade. In addition, the Funds' repurchase agreements will provide that the
value of the collateral underlying the repurchase agreement will always be at
least equal to the repurchase price, including any accrued interest earned on
the repurchase agreement, and that the Funds' custodian will take possession of
such collateral. In the event of a default or bankruptcy by the seller, the
Funds will seek to liquidate such collateral. However, the exercise of the
Funds' right to liquidate such collateral could involve certain costs or delays
and, to the extent that proceeds from any sale upon a default of the obligation
to repurchase were less than the repurchase price, a Fund could suffer a loss.
Repurchase agreements are considered to be loans by an investment company under
the Investment Company Act of 1940 (the "1940 Act"). There is no limit on the
amount of the Funds' net assets that may be subject to repurchase agreements
having a maturity of, or a liquidation feature permitting termination within a
period of, seven days or less. The Funds do not presently intend to enter into
repurchase agreements which will cause more than 10% of a Fund's net assets to
be subject to repurchase agreements having a maturity beyond seven days.
INVESTMENT RESTRICTIONS
The Funds observe the following fundamental investment restrictions which
can be changed only when permitted by law and approved by a majority of a Fund's
outstanding voting securities. A "majority of a Fund's outstanding voting
securities" means the lesser of (i) 67% of the shares represented at a meeting
at which more than 50% of the outstanding shares are represented in person or by
proxies or (ii) more than 50% of the outstanding shares.
The Funds may not:
(1) purchase securities on margin or purchase real estate or interests
therein, commodities or commodity contracts, or make loans, and except that the
Funds may purchase or hold short-term debt securities and enter into repurchase
agreements with respect to its portfolio securities as described in the
Prospectus. For this purpose, repurchase agreements are considered loans;
(2) invest more than 5% of the current value of the total assets of a Fund
in the securities of any one issuer, other than obligations of the United States
Government or its agencies or instrumentalities, and repurchase agreements fully
collateralized by direct obligations of the U.S. Government;
(3) purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after the purchase and as a result
thereof, the value of the investments of a Fund in that industry would exceed
25% of the current value of the total assets of the Fund, except that there is
no limitation with respect to investments in obligations of the United States
Government, its agencies or instrumentalities;
(4) engage in the underwriting of securities of other issuers, except to
the extent that a Fund may be deemed to be an underwriter in selling, as part of
an offering registered under the Securities Act of 1933, as amended, securities
which it has acquired; or participate on a joint or joint-and-several basis in
any securities trading account. The "bunching" of orders with other accounts
under the management of the Adviser to save commissions or to average prices
among them is not deemed to result in a securities trading account;
(5) effect a short sale of any security, or issue senior securities except
as permitted in paragraph (6). For purpose of this restriction, the purchase
and sale of financial futures contracts and related options does not constitute
the issuance of a senior security;
4
<PAGE>
(6) issue senior securities or otherwise borrow money, except that each
Fund may borrow from banks as a temporary measure for emergency purposes where
such borrowings would not exceed 10% of a Fund's total assets (including the
amount borrowed) taken at market value; or pledge, mortgage or hypothecate its
assets, except to secure indebtedness permitted by this paragraph and then only
if such pledging, mortgaging or hypothecating does not exceed 10% of the Fund's
total assets taken at market value;
(7) invest more than 10% of the total assets of a Fund in the securities
of other investment companies, subject to the limitations of Section 12(d)(1) of
the 1940 Act;
(8) invest in any security, including repurchase agreements maturing in
over seven days without a liquidation feature or other illiquid investments
which are subject to legal or contractual delays on resale or which are not
readily marketable, if as a result more than 10% of the market value of a Fund's
assets would be so invested;
(9) purchase interests in oil, gas, or other mineral exploration programs
of real estate and real estate mortgage loans except as provided in the
Prospectus;
(10) have dealings on behalf of a Fund with Officers and Trustees of the
Fund, except for the purchase or sale of securities on an agency or commission
basis, or make loans to any officers, directors or employees of the Fund; and
(11) purchase equity securities or other securities convertible into equity
securities.
There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in the market value of an investment, in the net
or total assets of a Fund, in the securities rating of the investment, or any
other later change.
MANAGEMENT
TRUSTEES AND OFFICERS
The principal occupations for the past five years of the Trustees and
executive officers of the Trust are listed below. The address of each, unless
otherwise indicated, is 370 Seventeenth Street, Suite 2700, Denver, Colorado
80202. Trustees deemed to be "interested persons" of the Trust for purposes of
the Investment Company Act of 1940, as amended, are indicated by an asterisk.
All of the Trustees were elected at a Special Meeting of shareholders held March
21, 1997.
NAME (AGE) PRINCIPAL OCCUPATION**
W. Robert Alexander* (69) Mr. Alexander , a member of the Board of Trustees
Trustee, Chairman and since December 1993, is the Chief Executive
President Officer of ALPS Mutual Funds Services, Inc. which
provides administration and distribution services
for proprietary mutual fund complexes. Prior to
co-founding ALPS, Mr. Alexander was Vice Chairman
of First Interstate Bank of Denver, responsible
for Trust, Private Banking, Retail Banking, Cash
Management Services and Marketing. Mr. Alexander
is currently a member of the Board of Trustees of
the Colorado Trust, Colorado's largest foundation
as well as a Trustee of the Hunter and Hughes
Trusts. Because of his affiliation with ALPS,
Mr. Alexander is considered an "interested"
Trustee of Financial Investors Trust.
Mary K. Anstine (56) President/Chief Executive Officer, HealthONE,
Trustee Denver, CO; Former Executive Vice President, First
Interstate Bank of Denver. Ms. Anstine is
currently a Director of the Trust Bank of
Colorado, Trustee of the Denver Area Council of
the Boy Scouts of America, a Director of the
Junior Achievement Board and the Colorado Uplift
Board, and a member of the Advisory Boards for the
Girl Scouts Mile Hi Council and the Hospice of
Metro Denver. Formerly, Ms. Anstine served as a
Director of ALPS from October 1995 to December
1996; Director of HealthONE; a member of the
American Bankers Association Trust Executive
Committee; and Director of the Center for Dispute Resolution.
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NAME (AGE) PRINCIPAL OCCUPATION**
Edwin B. Crowder (66) Mr. Crowder currently operates a marketing concern
Trustee with operations in the U.S. and Latin America. He
has previously engaged in business pursuits in the
restaurant, oil and gas drilling, and real estate
development industries. Mr. Crowder is a former
Director of Athletics and head football coach at
the University of Colorado.
John R. Moran, Jr. (67) Mr. Moran is President of The Colorado Trust, a
Trustee private foundation serving the health and hospital
community in the State of Colorado. An attorney,
Mr. Moran was formerly a partner with the firm of
Kutak Rock & Campbell in Denver, Colorado and a
member of the Colorado House of Representatives.
Currently, Mr. Moran is a member of the Board of
Directors and Treasurer of Grantmakers in Health;
a Director of the Conference of Southwest
Foundations; a member of the Treasurer's Office
Investment Advisory Committee for the University
of Colorado; a Trustee of the Robert J. Kutak
Foundation; Director of the Colorado Wildlife
Heritage Foundation; and a member of the Alumni
Council of the University of Denver College of
Law.
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** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
The following table contains relevant information concerning the Executive
Officers of the Trust.
NAME PRINCIPAL OCCUPATION** SINCE
William Paston, Product Development Manager of February 1994
Vice President and ALPS Mutual Funds Services, Inc.
Treasurer (41) Prior to joining ALPS, Mr. Paston
was an associate with Lipper
Analytical Services, coordinating
that firm's marketing effort in
the banking industry.
Steven R. Howard, Partner, Baker & McKenzie since February 1994
Secretary(44) April 1991; Secretary, HSBC
Funds Trust and HSBC Mutual
Funds Trust since 1987.
James V. Hyatt Mr. Hyatt is General Counsel August 1997
Assistant Secretary (45) of ALPS Mutual Funds Services,
Inc., the Administrator and
Distributor. Prior to joining
ALPS, Mr. Hyatt served as Senior
Legal Counsel for FMR Corp. and
Counsel to Fidelity Management
Trust Company.
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** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
Non-interested Trustees of the Trust receive from the Trust a fee in the
amount of $1,000 for attending each meeting of the Trustees and $500 for
attending each committee meeting and are reimbursed for all reasonable
out-of-pocket expenses relating to attendance at meetings.
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Pension Or Aggregate
Retirement Estimated Compensation
Aggregate Benefits Annual From The Trust
Compensation Accrued As Benefits and Fund
From the Part of Fund Upon Complex Paid
Trust Expenses Retirement to Trustees
- --------------------------------------------------------------------------------
Mary K. Anstine,
Trustee $1,500(1)(2) $0 $0 $1,000
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Edwin B. Crowder,
Trustee $1,500(1)(2) $0 $0 $1,000
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John R. Moran, Jr.,
Trustee $1,500(1)(2) $0 $0 $1,000
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(1) Amount does not reflect a full year of compensation as the Trustee was
elected on March 21, 1997. If the Trustee had served for an entire
year and attended all regularly scheduled meetings, total Trustee
compensation would be $4,500.
(2) Member of the Audit Committee.
As of the date of this Statement of Additional Information the Trustees and
officers of the Trust as a group owned less than 1% of the outstanding shares of
the Trust.
INVESTMENT ADVISER. The Trust retains GE Investment Management
Incorporated, Inc., (the "Adviser") as investment adviser for each Fund.
Each Advisory Contract provides that the Adviser will manage the portfolio
of each Fund and will furnish to each Fund investment guidance and policy
direction in connection therewith. The Adviser has agreed to provide to the
Trust, among other things, information relating to money market portfolio
composition, credit conditions and average maturity of the portfolio of each
Fund. Pursuant to each Advisory Contract, the Adviser also furnishes to the
Trust's Board of Trustees periodic reports on the investment performance of the
Funds.
SPONSOR AND DISTRIBUTOR. Shares of the Funds are offered on a continuous
basis through ALPS Mutual Funds Services, Inc., ("ALPS"), the Distributor,
pursuant to the Distribution Contract. The Distributor is not obligated to sell
any specific amount of shares.
ADMINISTRATOR. Pursuant to the Administrative Services Contract, ALPS: (i)
provides administrative services reasonably necessary for the operation of the
Funds (other than those services which are provided by the Adviser pursuant to
each Advisory Contract); (ii) provides the Funds with office space and office
facilities reasonably necessary for the operation of the Funds; and (iii)
employs or associates with itself such persons as it believes appropriate to
assist it in performing its obligations under the Administrative Services
Contract.
FEES AND EXPENSES
As compensation for advisory, management and administrative services, the
Adviser and ALPS ("the Administrator") are paid a monthly fee at the following
annual rates:
TREASURY FUND:
PORTION OF AVERAGE DAILY VALUE
OF NET ASSETS OF THE FUND ADVISORY ADMINISTRATIVE(1) TOTAL
Not exceeding $500 million 0.05% 0.18% 0.23%
In excess of $500 million but
not exceeding $1 billion 0.075% 0.15% 0.225%
In excess of $1 billion but
not exceeding $1.5 billion 0.10% 0.12% 0.22%
In excess of $1.5 billion 0.15% 0.12% 0.27%
7
<PAGE>
GOVERNMENT FUND:
PORTION OF AVERAGE DAILY VALUE
OF NET ASSETS OF THE FUND ADVISORY ADMINISTRATIVE(1) TOTAL
Not exceeding $500 million 0.04% 0.18% 0.22%
In excess of $500 million but
not exceeding $1 billion 0.06% 0.15% 0.21%
In excess of $1 billion 0.08% 0.12% 0.20%
(1) Subject to a minimum monthly fee of $62,500 for the Treasury Fund and $7,500
for the Government Fund.
From the inception of each Fund through March 23, 1997, FGIC Advisors, Inc.
served as the Investment Adviser to each Fund. During this period, Investment
Advisory fees earned by FGIC Advisors, Inc. were as follows:
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
March 23, 1997 April 30, 1996 April 30, 1995 (1)
<S> <C> <C> <C>
U.S. Treasury Money Market Fund
Advisory fees earned 739,988 742,238 264,224
Advisory fees waived (739,988) (742,238) (264,224)
U.S. Government Money Market Fund
Advisory fees earned 110,066 136,073 215,432
Advisory fees waived (110,066) (85,725) (109,039)
</TABLE>
(1) The Treasury Fund and the Government Funds commenced operations on May
25, 1994 and June 7, 1994, respectively.
At a meeting held on January 20, 1997, the Trustees approved new Advisory
Contracts with the Adviser on behalf of each Fund. The new Advisory Contracts
were submitted to shareholders of each respective Fund for their consideration
pursuant to a Proxy Statement dated March 3, 1997 and subsequently approved by a
majority of the shareholders of each respective Fund at a Special Meeting held
on March 21, 1997. Effective March 24, 1997, the Adviser assumed the role of
Adviser to each Fund. During the period from March 24, 1997 through April 30,
1997, the Adviser earned $8,799 and $3,542 in advisory fees from the Treasury
and Government Funds, respectively.
The Administrative fees earned by the Administrator under the
Administrative Services Agreement for the last three fiscal periods were as
follows:
Fiscal Period Ended April 30,
1997 1996 1995(1)
U.S. Treasury Money Market Fund
Administrative fees earned 750,000 750,000 687,761
Administrative fees waived (75,890) (190,288) 0
U.S. Government Money Market Fund
Administrative fees earned 92,781 76,135 68,092
Administrative fees waived (3,949) 0 0
(1) The Treasury Fund and the Government Fund commenced operations on May
25, 1994 and June 7, 1994, respectively.
The Administrator has stated that it will voluntarily waive a portion of
the administrative fees otherwise payable by each Fund, as well as voluntarily
assume a portion of each Fund's expenses, to the extent necessary to maintain a
total expense ratio of not more than .33% and .20% of the average net assets of
the Treasury and Government Funds, respectively. The Administrator reserves the
right to modify or terminate the fee waiver and assumption of expenses at any
time.
Except for the expenses paid by the Adviser under the Advisory Contract and
the Administrator under the Administrative Services Contract, each Fund bears
all costs of its operations. Expenses attributable to the Funds are charged
against the assets of each Fund, respectively.
8
<PAGE>
The Advisory Contract, Distribution Contract and Administrative Services
Contract will continue in effect with respect to each Fund from year to year
provided such continuance is approved annually (i) by the holders of a majority
of the outstanding voting securities of a Fund or by the Trust's Trustees; and
(ii) by a majority of the Trustees who are not parties to such contracts or
"interested persons" (as defined under the 1940 Act) of any such party. Each
contract may be terminated with respect to a Fund at any time, without payment
of any penalty, by a vote of a majority of the outstanding voting securities of
the Fund (as defined in the Investment Company Act of 1940) or by a vote of a
majority of the Trustees. The Advisory Contract, Administrative Services
Contract and the Distribution Contract shall terminate automatically in the
event of their assignment (as defined in the 1940 Act).
The Board of Trustees of the Trust approved the continuance of each Fund's
Distribution Contract and Administrative Services Contract at a meeting of the
Board of Trustees on April 15, 1997. As stated above, each Fund's Advisory
Contract was approved by the Board of Trustees on January 20, 1997 and by the
shareholders of each Fund on March 21, 1997.
The Trust incurs administration expenses based on the terms of the
Administrative Services Agreement. In the absence of certain fee waivers and
reimbursements, administration fees borne by the Funds might not be in
proportion to relative Fund assets.
CALCULATION OF YIELDS AND PERFORMANCE INFORMATION
Each Fund may, from time to time, include its yield and effective yield in
advertisements or reports to shareholders or prospective investors. Current
yield (or "SEC Seven Day Yield") for each Fund will be based on the change in
the value of a hypothetical investment (exclusive of capital changes) over a
particular 7-day period, less a pro-rata share of a Fund's expenses accrued over
that period (the "base period"), and stated as a percentage of the investment at
the start of the base period (the "base period return"). The base period return
is then annualized by multiplying by 365/7, with the resulting yield figure
carried to at least the nearest hundredth of one percent. "Effective yield" for
the Funds assumes that all dividends received during an annual period have been
reinvested. Calculation of "effective yield" begins with the same "base period
return" used in the calculation of yield, which is then annualized to reflect
weekly compounding pursuant to the following formula: Effective Yield - [(Base
Period Return) + 1) 365/7] - 1.
As of April 30, 1997, the Seven Day Effective Yield and the SEC Seven Day
Yield for the Treasury Fund was 5.31% and 5.17%, respectively. As of April 30,
1997, the Seven Day Effective Yield and the SEC Seven Day Yield for the
Government Fund was 5.43% and 5.29%, respectively.
From time to time, in marketing pieces and other Fund literature, the
Funds' total performance may be compared to the performance of broad groups of
comparable funds or unmanaged indices of comparable securities. Evaluations of
Fund performance made by independent sources may also be used in advertisements
concerning the Funds. Sources for Fund performance information may include, but
are not limited to, the following:
Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.
Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing
abroad.
Changing Times, The Kiplinger Magazine, a monthly investment advisory
publication that periodically features the performance of a variety of
securities.
Donoghue's Money Fund Report, a weekly publication of the Donoghue
Organization, Inc., of Holliston, Massachusetts, reporting on the
performance of the nation's money market funds, summarizing money market
fund activity, and including certain averages as performance benchmarks,
specifically "Donoghue's Money Fund Average," and "Donoghue's Government
Money Fund Average."
Financial Times, Europe's business newspaper, which features from time to
time articles on international or country-specific funds.
Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.
9
<PAGE>
Fortune, a national business publication that periodically rates the
performance of a variety of mutual funds.
Global Investor, a European publication that periodically reviews the
performance of U.S. mutual funds investing internationally.
Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a
weekly publication of industry-wide mutual fund averages by type of fund.
Money, a monthly magazine that from time to time features both specific
funds and the mutual fund industry as a whole.
New York Times, a nationally distributed newspaper which regularly covers
financial news.
Personal Investor, a monthly investment advisory publication that includes
a "Mutual Funds Outlook" section reporting on mutual fund performance
measures, yields, indices and portfolio holdings.
Sylvia Porter's Personal Finance, a monthly magazine focusing on personal
money management that periodically rates and ranks mutual funds by
performance.
Wall Street Journal, a Dow Jones and Company, Inc. newspaper which
regularly covers financial news.
Wiesenberger Investment Companies Services, an annual compendium of
information about mutual funds and other investment companies, including
comparative data on funds' backgrounds, management policies, salient
features, management results, income and dividend records, and price
ranges.
DETERMINATION OF NET ASSET VALUE
The Funds' net asset value per share is determined by dividing the total
current market value of the assets of a Fund, less liabilities, by the total
number of shares outstanding at the time of determination. All expenses,
including the advisory and administrative fees, are accrued daily and taken into
account for the purpose of determining the net asset value.
As indicated under "Determination of Net Asset Value" in the Funds'
Prospectuses, the Funds use the amortized cost method to determine the value of
their portfolio securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940. The amortized cost method involves valuing a security at its cost
and amortizing any discount or premium over the period until maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which the value, as determined by amortized cost, is higher or
lower than the price which the Fund would receive if the security were sold.
During these periods the yield to a shareholder may differ somewhat from that
which could be obtained from a similar fund which utilizes a method of valuation
based upon market prices. Thus, during periods of declining interest rates, if
the use of the amortized cost method resulted in a lower value of the Fund's
portfolio on a particular day, a prospective investor in the Fund would be able
to obtain a somewhat higher yield than would result from an investment in a fund
utilizing solely market values, and existing Fund shareholders would receive
correspondingly less income. The converse would apply during periods of rising
interest rates.
Rule 2a-7 provides that in order to value its portfolio using the amortized
cost method, the Funds must maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase securities having remaining maturities of
thirteen months or less and invest only in securities determined by the Trust's
Board of Trustees to be "eligible securities" as defined by Rule 2a-7 and to
present minimal credit risks. Pursuant to Rule 2a-7, the Board is required to
establish procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Funds, as computed for the purpose of sales and
redemptions, at $1.00. Such procedures include review of the Funds' portfolio
holdings by the Board of Trustees, at such intervals as it may deem appropriate,
to determine whether the net asset value of the Fund calculated by using
available market quotations deviates from $1.00 per share based on amortized
cost. The extent of any deviation will be examined by the Board of Trustees.
If such deviation exceeds 1/2 of 1%, 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, withholding dividends or establishing a net
asset value per share by using available market quotations.
10
<PAGE>
Each Fund will compute its net asset value once daily as of 5:00 p.m. (New
York City time), on each day the New York Stock Exchange is open for business
which excludes New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policy
established by the Trustees, the Adviser is primarily responsible for portfolio
decisions and the placing of portfolio transactions. In placing orders, it is
the policy of the Fund to obtain the best results taking into account the
dealer's general execution and operational facilities, the type of transaction
involved and other factors such as the dealer's risk in positioning the
securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Funds will not necessarily be paying the lowest
spread or commission available.
Purchases and sales of securities will often be principal transactions in
the case of debt securities traded otherwise than on an exchange. Debt
securities normally will be purchased or sold from or to issuers directly or to
dealers serving as market makers for the securities at a net price. Generally,
money market securities are traded on a net basis and do not involve brokerage
commissions. Under the 1940 Act, persons affiliated with the Adviser, the Funds
or the Distributor are prohibited from dealing with the Funds as a principal in
the purchase and sale of securities except in accordance with regulations
adopted by the Securities and Exchange Commission. Under the 1940 Act, persons
affiliated with the Adviser, the Funds or the Distributor may act as a broker
for the Funds. In order for such persons to effect any portfolio transactions
for the Funds, the commissions, fees or other remuneration received by such
persons must be reasonable and fair compared to the commissions, fees or other
remunerations paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time. This standard would allow the affiliate to receive
no more than the remuneration which would be expected to be received by an
unaffiliated broker in a commensurate arms-length transaction. The Trustees of
the Trust will regularly review the commissions paid by the Funds to affiliated
brokers.
The Adviser may, in circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to the Adviser. By allocating
transactions in this manner, the Adviser is able to supplement its research and
analysis with the views and information of securities firms.
EXCHANGE PRIVILEGE
Shareholders who have held all or part of their shares in one of the Funds
for at least seven days may exchange those shares for shares of the other Fund
if such Fund is available for sale in their state and meets the investment
criteria of the investor.
Before effecting an exchange, shareholders should review the Prospectus of
the other Fund. Exercise of the exchange privilege is treated as a redemption
for income tax purposes and, depending on the circumstances, a gain or loss may
be recognized.
The exchange privilege may be modified or terminated upon sixty (60) days'
written notice to shareholders. Although initially there will be no limit on
the number of times a shareholder may exercise the exchange privilege, the Funds
reserve the right to impose such a limitation. Call or write the Funds for
further details.
REDEMPTIONS
In the event that a Fund does not maintain a constant net asset value per
share, the proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal and state
and local income tax purposes. Any loss realized on the redemption of Fund
shares held, or treated as held, for six months or less will be treated as a
long-term capital loss to the extent of any long-term capital gain dividends
received on the redeemed shares.
A shareholder's account with the Funds remains open for at least one year
following complete redemption and all costs during the period will be borne by
the Funds. This permits an investor to resume investments in the Fund during
the period in an amount of $25,000 or more.
11
<PAGE>
To be in a position to eliminate excessive shareholder expense burdens, the
Funds reserve the right to adopt a policy pursuant to which a Fund may redeem,
upon not less than 30 days' notice, shares of the Fund in an account which has a
value below the designated amount set forth in each Fund's prospectus. However,
any shareholder affected by the exercise of this right will be allowed to make
additional investments prior to the date fixed for redemption to avoid
liquidation of the account. Shareholder accounts which have a value below the
designated amount due to changes in the market value in portfolio securities
will not be redeemed.
The Funds may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that Exchange is closed,
other than customary weekend and holiday closings, (ii) the Securities and
Exchange Commission has by order permitted such suspension or (iii) an emergency
exists making disposal of portfolio securities or determination of the value of
the net assets of the Fund not reasonably practicable.
Although it would not normally do so, the Trust has the right to pay the
redemption price in whole or in part in securities of a Fund's portfolio as
prescribed by the Trustees. When a shareholder sells portfolio securities
received in this fashion he would incur a brokerage charge. The Trust has,
however, elected to be governed by Rule 18f-1 under the 1940 Act, as amended.
Under that rule, the Trust must redeem its shares for cash except to the extent
that the redemption payments to any shareholder during any 90-day period would
exceed the lesser of $250,000 or 1% of a Fund's net asset value at the beginning
of such period.
FEDERAL INCOME TAXES
Each Fund has elected to be treated as a regulated investment company and
qualified as such in 1996. The Funds intend to continue to so qualify by
complying with the provisions of the Internal Revenue Code of 1986 (the "Code")
applicable to regulated investment companies so that the Funds will not be
liable for Federal income tax with respect to amounts distributed to
shareholders in accordance with the timing requirements of the Code.
In order to qualify as a regulated investment company for a taxable year,
each Fund must, among other things, (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currency
gains related to investments in stock or securities or other income (including
but not limited to gains from options, futures or forward contracts) derived
with respect to its business of investing in stock, securities or currency; (b)
diversify its holdings so that, at the end of each quarter of its taxable year,
(i) at least 50% of the market value of the Fund's assets is represented by
cash, cash items, U.S. Government securities, securities of other regulated
investment companies and certain other securities in respect of any one issuer
to an amount not greater in value than 5% of its assets and 10% of the
outstanding voting securities of the issuer, and (ii) not more than 25% of the
value of its total assets is invested in the securities of any one issuer (other
than U.S. Government securities or securities of other regulated investment
companies). As such, and by complying with the applicable provisions of the
Code, the Funds will not be subject to Federal income tax on taxable income
(including realized capital gains) which is distributed to shareholders in
accordance with the timing requirements of the Code.
The amount of capital gains, if any, realized in any given year will result
from sales of securities made with a view to the maintenance of a portfolio
believed by Fund management to be most likely to attain a Fund's investment
objective. Such sales and any resulting gains or losses, may therefore vary
considerably from year to year. Since at the time of an investor's purchase of
shares, a portion of the per share net asset value by which the purchase price
is determined may be represented by realized or unrealized appreciation in a
Fund's portfolio or undistributed income of the Fund, subsequent distributions
(or portions thereof) on such shares may be taxable to such investor even if the
net asset value of his shares is, as a result of the distributions, reduced
below his cost for such shares and the distributions (or portions thereof)
represent a return of a portion of his investment.
The Funds are required to report to the Internal Revenue Service (the
"IRS") all distributions of taxable dividends and of capital gains, as well as
the gross proceeds of share redemptions. The Funds may be required to withhold
Federal income tax at a rate of 31% ("backup withholding") from taxable
dividends (including capital gain dividends) and the proceeds of redemptions of
shares paid to non-corporate shareholders who have not furnished the Fund with a
correct taxpayer identification number and made certain required certifications
or who have been notified by the IRS that they are subject to backup
withholding. The Funds may also be required to withhold Federal income tax at a
rate of 31% if they are notified by the IRS or a broker that the taxpayer
identification number is incorrect or that backup withholding applies because of
underreporting of interest or dividend income.
12
<PAGE>
Distributions of taxable net investment income and net realized capital
gains will be taxable whether made in shares or in cash. In determining amounts
of net realized capital gains to be distributed, any capital loss carryovers
from prior years will be applied against capital gains. Shareholders receiving
distributions in the form of additional shares will have a cost basis for
Federal income tax purposes in each share so received equal to the net asset
value of a share of the Fund on the reinvestment date. Fund distributions will
also be included in individual and corporate shareholders' income on which the
alternative minimum tax may be imposed.
Any loss realized upon the redemption of shares held (or treated as held)
for six months or less will be treated as a long-term capital loss to the extent
of any long-term capital gain dividend received on the redeemed shares. Any
loss realized upon the redemption of shares within six months after receipt of
an exempt-interest dividend will be disallowed. All or a portion of a loss
realized upon the redemption of shares may be disallowed to the extent shares
are purchased (including shares acquired by means of reinvested dividends)
within 30 days before or after such redemption. Exchanges are treated as
redemptions for Federal tax purposes.
Different tax treatment is accorded to accounts maintained as IRAs,
including a penalty on early distributions. Shareholders should consult their
tax advisers for more information.
Each Fund will be separate for investment and accounting purposes and will
be treated as a separate taxable entity for Federal income tax purposes.
Each Fund is subject to a 4% nondeductible excise tax to the extent that it
fails to distribute to its shareholders during each calendar year an amount
equal to (a) at least 98% of its ordinary income (excluding any capital gain or
losses) for the calendar year; plus (b) at least 98% of the excess of its
capital gains over capital losses (adjusted for ordinary losses) for the one
year period ending on October 31 of such calendar year; plus (c) any ordinary
income or capital gain net income (adjusted for certain ordinary losses) from
the preceding calendar years which was neither distributed to shareholders nor
taxed to the Fund during such year. The Funds intend to distribute to
shareholders each year an amount sufficient to avoid the imposition of such
excise tax.
It is important to note that for tax years after August 5, 1997, the
Taxpayer Relief Act of 1997 repealed Section 851(b)(3) which required that a RIC
must derive less than 30 percent of its gross income from the sales or
disposition of stocks or securities held for less than three months.
SHARES OF BENEFICIAL INTEREST
The Trust consists of multiple separate portfolios or Funds. When certain
matters affect one Fund but not another, the shareholders would vote as a Fund
regarding such matters. Subject to the foregoing, on any matter submitted to a
vote of shareholders, all shares then entitled to vote will be voted separately
by the Fund unless otherwise required by the 1940 Act, in which case all shares
will be voted in the aggregate. For example, a change in a Fund's fundamental
investment policies would be voted upon only by shareholders of the Fund.
Additionally, approval of the Advisory Contract is a matter to be determined
separately by each Fund. Approval by the shareholders of one Fund is effective
as to that Fund whether or not sufficient votes are received from the
shareholders of the other Fund to approve the proposal as to that Fund. As used
in the Prospectuses and in this Statement of Additional Information, the term
"majority," when referring to approvals to be obtained from shareholders of a
Fund means the vote of the lesser of (i) 67% of the shares of the Fund or class
represented at a meeting if the holder of more than 50% of the outstanding
shares of the Fund or class are present in person or by proxy, or (ii) more than
50% of the outstanding shares of the Fund. The term "majority", when referring
to the approvals to be obtained from shareholders of the Trust as a whole means
the vote of the lesser of (i) 67% of the Trust's shares represented at a meeting
if the holders of more than 50% of the Trust's outstanding shares are present in
person or proxy, or (ii) more than 50% of the Trust's outstanding shares.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held.
The Trust may dispense with annual meetings of shareholders in any year in
which it is not required to elect trustees under the 1940 Act. However, the
Trust undertakes to hold a special meeting of its shareholders if the purpose of
voting on the question of removal of a director or trustees is requested in
writing by the holders of at least 10% of the Trust's outstanding voting
securities, and to assist in communicating with other shareholders as required
by Section 16(c) of the 1940 Act.
Each share of a Fund represents an equal proportional interest in the Fund
with each other share and is entitled to such dividends and distributions out of
the income earned on the assets belonging to the Fund as are declared in the
13
<PAGE>
discretion of the Trustees. In the event of the liquidation or dissolution of
the Trust, shareholders of each Fund are entitled to receive the assets
attributable to such Fund that are available for distribution, and a
distribution of any general assets of the Trust not attributable to a particular
Fund that are available for distribution in such manner and on such basis as the
Trustees in their sole discretion may determine.
Shareholders are not entitled to any preemptive rights. All shares, when
issued, will be fully paid and non-assessable by the Trust.
As of August 7, 1997, the following shareholders owned 5% or more of the
outstanding shares of the Funds as listed below:
FUND PERCENTAGE INTEREST
U.S. TREASURY MONEY MARKET FUND
City of Bridgeport 11%
Attn: Sharon D. Lemdon
45 Lyons Terrace
Bridgeport, CT 06604
City of New Haven 6%
200 Orange Street
New Haven, CT 06510
Metropolitan District 6%
555 Main Street, Po. Box 800
Hartford, CT 06142-0800
Riverside County Transportation 7%
Attn: Kenneth Kirin
P.O. Box 12005
Riverside, CA 92502-2205
U.S. GOVERNMENT MONEY MARKET FUND
City of Elgin 5%
150 Dexter Court
Elgin, IL 60120-5555
City of Hartford 25%
City Treasurer's Office
Denise Nappier
550 Main Street
Hartford, CT 06103
City of West Haven 5%
355 Main Street
West Haven, CT 06516
First Union National Bank of Florida 12%
Trustee for Orange County Expressway Authority
P.O. Box 44204
Jax, FL 32202
14
<PAGE>
Health Care FAC-SAYR 7%
c/o Mellon Bank, N.A.
Attn: Joe Robinson
Corporate Trust Group
Two Mellon Bank Center
Third Floor, Room 0325
Pittsburgh, PA 15259
City of Rock Island 9%
1504 Third Avenue
Rock Island, IL 61201-8684
Village of Schaumburg 5%
101 Schaumburg Court
Schaumburg, IL 60193-1899
OTHER INFORMATION
The Trust's Registration Statement, including the Prospectuses, the
Statement of Additional Information and the exhibits filed therewith, may be
examined at the office of the SEC in Washington, D.C. Statements contained in
the Prospectuses or the Statement of Additional Information as to the contents
of any contract or other document referred to herein or in the Prospectuses are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
CUSTODIAN AND SUB-CUSTODIAN
State Street Bank & Trust Company of Connecticut, N.A. acts as Custodian
for the Trust. The Custodian, among other things, maintains a custody account
or accounts in the name of the Funds; receives and delivers all assets for the
Funds upon purchase and upon sale or maturity; collects and receives all income
and other payments and distributions on account of the assets of the Funds and
pays all expenses of the Funds. For its services as Custodian, State Street
receives an asset-based fee and transaction charges. State Street Bank and
Trust Company serves as Sub-Custodian for the Trust. The Administrative
Services Agreement between ALPS Mutual Fund Services and the Trust currently
provides that the asset-based fee and transaction costs of the Trust's Custodian
and Sub-Custodian be paid by ALPS Mutual Fund Services. The Sub-Custodian was
paid $79,942, $83,234 and $76,684, for the years ended April 30, 1997, and April
30, 1996 and for the period ended April 30, 1995, respectively for custody
services.
EXPERTS
Deloitte & Touche LLP has been selected as the independent accountants for
the Trust. Deloitte & Touche provides audit services, tax return preparation
and assistance and consultation in connection with review of certain SEC
filings. Deloitte & Touche's address is 555 Seventeenth Street, Suite 3600,
Denver, Colorado 80202.
FINANCIAL STATEMENTS
The Trust's financial statements and financial highlights for the fiscal
year ended April 30, 1997 are included in the Trust's Annual Report which is a
separate report supplied independent of this Statement of Additional
Information. The Trust's financial statements and financial highlights are
incorporated herein by reference.
15
<PAGE>
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements included in Part A of this Registration
Statement:
Financial Highlights
(b) EXHIBITS
- (1) (a) Trust Instrument.
- (1) (b) Revised Trust Instrument.
- (2) (a) By-Laws of Registrant.
- (2) (b) Revised By-Laws of Registrant.
(3) None.
(4) None.
- (5) (a) Investment Advisory Contract between Registrant and
GE Investment Management, Incorporated with respect
to the U.S. Treasury Money Market Fund
- (5) (b) Investment Advisory Contract between Registrant and
GE Investment Management, Incorporated with respect
to the U.S. Government Money Market Fund.
- (6) (a) Distribution Agreement between Registrant and
ALPS Mutual Funds Services, Inc.
- (6) (b) Amended and restated Administration Agreement between
Registrant and ALPS Mutual Funds Services, Inc.
(7) None.
- (8) Custodian Contract between Registrant and State
Street Bank and Trust Company.
- (9) (a) Transfer Agency and Service Agreement between
Registrant and ALPS Mutual Funds Services, Inc.
<PAGE>
- (9) (b) Sub-Transfer Agency Agreement between ALPS Mutual
Funds Services, Inc. and State Street Bank and
Trust Company.
- (9) (c) Bookkeeping and Pricing Agreement between Registrant
and ALPS Mutual Funds Services, Inc.
- (10) Opinion and Consent of Baker & McKenzie, counsel to
Registrant.
- (11) (a) Consent of Independent Public Accountants.
(11) (b) Representation of Baker & McKenzie, counsel to
Registrant.
(12) None.
-- (13) Subscription Agreement.
(14) None.
(15) None.
- (16) Schedule of Computation of Performance Calculation.
- (17) Financial Data Schedule
(18) None
OTHER EXHIBITS
- (a) Power of Attorney dated April 15, 1997.
- Filed herewith.
-- Filed with Post-Effective Amendment No. 5 to Registrant's
Registration Statement on August 28, 1996.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
As of July 31, 1997:
U.S. Treasury Money Market Fund 316
Government Money Market Fund 61
<PAGE>
Item 27. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment Company Act
of 1940 (the "1940 Act") and pursuant to Article X of the Registrant's Trust
Instrument (Exhibit 1 to the Registration Statement), Section 7 of each
Investment Advisory Agreement (Exhibits 5(a) and 5(b) to the Registration
Statement) and Sections 1.9 and 1.10 of the Distribution Agreement (Exhibit
6(a) to this Registration Statement), officers, trustees, employees and
agents of the Registrant will not be liable to the Registrant, any
shareholder, officer, trustee, employee, agent or other person for any action
or failure to act, except for bad faith, willful misfeasance, gross
negligence or reckless disregard of duties, and those individuals may be
indemnified against liabilities in connection with the Registrant, subject to
the same exceptions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant understands that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The Registrant has purchased an insurance policy insuring its
officers and trustees against liabilities, and certain costs of defending
claims against such officers and trustees, to the extent such officers and
trustees are not found to have committed conduct constituting willful
misfeasance, bad faith, gross negligence or reckless disregard in the
performance of their duties. The insurance policy also insures the
Registrant against the cost of indemnification payments to officers under
certain circumstances.
Section 7 of each Investment Advisory Contract and Section 1.9 of
the Distribution Contract limit the liability of GE Investment Management,
Inc. and ALPS Mutual Funds Services, Inc., respectively, to liabilities
arising from willful misfeasance, bad faith or gross negligence in the
performance of their respective duties or from reckless disregard by them of
their respective obligations and duties under the agreements.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, By -Laws, Investment
Advisory Contracts and Distribution Contract in a manner consistent with
Release No. 11330 of the Securities and Exchange Commission under the 1940
Act so long as the interpretations of Section 17(h) and 17(i) of such Act
remain in effect and are consistently applied.
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to "Management of the Trust" in the Prospectus
forming Part A, and "The Management of the Trust" in the Statement of
Additional Information forming Part B, of this Registration Statement.
The list required by this Item 28 of officers and directors of GEIM,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by those officers and directors
during the past two years, is incorporated by reference to Schedules A and D
of Form ADV filed by GEIM pursuant to the Investment Advisers Act of 1940, as
amended (SEC File No. 801-31947).
Item 29. PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as Distributor/Underwriter
for various other unrelated registered investment companies.
(b) Officers and Directors
Name and Principal Positions and Offices with Positions and Offices
Business Address* Registrant with Underwriter
- -------------------------- -------------------------- --------------------
W. Robert Alexander Chairman of the Board of Chairman and Chief
Arthur J. L. Lucey None President and
Secretary
Thomas A. Carter None Vice President and
Chief Financial
Officer
Edmund J. Burke None Senior Vice President
James V. Hyatt Assistant Secretary General Counsel
William N. Paston Vice President and Vice President
Rick A. Pederson None Director
Chris Woessner None Director
- --------------------------
* All addresses are 370 Seventeenth Street, Suite 2700, Denver, Colorado
80202.
(c) Not applicable.
<PAGE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder
are maintained at the offices of ALPS Mutual Funds Services, Inc. and GE
Investment Management, Inc.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS.
(a) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the removal of a trustee if requested to
do so by the holders of at least 10% of the Registrant's
outstanding shares.
(b) Registrant undertakes to provide the support to shareholders
specified in Section 16(c) of the 1940 Act as though that
section applied to the Registrant.
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest
annual report upon request and without a charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant has duly caused this Post -Effective
Amendment No. 6 of its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Denver, and State of
Colorado, on August 28, 1997.
FINANCIAL INVESTORS TRUST (Registrant)
By: /s/ W. ROBERT ALEXANDER
-------------------------------
W. Robert Alexander
Trustee and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ W. ROBERT ALEXANDER Trustee and August 28, 1997
- ------------------------ President
W. Robert Alexander
/s/ WILLIAM PASTON Vice President and August 28, 1997
- ------------------------ Treasurer (Principal
William Paston Financial Officer)
/s/ MARY K. ANSTINE* Trustee August 28, 1997
- ------------------------
Mary K. Anstine
/s/ EDWIN B. CROWDER* Trustee August 28, 1997
- ------------------------
Edwin B. Crowder
/s/ JOHN R. MORAN, JR* Trustee August 28, 1997
- ------------------------
John R. Moran, Jr.
- ------------------------------------------
* Signature affixed by James V. Hyatt pursuant to a Power of Attorney dated
April 15, 1997 and filed herewith.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
EXHIBITS
to
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AND
THE INVESTMENT COMPANY ACT OF 1940
- --------------------------------------------------------------------------------
FINANCIAL INVESTORS TRUST
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document
- ------- --------
1(a) Trust Instrument.
1(b) Revised Trust Instrument.
2(a) By-Laws of Registrant.
2(b) Revised By-Laws of Registrant.
5(a) Investment Advisory Contract between Registrant and GE Investment
Management, Inc. with respect to the U.S. Treasury Money Market Fund.
5(b) Investment Advisory Contract between Registrant and GE Investment
Management, Inc. with respect to the U.S. Government Money Market
Fund.
6(a) Distribution Agreement between Registrant and ALPS Mutual Funds
Services, Inc.
6(b) Amended and restated Administration Agreement between Registrant and
ALPS Mutual Funds Services, Inc.
8 Custodial Contract between Registrant and State Street Bank and Trust
Company.
9(a) Transfer Agency and Service Agreement between Registrant and ALPS
Mutual Funds Services, Inc.
9(b) Sub -Transfer Agency Agreement between ALPS Mutual Funds Services,
Inc.and State Street Bank and Trust Company.
9(c) Bookkeeping and Pricing Agreement between Registrant and ALPS Mutual
Funds Services, Inc.
<PAGE>
10 Consent of Baker & McKenzie, counsel to Registrant.
11 (a) Consent of Independent Public Accountants.
11 (b) Representation of Baker & McKenzie, counsel to Registrant.
16 Schedule of Computation of Performance Calculation.
(a) U.S. Treasury Money Market Fund
(b) U.S. Government Money Market Fund
17 Financial Data Schedule.
(a) U.S. Treasury Money Market Fund
(b) U.S. Government Money Market Fund
OTHER EXHIBITS:
(a) Power of Attorney dated April 15, 1997.
<PAGE>
FEDERAL PUBLIC TRUST
TRUST INSTRUMENT
DATED DECEMBER 1, 1993
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I -- NAME AND DEFINITIONS 1
Section 1.01 Name 1
Section 1.02 Definitions 2
ARTICLE II-- BENEFICIAL INTEREST 4
Section 2.01 Shares of Beneficial Interest 4
Section 2.02 Issuance of Shares 5
Section 2.03 Register of Shares and Share
Certificates 6
Section 2.04 Transfer of Shares 7
Section 2.05 Treasury Shares 8
Section 2.06 Establishment of Series 8
Section 2.07 Investment in the Trust 10
Section 2.08 Assets and Liabilities of Series 10
Section 2.09 No Preemptive Rights 13
Section 2.10 Personal Liability of
Shareholders 13
Section 2.11 Assent to Trust Instrument 14
ARTICLE III -- THE TRUSTEES 14
Section 3.01 Management of the Trust 14
Section 3.02 Initial Trustees 16
Section 3.03 Term of Office of Trustees 16
Section 3.04 Vacancies and Appointment of
Trustees 17
Section 3.05 Temporary Absence of Trustee 18
Section 3.06 Number of Trustees 18
Section 3.07 Effect of Death, Resignation, etc
of a Trustee 19
Section 3.08 Ownership of Assets of the Trust 19
ARTICLE IV -- POWERS OF THE TRUSTEES 20
Section 4.01 Powers 20
Section 4.02 Issuance and Repurchase of Shares 26
Section 4.03 Trustees and Officers as
Shareholders 27
2
<PAGE>
Section 4.04 Action By The Trustees 27
Section 4.05 Chairman of the Trustees 28
Section 4.06 Principal Transactions 29
ARTICLE V -- EXPENSES OF THE TRUST 30
Section 5.01 Trustee Reimbursement.... 30
ARTICLE VI -- INVESTMENT ADVISER. PRINCIPAL
UNDERWRITER AND TRANSFER AGENT 31
Section 6.01 Investment Adviser 31
Section 6.02 Principal Underwriter 33
Section 6.03 Transfer Agent 33
Section 6.04 Parties to Contract 34
Section 6.05 Provisions and Amendments 35
ARTICLE VII - SHAREHOLDERS' VOTING POWER AND
MEETINGS 35
Section 7.01 Voting Powers 35
Section 7.02 Meetings 37
Section 7.03 Quorum and Required Vote 38
ARTICLE VIII - CUSTODIAN 39
Section 8.01 Appointment and Duties 39
Section 8.02 Central Certificate System.. 41
ARTICLE IX - DISTRIBUTIONS AND REDEMPTIONS 42
Section 9.01 Distributions 42
Section 9.02 Redemptions 43
Section 9.03 Determination of Net Asset Value and
Valuation of Portfolio Assets 44
Section 9.04 Suspension of the Right of
Redemption 46
Section 9.05 Redemption of Shares in Order
to Qualify as Regulated Investment Company 46
ARTICLE X - LIMITATION OF LIABILITY AND
INDEMNIFICATION. 48
Section 10.01 Limitation of Liability. 48
Section 10.02 Indemnification 48
Section 10.03 Shareholders 52
3
<PAGE>
ARTICLE XI - MISCELLANEOUS 53
Section 11.01 Trust Not a Partnership 53
Section 11.02 Trustee's Good Faith Action,
Expert Advice, No Bond or Surety 53
Section 11.03 Establishment of Record Dates 54
Section 11.04 Termination of Trust 55
Section 11.05 Reorganization 57
Section 11.06 Filing of Copies, References,
Headings 58
Section 11.07 Applicable Law 59
Section 11.08 Amendments 60
Section 11.09 Fiscal Year 61
Section 11.10 Provisions in Conflict with Law 61
4
<PAGE>
FEDERAL PUBLIC TRUST
DATED DECEMBER 1, 1993
TRUST INSTRUMENT, made December 1, 1993 by W. Robert Alexander (the
"Trustees"),
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money, and property
contributed to the trust hereunder shall be held and managed in trust under this
Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1.01. The name of the trust created hereby is the "Federal
Public Trust"
DEFINITIONS.
SECTION 1.02. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section
4.01(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940 Act
(as defined below). The terms "Affiliated Person", "Assignment", "Interested
Person" and "Principal
5
<PAGE>
Underwriter" shall have the meanings given them in the 1940 Act, as modified by
or interpreted by any applicable order or orders of the Commission or any rules
or regulations adopted or interpretive releases of the Commission thereunder..
"Majority Shareholder Vote" shall have the same meaning as the term "vote of a
majority of the outstanding voting securities" is given in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretive releases of the Commission
thereunder.
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts, n as it may be
amended from time to time.
(d) "Net Asset Value" means the net asset value of each Series (as
defined below) of the Trust determined in the manner provided in Article IX,
Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to time in
the books of the Trust or its Transfer Agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust;
(f) "Series" means a series of Shares (as defined below) of the Trust
established in accordance with the provisions of Article II, Section 2.06
hereof.
(g) "Shareholder n means a record owner of Outstanding Shares of the
Trust;
(h) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares as
well as whole Shares;
(i) The "Trust" refers to all Federal Public Trust Funds and reference
to a Fund, when applicable to one or more Series of the Trust, shall refer to
any such Series;
6
<PAGE>
(j) The "Trustees" means the person or persons who has or have signed
this Trust Instrument, so long as he or 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 the provisions
of Article III hereof and reference herein to a Trustee or to the Trustees shall
refer to the individual Trustees in their capacity as Trustees hereunder;
(k) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
(l) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 2.01. The beneficial interest in the Trust shall be divided
into such transferable Shares of one or more separate and distinct Series or
classes of a Series as the Trustees shall from time to time create and
establish. The number of Shares of each Series, and class thereof, authorized
hereunder is unlimited. Each Share shall have no par value. All Shares issued
hereunder, including without limitation, Shares issued in connection with a
dividend in Shares or a split or reverse split of Shares shall be fully paid and
non-assessable.
ISSUANCE OF SHARES
Section 2.02. The Trustees in their discretion may, from time to time,
without vote of the Shareholders, issue Shares, in addition to the then issued
and outstanding Shares and Shares held in the treasury, to such party or parties
and for such amount and type of consideration, subject to
7
<PAGE>
applicable law, including cash or securities, at such time or times and on
such terms as the Trustees may deem appropriate, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in connection
with, the assumption of liabilities) and businesses. In connection with any
issuance of Shares, the Trustees may issue fractional Shares and Shares held in
the treasury. The Trustees may from time to time divide or combine the Shares
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the Trust. Contributions to the Trust may be accepted
for, and Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share
or integral multiples thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
SECTION 2.03. A register shall be kept at the principal office of the
Trust or an office of the Trust's transfer agent which shall contain the names
and addresses of the Shareholders of each Series, the number of Shares of that
Series (or any class or classes thereof) held by them respectively and a record
of all transfers thereof. As to Shares for which no certificate has been issued,
such register shall be conclusive as to who are the holders of the Shares and
who shall be entitled to receive dividends or other distributions or otherwise
to exercise or enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive payment of any dividend or other distribution, nor to have
notice given to him as herein or in the Bylaws provided, until he has given his
address to the transfer agent or such other officer or agent of the Trustees as
shall keep the said registrar for entry thereon. The Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use. Such certificates may be
issuable for any purpose limited in the Trustees discretion. In the event that
one or more certificates are issued, whether in the name of a shareholder or a
nominee, such certificate or certificates shall constitute
8
<PAGE>
evidence of ownership of Shares for all purposes, including transfer, assignment
or sale of such Shares, subject to such limitations as the Trustees may, in
their discretion, prescribe.
TRANSFER OF SHARES
SECTION 2.04. Except as otherwise provided by the Trustees, Shares
shall be transferable on the records of the Trust only by the record holder
thereof or by his agent "hereunto duly authorized in writing, upon delivery to
the Trustees or the Trusts transfer agent of a duly executed instrument of
transfer, together with a Share certificate, if one is outstanding, and ~ such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery the
transfer shall be recorded on the registrar of the Trust. Until such record is
made, the Shareholder of record shall be deemed to be the holder of such Shares
for all purposes hereunder and neither the Trustees nor the Trust, nor any
transfer agent or registrar nor any officer, employee or agent of the Trust
shall be affected by any notice of the proposed transfer.
TREASURY SHARES
SECTION 2.05. Shares held in the treasury shall, until reissued
pursuant to Section 2.02 hereof, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
ESTABLISHMENT OF SERIES
SECTION 2.06. The Trust created hereby shall consist of one or more
Series and separate and distinct records shall be maintained by the Trust for
each Series and the assets associated with any such Series shall be held and
accounted for separately from the assets of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole discretion, and
without obtaining any prior authorization or vote of the Shareholders of any
Series of the Trust,
9
<PAGE>
to establish and designate and to change in any manner such Series of Shares or
any classes of initial or additional Series and to fix such preferences, voting
powers, right and privileges of such Series or classes thereof as the Trustees
may from time to time determine, to divide and combine the Shares or any Series
or classes thereof into a greater or lesser number, to classify or reclassify
any issued Shares or any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect to the Shares as
the Trustees may deem desirable. The establishment and designation of any Series
shall be effective upon the adoption of a resolution by a majority of the
Trustees setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Series. A Series may issue any
number of Shares and need not issue shares. At any time that there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may by a majority vote abolish that Series and the establishment and
designation thereof.
All references to Shares in this Trust Instrument shall be deemed to
be Shares of any or all Series, or classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each holder of Shares of a
Series shall be entitled to receive his pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series of the Trust.
INVESTMENT IN THE TRUST
10
<PAGE>
SECTION 2.07. The Trustees shall accept investments in any Series of
the Trust 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 the affected Series is
authorized to invest, valued as provided in Article IX, Section 9.03 hereof.
Investments in a Series shall be credited to each Shareholder's account in the
form of full Shares at the Net Asset Value per Share next determined after the
investment is received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial capital
contribution, (b) impose a sales charge upon investments in the Trust in such
manner and at such time determined by the Trustees or (c) issue fractional
Shares.
ASSETS AND LIABILITIES OF SERIES
SECTION 2.08. All consideration received by the Trust for the issue or
Male 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 of every
other Series and may be referred to herein as "assets belonging to" that Series.
The assets belonging to a particular Series shall belong to that Series for all
purposes, and to no other Series, subject only to the rights of creditors of
that Series. In addition, any assets, income, earnings, profits or funds, or
11
<PAGE>
payments and proceeds with respect thereto, which are not readily identifiable
as belonging to any particular Series shall be allocated by the Trustees between
and among one or more of the Series in such manner as the Trustees, in their
sole discretion, deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all purposes, and
such assets, income, earnings, profits or funds, or payments and proceeds with
respect thereto shall be assets belonging to that Series. The assets belonging
to a particular 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 holders of Shares
of that Series. The assets belonging to each particular Series shall be charged
with the liabilities of that Series and all expenses, costs, charges and
reserves attributable to that Series. Any general liabilities, expenses, costs,
changes or reserves of the Trust which are not readily identifiable as belonging
to a particular Series shall be allocated and changed by the Trustees belonging
to any one or more of the Series in such manner as the Trustees in their sole
discretion deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes. Without limitation
of the foregoing provisions of this Section 2.08, but subject to the right of
the Trustees in their discretion 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. Notice of this
contractual limitation on inter-Series liabilities may, in the Trustee's sole
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
inter-Series liabilities (and the statutory effect under Section 3804 of netting
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
12
<PAGE>
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 PREEMPTIVE RIGHTS
SECTION 2.09. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees, whether of the same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
SECTION 2.10. Each Shareholder of the Trust and of each Series shall
not be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
by or on behalf of any Series. The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of any
sum of money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust or to a Series shall
include a recitation limiting the obligation represented thereby to the Trust or
to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
ASSENT TO TRUST INSTRUMENT
SECTION 2.11. Every Shareholder, by virtue of having purchased a Share
shall become a Shareholder and shall be held to have expressly assented and
agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
13
<PAGE>
MANAGEMENT OF THE TRUST
SECTION 3.01. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this Trust
Instrument. The Trustees shall have power to conduct the business of the Trust
and carry on its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the United
States of America, and in any foreign jurisdiction and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Trust Instrument, the presumption shall be
in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
14
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INITIAL TRUSTEES
SECTION 3.02. The initial Trustees shall be the persons named herein.
On a date fixed by the Trustees, the Shareholders shall elect at least one but
not more than twelve Trustees, as specified by the Trustees pursuant to Section
3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
SECTION 3.03. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as herein provided; except (a) that any
Trustee may resign his trust by written instrument signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or upon such
later date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be retired or
who has died, become physically or mentally incapacitated by reason of disease
or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of Shareholders owning at least two-thirds
of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
Section 3.04. In case of the declination to serve, death, resignation,
retirement, removal, physical or mental incapacity by reason of disease or
otherwise, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees shall
have all the powers hereunder and the certificate of the other Trustees of such
vacancy shall be conclusive. In the
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case of an existing vacancy, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit
consistent with the limitations under the 1940 Act. Such appointment shall be
evidenced by a written instrument signed by a majority of the Trustees in office
or by resolution of the Trustees, duly adopted, which shall be recorded in the
minutes of a meeting of the Trustees, whereupon the appointment shall take
effect.
An appointment of a Trustee s y be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.04 shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power to appoint a Trustee pursuant to this
Section 3.04 is subject to the provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
SECTION 3.05. Any Trustee may, by power of attorney, delegate his
power for a period not exceeding six months at any one time to any other Trustee
or Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
SECTION 3.06. The number of Trustees shall be at least one (1), and
thereafter shall be such number as shall be fixed from time to time by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be more than twelve (12).
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EFFECT OF DEATH. RESIGNATION. ETC. OF A TRUSTEE
SECTION 3.07. The declination to serve, death, resignation,
retirement, removal, incapacity, or inability of the Trustees, or any one of
them, shall not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 3.08. The assets 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. Legal title
in all of the assets of the Trust and the right to conduct any business shall at
all times be considered as vested in the Trustees on behalf of the Trust, except
that the Trustees may cause legal title to any Trust Property to be held by, or
in the name 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, except as otherwise provided for
herein, a proportionate undivided beneficial interest in the Trust or Series.
The Shares shall be personal property giving only the rights specifically set
forth in this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
POWERS
SECTION 4.01. The Trustees in all instances shall act as principals,
and are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary
or appropriate in connection with the management of the Trust. The Trustees
shall not in any way be bound or limited by present or future laws or customs in
regard to trust investments, but
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shall have full authority and power to make any and all investments which they,
in their sole discretion, shall deem proper to accomplish the purpose of this
Trust without recourse to any court or other authority. Subject to any
applicable limitation in this Trust Instrument or the Bylaws of the Trust, the
Trustees shall have power and authority:
(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
present or future law or custom in regard to investments by trustees, and to
sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease
any or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both, or otherwise pursuant to a plan of distribution of any
kind;
(e) 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 that they do not reserve that right to the Shareholders; such
Bylaws shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
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(g) To employ one or more banks, trust companies or companies that
are members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager, custodian,
underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article IX, Section 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or ersons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form; or
either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article
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II hereof and to establish classes of such Series having relative rights, powers
and duties as they may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series or
to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in 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 in the Trust;
(r) 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;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any Shareholders whose investment is less than such
minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the
powers of the Trustees to said committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees, officers or
other agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the provisions of
this Article IV, and in addition to such provisions or any other provision of
this Trust Instrument or of the Bylaws, the Trustees may by resolution appoint a
committee consisting of less than the
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whole number of Trustees then in office, which committee may be empowered to act
for and bind the Trustees and the Trust, as if the acts of such committee were
the acts of all the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any action, suit
or proceeding which shall be pending or . threatened to be brought before any
court, administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Series;
(w) To establish a registered office and have a registered agent in
the state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power herein before set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and power,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner 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.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
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.
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ISSUANCE AND REPURCHASE OF SHARES
SECTION 4.02. The Trustees shall have the power to issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of,
and otherwise deal in Shares and, subject to the provisions set forth in Article
II and Article IX, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 4.03. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or -company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
SECTION 4.04. The Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by telephone
meeting provided a quorum of Trustees participate in any such telephone
meeting, unless the 1940 Act requires that a particular action be taken only
at a meeting at which the Trustees are present in person. At any meeting of
the Trustees. a majority of the Trustees shall constitute a quorum. Meetings
of the Trustees may be called orally or in writing by the Chairman and/or
Trustees or by any two other Trustees. Notice of the time, date and place of
all meetings of the Trustees shall be given by the party calling the meeting
to each Trustee by telephone, telefax, or telegram sent to his home or
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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 executes a written
waiver of notice with respect to the meeting. Any meeting conducted by telephone
shall be deemed to take place at the principal office of the Trust, as
determined by the Bylaws or by the Trustees. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one or more of their
number their authority to approve particular matters or take particular actions
on behalf of the Trust. Written consents or waivers of the Trustees may be
executed in one or more counterparts. Execution of a written consent or waiver
and delivery thereof to the Trust may be accomplished by telefax.
CHAIRMAN OF THE TRUSTEES
SECTION 4.05. The Trustees shall appoint one of their number to be
Chairman of the Board of 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, and may be (but is not
required to be) the chief executive, financial and/or accounting officer of the
Trust.
PRINCIPAL TRANSACTIONS
SECTION 4.06. Except to the extent 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 Trustees 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, distributor
or transfer agent for the Trust or with any Interested Person of such person;
and the Trust may employ any such person, or firm or company in which such
person is an Interested Person, as broker, legal counsel, registrar, investment
adviser, distributor, transfer agent, dividend disbursing agent, custodian or in
any other capacity upon customary terms.
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ARTICLE V
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 5.01. Subject to the provisions of Article II, Section 2.08
hereof, the Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and disbursement,
including, without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and commissions
of every kind, expenses of pricing Trust portfolio ~ securities, expenses of
issue, repurchase and redemption of shares, including expenses attributable to a
program of periodic repurchases or redemptions, expenses of registering and
qualifying the Trust and its Shares under Federal and State laws and regulations
or under the laws of any foreign jurisdiction, charges of third parties,
including investment advisers, managers, custodians, transfer agents, portfolio
accounting and/or pricing agents, and registrars, expenses of preparing and
setting up in type prospectuses and statements of additional information and
other related Trust documents, expenses of printing and distributing
prospectuses sent to existing Shareholders, auditing and legal expenses, reports
to Shareholders, expenses of meetings of Shareholders and proxy solicitations
therefor, insurance expenses, association membership dues and for such
non-recurring items as may arise, including litigation to which the Trust (or a
Trustee acting as such) is a party, and for all losses and liabilities by them
incurred in administering the Trust, and for the payment of such expenses,
disbursements, losses and liabilities 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. This section shall not
preclude the Trust from directly paying any of the aforementioned fees and
expenses.
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ARTICLE VI
INVESTMENT ADVISER. PRINCIPAL UNDERWRITER AND TRANSFER AGENT INVESTMENT ADVISER
SECTION 6.01. The Trustees may in their discretion, from time to time,
enter into an investment advisory or management contract or contracts with
respect to the Trust or any Series whereby the other party or parties to such
contract or contracts shall undertake to furnish the Trustees with such
management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Trustees may in their discretion determine; provided,
however, that the initial approval and entering into of such contract or
contracts shall be subject to a Majority Shareholder Vote. Notwithstanding any
other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or exchanges of
portfolio securities, other investment instruments of the Trust, or other Trust
Property on behalf of the Trustees, or may authorize any officer, agent, or
Trustee to effect such purchases, sales or exchanges pursuant to recommendations
of the investment adviser (and all without further action by the Trustees). Any
such purchases, sales and exchanges shall be deemed to have been authorized by
all of the Trustees.
The Trustees may authorize, subject to applicable requirements of the
1940 Act, including those relating to Shareholder approval, the investment
adviser to employ, from time to time, one or more sub-advisers to perform such
of the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser. Any reference in this Trust Instrument to the investment adviser
shall be deemed to include such sub-advisers, unless the context otherwise
requires.
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PRINCIPAL UNDERWRITER
SECTION 6.02. The Trustees may in their discretion from time to time
enter into an exclusive or non-exclusive underwriting contract or contracts
providing for the sale of Shares, whereby the Trust may either agree to sell
Shares to the other party to the contract or appoint such other party its sales
agent for such Shares. In either case, the contract shall be on such terms and
conditions, if any, as may be prescribed in the Bylaws, and such further terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article VI, or of the Bylaws; and such
contract may also provide for the repurchase or sale of Shares by such other
party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 6.03. The Trustees may in their discretion from time to time
enter into one or more transfer agency and shareholder service contracts whereby
the other party or parties shall undertake to furnish the Trustees with transfer
agency and shareholder services. The contract or contracts shall be on such
terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Trust Instrument or of the Bylaws.
PARTIES TO CONTRACT
SECTION 6.04. Any contract of the character described in Sections
6.01, 6.02 and 6.03 of this Article VI or any contract of the character
described in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the same in his capacity as Shareholder and/or
Trustee, nor
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shall any person holding such relationship be liable merely by reason of such
relationship for any loss or expense to the Trust under or by reason of said
contract or accountable for any profit realized directly or indirectly
therefrom, provided that the contract when entered into was not inconsistent
with the provisions of this Article VI or Article VIII hereof or of the Bylaws.
The same person (including a firm, corporation, partnership, trust or
association) may be the other party to contracts entered into pursuant to
Sections 6.01, 6.02 and 6.03 of this Article VI or pursuant to Article VIII
hereof, and any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned in this
Section 6.04.
PROVISIONS AND AMENDMENTS
SECTION 6.05. Any contract entered into pursuant to Sections 6.01 or
6.02 of this Article VI shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act or other applicable Act of Congress hereafter
enacted with respect to its continuance in effect, its termination, and the
method of authorization and approval of such contract or renewal thereof, and no
amendment to any contract, entered into pursuant to Section 6.01 of this Article
VI shall be effective unless assented to in a manner consistent with the
requirements of said Section 15, as modified by any applicable rule, regulation
or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 7.01. The Shareholders shall have power to vote only (i) for
the election of Trustees as provided in Article III, Sections 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III, Section
3.03(d) hereof, (iii) with respect to any investment advisory or management
contract as provided in Article VI, Sections 6.01 and 6.05 hereof, and (iv) with
respect
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to such additional matters relating to the Trust as may be required by law, by
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 separately by individual Series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by individual Series;
and (ii) when the Trustees have determined that the matter affects the interests
of more than one Series, then the Shareholders of all such Series shall be
entitled to vote thereon. The Trustees may also determine that a matter affects
only the interests of one or more classes of a Series, in which case any such
matter shall be voted on by such class or classes. 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. A proxy may
be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or Trustees of the Trust, Shares may be voted only
in person or by written proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted by law, this Trust Instrument or any of the Bylaws of the Trust to be
taken by Shareholders.
MEETINGS
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SECTION 7.02. The first Shareholders' meeting shall be held in order
to elect Trustees as specified in Section 3.02 of Article III hereof at the
principal office of the Trust or such other place as the Trustees may designate.
Meetings may be held within or without the State of Delaware. Special meetings
of the Shareholders of any Series may be called by the Trustees and shall be
called by the Trustees upon the written request of Shareholders owning at least
one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the 1940
Act, as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record, subject to any rights provided to
the Trust or any Trustees provided by said Section 16(c). Notice shall be sent,
by First Class Mail or such other means determined by the Trustees, at least 15
days prior to any such meeting.
QUORUM AND REQUIRED VOTE
SECTION 7.03. One-third of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a Shareholders,
meeting, except that where any provision of law or of this Trust Instrument
permits or requires that holders of any Series shall vote as a Series (or that
holders of a class shall vote as a class), then one-third of the aggregate
number of Shares of that Series (or that class) entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that Series
(or that class). Any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by law or by any provision of this Trust
Instrument or the Bylaws, a majority of the Shares voted in
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person or by proxy shall decide any questions and a plurality shall elect a
Trustee,provided that where any provision of law or of this Trust Instrument
permits or requires that the holders of any Series shall vote as a Series (or
that the holders of any class shall vote as a class), then a majority of the
Shares present in person or by proxy of that Series or, if required by law, a
Majority Shareholder Vote of that Series (or class), voted on the matter in
person or by proxy shall decide that matter insofar as that Series (or class) is
concerned. Shareholders may act by unanimous written consent. Actions taken by
Series (or class} may be consented to unanimously in writing by Shareholders of
that Series.
ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 8.01. The Trustees shall at all times employ a bank, a company
that is a member of a national securities exchange, or a trust company, each
having capital, surplus and undivided profits of at least two million dollars
($2,000,000) as custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the Bylaws of the Trust:
(l) to hold the securities owned by the Trust and deliver the same
upon written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as
the Trustees may direct; and
(3) to disburse such funds upon orders or vouchers; and the Trust may
also employ such custodian as its agent:
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(4) to keep the books and accounts of the Trust or of any Series or
class and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series, or class thereof, in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least two million dollars ($2,000,000) or such other
person as may be permitted by the Commission, or otherwise in accordance with
the 1940 Act.
CENTRAL CERTIFICATE SYSTEM
SECTION 8.02. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit all or
any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular class or series of any
issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such
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deposits shall be subject to withdrawal only upon the order of the Trust or its
custodians, subcustodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
SECTION 9.01.
(a) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series. The amount of such dividends or
distributions and the payment of them and whether they are in cash or any other
Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other distribution
or among the Shareholders of record at such other date or time or dates or times
as the Trustees shall determine, which dividends or distributions, at the
election of the Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cashdividend payout plans or related plans as the Trustees
shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a stock dividend pro rata
among the Shareholders of a particular Series, or class thereof, as of the
record date of that Series fixed as provided in Section (b) hereof.
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REDEMPTIONS
SECTION 9.02. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares or any -portion thereof, he may deposit
at the office of the transfer agent or other authorized agent of that Series a
written request or such other form of request as the Trustees may from time to
time authorize, requesting that the Series purchase the shares in accordance
with this Section 9.02; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter of
the Series shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 9.03 of this Article IX). The Series shall make
payment for any shares to be redeemed, as aforesaid, in cash or property from
the assets of that Series and payment for such Shares shall be made by the
Series or the principal underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request is effective. Upon
redemption, shares shall become Treasury shares and may be re-issued from time
to time.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 9.03. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value 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 valuing portfolio securities insofar as permitted under the 1940 Act and the
rules, regulations and interpretations thereof promulgated or issued by the
Commission or insofar as
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permitted by any Order of the Commission applicable to the Series. The Trustees
may delegate any of their powers and duties under this Section 9.03 with respect
to valuation of assets and liabilities. The resulting amount, which shall
represent the total Net Asset Value of the particular Series, shall be divided
by the total number of shares of that Series outstanding at the time and the
quotient so obtained shall be the Net Asset Value per Share of that Series. At
any time the Trustees may cause the Net Asset Value per Share last determined to
be determined again in similar manner and may fix the time when such
redetermined value shall become effective. If, for any reason, the net income of
any Series determined at any time, is a negative amount, the Trustees shall have
the power with respect to that Series (i) to offset each Shareholder's pro rata
share of such negative amount from the accrued dividend account of such
Shareholder, or (ii) to. reduce the number of Outstanding Shares of such Series
by reducing the number of Shares in the account of each Shareholder by a pro
rata portion of the number of full and fractional Shares which represents the
amount of such excess negative net income, or (iii) to cause to be recorded on
the books of such Series an asset account in the amount of such negative net
income (provided that the same shall thereupon become the property of such
Series with respect to such Series and shall not be paid to any Shareholder),
which account may be reduced by the amount, of dividends declared thereafter
upon the Outstanding Shares of such Series on the day such negative net income
is experienced, until such asset account is reduced to zero; (iv) to combine the
methods described in clauses ti) and (ii) and (iii) of the sentence; or (v) to
take any other action they deem appropriate, in order to cause (or in order to
assist in causing) the Net Asset Value per Share of such Series to remain at a
constant amount per Outstanding Share immediately after each such determination
and declaration. The Trustees shall also have the power not to declare a
dividend out of net income for the purpose of causing the Net Asset Value per
share to be increased. The Trustees shall not be required to adopt, but may at
any time adopt, discontinue
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or amend the practice of maintaining the Net Asset Value per Share of the Series
at a constant amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 9.04. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the Net Asset
Value per Share next determined after the termination of the suspension. In the
event that any Series are divided into classes, the provisions of this Section
9.03, to the extent applicable as determined in the discretion of the Trustees
and consistent with applicable law, may be equally applied to each such class.
REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY
Section 9.05. If the Trustees shall, at any time and in good faith, be
of the opinion 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
deemed equitable by them (i) to 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 (ii) to refuse to transfer or issue Shares to any person
whose acquisition of the Shares in question would result in such
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disqualification. The redemption shall be effected at the redemption price and
in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code, or to comply with the requirements of any other taxing authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 10.01. A Trustee, when acting in such capacity, shall not be
personally liable to any person other than the Trust or a beneficial owner for
any act, omission or obligation of the Trust or any Trustee. A Trustee shall not
be liable for any act or omission or any conduct whatsoever in his capacity as
Trustee, provided that nothing contained herein or in the Delaware Act shall
protect any Trustee against any liability to the Trust or to Shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
INDEMNIFICATION
SECTION 10.02.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every Person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be indemnified by
the Trust to the fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in connection
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with any claim, action, suit or proceeding in which he becomes involved as a
party or otherwise by virtue of his being or having been a Trustee or officer
and against amounts paid or incurred by him in the settlement thereof;
(ii) 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, attorneys'
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 the best interest of
the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer 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);
provided, however, that any Shareholder
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may, by appropriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a person who has ceased to be a
Covered Person and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 10.02 may be paid by the Trust or 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 him to
the Trust or Series if it is ultimately determined that he is not entitled to
indemnification under this Section 10.02; provided, however, that either (a)
such Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust is insured against losses arising out of any such
advance payments or (c) 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 tas opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Section 10.02.
SHAREHOLDERS
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SECTION 10.03. In case any Shareholder or former Shareholder of any
Series shall be held to be personally liable solely by reason of his being or
having been a Shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the 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 the Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon from
the assets of the Series.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
SECTION 11.01. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to bind
personally either the Trust's officers or any Shareholder. All persons extending
credit to, contracting with or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series or (if the
Trustees shall have yet to have established Series) of the Trust for payment
under such credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Trust Instrument shall protect a
Trustee against any liability to which the Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION. EXPERT ADVICE. NO BOND OR SURETY
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SECTION 11.02. The exercise by the Trustees of their powers and
discretions 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 X hereof and to Section 11.01 of this Article XI,
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 X hereof and Section 11.01 of this Article XI, shall be
under no liability 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.
ESTABLISHMENT OF RECORD DATES
SECTION 11.03. The Trustees may close the Share transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, 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; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend or other distribution, 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 any such dividend or other
distribution, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of Shares, and in such case
such Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or other
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distribution, or to receive such allotment or rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed as aforesaid.
TERMINATION OF TRUST
SECTION 11.04.
(a) This Trust shall continue without limitation of time but subject
to the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder Vote
of the Trust, and subject to a vote of a majority of the Trustees,
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association or
corporation, or to a separate series of shares thereof, organized under the laws
of any state which trust, partnership, association or corporation is an open-end
management investment company as 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 beneficial
interest, stock or other ownership interests of such trust, partnership,
association or corporation or of a series thereof; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or (ii), by such
assumption or otherwise, the Trustees shall
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distribute the remaining proceeds or assets (as the case may be) of each Series
(or class) ratably among the holders of Shares of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees and the Trust shall be discharged of any
and all further liabilities and duties hereunder and the right, title and
interest of all parties with respect to the Trust or Series shall be cancelled
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.
REORGANIZATION
SECTION 11.05. Notwithstanding anything else herein, the Trustees, in
order to change the form of organization of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate with or into
one or more trusts, partnerships, associations or corporations so long as the
surviving or resulting entity is an open-end management investment company under
the 1940 Act, or is a series thereof, that will succeed to or assume the Trust's
registration under that Act and which is formed, organized or existing under the
laws of a state, commonwealth possession or colony of the United States or (ii)
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.
Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Trust Instrument, an agreement
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of merger or consolidation approved by the Trustees in accordance with this
Section 11.05 may effect any amendment to the Trust Instrument 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.
FILING OF COPIES. REFERENCES. HEADINGS
SECTION 11.06. The original or a copy of this Trust Instrument and of
each amendment hereof or Trust Instrument supplemental hereto 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 an officer or Trustee of the
Trust as to whether or not any such amendments or supplements have been made and
as to any matters in connection with the Trust hereunder, and with the same
effect as if it were the original, may rely on a copy certified by an officer or
Trustee of the Trust to be a copy of this Trust Instrument or of any such
amendment or supplemental Trust Instrument, references to this Trust Instrument,
and all expressions like "herein thereof. and "hereunder," shall be deemed to
refer to this Trust Instrument as amended or affected by any such supplemental
Trust Instrument. All expressions like "his", "he" and "him", shall be deemed to
include the feminine and neuter, as well as masculine, genders. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this Trust Instrument, rather than the headings, shall control. This
Trust Instrument may be executed in any number of counterparts each of which
shall be deemed an original.
APPLICABLE LAW
SECTION 11.07. The trust set forth in this instrument is made in the
State of Delaware, and the Trust and this Trust Instrument, and the rights and
obligations of the Trustees and Shareholders hereunder, are to be governed by
and construed and administered according to the Delaware Act and the laws of
said State; provided, however, that there shall not be applicable to the
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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 and principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Trust Instrument. The Trust shall be of the type commonly called a
''business trust", and without limiting the provisions hereof, the Trust may
exercise all 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.
AMENDMENTS
SECTION 11.08. Except as specifically provided herein, the Trustees
may, without 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. Shareholders shall have the right to vote
(i) on any amendment which would affect their right to vote granted in Section
7.01 of Article VII hereof, (ii) on any amendment to this Section 11.08, (iii)
on any
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amendment as may be Required by law or by the Trust's registration statement
filed with the Commission and (iv) on any amendment submitted to them by the
Trustees. Any amendment required or permitted to be submitted to Shareholders
which, as the Trustees determine, shall affect the Shareholders of one or more
Series shall be authorized by vote of the Shareholders of each Series affected
and no vote of shareholders of a Series not affected shall be required.
Notwithstanding anything else herein, any amendment to Article 10 hereof shall
not limit the rights to indemnification or insurance provided therein with
respect to action or omission of Covered Persons prior to such amendment.
FISCAL YEAR
SECTION 11.09. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
PROVISIONS IN CONFLICT WITH LAW
SECTION 11.10. The provisions of this Trust Instrument are severable,
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict 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 remaining provisions of this Trust
Instrument or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this Trust Instrument shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such
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provision in such jurisdiction, such invalidity or unenforceability shall attach
only to such provision in such jurisdiction and shall not in any manner affect
such provisions in any other jurisdiction or any other provision of this Trust
Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees
of the Trust, have executed this instrument this 1st day of December, 1993.
/s/ W. Robert Alexander
- ------------------------
W. Robert Alexander, as Trustee and not individually
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REVISED TRUST INSTRUMENT OF REGISTRANT
1
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FGIC PUBLIC TRUST
TRUST INSTRUMENT
DATED FEBRUARY 24, 1994
2
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I -- NAME AND DEFINITIONS 1
Section 1.01 Name 1
Section 1.02 Definitions 2
ARTICLE II-- BENEFICIAL INTEREST 4
Section 2.01 Shares of Beneficial Interest 4
Section 2.02 Issuance of Shares 5
Section 2.03 Register of Shares and Share
Certificates 6
Section 2.04 Transfer of Shares 7
Section 2.05 Treasury Shares 8
Section 2.06 Establishment of Series 8
Section 2.07 Investment in the Trust 10
Section 2.08 Assets and Liabilities of Series 10
Section 2.09 No Preemptive Rights 13
Section 2.10 Personal Liability of
Shareholders 13
Section 2.11 Assent to Trust Instrument 14
ARTICLE III -- THE TRUSTEES 14
Section 3.01 Management of the Trust 14
Section 3.02 Initial Trustees 16
Section 3.03 Term of Office of Trustees 16
Section 3.04 Vacancies and Appointment of
Trustees 17
Section 3.05 Temporary Absence of Trustee 18
Section 3.06 Number of Trustees 18
Section 3.07 Effect of Death, Resignation, etc.
Of a Trustee 19
Section 3.08 Ownership of Assets of the Trust 19
ARTICLE IV-- POWERS OF THE TRUSTEES 20
Section 4.01 Powers 20
Section 4.02 Issuance and Repurchase of Shares 26
Section 4.03 Trustees and Officers as
Shareholders 27
3
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Section 4.04 Action By The Trustees 27
Section 4.05 Chairman of the Trustees 28
Section 4.06 Principal Transactions 29
ARTICLE V -- EXPENSES OF THE TRUST 30
Section 5.01 Trustee Reimbursement 30
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER AND TRANSFER AGENT 31
Section 6.01 Investment Adviser 31
Section 6.02 Principal Underwriter 33
Section 6.03 Transfer Agent 33
Section 6.04 Parties to Contract 34
Section 6.05 Provisions and Amendments 35
ARTICLE VII - SHAREHOLDERS' VOTING POWER AND
MEETINGS 35
Section 7.01 Voting Powers 35
Section 7.02 Meetings 37
Section 7.03 Quorum and Required Vote 38
ARTICLE VIII - CUSTODIAN 39
Section 8.01 Appointment and Duties 39
Section 8.02 Central Certificate System 41
ARTICLE IX - DISTRIBUTIONS AND REDEMPTIONS 42
Section 9.01 Distributions 42
Section 9.02 Redemptions 43
Section 9.03 Determination of Net Asset Value and
Valuation of Portfolio Assets 44
Section 9.04 Suspension of the Right of
Redemption 46
Section 9.05 Redemption of Shares in Order
to Qualify as Regulated
Investment Company 46
ARTICLE X - LIMITATION OF LIABILITY AND
INDEMNIFICATION 48
Section 10.01 Limitation of Liability 48
Section 10.02 Indemnification 48
4
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Section 10.03 Shareholders 52
ARTICLE XI- MISCELLANEOUS 53
Section 11.01 Trust Not a Partnership 53
Section 11.02 Trustee's Good Faith Action,
Expert Advice, No Bond or Surety 53
Section 11.03 Establishment of Record Dates 54
Section 11.04 Termination of Trust 55
Section 11.05 Reorganization 57
Section 11.06 Filing of Copies, References,
Headings 58
Section 11.07 Applicable Law 59
Section 11.08 Amendments 60
Section 11.09 Fiscal Year 61
Section 11.10 Provisions in Conflict with Law 61
5
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FGIC PUBLIC TRUST
DATED FEBRUARY 24, 1994
TRUST INSTRUMENT, made February 24, 1994 by W Robert Alexander (the
"Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and ~ managed in trust under
this Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1.01. The name of the trust created hereby is "FGIC Public
Trust".
DEFINITIONS.
SECTION 1.02. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section
4.01(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940 Act (as
defined below). The terms "Affiliated Person", "Assignment", "Interested Person"
and "Principal Underwriter" shall have the meanings given them in the 1940 Act,
as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive releases of the
Commission thereunder. "Majority Shareholder Vote" shall have the same meaning
as the term "vote of a majority of the outstanding
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voting securities" is given in the 1940 Act, as modified by or interpreted by
any applicable order or orders of the Commission or any rules or regulations
adopted or interpretive releases of the Commission thereunder.
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts," as it may be
amended from time to time.
(d) "Net Asset Value" means the net asset value of each Series (as
defined below) of the Trust determined in the manner provided in Article IX,
Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to time
in the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the treasury of
the Trust;
(f) "Series" means a series of Shares (as defined below) of the
Trust established in accordance with the provisions of Article II, Section
2.06 hereof.
(g) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(h) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares
as well as whole Shares;
(i) The "Trust" refers to all FGIC Public Trust Funds and reference
to a Fund, when applicable to one or more Series of the Trust, shall refer to
any such Series;
(j) The "Trustees" means the person or persons who has or have
signed this Trust Instrument, so long as he or 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 the
provisions of Article III hereof and reference herein to a Trustee or to the
Trustees shall refer to the individual Trustees in their capacity as Trustees
hereunder;
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(k) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
(l) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 2.01. The beneficial interest in the Trust shall be divided
into such separate and distinct Series or classes of a Series as the Trustees
shall from time to time create and establish. The number of Shares of each
Series, and class thereof, authorized hereunder is unlimited. Each Share
shall have no par value. All Shares issued hereunder, including without
limitation, Shares issued in connection with a dividend in Shares or a split
or reverse split of Shares, shall be fully paid and nonassessable.
ISSUANCE OF SHARES
SECTION 2.02. The Trustees in their discretion may, from time to time,
without vote of the Shareholders, issue Shares, in addition to the then issued
and outstanding Shares and Shares held in the treasury, to such party or parties
and for such amount and type of consideration, subject to applicable law,
including cash or securities, at such time or times and on such terms as the
Trustees may deem appropriate, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with, the
assumption of liabilities) and businesses. In connection with any issuance of
Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interests in the
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Trust. Contributions to the Trust may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000th of a Share or integral multiples
thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
SECTION 2.03. A register shall be kept at the principal office of the
Trust or an office of the Trust's transfer agent which shall contain the names
and addresses of the Shareholders of each Series, the number of Shares of that
Series (or any class or classes thereof) held by them respectively and a record
of all transfers thereof. As to Shares for which no certificate has been issued,
such register shall be conclusive as to who are the holders of the Shares and
who shall be entitled to receive dividends or other distributions or otherwise
to exercise or enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive payment of any dividend or other distribution, nor to have
notice given to him as herein or in the Bylaws provided, until he has given his
address to the transfer agent or such other officer or agent of the Trustees as
shall keep the said registrar for entry thereon. The Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use. Such certificates may be
issuable for any purpose limited in the Trustees discretion. In the event that
one or more certificates are issued, whether in the name of a shareholder or a
nominee, such certificate or certificates shall constitute evidence of ownership
of Shares for all purposes, including transfer, assignment or sale of such
Shares, subject to such limitations as the Trustees may, in their discretion,
prescribe.
TRANSFER OF SHARES
SECTION 2.04. Except as otherwise provided by the Trustees, Shares
shall be transferable on the records of the Trust only by the record holder
thereof or by his agent "hereunto duly authorized in writing, upon delivery to
the Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate, if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery the
transfer shall
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be recorded on the registrar of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor the Trust, nor any transfer
agent or registrar nor any officer, employee or agent of the Trust shall be
affected by any notice of the proposed transfer.
TREASURY SHARES
SECTION 2.05. Shares held in the treasury shall, until reissued
pursuant to Section 2.02 hereof, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
ESTABLISHMENT OF SERIES
SECTION 2.06. The Trust created hereby shall consist of one or more
Series and separate and distinct records shall be maintained by the Trust for
each Series and the assets associated with any such Series shall be held and
accounted for separately from the assets of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole discretion, and
without obtaining any prior authorization or vote of the Shareholders of any
Series of the Trust, to establish and designate and to change in any manner such
Series of Shares or any classes of initial or additional Series and to fix such
preferences, voting powers, right and privileges of such Series or classes
thereof as the Trustees may from time to time determine, to divide and combine
the Shares or any Series or classes thereof into a greater or lesser number, to
classify or reclassify any issued Shares or any Series or classes thereof into
one or more Series or classes of Shares, and to take such other action with
respect to the Shares as the Trustees may deem desirable. The establishment and
designation of any Series shall be effective upon the adoption of a resolution
by a majority of the Trustees setting forth such establishment and designation
and the relative rights and preferences of the Shares of such Series. A Series
may issue any number of Shares and need not issue shares. At any time that there
are no Shares outstanding of any
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particular Series previously established and designated, the Trustees may by a
majority vote abolish that Series and the establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to
be Shares of any or all Series, or classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each holder of Shares of a
Series shall be entitled to receive his pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series of the Trust.
INVESTMENT IN THE TRUST
SECTION 2.07. The Trustees shall accept investments in any Series of
the Trust 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 the affected Series is
authorized to invest, valued as provided in Article IX, 9.03 hereof. Investments
in a Series shall be credited Section to each Shareholder's account in the form
of full Shares at the Net Asset Value per Share next determined after the
investment is received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial capital
contribution, (b) impose a sales charge upon investments in the Trust in such
manner and at such time determined by the Trustees or (c) issue fractional
Shares.
ASSETS AND LIABILITIES OF SERIES
SECTION 2.08. 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
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may be, shall be held and accounted for separately from the other assets of the
Trust and of every other Series and may be referred to herein as "assets
belonging to" that Series. The assets belonging to a particular Series shall
belong to that Series for all purposes, and to no other Series, subject only to
the rights of creditors of that Series. In addition, any assets, income,
earnings, profits or funds, or payments and proceeds with respect thereto, which
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in such
manner as the Trustees, in their sole discretion, deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes, and such assets, income, earnings, profits or funds, or
payments and proceeds with respect thereto shall be assets belonging to that
Series. The assets belonging to a particular 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 holders of Shares of that Series. The assets belonging to each
particular Series shall be charged with the liabilities of that Series and all
expenses, costs, charges and reserves attributable to that Series. Any general
liabilities, expenses, costs, changes or reserves of the Trust which are not
readily identifiable as belonging to a particular Series shall be allocated and
changed by the Trustees belonging to any one or more of the Series in such
manner as the Trustees in their sole discretion deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Without limitation of the foregoing provisions of this
Section 2.08, but subject to the right of the Trustees in their discretion 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. Notice of this contractual limitation on inter-Series
liabilities may, in the Trustee's sole 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
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3804 of the Delaware Act relating to limitations on inter-Series liabilities
(and the statutory effect under 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 PREEMPTIVE RIGHTS
SECTION 2.09. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees, whether. of the same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
SECTION 2.10. Each Shareholder of the Trust and of each Series shall
not be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
by or on behalf of any Series. The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of any
sum of money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust or to a Series shall
include a recitation limiting the obligation represented thereby to the Trust or
to one or more Series and its or their assets (but the omission of such a
recitation shall not operate to bind any Shareholder or Trustee of the Trust).
ASSENT TO TRUST INSTRUMENT
SECTION 2.11. Every Shareholder, by virtue of having purchased a
Share shall become a Shareholder and shall be held to have expressly assented
and agreed to be bound by the terms hereof.
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ARTICLE III
THE TRUSTEES
MANAGEMENT OF THE TRUST
SECTION 3.01. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same extent
as if the Trustees were the sole owners of the Trust Property and business in
their own right, but with such powers of delegation as may be permitted by
this Trust Instrument. The Trustees shall have power to conduct the business
of the Trust and carry on its operations in any and all of its branches and
maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in
any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction
and to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good
faith shall be conclusive. In construing the provisions of this Trust
Instrument, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
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INITIAL TRUSTEES
SECTION 3.02. The initial Trustees shall be the persons named herein.
On a date fixed by the Trustees, the Shareholders shall elect at least one but
not more than twelve Trustees, as specified by the Trustees pursuant to Section
3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
SECTION 3.03. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as herein provided; except (a) that any
Trustee may resign his trust by written instrument signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or upon such
later date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to be retired or
who has died, become physically or mentally incapacitated by reason of disease
or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of Shareholders owning at least two-thirds
of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
SECTION 3.04. In case of the declination to serve, death, resignation,
retirement, removal, physical or mental incapacity by reason of disease or
otherwise, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees shall
have all the powers hereunder and the certificate of the other Trustees of such
vacancy shall be conclusive. In the case of an existing vacancy, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
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majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.04 shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power to appoint a Trustee pursuant to this
Section 3.04 is subject to the provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
SECTION 3.05. Any Trustee may, by power of attorney, delegate his
power for a period not exceeding six months at any one time to any other Trustee
or Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
SECTION 3.06. The number of Trustees shall be at least one (1), and
thereafter shall be such number as shall be fixed from time to time by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be more than twelve (12).
EFFECT OF DEATH. RESIGNATION. ETC. OF A TRUSTEE
SECTION 3.07. The declination to serve, death, resignation,
retirement, removal, incapacity, or inability of the Trustees, or any one of
them, shall not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
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OWNERSHIP OF ASSETS OF THE TRUST
SECTION 3.08. The assets 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. Legal title
in all of the assets of the Trust and the right to conduct any business shall at
all times be considered as vested in the Trustees on behalf of the Trust, except
that the Trustees may cause legal title to any Trust Property to be held by, or
in the name 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, except as otherwise provided for
herein, a proportionate undivided beneficial interest in the Trust or Series.
The Shares shall be personal property giving only the rights specifically set
forth in this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
POWERS
SECTION 4.01. The Trustees in all instances shall act as principals,
and are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary
or appropriate in connection with the management of the Trust. The Trustees
shall not in any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power to make any
and all investments which they, in their sole discretion, shall deem proper to
accomplish the purpose of this Trust without recourse to any court or other
authority. Subject to any applicable limitation in this Trust Instrument or the
Bylaws of the Trust, the Trustees shall have power and authority:
(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
present or future law or custom in regard to investments by
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trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both, or otherwise pursuant to a plan of distribution of any
kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amen* and repeal
them to the extent that they do not reserve that right to the Shareholders; such
Bylaws shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that
are members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager, custodian,
underwriter or other agent or independent contractor;
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(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article IX, Section 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of. securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form; or
either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish classes of
such Series having relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series or
to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease,
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mortgage, purchase, or sale of property by such corporation or concern, and to
pay calls or subscriptions with respect to any security held in the Trust;
(r) 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;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any Shareholders-whose investment is less than such
minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers
of the Trustees to said committees and to adopt a committee charter providing
for such responsibilities,
membership (including Trustees, officers or other agents of the Trust therein)
and any other characteristics of said committees as the Trustees may deem
proper. Notwithstanding the provisions of this Article IV, and in addition to
such provisions or any other provision of this Trust Instrument or of the
Bylaws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Series;
(w) To establish a registered office and have a registered agent in
the state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the
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attainment of any object or the furtherance of any power hereinbefore set forth,
either alone or in association with others, and to do every other act or thing
incidental or appurtenant to or growing out of or connected with the aforesaid
business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and power,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner 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.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
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.
ISSUANCE AND REPURCHASE OF SHARES
SECTION 4.02. The Trustees shall have the power to issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of,
and otherwise deal in Shares and, subject to the provisions set forth in Article
II and Article IX, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the Trust, or the
particular Series of the Trust, with respect to which such Shares are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 4.03. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or company in
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which he is interested, subject only to the general limitations herein contained
as to the sale and purchase of such Shares; and all subject to any restrictions
which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
SECTION 4.04. The Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by telephone
meeting provided a quorum of Trustees participate in any such telephone meeting,
unless the 1940 Act requires that a particular action be taken only at a meeting
at which the Trustees are present in person. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the Trustees may
be called orally or in writing by the Chairman and/or Trustees or by any two
other Trustees. Notice of the time, date and place of all meetings of the
Trustees shall be given by the party calling the meeting to each Trustee by
telephone, telefax, or telegram 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 executes a written waiver of notice with
respect to the meeting. Any meeting conducted by telephone shall be deemed to
take place at the principal office of the Trust, as determined by the Bylaws or
by the Trustees. Subject to the requirements of the 1940 Act, the Trustees by
majority vote may delegate to any one or more of their number their authority to
approve particular matters or take particular actions on behalf of the Trust.
Written consents or waivers of the Trustees may be executed in one or more
counterparts. Execution of a written consent or waiver and delivery thereof to
the Trust may be accomplished by telefax.
CHAIRMAN OF THE TRUSTEES
SECTION 4.0S. The Trustees shall appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of
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policies established by the Trustees and the administration of the Trust, and
may be (but is not required to be) the chief executive, financial and/or
accounting officer of the Trust.
PRINCIPAL TRANSACTIONS
SECTION 4.06. Except to the extent 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 Trustees 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, distributor or
transfer agent for the Trust or with any Interested Person of such person; and
the Trust may employ any such person, or firm or company in which such person is
an Interested Person, as broker, legal counsel, registrar, investment adviser,
distributor, transfer agent, dividend disbursing agent, custodian or in any
other capacity upon customary terms.
ARTICLE V
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
SECTION 5.01. Subject to the provisions of Article II, Section 2.08
hereof, the Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate Series for their expenses and disbursement,
including, without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and commissions
of every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares, including expenses attributable to a
program of periodic repurchases or redemptions, expenses of registering and
qualifying the Trust and its Shares under Federal and State laws and regulations
or under the laws of any foreign jurisdiction, charges of third parties,
including investment advisers, managers, custodians, transfer agents, portfolio
accounting and/or pricing agents, and registrars, expenses of preparing and
setting up in type prospectuses and statements of additional information and
other related Trust documents, expenses of printing and distributing
prospectuses sent to
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existing Shareholders, auditing and legal expenses, reports to Shareholders,
expenses of meetings of Shareholders and proxy solicitations therefor, insurance
expenses, association membership dues and for such non-recurring items as may
arise, including litigation to which the Trust (or a Trustee acting as such) is
a party, and for all losses and liabilities by them incurred in administering
the Trust, and for the payment of such expenses, disbursements, losses and
liabilities 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. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER. PRINCIPAL UNDERWRITER AND TRANSFER AGENT INVESTMENT
ADVISER
Section 6.01. The Trustees may in their discretion, from time to time,
enter into an investment advisory or management contract or contracts with
respect to the Trust or any Series whereby the other party or parties to such
contract or contracts shall undertake to furnish the Trustees with such
management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Trustees day in their discretion determine; provided,
however, that the initial approval and entering into of such contract or
contracts shall be subject to a Majority Shareholder Vote. Notwithstanding any
other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or exchanges of
portfolio securities, other investment instruments of the Trust, or other Trust
Property on behalf of the Trustees, or may authorize any officer, agent, or
Trustee to effect such purchases, sales or exchanges pursuant to recommendations
of the investment adviser (and all without further action by the
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Trustees). Any such purchases, sales and exchanges shall be deemed to have been
authorized by all of the Trustees.
The Trustees may authorize, subject to applicable requirements of the
1940 Act, including those relating to Shareholder approval, the investment
adviser to employ, from time to time, one or more sub-advisers to perform such
of the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser. Any reference in this Trust Instrument to the investment adviser
shall be deemed to include such sub-advisers, unless the context otherwise
requires.
PRINCIPAL UNDERWRITER
SECTION 6.02. The Trustees may in their discretion from time to time
enter into an exclusive or non-exclusive underwriting contract or contracts
providing for the sale of Shares, whereby the Trust may either agree to sell
Shares to the other party to the contract or appoint such other party its sales
agent for such Shares. In either case, the contract shall be on such terms and
conditions, if any, as may be prescribed in the Bylaws, and such further terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article VI, or of the Bylaws; and such
contract may also provide for the repurchase or sale of Shares by such other
party as principal or as agent of the Trust.
TRANSFER AGENT
SECTION 6.03. The Trustees may in their discretion from time to time
enter into one or more transfer agency and shareholder service contracts whereby
the other party or parties shall undertake to furnish the Trustees with transfer
agency and shareholder services. The contract or contracts shall be on such
terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Trust Instrument or of the Bylaws.
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PARTIES TO CONTRACT
SECTION 6.04. Any contract of the character described in Sections
6.01, 6.02 and 6.03 of this Article VI or any contract of the character
described in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the same in his capacity as Shareholder and/or
Trustee, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article VI or Article VIII hereof or of
the Bylaws. The same person (including a firm, corporation, partnership, trust
or association) may be the other party to contracts entered into pursuant to
Sections 6.01, 6.02 and 6.03 of this Article VI or pursuant to Article VIII
hereof, and any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned in this
Section 6.04.
PROVISIONS AND AMENDMENTS
SECTION 6.05. Any contract entered into pursuant to Sections 6.01 or
6.02 of this Article VI shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act or other applicable Act of Congress hereafter
enacted with respect to its continuance in effect, its termination, and the
method of authorization and approval of such contract or renewal thereof, and no
amendment to any contract, entered into pursuant to Section 6.01 of this Article
VI shall be effective unless assented to in a manner consistent with the
requirements of said Section 15, as modified by any applicable rule, regulation
or order of the Commission.
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ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 7.01. The Shareholders shall have power to vote only (i) for
the election of Trustees as provided in Article III, Sections 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III, Section
3.03(d) hereof, (iii) with respect to any investment advisory or management
contract as provided in Article VI, Sections 6.01 and 6.05 hereof, and (iv) with
respect to such additional matters relating to the Trust as may be required by
law, by 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 separately by individual Series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by individual Series;
and (ii) when the Trustees have determined that the matter affects the interests
of more than one Series, then the Shareholders of all such Series shall be
entitled to vote thereon. The Trustees may also determine that a matter affects
only the interests of one or more classes of a Series, in which case any such
matter shall be voted on by such class or classes. 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. A proxy may
be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or
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Trustees of the Trust, Shares may be voted only in person or by written proxy.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required or permitted by law, this Trust Instrument or
any of the Bylaws of the Trust to be taken by Shareholders.
MEETINGS
SECTION 7.02. The first Shareholders' meeting shall be held in order
to elect Trustees as specified in Section 3.02 of Article III hereof at the
principal office of the Trust or such other place as the Trustees may designate.
Meetings may be held within or without the State of Delaware. Special meetings
of the Shareholders of any Series may be called by the Trustees and shall be
called by the Trustees upon the written request of Shareholders owning at least
one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the 1940
Act, as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record, subject to any rights provided to
the Trust or any Trustees provided by said Section 16(c). Notice shall be sent,
by First Class Mail or such other means determined by the Trustees, at least 15
days prior to any such meeting.
QUORUM AND REQUIRED VOTE
SECTION 7.03. One-third of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Trust Instrument
permits or requires that holders of any Series shall vote as a Series (or that
holders of a class shall vote as a class), then one-third of the aggregate
number of Shares of that Series (or that class) entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that Series
(or that class). Any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a
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reasonable time after the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is required by law or by
any provision of this Trust Instrument or the Bylaws, a majority of the Shares
voted in person or by proxy shall decide any questions and a plurality shall
elect a Trustee, provided that where any provision of law or of this Trust
Instrument permits or requires that the holders of any Series shall vote as a
Series (or that the holders of any class shall vote as a class), then a majority
of the Shares present in person or by proxy of that Series or, if required by
law, a Majority Shareholder Vote of that Series (or class), voted on the matter
in person or by proxy shall decide that matter insofar as that Series (or class)
is concerned. Shareholders may act by unanimous written consent. Actions taken
by Series (or class) may be consented to unanimously in writing by Shareholders
of that Series.
ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
SECTION 8.01. The Trustees shall at all times employ a bank, a company
that is a member of a national securities exchange, or a trust company, each
having capital, surplus and undivided profits of at least two million dollars
($2,000,000) as custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
and
(3) to disburse such funds upon orders or vouchers; and the Trust may also
employ such custodian as its agent:
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(4) to keep the books and accounts of the Trust or of any Series or class
and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset Value
of any Series, or class thereof, in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least two million dollars ($2,000,000) or such other
person as may be permitted by the Commission, or otherwise in accordance with
the 1940 Act.
CENTRAL CERTIFICATE SYSTEM
SECTION 8.02. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit all or
any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular class or series of any
issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodians, subcustodians or other agents.
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ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
SECTION 9.01.
(a) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series. The amount of such dividends or
distributions and the payment of them and whether they are in cash or any other
Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other distribution
or among the Shareholders of record at such other date or time or dates or times
as the Trustees shall determine, which dividends or distributions, at the
election of the Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a stock dividend pro rata
among the Shareholders of a particular Series, or class thereof, as of the
record date of that Series fixed as provided in Section (b) hereof.
REDEMPTIONS
SECTION 9.02. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares or any portion thereof, he may deposit
at the office of the transfer agent or other authorized agent of that Series a
written request or such other form of request as the Trustees may from time to
time authorize, requesting that the Series purchase the shares in accordance
with this Section 9.02; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter of
the
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Series shall purchase his said Shares, but only at the Net Asset Value thereof
(as described in Section 9.03 of this Article IX). The Series shall make payment
for any shares to be redeemed, as aforesaid, in cash or property from the assets
of that Series and payment for such Shares shall be made by the Series or the
principal underwriter of the Series to the Shareholder of record within seven
(7) days after the date upon which the request is effective. Upon redemption,
shares shall become Treasury shares and may be re-issued from time to time.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 9.03. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value 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 valuing portfolio securities insofar as permitted under the 1940 Act and the
rules, regulations and interpretations thereof promulgated or issued by the
Commission or insofar as permitted by any Order of the Commission applicable to
the Series. The Trustees may delegate any of their powers and duties under this
Section 9.03 with respect to valuation of assets and liabilities. The resulting
amount, which shall represent the total Net Asset Value of the particular
Series, shall be divided by the total number of shares of that Series
outstanding at the time and the quotient so obtained shall be the Net Asset
Value per Share of that Series. At any time the Trustees may cause the Net Asset
Value per Share last determined to be determined again in similar manner and may
fix the time when such redetermined value shall become effective. If, for any
reason, the net income of any Series determined at any time, is a negative
amount, the Trustees shall have the power with respect to that Series (i) to
offset each Shareholder's pro rata share of such negative amount
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from the accrued dividend account of such Shareholder, or (ii) to reduce the
number of Outstanding Shares of such Series by reducing the number of Shares in
the account of each Shareholder by a pro rata portion of the number of full and
fractional Shares which represents the amount of such excess negative net
income, or (iii) to cause to be recorded on the books of such Series an asset
account in the amount of such negative net income (provided that the same shall
thereupon become the property of such Series with respect to such Series and
shall not be paid to any Shareholder), which account may be reduced by the
amount, of dividends declared thereafter upon the Outstanding Shares of such
Series on the day such negative net income is experienced, until such asset
account is reduced to zero; (iv) to combine the methods described in clauses (i)
and (ii) and (iii) of the sentence; or (v) to take any other action they deem
appropriate, in order to cause (or in order to assist in causing) the Net Asset
Value per Share of such Series to remain at a constant amount per Outstanding
Share immediately after each such determination and declaration. The Trustees
shall also have the power not to declare a dividend out of net income for the
purpose of causing the Net Asset Value per share to be increased. The Trustees
shall not be required to adopt, but may at any time adopt, discontinue or amend
the practice of maintaining the Net Asset Value per Share of the Series at a
constant amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
SECTION 9.04. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the Net Asset
Value per Share next determined after the termination of the suspension. In the
event that any Series are divided into classes, the provisions of this Section
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9.03, to the extent applicable as determined in the discretion of the Trustees
and consistent with applicable law, may be equally applied to each such class.
REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY
Section 9.05. If the Trustees shall, at any time and in good faith, be
of the opinion 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
deemed equitable by them (i) to 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 (ii) to refuse to transfer or issue Shares to any person
whose acquisition of the Shares in question would result in such
disqualification. The redemption shall be effected at the redemption price and
in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code, or to comply with the requirements of any other taxing authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
SECTION 10.01. A Trustee, when acting in such capacity, shall not be
personally liable to any person other than the Trust or a beneficial owner for
any act, omission or obligation of the Trust or any Trustee. A Trustee shall not
be liable for any act or omission or any conduct whatsoever in his capacity as
Trustee, provided that nothing contained herein or in the Delaware Act shall
protect any Trustee against any liability to
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the Trust or to Shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.
INDEMNIFICATION
SECTION 10.02.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every Person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be indemnified by
the Trust to the fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof;
(ii) 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, attorneys'
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 (Aj 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 the best interest of
the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer 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:
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(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);
provided, however, that any Shareholder may, by appropriate legal proceedings,
challenge any such determination by the Trustees or by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a person who has ceased to be a
Covered Person and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 10.02 may be paid by the Trust or 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 him to
the Trust or Series if it is ultimately determined that he is not entitled to
indemnification under this Section 10.02; provided, however, that either (a)
such Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust is insured against losses arising out of any such
advance payments or (c) 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 trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Section 10.02.
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SHAREHOLDERS
SECTION 10.03. In case any Shareholder or former Shareholder of any
Series shall be held to be personally liable solely by reason of his being or
having been a Shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the 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 the Shareholder, assume the defense of any claim. made against the
Shareholder for any act or obligation of the Series and satisfy any judgment
thereon from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
SECTION 11.01. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to bind
personally either the Trust's officers or any Shareholder. All persons extending
credit to, contracting with or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series or (if the
Trustees shall have yet to have established Series) of the Trust for payment
under such credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Trust Instrument shall protect a
Trustee against any liability to which the Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee hereunder.
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TRUSTEE'S GOOD FAITH ACTION. EXPERT ADVICE, NO BOND OR SURETY
SECTION 11.02. The exercise by the Trustees of their powers and
discretions 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 X hereof and to Section 11.01 of this Article XI,
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 X hereof and Section 11.01 of this Article XI, shall be
under no liability 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.
ESTABLISHMENT OF RECORD DATES
SECTION 11.03. The Trustees may close the Share transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, 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; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend or other distribution, 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 any such dividend or other
distribution, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of Shares, and in such case
such Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or other distribution, or to
receive such
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allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after any
such record date fixed as aforesaid.
TERMINATION OF TRUST
SECTION 11.04.
(a) This Trust shall continue without limitation of time but subject
to the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder Vote
of the Trust, and subject to a vote of a majority of the Trustees,
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association or
corporation, or to a separate series of shares thereof, organized under the laws
of any state which trust, partnership, association or corporation is an open-end
management investment company as 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 beneficial
interest, stock or other ownership interests of such trust, partnership,
association or corporation or of a series thereof; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining proceeds or
assets (as the case may be) of each Series (or class) ratably among the holders
of Shares of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees and the Trust shall
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be discharged of any and all further liabilities and duties hereunder and the
right, title and interest of all parties with respect to the Trust or Series
shall be cancelled 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.
REORGANIZATION
SECTION 11.05. Notwithstanding anything else herein, the Trustees, in
order to change the form of organization of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate with or into
one or more trusts, partnerships, associations or corporations so long as the
surviving or resulting entity is an open-end management investment company under
the 1940 Act, or is a series thereof, that will succeed to or assume the Trust's
registration under that Act and which is formed, organized or existing under the
laws of a state, commonwealth possession or colony of the United States or (ii)
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.
Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Trust Instrument, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 11.05 may effect any amendment to the
Trust Instrument 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.
FILING OF COPIES. REFERENCES. HEADINGS
SECTION 11.06. The original or a copy of this Trust Instrument and of
each amendment hereof or Trust Instrument supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any
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Shareholder. Anyone dealing with the Trust may rely on a certificate by an
officer or Trustee of the Trust as to whether or not any such amendments or
supplements have been made and as to any matters in connection with the Trust
hereunder, and with the same effect as if it were the original, may rely on a
copy certified by an officer or Trustee of the Trust to be a copy of this Trust
Instrument or of any such amendment or supplemental Trust Instrument, references
to this Trust Instrument, and all expressions like "herein," thereof" and
"hereunder," shall be deemed to refer to this Trust Instrument as amended or
affected by any such supplemental Trust Instrument. All expressions like "his",
"he" and "him", shall be deemed to include the feminine and neuter, as well as
masculine, genders. Headings are placed herein for convenience of reference only
and in case of any conflict, the text of this Trust Instrument, rather than the
headings, shall control. This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
APPLICABLE LAW
SECTION 11.07. The trust set forth in this instrument is made in the
State of Delaware, and the Trust and this Trust Instrument, and the rights and
obligations of the Trustees and Shareholders hereunder, are to be governed by
and construed and administered according to the Delaware Act and the laws of
said State; 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 and principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage
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or other manner of holding of trust assets, or (vii) the establishment of
fiduciary or other standards or responsibilities or limitations on the acts or
powers of trustees, which are inconsistent with the limitations or liabilities
or authorities and powers of the Trustees set forth or referenced in this Trust
Instrument. The Trust shall be of the type commonly called a "business trust",
and without limiting the provisions hereof, the Trust may exercise all 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.
AMENDMENTS
SECTION 11.08. Except as specifically provided herein, the Trustees
may, without 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. Shareholders shall have the right to vote
(i) on any amendment which would affect their right to vote granted in Section
7.01 of Article VII hereof, (ii) on any amendment to this Section 11.08, (iii)
on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to
Shareholders which, as the Trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by vote of the Shareholders of each
Series affected and no vote of shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, any amendment to Article 10
hereof shall not limit the rights to indemnification or insurance provided
therein with respect to action or omission of Covered Persons prior to such
amendment.
FISCAL YEAR
SECTION 11.09. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
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PROVISIONS IN CONFLICT WITH LAW
SECTION 11.10. The provisions of this Trust Instrument are severable,
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to hairs
constituted a part of this Trust Instrument' provided, however, that such
determination shall not affect any of the remaining provisions of this Trust
Instrument or render invalid or improper any action taken or omitted prior to
such determination. If any provision of this shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provisions in any other jurisdiction or any
other provision of this Trust Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees
of the Trust, have executed this instrument this 24th day of February, 1994.
/s/ W. ROBERT ALEXANDER,
- -------------------------
w. Robert Alexander, as Trustee and not individually
<PAGE>
Exhibit 2 (a)
Bylaws of Registrant
1
<PAGE>
BYLAWS
of
FEDERAL PUBLIC TRUST
These Bylaws of Federal Public Trust (the "Trust"), a Delaware
business trust, are subject to the Trust's Instrument of Trust dated December 1,
1993 as from time to time amended, supplemented or restated (the "Trust
Instrument"). Capitalized terms used herein which are defined in the Trust
Instrument are used as therein defined.
ARTICLE I
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 such other offices and places of business as
the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
OFFICERS
SECTION 1. The officers of the Trust shall be President, a Treasurer,
a Secretary, and such other officers as the Trustees may from time to time
elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
ELECTION OF OFFICERS
SECTION 2. The Treasurer and Secretary shall be chosen by the
Trustees. The President shall be chosen by and from the Trustees. Two or more
offices may be held by a single person except the offices or President and
Secretary. Subject to the provisions of Section 12 hereof, the President, the
Treasurer and the Secretary shall each hold office until their successors are
chosen and qualified and all other officers shall hold office at the pleasure of
the Trustees.
RESIGNATIONS
SECTION 3. Any officer of the Trust may resign, notwithstanding
Section 2 hereof, by filing a written resignation
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with the President, the Trustees or the Secretary, which resignation shall take
effect on being so filed or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
MANAGEMENT OF THE TRUST-GENERAL
SECTION 1. 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 and desirable to carry out their responsibilities, so far as such
powers are not inconsistent with the laws of the State of Delaware, the Trust
Instrument or with these Bylaws.
EXECUTIVE AND OTHER COMMITTEES
SECTION 2. The Trustees may elect from their own number an executive committee,
which shall have any or all the powers of the Trustees while the Trustees are
not in session. The Trustees may also elect from their own number other
committees from time to time. The number composing such committees and the
powers conferred upon the same are to be determined by vote of a majority of the
Trustees. All members of such committees shall hold such offices at the pleasure
of the Trustees. The Trustees may abolish any such committee at any time. Any
committee to which the Trustees delegate any of their powers or duties shall
keep records of its meetings and shall report its actions to the Trustees. The
Trustees shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
COMPENSATION
SECTION 3. Each Trustee and each committee member may receive such
compensation for his services and reimbursement for his expenses as may be fixed
from time to time by resolution of the Trustees.
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees shall appoint from among their number a
Chairman who shall serve as such at the pleasure of the Trustees. When present,
he shall preside at all meetings of the Shareholders and the Trustees, and he
may, subject to the approval of the Trustees, appoint a Trustee to preside at
such
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meetings in his absence. He shall perform such other duties as the Trustees may
from time to time designate.
PRESIDENT
SECTION 5. The President shall be the chief executive officer of the
Trust and, subject to the direction of the Trustees, shall have general
administration of the business and policies of the Trust. 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 thereof. He shall also have the power to employ attorneys,
accountants and other advisers and agents and counsel for the Trust. The
President shall perform such duties additional to all of the foregoing as the
Trustees may from time to designate.
TREASURER
SECTION 6. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall perform
such additional duties as the Trustees may from time to time designate.
SECRETARY
SECTION 7. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of the seal of the Trust. The
Secretary shall perform such additional duties as the Trustees may from time to
time designate.
VICE PRESIDENT
SECTION 8. Any Vice President of the Trust shall perform such duties
as the Trustees or the President may from time to time designate. 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 senior 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.
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ASSISTANT TREASURER
SECTION 8. Any Assistant Treasurer of the Trust shall perform such
duties as the Trustees or the Treasurer may from time to time designate, and, in
the absence of the Treasurer, the senior Assistant Treasurer, present and able
to act, may perform all the duties of the Treasurer.
ASSISTANT SECRETARY
SECTION 9. Any Assistant Secretary of the Trust shall perform such
duties as the Trustees or the Secretary may from time to time designate, and, in
the absence of the Secretary, the senior Assistant Secretary, present and able
to act, may perform all the duties of the Secretary.
SUBORDINATE OFFICERS
SECTION 10. The Trustees from time to time may appoint such other
officers or 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 from time to time may delegate to
one or more officers or committees of Trustees the power to appoint any such
subordinate officers or agents and to prescribe their respective terms of
office, authorities and duties.
SURETY BONDS
SECTION 11. 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, as amended ("the 1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("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 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 hands.
REMOVAL
SECTION 12. Any officer may be removed from office whenever in the
judgment of the Trustees the best interest of the Trust will be served thereby,
by the vote of a majority of the Trustees given at any regular meeting or any
special meeting of the Trustees. In addition, any officer or agent appointed IN
accordance with the provisions of Section 10 hereof may be
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removed, either with or without cause, by any officer upon whom such power of
removal shall have been conferred by the Trustees.
REMUNERATION
SECTION 13. The salaries or other compensation, if any, of the
officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
SPECIAL MEETINGS
SECTION 1. A special meeting of the shareholders shall be called by
the Secretary whenever (i) ordered by the Trustees or (ii) requested in writing
by the holder or holders of at least 10% of the Outstanding Shares entitled to
vote. If the Secretary, when so ordered or requested, refuses or neglects for
more than 30 days to call such special meeting, the Trustees or the Shareholders
so requesting, may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the Secretary. If
the meeting is a meeting of the Shareholders of one or more Series or classes of
Shares, but not a meeting of all Shareholders of the Trust, then only special
meetings of the Shareholders of such one or more Series or any Classes thereof
shall be entitled to notice of and to vote at such meeting.
NOTICES
SECTION 2. Except as above provided, notices of any meeting of the
Shareholders shall be given by the Secretary by delivering or mailing, postage
prepaid, to each Shareholder entitled to vote at said meeting, written or
printed notification of such meeting at least fifteen days before the meeting,
to such address as may be registered with the Trust by the Shareholder. Notice
of any Shareholder meeting need not be given to any Shareholder if a written
waiver of notice, executed before or after such meeting, is filed with the
record of such meeting, or to any Shareholder who shall attend such meeting in
person or by proxy. 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 and reasonable notice is given to persons present at the meeting and the
adjourned meeting is held
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within a reasonable time after the date set for the original meeting.
VOTING-PROXIES
SECTION 3. Subject to the provisions of the Trust Instrument,
shareholders entitled to vote may vote either in person or by proxy, provided
that either (i) an instrument authorizing such proxy to act is executed by the
Shareholder in writing and dated not more than eleven months before the meeting,
unless this instrument specifically provides for a longer period or (ii) the
adopt by resolution an electronic, telephonic, computerized or other alternative
to execution of a written instrument authorizing the proxy to act which
authorization is received no more than eleven months before the meeting. Proxies
shall be delivered to the Secretary of the Trust or other persons 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 specific
written notice to the contrary from any one of them. Unless otherwise
specifically limited by their terms, proxies shall entitle the holder thereof to
vote at any adjournment of a meeting. A proxy purporting to be exercised by or
on behalf of a Shareholder shall be deemed valid unless challenged at or prior
to its exercise and the burden in proving invalidity shall rest on the
challenger. At all meetings of the Shareholders, unless the voting is conducted
by inspectors, all questions relating to the qualifications of voting, the
validity of proxies, and the acceptance or rejection of votes shall be decided
by the Chairman of the meeting. Except as otherwise provided herein or in the
Trust Instrument, as these By-laws or such Trust Instrument may be amended or
supplemented from time to time, all matters relating to the giving, voting or
validity or 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.
PLACE OF MEETING
SECTION 4. All special meetings of the Shareholders shall be held at
the principal place of business of the Trust or at such other place in the
United States as the Trustees may designate.
ACTION WITHOUT A MEETING
SECTION 5. Any action to be taken by Shareholders may be taken without
a meeting if all shareholders entitled to vote
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on the matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such consent
shall be treated for all purposes as a vote at a meeting of the Trustees held at
the principal place of business of the Trust.
ARTICLE V
TRUSTEES' MEETINGS
SPECIAL MEETINGS
SECTION 1. Special meetings of the Trustees may be called orally or in
writing by the Chairman of the Board of Trustees or any two other Trustees.
REGULAR MEETINGS
SECTION 2. Regular meetings of the Trustees may be held at such places
and at such times as the Trustees may from time to
time determine; each Trustee present at such determination shall be deemed a
party calling the meeting and ho call or notice will be required to such Trustee
provided that any Trustee who is absent when such determination is made shall be
given notice of the determination by the Chairman or any two other Trustees, as
provided for in Section 4.04 of the Trust Instrument.
QUORUM
SECTION 3. A majority of the Trustees shall constitute a quorum for
the transaction of business and an action of a majority of the quorum shall
constitute action of the Trustees.
NOTICE
SECTION 4. Except as otherwise provided, notice of any special meeting
of the Trustees shall be given by the party calling the meeting to each Trustee,
as provided for in Section 4.04 of the Trust Instrument. A written notice may be
mailed, postage prepaid, addressed to him at his address as registered on the
books of the Trust or if not so registered, at his last known address.
PLACE OF MEETING
SECTION 5. All special meetings of the Trustees shall be held at the
principal place of business of the Trust or such other place as the Trustees may
designate. any place.
8
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SPECIAL ACTION
SECTION 6. When all the Trustees shall be present at any meeting,
however called or wherever held, or shall assent to the holding of the meeting
without notice, or shall sign a written assent thereto filed with the record of
such meeting, the acts of such meeting shall be valid as if such meeting had
been regularly held.
ACTION BY CONSENT
SECTION 7. Any action by the Trustees may be taken without a meeting
if a written consent thereto is signed by all the Trustees and filed with the
records of the Trustees' meeting. Such consent shall be treated, for all
purposes, as a vote at a meeting of the Trustees held at the principal place of
business of the Trustees.
PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE
SECTION 8. Trustees may participate in a meeting of Trustees by
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting. Any meeting conducted by
telephone shall be deemed to take place at and from the principal office of the
Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall at all times be
divided into such transferable Shares of one or more separate and distinct
Series, or classes thereof, as the Trustees shall from time to time create and
establish. The number of Shares is unlimited, and each Share of each Series or
class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preferences are established with respect to one or more classes of shares
consistent with applicable law and any rule or order to the Commission.
TRANSFER OF SHARES
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SECTION 2. The Shares of the Trust shall be transferable, so as to
affect the rights of the Trust, only by transfer recorded on the books of the
Trust, in person or by attorney.
EQUITABLE INTEREST NOT RECOGNIZED
SECTION 3. The Trust shall be entitled to treat the holder of record
of any Share or Shares of beneficial interest as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim or interest in such
Share or Shares on the part of any other person except as may be otherwise
expressly provided by law.
SHARE CERTIFICATE
SECTION 4. No certificates certifying the ownership of Shares shall be
issued except as the Trustees may otherwise authorize. The Trustees may issue
certificates to a Shareholder of any Series or class thereof for any purpose and
the issuance of a certificate to one or more Shareholders shall not require the
issuance of certificates generally. In the event that the Trustees authorize the
issuance of Share certificates, such certificate 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. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the
transfer or shareholder services agent may either issue receipts therefor or may
keep accounts upon the books of the Trust for the record holders of such Shares,
who shall in either case be deemed, for all purposes hereunder, to be holders of
certificates for such Shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
LOSS OF CERTIFICATE
SECTION 5. In the case of the alleged loss or destruction or the
mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
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DISCONTINUANCE OF ISSUANCE OF CERTIFICATES
SECTION 6. 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.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and 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.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status
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as such, whether or not the Trustees would have the power to indemnify him
against such liability.
The Trust may not acquire or obtain a contract for insurance that
protects or purports to protect any Trustee or officer of the Trust against any
liability to the Trust or its Shareholder to which he would otherwise be subject
by reason or willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form bearing the inscription:
"FEDERAL FUNDS TRUST
THE STATE OF DELAWARE"
The form of the seal shall be subject to alternation by the Trustees
and the seal my be used by causing it or a facsimile to be impressed or affixed
or printed or otherwise reproduced.
Any officer or Trustee of the trust shall have authority to affix the
seal of the Trust to any document, instrument or other paper executed and
delivered by or on behalf of the Trust; however, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on and its absence
shall not impair the validity of any document, instrument, or other paper
executed by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust shall end on such date as the Trustees shall from
time to time determine.
ARTICLE XII
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees of the
Trust by a majority vote.
ARTICLE XIII
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REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust including financial statements which shall
be certified at least annually by independent public accountants.
ARTICLE XIV
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.
13
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Exhibit 2(b)
Revised Bylaws of Registrant
<PAGE>
BYLAWS
OF
FGIC PUBLIC TRUST
These Bylaws of FGIC Public Trust (the "Trust"), a Delaware business
trust, are subject to the Trust's Instrument of Trust dated February 24, 1994 as
from time to time amended, supplemented or restated (the "Trust Instrument").
Capitalized terms used herein which are defined in the Trust Instrument are used
as therein defined.
ARTICLE I
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 such other offices and places of business as
the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
OFFICERS
SECTION 1. The officers of the Trust shall be President, a
Treasurer, a Secretary, and such other officers as the Trustees may from time
to time elect. The Trustees may delegate to any officer or committee the
power to appoint any subordinate officers or agents. It shall not be
necessary for any Trustee or other officer to be a holder of Shares in the
Trust.
ELECTION OF OFFICERS
SECTION 2. The Treasurer and Secretary shall be chosen by the
Trustees. The President shall be chosen by and from the Trustees. Two or more
offices may be held by a single person except the offices or President and
Secretary. Subject to the provisions of Section 12 hereof, the President, the
Treasurer and the Secretary shall each hold office until their successors are
chosen and qualified and all other officers shall hold office at the pleasure of
the Trustees.
RESIGNATIONS
2
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SECTION 3. Any officer of the Trust may resign, notwithstanding
Section 2 hereof, by filing a written resignation with the President, the
Trustees or the Secretary, which resignation shall take effect on being so filed
or at such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
MANAGEMENT OF THE TRUST-GENERAL
SECTION 1. 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 and desirable to carry out their responsibilities, so far as such
powers are not inconsistent with the laws of the State of Delaware, the Trust
Instrument or with these Bylaws.
EXECUTIVE AND OTHER COMMITTEES
SECTION 2. The Trustees may elect from their own number an executive
committee, which shall have any or all the powers of the Trustees while the
Trustees are not in session. The Trustees may also elect from their own number
other committees from time to time. The number composing such committees and the
powers conferred upon the same are to be determined by vote of a majority of the
Trustees. All members of such committees shall hold such offices at the pleasure
of the Trustees. The Trustees may abolish any such committee at any time. Any
committee to which the Trustees delegate any of their powers or duties shall
keep records of its meetings and shall report its actions to the Trustees. The
Trustees shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
COMPENSATION
SECTION 3. Each Trustee and each committee member may receive such
compensation for his services and reimbursement for his expenses as may be fixed
from time to time by resolution of the Trustees.
CHAIRMAN OF THE TRUSTEES
SECTION 4. The Trustees shall appoint from among their number a
Chairman who shall serve as such at the pleasure of the Trustees. When present,
he shall preside at all meetings of the
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Shareholders and the Trustees, and he may, subject to the approval of the
Trustees, appoint a Trustee to preside at such meetings in his absence. He shall
perform such other duties as the Trustees may from time to time designate.
PRESIDENT
SECTION 5. The President shall be the chief executive officer of the
Trust and, subject to the direction of the Trustees, shall have general
administration of the business and policies of the Trust. 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 thereof. He shall also have the power to employ attorneys,
accountants and other advisers and agents and counsel for the Trust. The
President shall perform such duties additional to all of the foregoing as the
Trustees may from time to designate.
TREASURER
SECTION 6. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall perform
such additional duties as the Trustees may from time to time designate.
SECRETARY
SECTION 7. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of the seal of the Trust. The
Secretary shall perform such additional duties as the Trustees may from time to
time designate.
VICE PRESIDENT
SECTION 8. Any Vice President of the Trust shall perform such duties
as the Trustees or the President may from time to time designate. 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 senior of the Vice Presidents
present and able to act) may perform all the duties of
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the President and, when so acting, shall have all the powers of and be subject
to all the restrictions upon the President.
ASSISTANT TREASURER
SECTION 8. Any Assistant Treasurer of the Trust shall perform such
duties as the Trustees or the Treasurer may from time to time designate, and, in
the absence of the Treasurer, the senior Assistant Treasurer, present and able
to act, may perform all the duties of the Treasurer.
ASSISTANT SECRETARY
SECTION 9. Any Assistant Secretary of the Trust shall
perform such duties as the Trustees or the Secretary may from time to time
designate, and, in the absence of the Secretary, the senior Assistant Secretary,
present and able to act, may perform all the duties of the Secretary.
SUBORDINATE OFFICERS
SECTION 10. The Trustees from time to time may appoint such other
officers or 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 from time to time may delegate to
one or more officers or committees of Trustees the power to appoint any such
subordinate officers or agents and to prescribe their respective terms of
office, authorities and duties.
SURETY BONDS
SECTION 11. 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, as amended (lithe 1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("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 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 hands.
REMOVAL
SECTION 12. Any officer may be removed from office whenever in the
judgment of the Trustees the best interest of the Trust will be served thereby,
by the vote of a majority of the Trustees given at any regular meeting or any
special meeting of the Trustees. In addition, any officer or agent appointed in
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accordance with the provisions of Section 10 hereof may be removed, either with
or without cause, by any officer upon whom such power of removal shall have been
conferred by the Trustees.
REMUNERATION
SECTION 13. The salaries or other compensation, if any, of the
officers of the Trust shall be fixed from time to time by resolution of the
Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
SPECIAL MEETINGS
SECTION 1. A special meeting of the shareholders shall be called by
the Secretary whenever (i) ordered by the Trustees or (ii) requested in writing
by the holder or holders of at least 10 of the Outstanding Shares entitled to
vote. If the Secretary, when so ordered or requested, refuses or neglects for
more than 30 days to call such special meeting, the Trustees or the Shareholders
so requesting, may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the Secretary. If
the meeting is a meeting of the Shareholders of one or more Series or classes of
Shares, but not a meeting of all Shareholders of the Trust, then only special
meetings of the Shareholders of such one or more Series or any Classes thereof
shall be entitled to notice of and to vote at such meeting.
NOTICES
SECTION 2. Except as above provided, notices of any meeting of the
Shareholders shall be given by the Secretary by delivering or mailing, postage
prepaid, to each Shareholder entitled to vote at said meeting, written or
printed notification of such meeting at least fifteen days before the meeting,
to such address as may be registered with the Trust by the Shareholder. Notice
of any Shareholder meeting need not be given to any Shareholder if a written
waiver of notice, executed before or after such meeting, is filed with the
record of such meeting, or to any Shareholder who shall attend such meeting in
person or by proxy. 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 and reasonable notice is given to persons present at the meeting and the
adjourned meeting is held within a reasonable time after the date set for the
original meeting.
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VOTINQ-PROXIES
SECTION 3. Subject to the provisions of the Trust Instrument,
shareholders entitled to vote may vote either in person or by proxy, provided
that either (i) an instrument authorizing such proxy to act is executed by the
Shareholder in writing and dated not more than eleven months before the meeting,
unless this instrument specifically provides for a longer period or (ii) the
Trustees adopt by resolution an electronic, telephonic, computerized or other
alternative to execution of a written instrument authorizing the proxy to act
which authorization is received no more than eleven months before the meeting.
Proxies shall be delivered to the Secretary of the Trust or other persons
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 specific written notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden in proving invalidity
shall rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the qualifications
of voting, the validity of proxies, and the acceptance or rejection of votes
shall be decided by the Chairman of the meeting. Except as otherwise provided
herein or in the Trust Instrument, as these By-laws or such Trust Instrument may
be amended or supplemented from time to time, all matters relating to the
giving, voting or validity or 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.
PLACE OF MEETING
SECTION 4. All special meetings of the Shareholders shall be held at
the principal place of business of the Trust or at such other place in the
United States as the Trustees may designate.
ACTION WITHOUT A MEETING
SECTION 5. Any action to be taken by Shareholders may be taken without
a meeting if all shareholders entitled to vote on the matter consent to the
action in writing and the written consents are filed with the records of
meetings of Shareholders of the Trust. Such consent shall be treated for all
purposes as a
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vote at a meeting of the Trustees held at the principal place of business of the
Trust.
ARTICLE V
TRUSTEES' MEETINGS
SPECIAL MEETINGS
SECTION 1. Special meetings of the Trustees may be called orally or in
writing by the Chairman of the Board of Trustees or any two other Trustees.
REGULAR MEETINGS
SECTION 2. Regular meetings of the Trustees may be held at such
places and at such times as the Trustees may from time to time determine;
each Trustee present at such determination shall be deemed a party calling
the meeting and no call or notice will be required to such Trustee provided
that any Trustee who is absent when such determination is made shall be given
notice of the determination by the Chairman or any two other Trustees, as
provided for in Section 4.04 of the Trust Instrument.
QUORUM
SECTION 3. A majority of the Trustees shall constitute a quorum for
the transaction of business and an action of a majority of the quorum shall
constitute action of the Trustees.
NOTICE
SECTION 4. Except as otherwise provided, notice of any special meeting
of the Trustees shall be given by the party calling the meeting to each Trustee,
as provided for in Section 4.04 of the Trust Instrument. A written notice may be
mailed, postage prepaid, addressed to him at his address as registered on the
books of the Trust or if not so registered, at his last known address.
PLACE OF MEETING
SECTION 5. All special meetings of the Trustees shall be held at
the principal place of business of the Trust or such other place as the
Trustees may designate. Any meeting may adjourn to any place.
SPECIAL ACTION
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SECTION 6. When all the Trustees shall be present at any meeting,
however called or wherever held, or shall assent to the holding of the meeting
without notice, or shall sign a written assent thereto filed with the record of
such meeting, the acts of such meeting shall be valid as if such meeting had
been regularly held.
ACTION BY CONSENT
SECTION 7. Any action by the Trustees may be taken without a meeting
if a written consent thereto is signed by all the Trustees and filed with the
records of the Trustees' meeting. Such consent shall be treated, for all
purposes, as a vote at a meeting of the Trustees held at the principal place of
business of the Trustees.
PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE
SECTION 8. Trustees may participate in a meeting of Trustees by
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting. Any
meeting conducted by telephone shall be deemed to take place at and from the
principal office of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall at all times be
divided into such transferable Shares of one or more separate and distinct
Series, or classes thereof, as the Trustees shall from time to time create and
establish. The number of Shares is unlimited, and each Share of each Series or
class thereof shall be without par value and shall represent an equal
proportionate interest with each other Share in the Series, none having priority
or preference over another, except to the extent that such priorities or
preferences are established with respect to one or more classes of shares
consistent with applicable law and any rule or order to the Commission.
TRANSFER OF SHARES
SECTION 2. The Shares of the Trust shall be transferable, so as to
affect the rights of the Trust, only by transfer recorded on the books of the
Trust, in person or by attorney.
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EQUITABLE INTEREST NOT RECOGNIZED
SECTION 3. The Trust shall be entitled to treat the holder of record
of any Share or Shares of beneficial interest as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim or interest in such
Share or Shares on the part of any other person except as may be otherwise
expressly provided by law.
SHARE CERTIFICATE
SECTION 4. No certificates certifying the ownership of Shares shall be
issued except as the Trustees may otherwise authorize. The Trustees may issue
certificates to a Shareholder of any Series or class thereof for any purpose and
the issuance of a certificate to one or more Shareholders shall not require the
issuance of certificates generally. In the event that the Trustees authorize the
issuance of Share certificates, such certificate 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. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the
transfer or shareholder services agent may either issue receipts therefor or may
keep accounts upon the books of the Trust for the record holders of such Shares,
who shall in either case be deemed, for all purposes hereunder, to be holders of
certificates for such Shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
LOSS OF CERTIFICATE
SECTION 5. In the case of the alleged loss or destruction or the
mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
DISCONTINUANCE OF ISSUANCE OF CERTIFICATES
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SECTION 6. 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.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and 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.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
INSURANCE OF OFFICERS TRUSTEES. AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Trustees would
have the power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance that
protects or purports to protect any Trustee or officer of the Trust against any
liability to the Trust or its Shareholder to which he would otherwise be subject
by reason or
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willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form bearing the inscription:
"FGIC PUBLIC TRUST
THE STATE OF DELAWARE"
The form of the seal shall be subject to alternation by the Trustees
and the seal my be used by causing it or a facsimile to be impressed or affixed
or printed or otherwise reproduced.
Any officer or Trustee of the trust shall have authority to affix the
seal of the Trust to any document, instrument or other paper executed and
delivered by or on behalf of the Trust; however, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on and its absence
shall not impair the validity of any document, instrument, or other paper
executed by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust shall end on such date as the Trustees-shall from
time to time determine.
ARTICLE XII
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees of the
Trust by a majority vote.
ARTICLE XIII
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust including financial statements which shall
be certified at least annually by independent public accountants.
ARTICLE XIV
HEADINGS
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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.
13
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INVESTMENT ADVISORY AGREEMENT
FINANCIAL INVESTORS TRUST
U.S. TREASURY MONEY MARKET FUND
Agreement made as of March 21, 1997 between GE INVESMENT MANAGEMENT INCORPORATED
("GEIM") and FINANCIAL INVESTORS TRUST (the "Trust") on behalf of the U.S.
Treasury Money Market Fund, a series of the Trust (the "Fund").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, GEIM is a Delaware corporation registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust wishes to retain GEIM to serve as investment adviser to the
Fund and GEIM agrees to provide such services, in the manner and on the terms
set forth herein.
NOW, THERFORE, the parties hereto agree as follows:
Section 1. SERVICES AS INVESTMENT ADVISER.
(a) The Trust hereby appoints GEIM as investment adviser with respect to
the Fund's assets for the period and on the terms set forth in this agreement.
GEIM accepts this appointment and hereby agrees to render the services herein
set forth for the compensation herein provided.
(b) The Trust anticipates that the Fund will employ its capital by
investing and reinvesting in investments of the types specified in the Trust's
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement"), and in the manner and to the extent approved by the
Board of Trustees of the Trust. Copies of the Registration Statement have been
submitted to GEIM.
(c) Subject to the supervision and direction of the Trust's Board of
Trustees, GEIM, as the Fund's investment adviser, will manage the Fund's assets
in accordance with the investment objective and policies of the Fund as stated
in the Registration Statement, will make investment decisions for the Fund and
will place purchase and sale orders for the Fund's portfolio transactions.
<PAGE>
(d) GEIM will, at its own expense, maintain sufficient staff, and employ
or retain sufficient personnel and consult with any other persons that it
determines may be necessary or useful to the performance of its obligations
under this agreement.
(e) GEIM will keep the Trust informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund from time
to time with whatever information GEIM believes is appropriate for this purpose.
(f) GEIM shall provide (or arrange for its affiliates to provide)
administrative assistance which shall include compiling statistical and research
data required for the preparation of reports and statements which are
periodically distributed to the Trust's officers and Trustees. GEIM shall also
provide to the Trust and the Fund information relating to portfolio composition,
credit conditions and average maturity of the portfolio of the Fund. GEIM shall
furnish periodic reports on the investment performance of the Fund to the
Trustees of the Trust. GEIM generally shall monitor the Trust's and the Fund's
compliance with investment policies and restrictions as set forth in the
currently effective prospectus and statement of additional information relating
to the shares of the Fund under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended. GEIM shall make reports to the
Trustees of the performance of its obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Trust and the Fund as it shall determine to be desirable.
Section 2. SELECTION OF INVESTMENTS ON BEHALF OF THE FUND.
Unless otherwise set forth in the Registration Statement or directed by the
Trust, GEIM will, in selecting brokers or dealers to effect transactions on
behalf of the Fund select the best overall terms available. In so doing, GEIM
may consider the breadth of the market on the investment, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. GEIM may also consider brokerage and
research services provided to the Fund and or other accounts over which GEIM or
its affiliates exercise investment discretion. The Trust recognizes the
desirability of GEIM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Trust, thus, authorizes GEIM, to
the extent permitted by applicable law and regulations, to pay higher brokerage
commissions for the purchase and sale of securities for the Fund to brokers who
provide supplemental investment and market research and security and economic
analyses, subject to GEIM's determining in good faith that such commissions are
reasonable in terms either of the particular transaction or of the overall
responsibility of GEIM to the Fund and its other clients and that the total
commissions paid by the Fund will be reasonable in relation to the benefits to
the Fund over the long term. The Fund understands that the services provided by
those brokers
<PAGE>
may be useful to GEIM in connection with its services to other clients. In no
instance will portfolio securities be purchased from or sold to GEIM, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder. Subject to Section 5 hereof, whenever
GEIM simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other accounts advised by GEIM, the orders
will be allocated as to price and amount among all such accounts in a manner
reasonably believed to be equitable by GEIM over time to each account.
Section 3. COSTS AND EXPENSES
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will, at its own expense, pay the salaries of
all officers and employees who are employed by both it and the Trust. GEIM will
provide the Fund with investment officers who are authorized by the Trust's
Board of Trustees to execute purchases and sales of securities on behalf of the
Fund and will employ a professional staff of portfolio managers who draw upon a
variety of sources for research information for the Fund.
Section 4. COMPENSATION
In consideration of services rendered pursuant to this Agreement, the Trust
will pay GEIM at the beginning of each calendar month a fee for the previous
month that is accrued daily at the maximum annual rate of 0.15% of the average
daily net assets of the Portfolio, subject to the following schedule of waivers:
PORTION OF AVERAGE DAILY ADVISORY FEE RATE
NET ASSETS OF THE FUND
Not exceeding $500 million 0.05%
In excess of $500 million but
not exceeding $1 billion 0.075%
In excess of $1 billion but
not exceeding $1.5 billion 0.10%
In excess of $1.5 billion 0.15%
For the purpose of determining fees payable to GEIM under this Agreement,
the value of the Portfolio's net assets will be computed in the manner described
in the Registration Statement.
Section 5. SERVICES TO OTHER COMPANIES OR ACCOUNTS.
(a) The Trust understands and acknowledges, that GEIM now acts and will
continue to act as investment manager or adviser to various fiduciary or other
managed accounts ("Other Accounts") and the Trust has no objection to GEIM's so
acting, so long as that when the Fund and any Other Account served by GEIM are
prepared to invest in,
<PAGE>
or desire to dispose of the same security, available investments or
opportunities for sales will be allocated in a manner reasonably believed by
GEIM to be equitable to the Fund and the Other Account. In addition, the Trust
understands and acknowledges that GEIM may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or purchased
for the Fund with those to be sold or purchased for the Other Accounts so long
as the securities purchased or sold, as well as the expenses incurred in the
transaction, are allocated in a manner reasonably believed by GEIM to be
equitable to the Fund and the Other Accounts. The Trust recognizes that, in
some cases, these procedures may adversely affect the price paid or received by
the Fund or the size of the position obtained or disposed of by the Fund.
(b) The Trust understands and acknowledges that the persons employed by
GEIM to assist in the performance of its duties under this Agreement will not
devote their full time to that service and agrees that nothing contained in this
Agreement will be deemed to limit or restrict the right of GEIM or any affiliate
of GEIM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
Section 6. CONTINUANCE AND TERMINATION OF THE AGREEMENT.
(a) This Agreement will become effective as of March 21, 1997 and will
continue for an initial two-year term and will continue thereafter so long as
the continuance is specifically approved at least annually (a) by the Board of
Trustees of the Trust or (b) by a vote of a majority of the Fund's outstanding
voting securities, as defined in the 1940 Act, provided that in either event the
continuance is also approved by a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on the approval.
(b) This Agreement is terminable without penalty, by the Trust on not
more than 60 nor less than 30 days' written notice to GEIM, by vote of holders
of a majority of the Fund's outstanding voting securities, as defined in the
1940 Act, or by GEIM on not more than 60 nor less than 30 days' notice to the
Trust.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act or in rules adopted under the 1940 Act).
Section 7. LIMITATION OF LIABILITY
(a) GEIM will exercise its best judgment in rendering the services
described in this Agreement, except that GEIM will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, other than a loss resulting
from willful misfeasance, bad faith or gross
<PAGE>
negligence on the part of GEIM in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, director, employee or agent of GEIM, who may be or
become an officer, trustee, employee or agent of the Trust, will be deemed, when
rendering services to the Trust or acting on any business of the Trust, to be
rendering services to, or acting solely for, the Trust and not as an officer,
director, employee or agent, or one under the control or direction of, GEIM even
though paid by GEIM.
Section 8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the applicable provisions of the Investment
Company Act of 1940, as amended. To the extent that the applicable laws of the
State of New York, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
Section 9. MISCELLANEOUS.
The Trust recognizes that directors, officers and employees of GEIM and its
affiliates may from time to time serve as directors, trustees, officers and
employees of corporations, partnerships, group trusts and business trusts
(including other investment companies) and that such other entities may include
the initials "GE" or the words "General Electric" as part of their name, and
that GEIM or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEIM ceases to act
as the investment adviser to the Fund, the Trust agrees that, at GEIM's request,
any license granted to the Trust for the use of the initials "GE" will terminate
and that the Trust will cease and discontinue completely further use of such
initials.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
FINANCIAL INVESTORS TRUST
By:
--------------------------
Name: W. Robert Alexander
Title: Chairman
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By:
--------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
<PAGE>
INVESTMENT ADVISORY AGREEMENT
FINANCIAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET FUND
Agreement made as of March 21, 1997 between GE INVESMENT MANAGEMENT INCORPORATED
("GEIM") and FINANCIAL INVESTORS TRUST (the "Trust") on behalf of the U.S.
Government Money Market Fund, a series of the Trust (the "Fund").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, GEIM is a Delaware corporation registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust wishes to retain GEIM to serve as investment adviser to the
Fund and GEIM agrees to provide such services, in the manner and on the terms
set forth herein.
NOW, THERFORE, the parties hereto agree as follows:
Section 1. SERVICES AS INVESTMENT ADVISER.
(a) The Trust hereby appoints GEIM as investment adviser with respect to
the Fund's assets for the period and on the terms set forth in this agreement.
GEIM accepts this appointment and hereby agrees to render the services herein
set forth for the compensation herein provided.
(b) The Trust anticipates that the Fund will employ its capital by
investing and reinvesting in investments of the types specified in the Trust's
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement"), and in the manner and to the extent approved by the
Board of Trustees of the Trust. Copies of the Registration Statement have been
submitted to GEIM.
(c) Subject to the supervision and direction of the Trust's Board of
Trustees, GEIM, as the Fund's investment adviser, will manage the Fund's assets
in accordance with the investment objective and policies of the Fund as stated
in the Registration Statement, will make investment decisions for the Fund and
will place purchase and sale orders for the Fund's portfolio transactions.
<PAGE>
(d) GEIM will, at its own expense, maintain sufficient staff, and employ
or retain sufficient personnel and consult with any other persons that it
determines may be necessary or useful to the performance of its obligations
under this agreement.
(e) GEIM will keep the Trust informed of developments materially
affecting the
Fund, and will, on its own initiative, furnish the Fund from time to time with
whatever
information GEIM believes is appropriate for this purpose.
(f) GEIM shall provide (or arrange for its affiliates to provide)
administrative assistance which shall include compiling statistical and research
data required for the preparation of reports and statements which are
periodically distributed to the Trust's officers and Trustees. GEIM shall also
provide to the Trust and the Fund information relating to portfolio composition,
credit conditions and average maturity of the portfolio of the Fund. GEIM shall
furnish periodic reports on the investment performance of the Fund to the
Trustees of the Trust. GEIM generally shall monitor the Trust's and the Fund's
compliance with investment policies and restrictions as set forth in the
currently effective prospectus and statement of additional information relating
to the shares of the Fund under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended. GEIM shall make reports to the
Trustees of the performance of its obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Trust and the Fund as it shall determine to be desirable.
Section 2. SELECTION OF INVESTMENTS ON BEHALF OF THE FUND.
Unless otherwise set forth in the Registration Statement or directed by the
Trust, GEIM will, in selecting brokers or dealers to effect transactions on
behalf of the Fund select the best overall terms available. In so doing, GEIM
may consider the breadth of the market on the investment, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. GEIM may also consider brokerage and
research services provided to the Fund and or other accounts over which GEIM or
its affiliates exercise investment discretion. The Trust recognizes the
desirability of GEIM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Trust, thus, authorizes GEIM, to
the extent permitted by applicable law and regulations, to pay higher brokerage
commissions for the purchase and sale of securities for the Fund to brokers who
provide supplemental investment and market research and security and economic
analyses, subject to GEIM's determining in good faith that such commissions are
reasonable in terms either of the particular transaction or of the overall
responsibility of GEIM to the Fund and its other clients and that the total
commissions paid by the Fund will be reasonable in relation to the benefits to
the Fund over the long term. The Fund understands that the services provided by
those brokers
<PAGE>
may be useful to GEIM in connection with its services to other clients. In no
instance will portfolio securities be purchased from or sold to GEIM, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder. Subject to Section 5 hereof, whenever
GEIM simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other accounts advised by GEIM, the orders
will be allocated as to price and amount among all such accounts in a manner
reasonably believed to be equitable by GEIM over time to each account.
Section 3. COSTS AND EXPENSES
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will, at its own expense, pay the salaries of
all officers and employees who are employed by both it and the Trust. GEIM will
provide the Fund with investment officers who are authorized by the Trust's
Board of Trustees to execute purchases and sales of securities on behalf of the
Fund and will employ a professional staff of portfolio managers who draw upon a
variety of sources for research information for the Fund.
Section 4. COMPENSATION
In consideration of services rendered pursuant to this Agreement, the Trust
will pay GEIM at the beginning of each calendar month a fee for the previous
month that is accrued daily at the maximum annual rate of 0.08% of the average
daily net assets of the Portfolio, subject to the following schedule of waivers:
PORTION OF AVERAGE DAILY ADVISORY FEE RATE
NET ASSETS OF THE FUND
Not exceeding $500 million 0.04%
In excess of $500 million but
not exceeding $1 billion 0.06%
In excess of $1 billion 0.08%
For the purpose of determining fees payable to GEIM under this Agreement,
the value of the Portfolio's net assets will be computed in the manner described
in the Registration Statement.
Section 5. SERVICES TO OTHER COMPANIES OR ACCOUNTS.
(a) The Trust understands and acknowledges, that GEIM now acts and will
continue to act as investment manager or adviser to various fiduciary or other
managed accounts ("Other Accounts") and the Trust has no objection to GEIM's so
acting, so long as that when the Fund and any Other Account served by GEIM are
prepared to invest in, or desire to dispose of the same security, available
investments or opportunities for sales will be allocated in a manner reasonably
believed by GEIM to be equitable to the Fund
<PAGE>
and the Other Account. In addition, the Trust understands and acknowledges that
GEIM may, to the extent permitted by applicable laws and regulations, aggregate
securities to be sold or purchased for the Fund with those to be sold or
purchased for the Other Accounts so long as the securities purchased or sold, as
well as the expenses incurred in the transaction, are allocated in a manner
reasonably believed by GEIM to be equitable to the Fund and the Other Accounts.
The Trust recognizes that, in some cases, these procedures may adversely affect
the price paid or received by the Fund or the size of the position obtained or
disposed of by the Fund.
(b) The Trust understands and acknowledges that the persons employed by
GEIM to assist in the performance of its duties under this Agreement will not
devote their full time to that service and agrees that nothing contained in this
Agreement will be deemed to limit or restrict the right of GEIM or any affiliate
of GEIM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
Section 6. CONTINUANCE AND TERMINATION OF THE AGREEMENT.
(a) This Agreement will become effective as of March 21, 1997 and will
continue for an initial two-year term and will continue thereafter so long as
the continuance is specifically approved at least annually (a) by the Board of
Trustees of the Trust or (b) by a vote of a majority of the Fund's outstanding
voting securities, as defined in the 1940 Act, provided that in either event the
continuance is also approved by a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on the approval.
(b) This Agreement is terminable without penalty, by the Trust on not
more than 60 nor less than 30 days' written notice to GEIM, by vote of holders
of a majority of the Fund's outstanding voting securities, as defined in the
1940 Act, or by GEIM on not more than 60 nor less than 30 days' notice to the
Trust.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act or in rules adopted under the 1940 Act).
Section 7. LIMITATION OF LIABILITY
(a) GEIM will exercise its best judgment in rendering the services
described in this Agreement, except that GEIM will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, other than a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of GEIM in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of GEIM, who may be or become an
<PAGE>
officer, trustee, employee or agent of the Trust, will be deemed, when rendering
services to the Trust or acting on any business of the Trust, to be rendering
services to, or acting solely for, the Trust and not as an officer, director,
employee or agent, or one under the control or direction of, GEIM even though
paid by GEIM.
Section 8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the applicable provisions of the Investment
Company Act of 1940, as amended. To the extent that the applicable laws of the
State of New York or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
Section 9. MISCELLANEOUS.
The Trust recognizes that directors, officers and employees of GEIM and its
affiliates may from time to time serve as directors, trustees, officers and
employees of corporations, partnerships, group trusts and business trusts
(including other investment companies) and that such other entities may include
the initials "GE" or the words "General Electric" as part of their name, and
that GEIM or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEIM ceases to act
as the investment adviser to the Fund, the Trust agrees that, at GEIM's request,
any license granted to the Trust for the use of the initials "GE" will terminate
and that the Trust will cease and discontinue completely further use of such
initials.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
FINANCIAL INVESTORS TRUST
By:
----------------------------
Name: W. Robert Alexander
Title: Chairman
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By:
-----------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
<PAGE>
DISTRIBUTION AGREEMENT
March 15, 1994
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202
Dear Sirs:
This is to confirm that in consideration of the agreements hereinafter
contained, the undersigned, Financial Investors Trust, a Delaware business trust
(the "Trust"), has agreed that you shall be, for the period of this Agreement,
the distributor of shares of beneficial interest (the "Shares") of the Trust's
U.S. Treasury Money Market Fund, U.S. Government Money Market Fund and any other
Funds offered by the Trust (the "Funds").
1. SERVICES AS DISTRIBUTOR
1.1 You will act as agent for the distribution of shares in
accordance with the instructions of the Trust's Board of Trustees and
registration statement and prospectuses then in effect with respect to the
Funds under the Securities Act of 1933, as amended, and will transmit
promptly any orders received by you for the purchase or redemption of Shares
either directly to the Trust's transfer agent for the Fund involved or to any
qualified broker/dealer for transmittal to said agent.
1.2(a) You agree to use your best efforts to solicit orders for the sale
of Shares. You, at your expense, shall finance appropriate activities which you
deem reasonable which are primarily intended to result in the sale of Shares,
including but not limited to, advertising, compensation of underwriters, dealers
and sales personnel, the printing and mailing of prospectuses to other than
current shareholders, and the printing and mailing of sales literature. In
addition, you will provide one or more persons, during normal business hours, to
respond to telephone questions with respect to the Funds.
1.2(b) All shares of the Funds offered for sale by you shall be offered
for sale to the public at a price per share (the "offering price") equal to
their net asset value (determined in the manner set forth in the Trust's
Declaration of Trust and then current prospectuses). The offering price, if not
an exact multiple of one cent, shall be adjusted to the nearest cent.
1.3 You shall act as distributor of the Shares in compliance with
all applicable laws, rules and regulations, including, without limitation,
all rules and regulations made or adopted pursuant to the Investment Company
Act of 1940, as amended, by the Securities and Exchange Commission or any
securities association registered under the Securities and Exchange Act of
1934, as amended. YOU SHALL NOT MAKE OFFERS OF SALE OF SHARES IN ANY STATE
UNLESS YOU HAVE BEEN NOTIFIED BY THE TRUST THAT SUCH SHARES HAVE BEEN
REGISTERED UNDER THE SECURITIES LAWS OF SUCH STATE, OR THAT THERE IS AN
AVAILABLE EXEMPTION FROM REGISTRATION.
<PAGE>
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, the Trust's
officers may decline to accept any orders for, or make any sales of, any Shares
until such time as they deem it advisable to accept such orders and to make such
sales and the Trust shall advise you promptly of such determination.
1.5 Except as otherwise provided for in the Administrative Agreement dated
as of February 01, 1994, by and between the Trust and you (the "Administration
Agreement"). The Trust agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Trust hereunder.
1.6 The Trust agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Trust's officers in connection with the
qualification of Shares for sale in such states as you may designate to the
Trust and the Trust may approve, and the Trust agrees to pay all expenses which
may be incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a broker under State or
Federal laws and, except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.7 The Trust shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to the Trust and the
Shares as you may reasonably request, and the Trust warrants that the statements
contained in any such information, when so signed by the Trust's officers, shall
be true and correct. Subject to the provisions of the Administration Agreement
the Trust also shall furnish you upon request with: (a) annual audited reports
of the Trust's books and accounts with respect to each of the Funds, made by
independent public accountants regularly retained by the Trust, (b) semi-annual
reports with respect to each of the Funds prepared by the Trust, and (c) from
time to time such additional information regarding the Trust's financial
condition as you may reasonably request.
1.8 The Trust represents to you that all registration statements and
prospectuses filed by the Trust with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the Shares have
been prepared in conformity with the requirements of said Act and rules and
regulations of the Securities and Exchange Commission thereunder. As used in
this agreement the terms "registration statement" and "prospectus" shall mean
any registration statement and prospectus (together with the related statement
of additional information) filed with the Securities and Exchange Commission
with respect to any of the Shares and any amendments and supplements thereto
which at any time shall have been filed with said Commission. The Trust
represents and warrants to you that any registration statement and prospectus,
when such registration statement becomes effective, will contain all statements
2
<PAGE>
required to be stated therein in conformity with said Act and the rules and
regulations of said Commission; that all statements of fact contained in any
such registration statement and prospectus will be materially true and correct
when such registration statement becomes effective; and that neither any
registration statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Trust may but shall not be obligated to
propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Trust's counsel, be necessary
or advisable. If the Trust shall not propose such amendment or amendments
and/or supplement or supplements within fifteen days after receipt by the Trust
of a written request from you to do so, you may, at your option, terminate this
agreement. The Trust shall not file any amendment to any registration statement
or supplement to any prospectus without giving you reasonable notice thereof in
advance; provided, however, that nothing contained into this agreement shall in
any way limit the Trust's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of whatever
character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
1.9 The Trust authorizes you to use any prospectus in the form furnished
to you from time to time, in connection with the sale of Shares. The Trust
agrees to indemnify, defend and hold you, your several officers and directors,
and any person who controls you within the meaning of Section 15 of the
Securities Act of 1933, as amended, (hereinafter referred to collectively as
"indemnified party") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands, or liabilities and any counsel fees in
connection therewith) which you, your officers and directors, or any such
controlling person, may incur under the Securities Act of 1933, as amended, or
under common law, or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Trust's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of or based on any omission, or alleged omission, made in any
registration statement or prospectus in reliance upon and in conformity with
information furnished to the Trust or its counsel by you and used in the
preparation thereof; and provided further that the Trust's agreement to
indemnify you and the Trust's representations and warranties herein set forth
shall not be deemed to cover any liability to the Trust or its shareholders to
which you would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in performance of your duties, or by reason of your reckless
disregard of your obligations and duties under this agreement. The Trust's
agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust's
being notified of any action brought against you, your officers and directors,
or any such controlling person, such notification to be given by letter or by
3
<PAGE>
telegram addressed to the Trust at its principal office within ten days after
the summons or other first legal process shall have been served. The failure to
so notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Trust's indemnity
agreement contained in this paragraph 1.9. The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand, or liability,
but, in such case, such defense shall be conducted by counsel of good standing
chosen by the Trust and approved by you. In the event the Trust elects to
assume the defense of any such suit and retain counsel of good standing chosen
by the Trust and approved by you, which approval shall not be unreasonably
withheld, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by the defense of any such suit, or
in case you do not reasonably approve of counsel chosen by the Trust, the Trust
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. The Trust's indemnification agreement
contained in this paragraph 1.9 and the Trust's representations and warranties
in this agreement shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of you, your officers and directors,
and their respective estates, and to the benefit of any controlling persons and
their successors. The Trust agrees promptly to notify you of the commencement
of any litigation or proceedings against the Trust or any of its officers or
trustees in connection with the issue and sale of any of the Shares.
1.10 You agree to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands, liabilities, and any
counsel fees incurred in connection therewith) which the Trust, its officers or
trustees, or any such controlling person, may incur under the Securities Act of
1933, as amended, or under common law or otherwise, but only to the extent that
such a liability or expense incurred by the Trust, its officers or trustees, or
such controlling person resulting from such claims or demands, shall arise out
of or be based upon any omission, or alleged omission, to state a material fact
in connection with such information furnished by you to the Trust, or necessary
to make such information not misleading. Your agreement to indemnify the Trust,
its officers and trustees, or any such controlling person, such notification to
be given by letter or telegram addressed to you at your principal office within
ten days after the summons or other first legal process shall have been served.
You shall have the right to control the defense of such action with counsel of
your own choosing, satisfactory to the Trust, if such action is based solely
upon such alleged misstatement or omission on your part, and in any other event
the Trust, its officers or trustees or such controlling person shall each have
the right to participate in the defense or preparation of the defense of such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Trust, its officers or trustees, or
to such controlling person by reason of any such untrue, or alleged untrue,
statement of your omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10.
4
<PAGE>
1.11 No Shares shall be offered by either you or the Trust under any of the
provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Trust's obligation to repurchase Shares from any shareholder in
accordance with the provisions of the prospectuses or Declaration of Trust.
1.12 You and the Trust each agree to advise the other promptly in writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement or
prospectuses then in effect;
(b) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the
effectiveness of the registration statement or prospectuses
then in effect or the initiation of any proceeding for that
purpose;
(c) of the happening of any event which makes untrue any
statement of a material fact made in the registration
statement or prospectuses in order to make the statements
therein not misleading; and
(d) of all the actions of the Securities and Exchange Commission with
respect to any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange Commission.
2. TERM
2.1 This agreement shall become effective as of the date hereof and,
unless sooner terminated, shall continue until February 1, 1997, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (i) the Trust's Board
of Trustees or (ii) the vote of a majority (as defined in the Investment Company
Act of 1940) of the Funds' outstanding Shares, provided that in either event its
continuance also is approved by a majority of the Trust's trustees who are not
"interested persons" (as defined in said Act) of any party to this agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. Notwithstanding anything to the contrary in this Agreement, you may
not terminate this Agreement prior to the later of: (i) the
5
<PAGE>
Administration Agreement; or (ii) the effectiveness of any termination notice
pursuant to the Administration Agreement.
3. MISCELLANEOUS
3.1 The Trust recognizes that from time to time your directors, officers
and employees may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trust may include the name ALPS as part of their
name, and that you or your affiliates may enter into investment advisory or
other agreements with such other corporations and trusts.
3.2 The names "Financial Investors Trust" and "Trustees of Financial
Investors Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated Feb. 23, 1994, which is hereby referred to and a copy
of which is on file at the office of the State Secretary of State of Delaware
and the principal office of the Trust. The obligations of "Financial Investors
Trust" entered into in the name of or on behalf thereof by any of its trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the trustees, shareholders, or representatives of
the Trust personally, but bind only the Trust property belonging to such class
for the enforcement of any claims against the Trust.
3.3 No substantive amendment of this Agreement shall be effective as to
the Trust until approved by vote of a majority of the outstanding voting
securities of the Trust.
3.4 No provision of this agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or determination
is sought.
3.5 This agreement shall be governed by Colorado law.
3.6 This agreement shall not be assigned by a party without the prior
written consent of the other party.
Please confirm that the foregoing is in accordance with your understanding
by indicating your acceptance hereof at the place below indicated, whereupon it
shall become a binding agreement between us.
Very truly yours,
FINANCIAL INVESTORS TRUST
By:
---------------------------
6
<PAGE>
Accepted:
ALPS Mutual Funds Services, Inc.
By:
-----------------------------
7
<PAGE>
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
April 15, 1997
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202
Dear Sirs:
Financial Investors Trust, a Massachusetts business trust (the
"Trust"), herewith confirms its agreement with ALPS Mutual Funds Services, Inc.
("ALPS") as follows:
WHEREAS, the Trust desires to employ the capital of its U.S. Treasury Money
Market Fund, U.S. Government Money Market Fund and any other fund to be offered
by the Trust designated by the parties hereto and made subject to this Agreement
(each, a "Fund" and collectively, "the "Funds") by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
within each Fund's Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be submitted to ALPS,
and resolutions of the Trust's Board of Trustees;
AND WHEREAS, the Trust desires to employ ALPS as its administrator for the
Funds;
AND WHEREAS, the Trust and ALPS wish to amend and restate their Administration
Agreement dated as of March 15, 1994 to clarify that the calculation of fees
hereunder shall be determined by computing the assets of each Fund subject to
this Agreement separately from each other Fund and deriving the fee therefore
separately for each Fund rather than on an aggregate basis;
NOW THEREFORE, the parties hereto agree as follows:.
1. SERVICES AS ADMINISTRATOR
Subject to the direction and control of the Board of Trustees of the
Trust, ALPS will: (a) assist in maintaining office facilities (which may be in
the offices of ALPS or a corporate affiliate but shall be in such location as
the Trust and ALPS shall reasonably determine); (b) furnish clerical services
and stationery and office supplies; (c) compile data for and prepare with
respect to the Funds timely Notices to the Securities and Exchange Commission
required pursuant to Rule 24f-2 under the Investment Company Act of 1940 (the
"1940 Act") and Semi-Annual Reports on Form N-SAR; (d) coordinate execution and
filing by the Trust of all federal and state tax returns and required tax
filings other than those required to be made by the Trust's custodian; (e)
prepare compliance filings pursuant to state securities laws with the advice of
the Trust's counsel; (f) assist to the extent requested by the Trust with the
Trust's preparation of Annual and Semi-Annual
<PAGE>
Reports to the Funds shareholders and Registration Statements for the Funds (on
Form N-1A or any replacement therefor); (g) monitor the Fund's expense accruals
and pay all expenses on proper authorization from the Funds; (h) monitor the
Fund's status as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended from time to time; (i) maintain the
Fund's fidelity bonds as required by the 1940 Act; (j) monitor compliance with
the policies and limitations of each fund as set forth in the Prospectus,
Statement of Additional Information, Code of Regulations and Declaration of
Trust; and (k) generally assist in the Fund's operations; (l) perform fund
accounting and pricing as set out in the "Bookkeeping and Pricing Agreement";
(m) perform Transfer Agency as set out in the "Transfer Agency Agreement" and
800-line servicing; (n) Monitor the costs and coordinate custodial services as
performed by a bank contracted by ALPS; (o) cover the costs of external audit
and tax work performed by one of the "big six" accounting firms determined by
ALPS; (p) monitor and pay Securities and Exchange Commission registration fees;
(q) all costs involved with the coordination and printing of the Prospectus,
Semi-Annual Report, Annual Report, the Statement of Additional Information and
the account applications; (r) payment of trustee fees up to a maximum amount of
$36,000 per year. (Bob Alexander will serve as trustee at no compensation.
William Paston will serve as an officer of the Trust as Vice President, also at
no cost to the Fund.); (s) coordinate and pay for fund ratings, provided by two
of the major ratings agencies; (t) provide NASD licensing and training to the
Financial Investors Trust mutual fund sales force (u) act as principal
underwriter and distributor of the Fund's securities pursuant to a Distribution
Agreement. The selected sales force is subject to review and approval by ALPS.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
ALPS hereby agrees that all records which it maintains for each Fund are the
property of the Trust and further agrees to surrender promptly to the Trust any
of such records upon the Trust's request. ALPS further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act.
2. FEES; DELEGATION; EXPENSES
In consideration of services rendered pursuant to this Agreement, the
Bookkeeping and Pricing Agreement, the Transfer Agency Agreement, the Custodian
Contract, and all other services described herein, each Fund will pay ALPS a
fee, computed daily and payable monthly, at the annual rate of .18% of the first
$500 million average daily net assets of each Fund. The next $500 million will
be at a rate of .15% of the average daily net assets and .12% of the average
daily net assets in excess of $1 billion. At all times ALPS' fee will be no
less than $62,500 per month commencing and due as of the commencement of the
Trust. The minimum annual fee will increase by $7,500 per month for each
additional Fund or class of shares in the Trust. Net asset value shall be
computed in accordance with the Fund's Prospectus and resolutions of the Trust's
Board of Trustees. The fee for the period from the day of the month of this
Agreement is entered into until the end of that month shall be pro-rated
according to the proportion which such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement.
2
<PAGE>
ALPS will from time to time employ or associate itself with such
person or persons or organizations as ALPS may believe to be desirable in the
performance of its duties. Such person or persons may be officers and employees
who are employed by both ALPS and the Trust. The compensation of such person or
persons or organizations shall be paid by ALPS and no obligation shall be
incurred on behalf of a Fund in such respect.
ALPS will bear all expenses in connection with the performance of its
services under this Agreement and all related agreements, except as otherwise
provided herein. ALPS will not bear any of the costs of Financial Investors
personnel, except with regard to licensing and training Financial Investors
mutual fund sales staff, as outlined above. Other expenses to be incurred in
the operation of the Funds, including organizational expenses, taxes, interest,
brokerage fees and commissions, state Blue Sky qualification fees, advisory
fees, insurance premiums, fidelity bond, Trust and Advisory related legal
expenses, costs of maintenance of corporate existence, travel and entertainment
expenses for Trustees in excess of $36,000, shall be borne by the Trust.
3. PROPRIETARY AND CONFIDENTIAL INFORMATION
ALPS agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Funds (and clients of said shareholders), and not to
use such record and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where ALPS may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
4. LIMITATION OF LIABILITY
ALPS shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
this Agreement and the other agreements referred to in paragraph two relates,
except for a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
5. TERM
This Agreement shall become effective the earlier of the commencement
of Fund operations or March 15, 1997, and unless sooner terminated as provided
herein, shall continue until March 15, 1997 (the "Initial Term"). Thereafter,
this Agreement shall continue automatically with respect to the Trust for
successive annual periods ending August 31 of each year, PROVIDED such
continuance is specifically approved at least annually (i) by the Trust's Board
of Trustees or (ii) by a vote of a majority of the outstanding voting securities
of the Fund (as defined in the 1940 Act), and PROVIDED further that in either
event such continuance is also approved by a majority of the Trust's
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Trustees who are not interested person's (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. During the Initial Term, the performance of
ALPS' obligations and duties as Administrator shall be specifically reviewed at
least annually by the Trust's Board of Trustees. During the Initial Term, this
Agreement may be terminated with respect to a Fund, without penalty, solely by
agreement of the parties or for cause (as defined below) on not less than ninety
day notice by the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund (as defined by the 1940 Act). After
the Initial Term, this Agreement may be terminated without cause or respect to a
Fund and without penalty, by the Trust's Board of Trustees, by a vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
such Fund, or by ALPS, on not less than ninety days notice.
Termination for "cause" for the Initial Term shall mean:
(i) willful misfeasance, bad faith, gross negligence, abandonment, or
reckless disregard on the part of ALPS with respect to its obligations and
duties hereunder;
(ii) Regulatory, administrative, or judicial proceedings against ALPS which
result in a determination that it has violated any rule, regulation, order, or
law and which in the reasonable judgement of the Trust's Board of Trustees,
including a majority of the Trust's Trustees who are not interested persons (as
defined in the 1940 Act) of any party to this Agreement, which substantially
impairs the performance of ALPS' obligations and duties hereunder;
(iii) financial difficulties on the part of ALPS which are evidenced by the
authorization or commencement of, or involvement by way of pleading, answer,
consent, or acquiescence in, a voluntary or involuntary case under title 11 of
the United States Code, as from time to time in effect, or any applicable law
other than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors;
(iv) Any other circumstance which in the reasonable judgement of the
Trust's Board of Trustees, including a majority of the Trust's Trustees who are
not interested persons (as defined in the 1940 Act) of any party to this
Agreement, which substantially impairs the performance of ALPS' obligations and
duties hereunder.
6. GOVERNING LAW: State of Colorado
7. OTHER PROVISIONS
The Trust recognizes that from time to time directors, officers and
employees of ALPS may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trusts may include ALPS as part of their name and
that ALPS or its affiliates may enter into administration or other agreements
with such other corporations and trusts.
4
<PAGE>
The names "Financial Investors Trust" and "Trustees of Financial Investors
Trust" refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a Declaration of
Trust dated February 23, 1994 which is hereby referred to and a copy of which is
on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of
"Financial Investors Trust" entered into in the name or on behalf thereof by any
of its trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust property belonging to such class for the enforcement of any claims
against the Trust.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very Truly Yours,
FINANCIAL INVESTORS TRUST
By
----------------------------
Name: W. Robert Alexander
Title: Chairman
Accepted:
ALPS MUTUAL FUNDS SERVICES, INC.
By
--------------------------
Name: William Paston
Title: Vice President
5
<PAGE>
CUSTODIAN CONTRACT
BETWEEN
FGIC PUBLIC TRUST
AND
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, N.A.
<PAGE>
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian with Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 3
2.3 Registration of Securities 8
2.4 Bank Accounts 9
2.5 Payments for Shares 9
2.6 Availability of Federal Funds 10
2.7 Collection of Income 10
2.8 Payment of Monies 11
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased 14
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund 14
2.11 Appointment of Agents 15
2.12 Deposit of Fund Assets in Securities Systems 15
2.12A Fund Assets Held in the Custodian's Direct Paper System 18
2.13 Segregated Account 20
2.14 Ownership Certificates for Tax Purposes 21
2.15 Proxies 21
2.16 Communications Relating to Fund Portfolio Securities 22
2.17 Proper Instructions 22
2.18 Actions Permitted Without Express Authority 23
2.19 Evidence of Authority 24
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 25
4. Records 25
5. Opinion of Trust's Independent Accountant 26
6. Reports to Trust by Independent Public Accountants 26
7. Compensation of Custodian 27
8. Responsibility of Custodian 27
9. Effective Period, Termination and Amendment 28
10. Successor Custodian 30
11. Interpretive and Additional Provisions. 32
12. Massachusetts Law to Apply 32
13. Prior Contracts 32
14. Names 32
2
<PAGE>
CUSTODIAN CONTRACT
This Contract between FGIC Public Trust, a business trust organized and
existing under the laws of Delaware, having its principal place of business at
370 Seventeenth Street, Suite 2700, Denver, Colorado 80202, hereinafter called
the "Trust" and State Street Bank and Trust Company of Connecticut, N.A., having
its principal place of business at 750 Main Street, Suite 1114, Hartford,
Connecticut, hereinafter called the "Custodian",
WITNESSETH, that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
The Trust hereby employs the Custodian as the custodian of the assets of
its Treasury Money Market Fund and its Enhanced Government Income Fund, ("the
Funds"), pursuant to the provisions of the Declaration of Trust. The parties
contemplate that the Custodian may act as custodian of additional funds to be
offered by the Trust from time to time to be designated by the parties hereto
and made subject to this Agreement. The Trust agrees to deliver to the Custodian
all securities and cash owned by the Funds, and all payments of income, payments
of principal or capital distributions received by the Funds with respect to all
securities owned by them from time to time, and the cash consideration received
by them for such new or treasury shares of capital stock ("Shares") of the Funds
as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Funds held or received by the Funds and not
delivered to the Custodian.
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<PAGE>
Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the Board of Trustees of the
Trust, and provided that the Custodian shall have no more or less responsibility
or liability to the Funds on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
The parties may from time to time execute documents to appoint State Street
Bank and Trust Company as custodian of funds other than the Funds.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUNDS HELD BY
THE CUSTODIAN.
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of a Fund all non-cash property, including all securities owned
by the Fund, other than (a) securities which are maintained pursuant to Section
2.12 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as a "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as issuing
and paying agent ("Direct Paper") which is deposited and/or maintained in the
Direct Paper System of the Custodian pursuant to Section 2.12A. THE CUSTODIAN
WILL USE ITS BEST EFFORTS TO ENSURE THAT THE SPECIFIC SECURITIES HELD BY IT
HEREUNDER WILL BE IDENTIFIABLE AS FUND ASSETS AT ALL TIMES. THE CUSTODIAN WILL
USE THE SAME CARE WITH RESPECT TO THE SAFEKEEPING OF AND NON-CASH PROPERTY HELD
BY IT HEREUNDER AS IT USES WITH RESPECT TO ITS OWN SIMILAR PROPERTY.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by each Fund held by the Custodian or in a Securities System
account of the Custodian or in the Custodian's Direct Paper book entry system
account ("Direct Paper Account") only upon receipt
4
<PAGE>
of Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of a Fund and receipt of
payment therefor;
2) Upon the receipt of payment in connection with any repurchase agreement
related to such securities entered into by a Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for portfolio securities of a Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any such
case, the cash or other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of a
Fund or into the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to Section 2.11 or
into the name or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against receipt, for examination in
accordance with "street delivery" custom; provided that in any such case,
the Custodian shall have no responsibility or liability for any loss
arising from the delivery of such securities prior to receiving
5
<PAGE>
payment for such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or
the surrender of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by a Fund,
but only against receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Trust, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for which
collateral is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery of securities owned
by a Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by a Fund
requiring a pledge of assets by the Fund, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement among a
Fund, the Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934
6
<PAGE>
("Exchange Act") and a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations, regarding escrow
or owner arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement among a
Fund, the Custodian, and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding account deposits in
connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer Agent")
for a Fund, for delivery to such Transfer Agent or to the holders of shares
in connection with distributions in kind, as may be described from time to
time in the Fund's currently effective prospectus and statement of
additional information ("prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption;
15) For any other proper Trust purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant Secretary, specifying
the securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such
securities shall be made: and
16) Upon termination of this Contract as set forth in Section 10 hereunder.
7
<PAGE>
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of each appropriate Fund
or in the name of any nominee of the Fund or of any nominee of the Custodian
which nominee shall be assigned exclusively to the Fund, unless the Trust has
authorized in writing for a particular Fund the appointment of a nominee to be
used in common with other registered investment companies having the same
investment adviser as such Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All securities accepted by the
Custodian on behalf of each Fund under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Trust directs the
Custodian to maintain the securities of a particular Fund in "street name," the
Custodian shall utilize its best efforts only to timely collect income due that
Fund on such securities and to notify the Trust on a best efforts basis of
relevant corporate actions including, without limitation, tendency of calls,
maturities, tender or exchange offers. IF SECURITIES UPON WHICH INCOME IS
PAYABLE TO A PARTICULAR FUND ARE IN DEFAULT OR PAYMENT ON SUCH SECURITIES IS
REFUSED AFTER DUE DEMAND OR PRESENTATION BY THE CUSTODIAN. THE CUSTODIAN SHALL
NOTIFY THE TRUST IN WRITING OF SUCH OCCURRENCE WITHIN ONE BUSINESS DAY FOLLOWING
THE DAY ON WHICH THE CUSTODIAN FIRST BECOMES AWARE OF SUCH DEFAULT OR REFUSAL,
PROVIDED THAT SUCH NOTIFICATION SHALL NOT NEGATE THE CUSTODIAN'S OBLIGATION TO
USE ITS BEST EFFORTS TO COLLECT SUCH INCOME.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund, subject only to draft or order by
the Custodian acting pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received by
it from or for the account of a Fund, other than cash
8
<PAGE>
maintained by a Fund in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the Custodian
for a Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; PROVIDED, however, that every
such bank or trust company shall be qualified to act as a custodian under the
Investment Company-Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees of the Trust. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity. THE CUSTODIAN WILL USE THE
SAME CARE WITH RESPECT TO THE SAFEKEEPING OF ANY CASH MAINTAINED BY IT HEREUNDER
AS IT USES WITH RESPECT TO ITS OWN CASH ASSETS.
2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
for each Fund's Shares or from the Transfer Agent of each Fund and deposit into
a Fund's account such payments as are received for Shares of a Fund issued or
sold from time to time by a Fund. The Custodian will provide timely notification
to each Fund and the Transfer Agent of any receipt by it of payments for Shares
of a Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Trust
and the Custodian, the Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to a particular Fund as of specified times agreed
upon from time to time by the Trust and the Custodian in the amount of checks
received in payment for Shares of such Fund which are deposited into the Fund's
account.
2.7 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments with
respect to registered securities held
9
<PAGE>
hereunder to which each Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to each appropriate Fund's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due a particular Fund on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the particular Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund involved
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Fund is properly entitled.
2.8 PAYMENT OF MONIES. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of each Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or options
on futures contracts for the account of the Fund involved but only (a)
against the delivery of such securities or evidence of title to such
options, futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment Company Act
of 1940, as amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the Fund
or in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the
10
<PAGE>
case of a purchase effected through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.12A; (d) in the case of repurchase
agreements entered into between the Fund and the Custodian, or another
bank, or a broker-dealer against delivery of the securities either in
certificate form or through an entry crediting the Custodian's account at
the Federal Reserve Bank with such securities or (e) for IMMEDIATE transfer
to a time deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper Instructions
from the Trust as defined in Section 2.17;
2) In connection with conversion, exchange or surrender of securities owned
by a Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by a Fund as set forth
in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by a Fund,
including. but not limited to the following payments for the account of the
Fund: interest, taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as deferred expenses; For the
payment of any dividends declared pursuant to the governing documents of a
Fund and the Trust;
6) For payment of the amount of dividends received in respect of securities
sold short;
7) For any other proper purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of
Trustees or of the Executive
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<PAGE>
Committee of the Trust signed by an officer of the Trust and certified by
its Secretary or an Assistant Secretary, 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; and
8) UPON TERMINATION OF THIS CONTRACT AS SET FORTH IN ARTICLE 10 HEREUNDER.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and every case
where payment for purchase of securities for the account of a Fund is made by
the Custodian in advance of receipt of the securities purchased in the absence
of specific written instructions from the Trust to so pay in advance, the
Custodian shall be absolutely liable to such Fund for such securities to the
same extent as if the securities had been received by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF A FUND. From such
funds as may be available for the purpose but subject to the limitations of the
Declaration of Trust and any applicable votes or resolutions of the Board of
Trustees of the Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of each Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of a Fund, the Custodian shall honor checks drawn on the
Custodian by a holder of Shares, which checks have been furnished by the Trust
to the holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Trust and the Custodian.
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<PAGE>
2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
which is itself qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Section 2 as the Custodian may from time to time direct; PROVIDED, however, that
the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by each Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities System"
in accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and Subject to the following
provisions:
1) The Custodian may keep securities of a Fund in a Securities System
provided that such securities are represented in an account ("Account") of
the Custodian in the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to securities of a Fund which
are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of a
Fund OR SHALL PAY CASH COLLATERAL AGAINST THE RETURN OF SECURITIES LOANED
BY A FUND upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such payment and
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<PAGE>
transfer for the account of the Fund. The Custodian shall transfer
securities sold OR LOANED for the account of a Fund upon (i) receipt of
advice from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such transfer and payment for the account of
the Fund. Copies of all advice from the Securities System of transfers of
securities for the account of a Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be provided to the Trust at its request.
Upon request, the Custodian shall furnish the Trust confirmation of each
transfer to or from the account of a Fund in the form of a written advice
or notice and shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the account
of the Fund.
4) The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received the initial or annual certificate, as
the case may be, required by Section 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the Custodian
shall be liable to a Fund for any loss or damage to the Fund resulting from
use of the Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities System; at
the election of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the Securities
System or any other person which the
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<PAGE>
Custodian may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any such loss or
damage.
2.12A FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The
Custodian may deposit and/or maintain securities owned by each Fund in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will be
effected in the absence of Proper Instructions, nor unless the Custodian
shall have received the initial or annual certificate, as the case may be,
required by Section 9 hereof;
2) The Custodian may keep securities of a Fund in the Direct Paper System
only if such securities are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not include any assets of
the Custodian other than assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian withrespect to securities of a Fund which
are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of a
Fund upon the making of an entry on the records of the Custodian to reflect
such payment and transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of a Fund upon the
making of an entry on the records of the Custodian to reflect such transfer
and receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Trust confirmation of each transfer to
or from the account of a Fund, in the form of a written advice or notice,
of Direct Paper on the next business day following such transfer and shall
furnish to the Trust copies of daily
15
<PAGE>
transaction sheets reflecting each day's transaction in the Securities
System for the account of the Fund;
6) The Custodian shall provide the Trust with any report on its system of
internal accounting control as the Trust may reasonably request from time
to time.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of any Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.12 hereof, (i) in accordance with the provisions
of any agreement among the Trust, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by a
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by a Fund or commodities
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purpose of compliance by a Fund with the procedures RECOMMENDED by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other proper
Trust purposes, BUT ONLY, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Trustees or of Executive Committee signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary, setting
16
<PAGE>
forth the purpose or purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of each Fund held by it and in connection with transfers of
securities.
2.15 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of a
Fund or a nominee of a Fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to each Fund such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the Trust
for each applicable Fund all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
a particular Fund and the maturity of futures contracts purchased or sold by a
particular Fund) received by the Custodian from issuers of the securities being
held for a particular Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust for each applicable Fund all
written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If a Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Trust shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
17
<PAGE>
2.17 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Contract means writing signed or initialled by one or more person or persons as
the Board of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Trust shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the authorization
by the Board of Trustees of the Trust accompanied by a detailed description of
procedures approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied that
such procedures afford adequate safeguards for each Fund's assets. For purposes
of this Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.13.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust PRIOR TO RECEIVING A
CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY CONTAINING A CONTRARY
DIRECTION OF THE BOARD OF TRUSTEES:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, PROVIDED that all such payments shall be CHARGED AGAINST AND
accounted for to the Fund involved;
2) surrender securities in temporary form for securities in definitive
form;
18
<PAGE>
3) endorse for collection, in the name of each applicable Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of each Fund except as otherwise directed
by the Board of Trustees of the Trust.
2.19 EVIDENCE OF AUTHORITY. SUBJECT TO THE PROVISIONS OF SECTION 8. the
Custodian shall be protected in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper REASONABLY believed by it to
be genuine and to have been properly executed by or on behalf of a Fund. The
Custodian may receive and accept a certified copy of a vote or resolution of the
Board of Trustees of the Trust as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or resolution or (b) of any
determination or of any action by the Board of Trustees pursuant to the Amended
and Restated Declaration of Trust as described in such vote or resolution, and
such vote or resolution may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION
OF NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Trust to keep the
books of account of the Funds and/or compute the net asset value per share of
the outstanding shares of each Fund or, if directed in writing to do so by the
Trust, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of each Fund as described in a Fund's currently effective prospectus
and shall advise the Trust and the Transfer Agent daily of the total amounts of
such net income and, if instructed in
19
<PAGE>
writing by an officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of the
Funds shall be made at the time or times described from time to time in each
respective Fund's currently effective prospectus. ADDITIONALLY. THE CUSTODIAN
WILL ASSIST GENERALLY IN THE PREPARATION OF REPORTS TO FUND SHAREHOLDERS AND
OTHERS AND PERFORM SIMILAR MINISTERIAL MATTERS.
4. RECORDS.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Funds under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-l and 31a-2 thereunder,
AND OTHER APPLICABLE FEDERAL AND STATE LAWS. ADMINISTRATIVE RULES AND
PROCEDURES. All such records shall be the property of the Trust and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by the
Funds and held by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT.
The Custodian shall take all reasonable action, as the Trust may from time
to time request, to obtain from year to year favorable opinions from the Trust's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Trust's Forms
20
<PAGE>
N-1A, and Forms N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail as may reasonably be required by the
Trust to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
7. COMPENSATION OF CUSTODIAN.
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as SET FORTH IN EXHIBIT A, and.agreed upon from time
to time between the Trust and the Custodian.
8. RESPONSIBILITY OF CUSTODIAN.
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of a three party
futures or options agreement. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this
21
<PAGE>
Contract, but shall be kept indemnified by and shall be without liability to a
Fund for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel WHO IS
REASONABLY SATISFACTORY TO THE TRUST (who may be counsel for the Trust) on all
matters, and shall be without liability for any action reasonably taken or
omitted IN GOOD FAITH pursuant to such advice.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
a Fund being liable for the payment of money or incurring liability of some
other form, the Fund involved, as a prerequisite to requiring the Custodian to
take such action, shall provide UPON WRITTEN REQUEST FROM THE CUSTODIAN
indemnity to the Custodian in an amount and form satisfactory to it.
If the Trust requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act, willful misconduct OR
BAD FAITH, any property at any time held for the account of the Fund involved
shall be security therefor and should that Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of assets only of that Fund to the extent necessary to obtain
reimbursement.
9. EFFECTIVE PERIOD. TERMINATION AND AMENDMENT.
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement
22
<PAGE>
of the parties hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than SIXTY (60) DAYS after the date of
such delivery or mailing; PROVIDED, however that the Custodian shall not act
under Section 2.12 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Trustees of the Trust
has approved the initial use of a particular Securities System for a particular
Fund and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by a particular Fund
of such Securities System, as required in each-case by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not act
under Section 2.12A hereof in the absence of receipt of an initial certificate
of the Secretary or an Assistant Secretary that the Board of Trustees has
approved the initial use of the Direct Paper System for a particular Fund and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has reviewed the use by a particular Fund of the
Direct Paper System; PROVIDED FURTHER, however, that the Trust shall not amend
or terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust of the Trust as from
time to time in effect, and further provided, that the Trust may at any time by
action of its Board of Trustees (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction OR UPON THE CUSTODIAN'S NO LONGER
BEING QUALIFIED TO ACT AS THE FUNDS' CUSTODIAN UNDER APPLICABLE LAW.
23
<PAGE>
Upon termination of the Contract, the Trust shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements ACCRUED PRIOR
TO TERMINATION.
10. SUCCESSOR CUSTODIAN.
If a successor custodian shall be appointed by the Board of Trustees of the
Trust, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, ALL SECURITIES (DULY ENDORSED AND IN
THE FORM FOR TRANSFER), FUNDS AND OTHER PROPERTY HELD BY IT HEREUNDER AND ALL
OTHER INSTRUMENTS AND RECORDS RELATIVE TO SUCH SECURITIES FUNDS AND OTHER
PROPERTY, and shall transfer to an account of the successor custodian all of the
Funds' securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of Trustees
of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties, AND ALL OTHER INSTRUMENTS AND RECORDS
RELATIVE THERETO, in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, AND
IS OTHERWISE QUALIFIED TO ACT AS THE FUNDS' CUSTODIAN UNDER THE INVESTMENT
COMPANY ACT OF 1940 AND OTHER APPLICABLE LAW, doing business in Boston,
Massachusetts, of its own selection, (UPON PROPER NOTIFICATION OF THE TRUST),
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities, funds and
other properties held by the
24
<PAGE>
Custodian and all instruments held by the Custodian relative thereto and all
other property AND RECORDS held by it under this Contract and to transfer to an
account of such successor custodian all of the Funds' securities held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Contract, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Trust. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. MASSACHUSETTS LAW TO APPLY.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
25
<PAGE>
13. PRIOR CONTRACTS.
This Contract supersedes and terminates, as of the date hereof, any prior
contracts between the Trust and the Custodian relating to the custody of the
Funds' assets.
14. NAMES.
The names "FGIC Public Trust" and "Trustees of FGIC Public Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated and as may be amended from time to time which is hereby referred to
and a copy of which is on file at the office of the State Secretary of the State
of Delaware and the principal office of the Trust. The obligations of "FGIC
Public Trust" entered into in the name or behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the Trust property, and all persons dealing with
any class of shares of the Trust must look solely to the Trust property
belonging to such class for the enforcement of any claims against the Trust. The
Shareholders of the Trust shall not be personally liable for any obligations or
liabilities of the Trust, any Fund or any series of Shares of any Fund.
26
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 6th day of May, 1994.
ATTEST FGIC PUBLIC TRUST
By:
- ------------------------- ------------------------
Vice President and Treasurer
ATTEST State Street Bank & Trust Co.
Of Connecticut, N.A.
By:
- ------------------------- ------------------------
Vice President
27
<PAGE>
STATE STREET BANK AND TRUST COMPANY
FEE SCHEDULE FOR:
FGIC Public Trust
Domestic Custodian Fee Schedule
- --------------------------------------------------------------------------------
I. U.S. CUSTODY SERVICES
- --------------------------------------------------------------------------------
Maintain custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income.
Make cash disbursement and report cash transactions. Coordinate
currency settlements.
FUND NET ASSETS
First $350 million 1 basis point
Next $300 million 0.75 basis points
Excess $650 million 0.50 basis points
There is a minimum monthly charge per fund of $2,000
- --------------------------------------------------------------------------------
II. PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $10.00
New York Physical Settlements $25.00
Maturity Collections $ 8.00
PTC Purchase, Sale, Deposit or Withdrawal $20.00
Foreign Trades - Euro CD & Time Deposits $25.00
All Other Trades $16.00
- --------------------------------------------------------------------------------
III. OPTIONS
- --------------------------------------------------------------------------------
Option charges for each option written or
closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
- --------------------------------------------------------------------------------
IV. INTEREST RATE FUTURES
- --------------------------------------------------------------------------------
Transactions - no security movement $ 8.00
- --------------------------------------------------------------------------------
V. PRINCIPAL REDUCTION PAYMENTS
- --------------------------------------------------------------------------------
<PAGE>
Per Pay Down $10.00
- --------------------------------------------------------------------------------
VI. DIVIDEND CHARGES
- --------------------------------------------------------------------------------
For items held at the request of traders over
record date in street form $50.00
- --------------------------------------------------------------------------------
VII. SPECIAL SERVICES
- --------------------------------------------------------------------------------
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments and
the preparation of special reports will be subject to negotiation.
Fees for SEC yield calculation, fund administration activities, self
directed securities lending transactions, SaFiRe financial reporting,
multiple class and core/feeder accounting, and other special items will
be negotiated separately.
- --------------------------------------------------------------------------------
VIII. BALANCE CREDITS
- --------------------------------------------------------------------------------
A balance credit will be applied to the custodian bill for 75% of the
90-day Treasury Bill rate on 90% of the monthly average collected
balance for each portfolio. The balance credit cannot exceed the
custody fee portion of the monthly bill. Balance credit balances can
roll forward to the next month. No balance credit balance will be
allowed to roll forward at each fiscal year end.
- --------------------------------------------------------------------------------
IX. OUT-OF-POCKET EXPENSES
- --------------------------------------------------------------------------------
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following:
- Telephone
- Wire Charges ($5.25 in and $5 out)
- Postage and Insurance
- Courier Service
- Duplication
- Legal Fees
- Supplies Related to Fund Records
- Rush Transfer ($8 each)
- Transfer Fees
- Sub-custodian Charges
- Price Waterhouse Audit Letter
- Federal Reserve Fee for Return items over $2,500 ($4.25 each)
- GNMA transfer ($15 each)
- PTC Deposit/Withdrawal for Same day turnaround ($50 each)
- --------------------------------------------------------------------------------
X. PAYMENT OF FEES
- --------------------------------------------------------------------------------
All fees are expressed in U.S. Dollars and will be charged against the
fund's custodian account five business days after the invoice is mailed
to the fund's offices.
<PAGE>
- --------------------------------------------------------------------------------
FGIC PUBLIC TRUST STATE STREET BANK & TRUST COMPANY
By By
------------------------------- -----------------------------
Title Title
------------------------------- -----------------------------
Date Date
------------------------------- -----------------------------
This schedule will be effective May 1, 1996
- --------------------------------------------------------------------------------
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
FGIC PUBLIC TRUST
AND
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1. Terms of Appointment; Duties 2
Article 2. Fees and Expenses 6
Article 3. Representations and Warranties of ALPS 7
Article 4. Representations and Warranties of the Trust 8
Article 5. Data Access and Proprietary Information 8
Article 6. Indemnification 11
Article 7. Standard of Care 14
Article 8. Covenants of the Trust and ALPS 14
Article 9. Termination of Agreement 16
Article 10. Assignment 16
Article 11. Amendment 17
Article 12. Colorado Law to Apply 17
Article 13. Merger of Agreement 17
Article 14. Counterparts 17
Article 15. Limitation of Liability of the Trustees
and Shareholders 18
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of March, 1994, by and between FGIC
PUBLIC TRUST, a Delaware business trust, having its principal office and place
of business at 370 Seventeenth Street, Suite 2700, Denver, Colorado 80202 (the
"Trust"), and ALPS MUTUAL FUNDS SERVICES, INC., a Colorado Corporation having
its principal office and place of business at the above address ("ALPS" or the
"Administrator");
WHEREAS, THE TRUST AND ALPS HAVE ENTERED INTO AN ADMINISTRATION AGREEMENT
DATED AS OF FEBRUARY 1, 1994 (THE "ADMINISTRATION AGREEMENT") PURSUANT TO WHICH
ALPS IS TO PROVIDE VARIOUS SERVICES,
WHEREAS, the Trust IN ACCORDANCE WITH THE ADMINISTRATION Agreement desires
to appoint ALPS as its transfer agent, dividend disbursing agent and agent in
connection with certain other activities, and ALPS desires to accept such
appointment;
WHEREAS, the Trust is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Trust presently offers shares in two separate series, the
Enhanced Government Income Fund (the "Enhanced Fund") and the Treasury Money
Market Fund (the "Money Market Fund");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1. TERMS OF APPOINTMENT; DUTIES OF ALPS
1.01 Subject to the terms and conditions set forth in this Agreement,
the Trust hereby employs and appoints ALPS to act as, and ALPS agrees to act as
its transfer agent for the Trust's authorized and issued shares of beneficial
interest in the Trust or any other fund of the Trust ("Shares"), dividend
disbursing agent and agent in connection with any accumulation, open-account or
similar plans provided to the shareholders of the Trust ("Shareholders") and set
out in the currently effective prospectus and statement of additional
information ("prospectus") of the Trust, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 ALPS agrees that it will perform the following services in
accordance with the Trust's prospectus:
(a) In accordance with procedures established from time to time
by agreement between the Trust and ALPS, ALPS shall:
(i) Receive for acceptance, orders for the purchase of Shares, promptly
deliver payment and appropriate documentation thereof to the Custodians of the
Trust authorized pursuant to the Declaration of Trust of the Trust (who is
referred to herein as the "Custodian"), and make proper remittance of any sales
load received by it to the persons entitled to the same as instructed by the
Trust's Administrator;
3
<PAGE>
(ii) Pursuant to purchase orders, issue the appropriate number of Shares and
hold Shares in the appropriate Shareholder account;
(iii) In the event any check or other order for the transfer of money is
returned unpaid, take such steps as it may deem appropriate or the
Trust may instruct to protect the Trust and ALPS from financial loss;
(iv) Receive for acceptance redemption requests and redemption directions
and deliver the appropriate documentation thereof to the appropriate
Custodian;
(v) In respect to the transactions in items (i), (ii) and (iv) above, ALPS
shall execute transactions directly with broker-dealers authorized by
the Trust who shall thereby be deemed to be acting on behalf of the
Trust; At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or cause
to be paid over in the appropriate. manner such monies as instructed by
the redeeming Shareholders;
(vii) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(viii) Prepare and transmit payments (or where appropriate credit a
Shareholder account) for dividends and distributions declared by a
Fund;
(ix) Issue replacement certificates for those certificates alleged to have
been lost, stolen or destroyed upon receipt by ALPS of indemnification
satisfactory to ALPS and protecting ALPS and the Trust, and ALPS at its
option, may issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such indemnity;
(x) Maintain records of account for and advise the Trust and its
Shareholders as to the foregoing; and Record the issuance of Shares of
the Trust and maintain pursuant to SEC Rule 17Ad-lO(e) a record of the
total number of Shares of the Trust which are authorized, based upon
data provided to it by the Trust, and issued and outstanding. ALPS
shall also provide the Trust on a regular basis with the total number
of Shares which are authorized and issued and outstanding and shall
have no obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws relating
to the issue or sale of such Shares, which functions shall be the sole
responsibility of the Trust.
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), ALPS shall:
(i) perform the customary services of a transfer agent, dividend
disbursing agent and, as relevant, agent in connection with accumulation,
open-account or similar plans (including without limitation any periodic
investment plan or periodic withdrawal program), including but not limited to:
maintaining all Shareholder accounts, preparing shareholder meeting lists,
mailing proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident alien accounts
and maintaining records with respect to such withholding, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate forms required with
respect to dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and statements of account
to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, responding to Shareholder
telephone calls and Shareholder correspondence, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information and
(ii) provide a system which will enable the Trust to monitor the total number of
Shares sold in each State.
4
<PAGE>
(c) In addition, the Trust's outside legal counsel shall (i)
identify to ALPS in writing those transactions and assets to be treated as
exempt from blue sky reporting for each State and (ii) verify the establishment
of transactions for each State on the system prior to activation and thereafter
monitor the daily activity for each State. The responsibility of ALPS for a
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by such Fund and
the reporting of such transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between the Trust
and ALPS per the attached service responsibility schedule. ALPS may at times
perform only a portion of these services and the Trust or its agent may perform
these services on the Trust's behalf.
(e) ALPS shall provide additional services on behalf of the
Trust (i.e., escheatment services) which may be agreed upon in writing between
the Trust and ALPS.
Article 2. FEES AND EXPENSES
2.01 For the performance by ALPS pursuant to this Agreement, the Trust
agrees to pay ALPS the fees IN ACCORDANCE WITH THE TERMS OF THE ADMINISTRATION
AGREEMENT.
2.02 In addition to the fee paid under Section 2.01 above, the Trust
agree(s) to reimburse ALPS for tabulating proxies. In addition, any other
expenses incurred by ALPS at the request or with the consent of the Trust, will
be reimbursed by the Fund.
2.03 The Trust agree(s) to pay all fees and reimbursable expenses
within thirty days following the receipt of the respective billing notice.
Postage for mailing of proxies to all Shareholder accounts shall be advanced to
ALPS by the Trust at least seven (7) days prior to the mailing date of such
materials.
Article 3. REPRESENTATIONS AND WARRANTIES OF ALPS
ALPS represents and warrants to the Trust that:
3.01 It is a company duly organized and existing and in good standing
under the laws of the State of Colorado.
3.02 It is duly qualified to carry on its business in the State of
Colorado.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to ALPS that:
5
<PAGE>
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and Code of Regulations to enter into and perform this Agreement.
4.03 All trust proceedings required by said Declaration of Trust and
Code of Regulations have been taken to authorize it to enter into and perform
this Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Trust being offered for sale.
Article 5. DATA ACCESS AND PROPRIETARY INFORMATION
5.01 The Trust acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by ALPS as part of the Trust's ability to access
certain related data ("Customer Data") maintained by ALPS on data bases under
the control and ownership of ALPS ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to ALPS. It is understood that
Customer Data, which includes data provided to ALPS by or on behalf of the Trust
and records belonging to the Trust pursuant to Section 31 of the Investment
Company Act of 1940 as amended (and the Rules thereunder), will not be deemed to
be Data Access Services or Proprietary Information. The Trust agrees to treat
all Proprietary Information as proprietary to ALPS and further agrees that it
shall not divulge any Proprietary Information to any person or organization
except as may be provided hereunder. Without limiting the foregoing, the Trust
agrees for itself and its employees and agents:
(a) to access Customer Data solely from locations as may be designated in
writing by and solely in accordance with ALPS' applicable user
documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained, to
inform in a timely manner of such fact and dispose of such information in
accordance with ALPS' instructions;
(d) to refrain from causing or allowing third-party data acquired hereunder
from being retransmitted to any other computer facility or other
location, except with the prior written consent of ALPS;
(e) that the Trust shall have access only to those authorized transactions
agreed upon by the parties;
(f) to honor all reasonable written requests made by ALPS to protect at ALPS'
expense the rights of ALPS in Proprietary Information at common law,
under federal copyright law and under other federal or state law.
6
<PAGE>
Each party shall take reasonable efforts to advise its employees or
independent service contractors of the obligations pursuant to this Article 5.
The obligations of this Article shall survive any earlier termination of this
Agreement.
5.02 If the Trust notifies ALPS that any of the Data Access Services
do not operate in material compliance with the most recently issued user
documentation for such services, ALPS shall endeavor in a timely manner to
correct such failure. Organizations from which ALPS may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and the Trust agrees to make no claim against ALPS arising out of the
contents of such third-party data, including, but not limited to, the accuracy
thereof, provided that ALPS will comply with all reasonable requests for
assistance from the Trust in resolving any claim or other discrepancy the Trust
may have with such third party organizations. DATA ACCESS SERVICES AND ALL
COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE
PROVIDED ON AN AS IS, AS AVAILABLE BASIS (PROVIDED THAT ALPS SHALL CONTINUE TO
BE RESPONSIBLE FOR ANY DELAY IN OR OTHER FAILURE OF PERFORMANCE THAT ARISES AS A
RESULT OF A MATTER REASONABLY WITHIN ALPS' CONTROL). ALPS EXPRESSLY DISCLAIMS
ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
5.03 If the transactions available to the Trust include the ability to
originate a customer originated electronic financial instruction to ALPS in
order to (i) effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information (such transactions constituting a
"COEFI"), then in such event ALPS shall be entitled to rely on the validity and
authenticity of such instruction without undertaking any further inquiry as long
as such instruction is undertaken in conformity with reasonable security
procedures established by ALPS from time to time.
Article 6. INDEMNIFICATION
6.01 ALPS shall not be responsible for, and the Trust shall indemnify
and hold ALPS harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions taken or omitted to be taken by ALPS or its
agent or subcontractors required to be taken pursuant to this Agreement,
provided that such actions are taken in good faith and without negligence or
willful misconduct.
(b) The Funds lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty of
the Fund hereunder.
(c) The good faith reliance on or use by ALPS or its agents or
subcontractors of written information, records and documents or services which
(i) are received or relied upon by ALPS or its agents or subcontractors and
furnished to it or performed by or on behalf of the Fund, and (ii) have been
prepared, maintained and/or performed by the Fund or any other authorized person
or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ALPS or its agents
or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in
7
<PAGE>
such state or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of such Shares
in such state.
6.02 At any time ALPS may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ALPS under this
Agreement, and ALPS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel (provided
such counsel is reasonably satisfactory to the Trust). ALPS, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Trust, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided ALPS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Trust, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. ALPS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officer(s) of the Trust,
and the proper countersignature of any former transfer agent or former
registrar, or of a co-transfer agent or co-registrar.
6.03 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Trust may be
required to indemnify ALPS, ALPS shall promptly notify the Trust of such
assertion, and shall keep the Trust advised with respect to all developments
concerning such claim. The Trust shall have the option to participate with ALPS
in the defense of such claim or to defend against said claim in its own name or
in the name of ALPS. ALPS shall in no case confess any claim or make any
compromise in any case in which the Trust may be required to indemnify ALPS
except with the Trust's prior written consent.
Article 7. STANDARD OF CARE
7.01 ALPS shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss OF damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its employees.
Article 8. COVENANTS OF THE TRUST AND ALPS
8.01 The Trust shall promptly furnish to ALPS the following:
(a) A certified copy of the resolution of the Board of Trustees
of the Trust authorizing the appointment of ALPS and the execution and delivery
of this Agreement.
(b) A copy of the Declaration of Trust and Code of Regulations
of the Trust and all amendments thereto.
(c) Copies of each vote of the Board of Trustees of the Trust
designating authorized persons to give instructions to ALPS.
8
<PAGE>
8.02 ALPS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
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.
8.03 ALPS shall keep records relating to the services to be performed
hereunder, in the form and manner, as it may deem advisable, as required by
applicable laws, rules and regulations. To the extent required by Section 31 of
the Investment Company Act of 1940, as amended, and the Rules thereunder, ALPS
agrees that all such records prepared or maintained by ALPS relating to the
services to be performed by ALPS hereunder are the property of the Trust and
will be preserved, maintained and made available in accordance with such Section
and Rules, and will be surrendered promptly to the Trust on and in accordance
with its request. Additionally, ALPS will make reasonably available to the Trust
and its authorized representatives records maintained by ALPS pursuant to this
Agreement for reasonable inspection, use and audit, and will take all reasonable
action to assist the Trust's independent accountants in rendering their opinion.
8.04 ALPS and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, ALPS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. ALPS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person.
Article 9. TERMINATION OF AGREEMENT
9.01 This Agreement may be terminated by either party upon NINETY-(90)
days written notice to the other. NOT WITHSTANDING ANYTHING TO THE CONTRARY IN
THIN AGREEMENT, ALPS MAY NOT TERMINATE THIS AGREEMENT PRIOR TO THE LATER OF: (i)
the EXPIRATION OF THE INITIAL OR ANY RENEWAL TERM OF THE ADMINISTRATION
AGREEMENT; OR (II) THE EFFECTIVENESS OF ANY TERMINATION NOTICE PURSUANT TO THE
ADMINISTRATION AGREEMENT. THIS AGREEMENT may be terminated immediately by the
Trust should ALPS cease to be qualified to act as the Trust's transfer agent
pursuant to applicable law.
9.02 Should the Trust exercise its right to terminate, other than as a
result of a default under this Agreement by ALPS, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Trust.
Additionally, ALPS reserves the right to charge for any other reasonable
expenses associated with such termination.
Article 10. ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
10.03 ALPS may, without further consent on the part of the Trust,
subcontract for the performance hereof with (i) State Street Bank Trust, a duly
registered transfer agent pursuant to Section
9
<PAGE>
17A(c)(l) of the Securities Exchange Act of 1934, as amended ("Section
17A(c)(l)"); provided, however, that ALPS shall be as fully responsible to the
Trust for the acts and omissions of any subcontractor as it is for its own acts
and omissions.
Article 11. AMENDMENT
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
Article 12. COLORADO LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Colorado.
Article 13. MERGER OF AGREEMENT
13.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
Article 14. COUNTERPARTS
14.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
Article 15. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
15.01 The names "FGIC Public Trust" and "Trustees of FGIC Public
Trust" refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a Declaration of
Trust dated Feb. 23, 1994, which may be further amended from time to time which
i hereby referred to and a copy of which is on file at the office of the
Secretary of the State of Delaware and the principal office of the Trust. The
obligations of "FGIC Public Trust" entered into in the name or on behalf thereof
by any of the Trustees, representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the Trustees, shareholders,
or representatives of the Trust personally, but bind only the Trust Property,
and all persons dealing with any class of shares of the Trust must look solely
to the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
FGIC PUBLIC TRUST
By:
-------------------------
ATTEST:
- -------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
-------------------------
ATTEST:
- -------------------------------
11
<PAGE>
ALPS MUTUAL FUNDS SERVICES, INC.
FUND SERVICE RESPONSIBILITIES
<TABLE>
<CAPTION>
SERVICE PERFORMED RESPONSIBILITY
- ----------------- --------------
ALPS TRUST
---- -----
<S> <C> <C>
1. Receives orders for the purchase of Shares. X
2. Issue Shares and hold Shares in Shareholder's accounts. X
3. Receive redemption requests. X
4. Effect transactions 1-3 above directly with broker-dealers. X
5. Pay over monies to redeeming Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends and distributions. X
8. Issue replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and accurate control
book for each issue of securities. X
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current Shareholders. X
15. Withhold taxes on U.S. resident and non-resident alien accounts. X
16. Prepare and file U.S. Treasury Department forms. X
17. Prepare and mail account and confirmation
statements for Shareholders. X
18. Provide Shareholder account information. X
19. Blue sky reporting. X
</TABLE>
12
<PAGE>
- - Such services are more fully described in Article 1.02 (a), (b) and (c) of
the Agreement.
FGIC PUBLIC TRUST
By:
----------------------
ATTEST:
- -------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By:
----------------------
ATTEST:
- -------------------------
13
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
between
ALPS MUTUAL FUNDS SERVICES, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
Article 1. Terms of Appointment; Duties of the Bank. . . . . . . . . . . . .2
Article 2. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . .6
Article 3. Representations and Warranties of the Bank. . . . . . . . . . . .7
Article 4. Representations and Warranties of the Trust . . . . . . . . . . .7
Article 5. Data Access and Proprietary Information . . . . . . . . . . . . .8
Article 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 10
Article 7. Standard of Care. . . . . . . . . . . . . . . . . . . . . . . . 12
Article 8. Covenants of ALPS and the Bank. . . . . . . . . . . . . . . . . 12
Article 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . 13
Article 10. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Article 11. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Article 12. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . 14
Article 13. Merger of Agreement. . . . . . . . . . . . . . . . . . . . . . 14
Article 14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 14
Article 15. Limitation of Liability of the Trustees and Shareholders . . . 14
2
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of March, 1994, by and between ALPS
MUTUAL FUNDS SERVICES, INC., a Colorado corporation, having its principal office
and place of business at 370 Seventeenth Street, Suite 2700, Denver, Colorado
80202 ("ALPS" or the "Administrator"), and STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company having its principal office and place of business
at 225 Franklin Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Trust and ALPS have entered into an Administration Agreement
dated as of February 1, 1994 (the "Administration Agreement") pursuant to which
ALPS is to provide various services,
WHEREAS, ALPS has been appointed as the transfer agent, dividend disbursing
agent and agent in connection with certain other activities for the FGIC Public
Trust, a Delaware business trust, having its principal office and place of
business at 370 Seventeenth Street, Suite 2700, Denver, Colorado, 80202 (the
"Trust"), and ALPS desires to sub-contract its transfer agency duties to the
Bank and the Bank agrees to accept such appointment;
WHEREAS, the Trust is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Trust presently offers Shares in 2 series, the Enhanced
Government Income Fund (the "Enhanced Fund") and the Treasury Money Market Fund
(the "Money Market Fund"), [together with any other series subsequently offered
by the Trust and made subject to this Agreement (the "Funds")];
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1. TERMS OF AGREEMENT; DUTIES OF THE BANK
1.01 Subject to the terms and conditions set forth in this Agreement,
ALPS hereby employs and appoints the Bank to act as, and the Bank agrees to act
as its transfer agent for the Trust's authorized and issued shares of beneficial
interest in the Funds ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans provided to the
shareholders of the Trust ("Shareholders") and set
3
<PAGE>
out in the currently effective prospectus and statement of additional
information ("prospectuses") of the Trust, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following services
in accordance with the Fund's prospectus:
(a) In accordance with procedures established from time to time
by agreement between ALPS and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares,
promptly deliver payment and appropriate documentation thereof to the Custodian
of the Trust authorized pursuant to the Declaration of Trust of the Trust
(referred to herein as the "Custodian"), and make proper remittance of any sales
load received by it to the persons entitled to the same as instructed by the
Trust's Administrator;
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate Shareholder account;
(iii) In the event any check or other order for the transfer of
money is returned unpaid, take such steps as it may deem appropriate or the
Trust or ALPS may instruct to protect the Trust, ALPS and the Bank from
financial loss;
(iv) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the appropriate
Custodian;
(v) In respect to the transactions in items (i), (ii) and (iv)
above, the Bank shall execute transactions directly with broker-dealers
authorized by the Trust who shall thereby be deemed to be acting on behalf of
ALPS and the Trust;
(vi) At the appropriate time as and when it receives monies paid
to it by the Custodian with respect to any redemption, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the redeeming
Shareholders;
(vii) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
4
<PAGE>
(viii) Prepare and transmit payments (or where appropriate
credit a Shareholder account) for dividends and distributions declared by a
Fund;
(ix) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt by the Bank of
indemnification satisfactory to the Bank and protecting the Bank, ALPS and the
Trust, and the Bank at its option, may issue replacement certificates in place
of mutilated stock certificates upon presentation thereof and without such
indemnity;
(x) Maintain records of account for and advise ALPS of the
Trust's Shareholders as to the foregoing; and
(xi) Record the issuance of Shares of the Trust and maintain
pursuant to SEC Rule 17Ad-l0(e) a record of the total number of Shares of the
Trust which are authorized, based upon data provided to it by ALPS and the
Trust, and issued and outstanding. The Bank shall also provide to ALPS and the
Trust on a regular basis with the total number of Shares which are authorized
and issued and outstanding and shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or to take cognizance
of any laws relating to the issue or sale of such Shares, which functions shall
be the sole responsibility of the Trust, subject to section 1.02(c) of this
Agreement.
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), the Bank shall: (i) perform
the customary services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, mailing
Shareholder reports and prospectuses to current Shareholders, withholding taxes
on U.S. resident and non-resident alien accounts and maintaining records with
respect to such withholding, preparing and filing U.S. Treasury Department Forms
1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all purchases
and redemptions of Shares and other confirmable transactions in Shareholder
accounts, responding to Shareholder
5
<PAGE>
telephone calls and Shareholder correspondence, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information and
(ii) provide a system which will enable the Trust to monitor the total number of
Shares sold in each State.
(c) In addition, the Trust's Administrator shall (i) identify to
the Bank in writing those transactions and assets to be treated as exempt from
blue sky registration for each State. The responsibility of the Bank for a
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions, verification and monitoring transactions for each
State and the reporting of such transactions to the Fund as provided above.
Notwithstanding the immediately preceding statement, the Bank shall not issue,
shares in any State unless the Bank has been notified by ALPS or the Trust that
such Shares have been registered under the securities laws of such State, or
that there is an available exemption from registration.
(d) Procedures as to who shall provide certain of these services
in Article 1 may be established from time to time by agreement between ALPS and
the Bank per the attached service responsibility schedule. The Bank may at times
perform only a portion of these services and ALPS or its agent may perform these
services on the Trust's behalf.
(e) The Bank shall provide such additional services on behalf of
the Trust (e.g., escheatment services)which may be agreed upon in writing
between the Bank, ALPS and the Trust.
Article 2. FEES AND EXPENSES
2.01 For the performance by the Bank of services pursuant to this
Agreement, ALPS agrees to pay the Bank an annual maintenance fee for each
Shareholder account as set out in the initial fee schedule attached hereto as
Exhibit A. Such fees and out-of-pocket expenses and advances identified under
Section 2.02 below may be changed from time to time subject to mutual written
agreement between ALPS and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, ALPS agrees
to reimburse the Bank for out-of-pocket expenses, including but not limited to,
confirmation production, postage, forms, telephone, microfilm, microfiche,
tabulating proxies, records storage, or advances incurred by the Bank for the
6
<PAGE>
items set out in the fee schedule attached hereto as Exhibit A. In addition, any
other expenses incurred by the Bank at the request or with the consent of ALPS,
will be reimbursed by ALPS.
2.03 ALPS agrees to pay all fees and reimbursable expenses described
in section 2.02 above, within thirty days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies, Fund
reports and other mailings to all Shareholder accounts shall be advanced to the
Bank by ALPS at least seven (7) days prior to the mailing date of such
materials.
Article 3. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to ALPS that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth
of Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4. REPRESENTATIONS AND WARRANTIES BY ALPS ON BEHALF OF THE TRUST
ALPS represents and warrants to the Bank that the Trust:
4.01 Is a business trust duly organized and existing and in good
standing under the laws of Delaware.
4.02 Is empowered under applicable laws and by its Declaration of
Trust and By-Laws to have ALPS enter into and perform this Agreement.
7
<PAGE>
4.03 All trust proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize ALPS and the Trust to enter into and
perform this Agreement.
4.04 Is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 Will ensure that a registration statement under The Securities
Act of 1933, as amended, is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Trust being offered for sale.
Article 5. DATA ACCESS AND PROPRIETARY INFORMATION
5.01 ALPS acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by the Bank as part of the Trust's ability to
access certain related data ("Customer Data") maintained by the Bank on data
bases under the control and ownership of the Bank ("Data Access Services")
constitute copyrighted, trade secret, or other proprietary information
(collectively, "Proprietary Information") of substantial value to the Bank. It
is understood that Customer Data, which includes data provided to the Bank by or
on behalf of the Trust and records belonging to the Trust pursuant to Section 31
of The Investment Company Act of 1940, as amended (and the Rules thereunder),
will not be deemed to be Data Access Services or Proprietary Information. ALPS
agrees to treat all Proprietary Information provided to the Trust as proprietary
to the Bank and further agrees that it shall not divulge any Proprietary
Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, ALPS agrees for itself and
its employees and agents:
(a) to access Customer Data solely from locations as may be designated in
writing by the Bank and solely in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such
8
<PAGE>
access is inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the Bank's
instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility or
other location, except with the prior written consent of the Bank;
(e) that ALPS shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to protect
at the Bank's expense the right of the Bank in Proprietary Information
at common law, under federal copyright law and under other federal or
state law. Each party shall take reasonable efforts to advise its
employees or independent service contractors of the obligations
pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
5.02 If ALPS notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely manner to
correct such failure. Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and ALPS agrees to make no claim against the Bank arising out of the
contents of such third-party data, including, but not limited to, the accuracy
thereof, provided that the Bank will comply with all reasonable requests for
assistance from ALPS in resolving any claim or other discrepancy ALPS may have
with such third party organizations. DATA ACCESS SERVICES AND ALL COMPUTER
PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED
ON AN AS IS, AS AVAILABLE BASIS (PROVIDED THAT THE BANK SHALL CONTINUE TO BE
RESPONSIBLE FOR ANY DELAY IN OR OTHER FAILURE OF PERFORMANCE THAT ARISES AS A
RESULT OF A MATTER REASONABLY WITHIN THE BANK'S CONTROL). THE BANK EXPRESSLY
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.03 If the transactions available to ALPS include the ability to
originate customer originated electronic financial instruction to the Bank in
order to (i) effect the transfer or
9
<PAGE>
movement of cash or Shares or (ii) transmit Shareholder information or other
information (such transactions constituting a "COEFI"), then in such event the
Bank shall be entitled to rely on the validity and authenticity of such
instruction without undertaking any further inquiry as long as such instruction
is undertaken in conformity with reasonable security procedures established by
ALPS and the Bank from time to time.
Article 6. INDEMNIFICATION
6.01 The Bank shall not be responsible for, and ALPS shall indemnify
and hold the Bank harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions taken or omitted to be taken by the Bank or its agent
or subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.
(b) The Funds' lack of good faith, negligence or willful misconduct
which arises out of the breach of any representation or warranty of ALPS
hereunder.
(c) The good faith reliance on or use by the Bank or its agents or
subcontractors of written information, records and documents or services which
(i) are received or relied upon by the Bank or its agents or subcontractors and
furnished to it or performed by or on behalf of the Fund(s), and (ii) have been
prepared, maintained and/or performed by the Fund(s) or any other authorized
person or firm on behalf of the Fund(s).
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of ALPS or the Fund(s) pursuant
to this Agreement, provided that the Bank and its agents and subcontractors act
in good faith and without negligence or willful misconduct.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or regulations
of any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state, provided that
the Bank and its agents and subcontractors act in good faith and without
negligence or willful misconduct.
10
<PAGE>
6.02 At any time the Bank may apply to any officer of ALPS for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by ALPS for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel (provided such
counsel is reasonably satisfactory to ALPS). The Bank, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund(s), reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided the Bank or its
agents or subcontractors by ALPS in the form of machine readable input, telex,
CRT data entry or other similar means authorized by the Fund(s), and shall not
be held to have notice of any change of authority of any person, 1 until receipt
of written notice thereof from the Fund(s). me Bank, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officer(s) of ALPS, and the proper countersignature
of any former transfer agent or former registrar, or of a co-transfer agent or
co-registrar.
6.03 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which ALPS may be
required to indemnify the Bank, the Bank shall promptly notify ALPS of such
assertion, and shall keep ALPS and the Trust advised with respect to all
developments concerning such claim. ALPS shall have the option to participate
with the Bank in the defense of such claim or to defend against said claim in
its own name or in the name of the Bank. m e Bank shall in no case confess any
claim or make any compromise in any case in which ALPS may be required to
indemnify the Bank except with the Trust's and ALPS' prior written consent.
11
<PAGE>
Article 7. STANDARD OF CARE
7.01 The Bank shall at all times act in good faith and agrees to use
its best efforts to insure the accuracy of all services performed under this
Agreement, but assumes no responsibility and shall not be liable for loss or
damage due to errors unless said errors are caused by its negligence, bad faith,
or willful misconduct or that of its employees, agents or Subcontractors.
Article 8. COVENANTS OF ALPS AND THE BANK
8.01 ALPS shall promptly furnish to the Bank the
following:
(a) A certified copy of the resolution of the Board of Trustees
of the Trust authorizing the appointment of ALPS and the execution and delivery
of the Transfer Agency Agreement between ALPS and the Trust.
(b) A copy of the Declaration of Trust and By-Laws of the Trust
and all amendments thereto.
(c) Copies of each vote of the Board of Trustees of the Trust
designating authorized persons to give instructions to ALPS and the Bank.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
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 for the performance of any other of the Bank's duties
hereunder.
8.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it nay deem advisable, and as
required by applicable laws, rules and regulations. To the extent required by
Section 31 of the Investment Company Act of 1940, as amended, and the Rules
- -thereunder, the Bank agrees that all such records prepared or maintained by the
Bank relating to the services to be performed by the Bank hereunder are the
property of the Trust and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered promptly to ALPS
and the Trust on and in accordance with its request. Additionally, the
12
<PAGE>
Bank will make reasonably available to ALPS, the Trust, and their authorized
representatives records maintained by the Bank pursuant to this Agreement for
reasonable inspection, use and audit, and will take all reasonable action to
assist ALPS' and the Trust's independent accountants in rendering their
opinion(s).
8.04 The Bank and ALPS agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, the Bank will endeavor to notify ALPS and to
secure instructions from an authorized officer of ALPS as to such inspection.
The Bank reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person.
Article 9. TERMINATION OF AGREEMENT
9.01 This Agreement may be terminated by either party upon ninety
(90) days written notice to the other, and may be terminated immediately by ALPS
should the Bank cease to be qualified to act as the transfer agent under this
Sub-Agreement pursuant to applicable law.
9.02 Should ALPS exercise its right to terminate this Agreement,
other than as a result of a default under this Agreement by the Bank, all
out-of-pocket expenses associated with the movement of records and material will
be borne by ALPS. Additionally, the Bank reserves the right to charge for any
other reasonable expenses associated with such termination.
Article 10. ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
13
<PAGE>
10.02 his Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
Article 11. AMENDMENT
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
Article 12. COLORADO LAW TO APPLY
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Colorado.
Article 13 MERGER OF AGREEMENT
13.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
Article 14. COUNTERPARTS
14.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
Article 15. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
15.01 The names MAGIC Public Trusts and Trustees of FGIC Public Trust.
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated and as may be amended from time to time which is hereby referred to
and a copy of which is on file at the office of the Secretary of the State of
Delaware and the principal office of the Trust. The obligations of -FGIC Public
Trust. entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders, or representatives of
the Trust personally, but bind only the Trust property, and all persons dealing
with any class of shares of the Trust must look solely to the Trust property
belonging to such class for the enforcement of
14
<PAGE>
any claims against the Trust. The Shareholders of the Trust shall not be
personally liable for any obligation or liabilities of the Trust, any Fund or
any series of Shares of any Fund.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
ALPS MUTUAL FUND SERVICES, INC.
By:
------------------------------
ATTEST:
- -----------------------------
STATE STREET BANK AND TRUST COMPANY
By:
------------------------------
Vice President
ATTEST:
- -----------------------------
16
<PAGE>
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES
SERVICE PERFORMED RESPONSIBILITY
- ----------------- --------------
BANK ALPS
---- ----
1. Receives orders for the purchase
of Shares. X
2. Issue Shares and hold Shares in
Shareholder accounts. X
3. Receive redemption requests. X
4. Effect transactions 1-3 above
directly with broker-dealers. X
5. Pay over monies to redeeming
Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends
and distributions. X
8. Issue replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and
accurate control book for each
issue of securities. X
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current
Shareholders. X
15. Withhold taxes on U.S. resident
and non-resident alien accounts. X
17
<PAGE>
16. Prepare and file U.S. Treasury
Department forms. X
17. Prepare and mail account and
confirmation statements for
Shareholders. X
18. Provide Shareholder account
information. X
19. Blue Sky reporting. X
(*) Such services are more fully described in Article 1.02(a), (b) and (c)
of the Agreement.
ALPS MUTUAL FUNDS SERVICES, INC.
By:
----------------------------
ATTEST:
- ---------------------------
STATE STREET BANK AND TRUST COMPANY
By:
------------------------------
Vice President
ATTEST:
- ---------------------------
18
<PAGE>
EXHIBIT A
STATE STREET BANK AND TRUST COMPANY
FGIC PUBLIC TRUST
FEE SCHEDULE FOR TRANSFER AGENT SERVICES
ITEM DESCRIPTION PRICE
Trade Processing - Manual $4.80
(Per Trade) - Automated $2.00
Monthly Maintenance Fee 0 - 50 Shareholders $1,000.00
(Per Fund) 51 - 100 Shareholders $1,500.00
101-150 Shareholders $2,000.00
151-200 Shareholders $2,500.00
Out of Pocket Expenses billed to client which include but is not limited
to:
- Custom System Enhancements
- Communication
- Mailing Costs
19
<PAGE>
BOOKKEEPING AND PRICING AGREEMENT
BETWEEN
FGIC PUBLIC TRUST
AND
ALPS MUTUAL FUNDS SERVICES, INC.
<PAGE>
BOOKKEEPING AND PRICING AGREEMENT
AGREEMENT made this 15th day of March, 1994 between FGIC Public Trust,
a business trust established under the laws of the State of Delaware (the
"Trust") and ALPS MUTUAL FUNDS SERVICES, INC., a Colorado corporation having its
principal office at 370 Seventeenth Street, Suite 2700, Denver, Colorado 80202
(the "Agent").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940 presently consisting of the
following investment portfolios: Treasury Money Market Fund, the Enhanced
Government Income Fund, and any additional investment portfolios that may be
established by the Trust herein referred to individually as a "Portfolio" and
collectively as the "Portfolios;" and
WHEREAS, THE TRUST AND THE AGENT HAVE ENTERED INTO AN ADMINISTRATION
AGREEMENT, DATED AS OF FEBRUARY 1, 1994 (THE "ADMINISTRATION AGREEMENT"),
PURSUANT TO WHICH THE AGENT WILL PROVIDE CERTAIN SERVICES; AND
WHEREAS, the Trust desires to appoint the Agent as agent to perform
certain bookkeeping and pricing services for the Portfolios on behalf of the
Trust, and the Agent has indicated its willingness to so act, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. AGENT APPOINTED BOOKKEEPING AND PRICING AGENT. The Trust hereby
appoints the Agent as bookkeeping and pricing agent for the Portfolios and the
Agent agrees to provide the services contemplated herein upon the terms and
conditions hereinafter set forth.
2. DEFINITIONS. In this Agreement the terms below have the following
meanings:
(a) AUTHORIZED PERSON. Authorized Person means any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of the Trust
by appropriate resolution of the Board of Trustees of the Trust The Trust will
at all times maintain on file with the Agent certification, in such form as may
be acceptable to the Agent, of (i) the names and signatures of the Authorized
Person(s) and (ii) the names of the members of the Board of Trustees of the
Trust, it being understood that upon the occurrence of any change in the
information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Trust will provide a new
or amended certification setting forth the change. The Agent will be entitled to
rely upon any Proper Instruction (defined below) which has been signed by
person(s) named in the most recent certification.
2
<PAGE>
(b) PROPER INSTRUCTIONS. Proper Instructions means any request,
instruction or certification signed by one or more Authorized Persons. Oral
instructions will be considered Proper Instructions if the Agent reasonably
believes them to have been given by an Authorized Person and they are confirmed
in writing. Proper Instructions may include communication effected directly
between electromechanical or electronic devices as agreed upon by the parties
hereto.
3. DUTIES OF THE AGENT. The Agent agrees to provide or to arrange to
provide at its expense the following services for the Trust:
(a) Maintain separate accounts for the Portfolios, all as directed from time to
time by Proper Instructions;
(b) Timely calculate and transmit to NASDAQ each Portfolio's daily net asset
value and public offering price (such determinations to be made in
accordance with the provisions of the Declaration of Trust and the
appropriate prospectus and statement of additional information relating to
the Portfolios, and any applicable resolutions of the Board of Trustees of
the Trust) and promptly communicate such values and prices to the
Portfolio's and the Portfolio's transfer agent;
(c) Maintain and keep current all books and records of the Fund as required by
Section 31 and the rules thereunder under the 1940 Act ("Section 31") in
connection with the Agent's duties hereunder. The Agent shall comply with
all laws, rules and regulations applicable to the performance of its
obligations hereunder. Without limiting the generality of the foregoing,
the Agent will prepare and maintain the following records upon receipt of
information in proper form from Authorized Persons of the Trust:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend records
(iv) Purchase and sales - portfolio securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
(vii) Broker ledgers
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Securities and monies borrowed or loaned and collateral
therefore
(xii) Foreign currency journals
(xiii) Trial balances
(d) Provide the Trust and its investment adviser(s) with daily portfolio
values, net asset values and other statistical data for each Portfolio as
requested from time to time.
3
<PAGE>
(e) Compute the net income, exempt interest income and capital gains of the
Portfolio for dividend purposes in accordance with relevant prospectus
policies and resolutions of the Board of Trustees of the Trust.
(f) Provide the Portfolio and its investment adviser(s) with copies of the
semi-annual and annual financial statements to be furnished to shareholders
of each Portfolio and all raw financial data necessary for the timely
preparation of tax returns, Form N-SAR, prospectus updates, Rule 24f-2
filings and proxy statements.
(g) Provide facilities to accommodate annual audits and any audits or
examinations conducted by the Securities and Exchange Commission or other
governmental entities.
(h) Provide audited financial statements regarding the Agent on an annual
basis, as requested. Such audits shall be conducted by an independent
accounting firm mutually agreed upon by the Agent and the Trust.
(i) Furnish to the Trust at the end of every month, and at the close of each
quarter of the Trust's fiscal year, a list of the portfolio securities and
the aggregate amount of cash in the Portfolios.
(j) Assist in the preparation of certain reports, audits of accounts, and other
matters of like nature, as reasonably requested from time to time by the
Trust.
The Agent shall for all purposes be deemed to be an independent
contractor and shall, unless otherwise expressly authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Trust.
4. SUBCONTRACTORS. It is understood that the Agent may from time to
time at its own expense delegate the performance of all or a portion of its
obligations under this Agreement to one or more persons (hereinafter
"subcontractor(s)") as the Agent may believe to be particularly fit to assist it
in the performance of this Agreement. The Agent shall provide oversight over any
subcontractor(s) who shall in turn provide services pursuant to an agreement
with the Agent approved by a resolution of the Board of Trustees of the Trust.
5. INSTRUCTIONS TO THE AGENT. The Agent shall promptly take all
appropriate steps necessary to carry out or comply with any Proper Instructions
received from the Trust.
6. AGENT COMPENSATION. In consideration for the services to be
performed by the Agent, the Agent shall be entitled to receive from the Fund
such compensation as set forth in the Administration Agreement.
7. LIABILITY OF THE AGENT.
(a) The Agent may rely upon the written advice of counsel for
the Trust and the Trust's independent accountants, and upon oral or written
statements of brokers and other persons reasonably believed by the Agent in good
faith to be expert in the matters upon which they are
4
<PAGE>
consulted and, for any actions reasonably taken in good faith reliance upon such
advice or statements and without negligence, the Agent shall not be liable to
anyone.
(b) Nothing herein contained shall be construed to protect the
Agent against any liability to the Trust or its security holders to which the
Agent would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of its duties.
(c) Except as may otherwise be provided by applicable law,
neither the Agent nor its shareholders, officers, directors, employees or agents
shall be subject to, and the Trust shall indemnify and hold such persons
harmless from and against, any liability for and any damages, expenses or losses
incurred by reason of the inaccuracy of factual information furnished to the
Agent or any subcontractor(s) by an Authorized Person of the Fund.
(d) The Agent shall ensure that it or any subcontractors have
and maintain Errors and omissions Insurance for the services rendered under this
Agreement of at least S1 million (provided the Board of Trustees of the Trust
may by resolution approve some lesser amount). The Agent shall provide to the
Trust annually a certificate from the appropriate errors and omissions insurance
carrier(s) certifying that such Errors and Omissions Insurance is in full force
and effect.
8. REPORTS. Whenever, in the course of performing its duties under
this Agreement, the Agent determines, on the basis of information supplied to
the Agent by the Trust or its authorized agents, that a violation of applicable
law has occurred or that, to its knowledge, a possible violation of applicable
law may have occurred or, with the passage of time, would occur, the Agent shall
promptly notify the Trust and its counsel.
9. ACTIVITIES OF THE AGENT. The services of the Agent under this
Agreement are not to be deemed exclusive, and the Agent shall be free to render
similar services to others so long as its services hereunder are not impaired
thereby.
10. ACCOUNTS AND RECORDS. The accounts and records maintained by the
Agent shall be the property of the Trust, and shall be surrendered to the Trust
promptly upon receipt of Proper Instructions from the Trust in the form in which
such accounts and records have been maintained or preserved. The Agent agrees to
maintain a back-up set of accounts and records of the Trust (which back-up set
shall be updated on at least a weekly basis) at a location other than that where
the original accounts and records are stored. The Agent shall assist the Trust,
the Trust's independent auditors, or, upon approval of the Trust, any regulatory
body, in any requested review of the Trust by the Agent or its independent
accountants concerning its accounting system and internal auditing controls will
be open to such entities for audit or inspection upon reasonable request. There
shall be no additional fee for these services. The Agent shall preserve the
accounts and records, as they are required to be maintained and preserved by
Section 31 of the Investment Company Act of 1940.
11. CONFIDENTIALITY. The Agent agrees that it will, on behalf of
itself and its officers and employees, treat all transactions contemplated by
this Agreement, and all other information germane thereto, as confidential and
not to be disclosed to any person except as may be authorized by the Trust in
Proper Instructions.
5
<PAGE>
12. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date hereof. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS AGREEMENT, THE AGENT MAY NOT TERMINATE THIS AGREEMENT PRIOR TO THE LATER
OF: (i) THE EXPIRATION OF THE INITIAL OR ANY RENEWAL TERM OF THE ADMINISTRATION
AGREEMENT; OR (II) THE EFFECTIVENESS OF ANY TERMINATION NOTICE PURSUANT TO THE
ADMINISTRATION AGREEMENT.
Upon termination of this Agreement, the Agent shall deliver to the
Trust or as otherwise directed in Proper Instructions (at the expense of the
Fund, unless such termination is for breach of this Agreement by the Agent) all
records and other documents made or accumulated in the performance of its duties
or the duties of any subcontractor(s) for the Trust hereunder.
13. ASSIGNMENT. This Agreement shall extend to and shall be binding
upon the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust without the
prior written consent of the Agent, or by the Agent without the prior written
consent of the Trust.
14. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the state of Colorado and the
1940 Act and the rules thereunder. To the extent that the laws of Colorado
conflict with the 1940 Act or such rules, the latter shall control.
15. NAMES. The names "FGIC Public Trust" and "Trustees of FGIC Public
Trust" refer respectively to the Trust created and the Trustees as trustees but
not individually or personally, acting from time to time under the Declaration
of Trust dated Feb. 23, 1994 and as may be amended from time to time which is
hereby referred to and a copy of which is on file at the office of the Secretary
of the State of Delaware and the principal office of the Trust. The obligations
of "FGIC Public Trust" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
16. AMENDMENTS TO THIS AGREEMENT. This Agreement may only be amended
by the parties in writing.
17. NOTICES. All notices and other communications hereunder shall be
in writing, shall be deemed to have been given when received or when sent by
telex or facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
TO THE AGENT:
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street - Suite 2700
Denver, Colorado 80202
Attn: James L. Smith
6
<PAGE>
TO THE FUND:
FGIC Public Trust
370 Seventeenth Street - Suite 2700
Denver, Colorado 80202
18. COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FGIC PUBLIC TRUST
BY:
-------------------------
ATTEST:
- -------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
BY:
-------------------------
ATTEST:
- -------------------------
7
<PAGE>
[LETTERHEAD]
August 28, 1997
Financial Investors Trust
370 17th Street, Suite 2700
Denver, CO 80202
Re: Financial Investors Trust
Registration Nos. 33-72424 and 811-8194
---------------------------------------
Dear Sir or Madam:
It is our opinion that the securities being registered hereunder
will, when sold, be legally issued, fully paid and non-assessable, and we hereby
consent to the reference to our firm as Counsel in Post-Effective Amendment
No. 7 to Registration Nos. 33-72424 and 811-8194.
Very truly yours,
BAKER & McKENZIE
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 6 to Registration Statement No. 33-72424 of our report dated May 22, 1997,
appearing in the April 30, 1997 Annual Report of Financial Investors Trust and
to the references to us under the captions "Financial Highlights" appearing in
the Prospectus and "Experts" appearing in the Statement of Additional
Information which are included in such Registration Statement.
Deloitte & Touche LLP
Denver, Colorado
August 21, 1997
<PAGE>
[LETTERHEAD]
August 28, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: FINANCIAL INVESTORS TRUST (REGISTRATION NOS. 33-72424 AND 811-8194)
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Dear Sir/Madam:
As counsel to Financial Investors Trust (the "Trust"), we have
reviewed Post-Effective Amendment No. 7 to the Trust's Registration Statement
on Form N-1A (the "Amendment"). The Amendment is being filed pursuant to
Rule 485 of the 1933 Act and it is proposed that it will become effective
immediately upon filing pursuant to paragraph (b).
Based on our review, it is our view that the Amendment does not
include disclosure which we believe would render it ineligible to become
effective under paragraph (b) of Rule 485.
If you have any questions or comments concerning the enclosed, please
telephone James R. Foggo at (212) 891-3946.
Sincerely,
/s/ James R. Foggo
----------------------------
James R. Foggo
JRF/ear
Enclosures
<PAGE>
U.S. TREASURY MONEY MARKET FUND
SEC Seven Day Yield as of April 30, 1997
(Base Period Return) X (365/7)
(.000955) X (365/7) = 5.17%
Seven Day Effective Yield as of April 30, 1997
(Base Period Return) + 1)365/7) - 1
(.000955 + 1)365/7) - 1 = 5.31%
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND
SEC Seven Day Yield as of April 30, 1997
(Base Period Return) X (365/7)
(.000972) X (365/7) = 5.29%
Seven Day Effective Yield as of April 30, 1997
(Base Period Return + 1) 365/7) - 1
(.000972 + 1)365/7) - 1 = 5.43%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> US TREASURY MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 166889578
<INVESTMENTS-AT-VALUE> 166889578
<RECEIVABLES> 1394567
<ASSETS-OTHER> 157535
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 168441680
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 749930
<TOTAL-LIABILITIES> 749930
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 167725567
<SHARES-COMMON-STOCK> 167725567
<SHARES-COMMON-PRIOR> 316397584
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (33817)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 167691750
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14068420
<OTHER-INCOME> 0
<EXPENSES-NET> (792895)
<NET-INVESTMENT-INCOME> 13275525
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13275525
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13275525)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 762297270
<NUMBER-OF-SHARES-REDEEMED> (923910706)
<SHARES-REINVESTED> 12941419
<NET-CHANGE-IN-ASSETS> (148672017)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (33817)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 748787
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1778915
<AVERAGE-NET-ASSETS> 264263037
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> .00
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .3
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> US GOVERNMENT MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 87805409
<INVESTMENTS-AT-VALUE> 87805409
<RECEIVABLES> 0
<ASSETS-OTHER> 23448
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 87828857
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 413205
<TOTAL-LIABILITIES> 413205
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87580070
<SHARES-COMMON-STOCK> 87428781
<SHARES-COMMON-PRIOR> 3117058
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (164418)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 87415652
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3879243
<OTHER-INCOME> 0
<EXPENSES-NET> (168418)
<NET-INVESTMENT-INCOME> 3710825
<REALIZED-GAINS-CURRENT> 22252
<APPREC-INCREASE-CURRENT> (40458)
<NET-CHANGE-FROM-OPS> 3692619
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3710825)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 209836616
<NUMBER-OF-SHARES-REDEEMED> (155874732)
<SHARES-REINVESTED> 2517778
<NET-CHANGE-IN-ASSETS> 56333504
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (161745)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 113608
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 284027
<AVERAGE-NET-ASSETS> 72285449
<PER-SHARE-NAV-BEGIN> 9.97
<PER-SHARE-NII> .14
<PER-SHARE-GAIN-APPREC> .00
<PER-SHARE-DIVIDEND> (.14)
<PER-SHARE-DISTRIBUTIONS> (8.97)
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
POWER OF ATTORNEY
We, the undersigned Trustees of FINANCIAL INVESTORS TRUST (the "Funds"), an
open-ended, diversified, management investment company, organized as a
Massachusetts business trust, do hereby constitute and appoint James V. Hyatt,
our true and lawful attorney and agent to take any and all action and execute
any and all instruments which said attorney and agent may deem necessary or
advisable to enable the Funds to comply with:
(i) the Securities Act of 1933, as amended, and any rules, regulations,
orders or other requirements of the Securities and Exchange
Commission thereunder, in connection with the registration under
such Securities Act of 1933, as amended, of shares of beneficial
interest of the Funds to be offered by the Funds;
(ii) the Investment Company Act of 1940, as amended, and any rules,
regulations, orders or other requirements of the Securities and
Exchange Commission thereunder, in connection with the registration
of the Funds under the Investment Company Act of 1940, as amended;
and
(iii) state securities laws and any rules, regulations, orders or other
requirements of state securities commissions, in connection with the
registration under state securities laws of the Funds and with the
registration under state securities laws of shares of beneficial
interest of the Funds to be offered by the Funds;
including specifically, but without limitation of the foregoing, power and
authority to sign the name of the Funds in its behalf and to affix its seal, and
to sign the name of such Trustee in his behalf as such Trustee to any amendment
or supplement (including post-effective amendments) to the registration
statement or statements filed with the Securities and Exchange Commission under
such Securities Act of 1933, as amended, and to execute any instruments or
documents filed or to be filed as part of or in connection with such
registration statement or statements, and to execute any instruments or
documents filed or to be filed as a part of or in connection with compliance
with state securities laws, including, but not limited to, all state filings for
any purpose, state filings in connection with corporate or trust organization or
amending corporate or trust documentation, filings for purposes of state tax
laws and filings in connection with blue sky regulations; and the undersigned
hereby ratifies and confirms all that said attorneys and agents shall do or
cause to be done by virtue hereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned place their hands as of this 15th day
of April, 1997.
/s/ W. Robert Alexander
- -------------------------
W. Robert Alexander
/s/ Mary K. Anstine
- -------------------------
Mary K. Anstine
/s/ Edwin B. Crowder
- -------------------------
Edwin B. Crowder
/s/ John R. Moran, Jr.
- -------------------------
John R. Moran, Jr.
