<PAGE>
SCHEDULE 14A INFORMATION:
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
CHECK THE APPROPRIATE BOX:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
(Name of Registrant as Specified In Its Charter): FGIC PUBLIC TRUST
(Name of Person(s) Filing Proxy Statement, if other than the Registrant):
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[ ] $125 Per Exchange Act Rules 0-11(c )(1)(ii), 14a-6(I)(1), or 14a-6(I)(2).
[ ] $500 Per each party to the controversy pursuant to Exchange Act
Rule 14a-6(I)(3).
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
<PAGE>
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FGIC PUBLIC TRUST
370 17th Street, Suite 2700
Denver, CO 80202
March 3, 1997
Dear Shareholders:
A Special Meeting of FGIC Public Trust (the "Trust"), will be held on
Friday, March 21, 1997, at 3:00 p.m. Eastern Time at the offices of ALPS
Mutual Funds Services, Inc. at 370 17th Street, Suite 2700, Denver, Colorado
80202. Shareholders of the U.S. Government Money Market Fund and the U.S.
Treasury Money Market Fund (each, a "Fund" or collectively, the "Funds"),
each a series of the Trust, are cordially invited to attend. The matters to
be acted upon are described in the attached Notice and Proxy Statement.
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<PAGE>
Although we would like very much to have each shareholder attend the Special
Meeting, we realize this may not be possible. Whether or not you plan to be
present, we need your vote. We urge you to complete, sign and return the
enclosed proxy card or cards promptly. A postage-paid envelope is enclosed for
this purpose.
If you return your proxy promptly you can help the Trust avoid the expense
of follow-up mailings to achieve a quorum. If your shares in the Trust are held
in street name, your bank or broker can vote your shares, but may do so only
upon receipt of your specific instructions. Please contact the person
responsible for your account and instruct him or her to execute a proxy card
today. If you decide between now and the meeting that you can attend the
meeting in person, you can revoke your proxy at that time and vote your shares
at the meeting.
As the date of the meeting approaches, if we have not received your vote,
you may receive a call from ALPS Mutual Funds Services, Inc., the Distributor
and Administrator for the Funds which will assist shareholders in the voting
process.
We look forward to seeing you at the meeting or receiving your proxy so that
your shares may be voted at the meeting.
Sincerely,
President
FGIC Public Trust
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF EACH PROPOSAL.
3
<PAGE>
FGIC PUBLIC TRUST
370 17th Street, Suite 2700
Denver, CO 80202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
March 3, 1997
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of the U.S. Government Money Market Fund and the U.S. Treasury
Money Market Fund (each, a "Fund" or collectively, the "Funds"), each a series
of FGIC Public Trust (the "Trust"), will be held at the offices of ALPS Mutual
Funds Services, Inc. at 370 17th Street, Suite 2700, Denver, Colorado 80202,
on Friday, March 21, 1997 at 3:00 p.m., Eastern time, for the following
purposes:
1. To elect four (4) Trustees to the Board of Trustees as set forth
in Part I of the attached Proxy Statement.
2. To approve new proposed advisory agreements between the Trust, on
behalf of each Fund, with GE Investment Management Incorporated
as set forth in Part II of the attached Proxy Statement.
3. To change the name of the Trust to Institutional Investors Trust
as set forth in Part III of the attached Proxy Statement.
4. To ratify or reject the selection of Deloitte and Touche LLP as
independent accountants for the Trust and each Fund for the
current fiscal year as described in Part IV of the attached Proxy
Statement.
5. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Only shareholders of record of the Funds at the close of business
on February 20, 1997 (the "Record Date") are entitled to receive
notice of and to vote at the Meeting and at any adjournments thereof
on matters relating to the Funds.
At the Meeting on Friday, March 21, 1997, the matters specified in Parts
I, II, III and IV of the attached Proxy Statement, relating to the election of
Trustees, the approval of the new proposed advisory arrangements, the change in
the Trust's name and the ratification of the selection of independent
accountants will be voted upon. Only shareholders of the Funds are being
solicited for their proxies.
March 3, 1997 By Order of the Trustees,
Secretary
FGIC Public Trust
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. A
4
<PAGE>
PROXY CARD IS ENCLOSED. IF YOU DO NOT EXPECT TO ATTEND THE MEETING, WE URGE
YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT
THE MEETING. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF EACH PROPOSAL.
5
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARD:
The following general rules for signing proxy cards may be of assistance to
you and may help to avoid the time and expense involved in validating your vote
if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS. Sign your name exactly as it appears on the
proxy card.
2. JOINT ACCOUNTS. Either party may sign, but the name of the party
signing should conform exactly to a name shown on the proxy card.
3. ALL OTHER ACCOUNTS. The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the name on the proxy card.
For example:
Registration Valid Signature
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp. (1) ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan (3) John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust (1) Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee (2) Jane B. Doe
u/t/d 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. (1) John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. (2) John B. Smith, Executor
6
<PAGE>
FGIC PUBLIC TRUST
370 17th Street, Suite 2700
Denver, CO 80202
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Trustees of FGIC Public Trust (the "Trust") on behalf of its
publicly offered series portfolios, the U.S. Government Money Market Fund (the
"Government Fund") and the U.S. Treasury Money Market Fund (the "Treasury
Fund"), (each, a "Fund" or collectively, the "Funds") to be used at the Special
Meeting of shareholders of the Funds and at any adjournments thereof (the
"Meeting").
The Meeting is scheduled to be held on Friday, March 21, 1997 at 3:00
p.m. Eastern time at the offices of ALPS Mutual Funds Services, Inc. at 370 17th
Street, Suite 2700, Denver, Colorado 80202. This Proxy Statement and the
accompanying form of proxy are being first mailed to shareholders of the Funds
on or about March 3, 1997.
COPIES OF THE FUNDS' MOST RECENT ANNUAL REPORTS ARE AVAILABLE WITHOUT CHARGE
UPON REQUEST MADE TO THE TRUST, 370 17TH STREET, SUITE 2700, DENVER, CO 80202,
(800) 298-FGIC(3442).
At the Meeting on Friday, March 21, 1997, the matters specified in
Parts I, II, III and IV of the attached Proxy Statement, relating to the
election of new Trustees, the new proposed investment advisory arrangements,
the proposed change of name for the Trust and the ratification or rejection
of independent accountants will be voted upon. Only shareholders of the Funds
are being solicited for their proxies.
Only shareholders of record at the close of business on February 20, 1997
(the "Record Date") will entitled to vote at the Meeting. On that date, there
were 120,568,769 and 186,700,836 shares of beneficial interest ("Share" or
"Shares"), respectively, in the Government Fund and the Treasury Fund
outstanding and entitled to be voted at the Meeting. Each Share or fraction
thereof is entitled to one vote or a fraction thereof.
For additional information with respect to the Meeting, the number of shares
needed for a quorum and the number of votes necessary to approve the proposals
described herein, please see Part VI of this Proxy Statement.
7
<PAGE>
INTRODUCTION
FGIC Advisors, Inc., 115 Broadway, New York, New York, the Funds' current
investment advisor ("FGIC" or the "Adviser"), a wholly-owned subsidiary of
General Electric Capital Corporation, and GE Investment Management Incorporated,
3003 Summer Street, Stamford, CT ("GEIM"), a wholly-owned subsidiary of General
Electric Company ("GE"), have elected to consolidate their investment management
activities in the cash management industry through GEIM's assumption of the
investment advisory role for the Funds. At the Meeting, shareholders will be
asked to take several actions in conjunction with this consolidation. With
respect to Proposal I, the Election of Trustees, all current members of the
Board of Trustees with the exception of Mr. Robert Alexander have tendered their
resignations, effective on the election of successor Trustees at the Meeting,
and three new candidates are being proposed for election by shareholders.
Information concerning each nominee for election as Trustee appears below.
Shareholders are also being asked to consider a new investment advisory
arrangement between the Trust and GEIM with respect to each Fund, including the
approval of new advisory agreements (each, a "New Advisory Contract" and
collectively, "New Advisory Contracts"). The New Advisory Contracts are being
submitted to shareholders of the Funds for the first time. Information
concerning the New Advisory Contracts appears below under Proposal II.
Proposal III concerns a change of name from FGIC Public Trust to Institutional
Investors Trust. If shareholders approve the New Advisory Contracts and the
current investment advisory arrangement with FGIC is terminated, FGIC will no
longer be associated with the Trust and its operations. The proposal to change
the name of the Trust will reflect this disassociation.
I. ELECTION OF TRUSTEES
The first proposal to be considered at the Special Meeting is the election of
four (4) of the five (5) Trustees of the Trust. The Board of Trustees of the
Trust will have one (1) vacancy. Mr. Alexander is currently a Trustee of the
Trust and has served in that capacity continuously since originally elected. He
is the only current Trustee who will stand for election by shareholders at the
Meeting. Messrs. Crowder and Moran, and Ms. Anstine have not previously served
as Trustees of the Trust and are nominated as successors to Ms. Ann C. Stern,
Ms. Beverly S. Bunch, and Messrs. William J. Cochran and Maynard H. Jackson.
The nominees for Trustee were approved by the Board of Trustees at meetings
held on January 20, and February 21, 1997. None of the nominees is related to
one another.
8
<PAGE>
The persons named in the accompanying form of proxy intend in the absence of
contrary instructions to vote all proxies for the election of the four nominees
listed below as Trustees of the Trust:
W. Robert Alexander
Mary K. Anstine
Edwin B. Crowder
John R. Moran, Jr.
to serve for indefinite terms until the earlier of (i) the election and
qualification of their successors, (ii) until any nominee resigns, or (iii)
until his or her term as Trustee is terminated in accordance with the Trust's
Declaration of Trust. In case a vacancy exists for any reason, the remaining
Trustees may fill such vacancy by appointing another Trustee. If, at anytime,
less than a majority of the Trustees holding office have been elected by the
shareholders, the Trustees then in office will call a shareholders meeting for
the purpose of electing a Board of Trustees. Normally, there will be no
meetings of shareholders for the purpose electing Trustees except as required by
the Investment Company Act of 1940 (the "1940 Act"). If any such nominee should
be unable to serve, an event that is not now anticipated, the proxies will be
voted for such person, if any, as shall be designated by the Board of Trustees
to replace such nominee.
In the tables that follow, those individuals indicated by an asterisk (*) are
"interested persons" of the Trust by virtue of, among other things, their
affiliation with the Trust, or the Trust's current or proposed new investment
adviser, or principal underwriter. In the election of Trustees, if the nominees
receive a majority of the votes cast at the Meeting, providing a quorum is
present, they shall be elected.
The following table contains relevant information concerning the nominees for
Trustee:
NAME (AGE)+ PRINCIPAL OCCUPATION**
- ----------- -----------------------
W. Robert Alexander (68)* Mr. Alexander , a member of the Board
of Trustees since December 1993, is the Chief
Executive 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
9
<PAGE>
Trustee of the Hunter and Hughes Trusts. Because
of his affiliation with ALPS, Mr. Alexander is
considered an "interested" Trustee of FGIC Public
Trust.
Mary K. Anstine (56) President/Chief Executive Officer, HealthONE,
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.
Edwin B. Crowder (65) Mr. Crowder currently operates a marketing concern
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. (66) Mr. Moran is President of The Colorado Trust, a
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.
- ------------------------
+ Based on statements furnished to the Trust by the nominees, no nominee
beneficially owns any shares of the Funds.
** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
The non-interested nominees, if elected, will 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.
The following table contains relevant information concerning the Executive
Officers of the Trust.
<TABLE>
NAME PRINCIPAL OCCUPATION** SINCE
- ---- ---------------------- -----
<S> <C> <C>
William Paston, February 1994
10
<PAGE>
Vice President and
Treasurer (40) Product Development Manager of ALPS Mutual Funds
Services. 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, February 1994
Secretary (43) Partner, Baker & McKenzie since April 1991;
Secretary, HSBC Funds Trust and HSBC Mutual Funds
Trust since 1987.
</TABLE>
- -----------------------
** Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.
The Fund's Board, which is currently composed of two interested and three non-
interested Trustees, met four times during the twelve months ended April 30,
1996. It is expected that the Trustees will meet at least four times a year at
regularly scheduled meetings. Each Trustee except Mr. Jackson attended at least
75% of the aggregate number of Board meetings and meetings of committees on
which he or she served during the twelve months ended April 30, 1996. Mr.
Jackson attended 25% of such meetings. The Fund's Audit Committee is composed
entirely of Trustees who are not interested persons of the Funds or of FGIC
Advisors, Inc. or ALPS Mutual Funds Services, Inc. or their affiliates and
normally meets once a year, or as required, prior to meetings of the Board of
Trustees. Currently, Messrs. Cochran, Jackson and Ms. Bunch are members of the
Committee. This Committee oversees and monitors the financial reporting process,
including recommending to the Board the independent accountants to be selected
for the Funds (see Proposal IV), reviewing internal controls and the auditing
function (both internal and external), reviewing the qualifications of key
personnel performing audit work, and overseeing compliance procedures. During
the twelve months ended April 30, 1996, the Committee held one meeting. The
Board of Trustees does not have a nominating committee, compensation committee
or any committee of the Board of Trustees performing similar functions. As a
group, the non-interested Trustees, in aggregate, received fees and expenses of
$19,500 from the Trust in their capacity as Trustees for the fiscal year ended
April 30, 1996.
The following table sets forth information describing the compensation of each
current Trustee of the Trust for his or her services as a Trustee for the fiscal
year ending April 30, 1996:
11
<PAGE>
COMPENSATION TABLE
<TABLE>
Name of Trustee Aggregate Pension or Estimated Total
Compensation Retirement Annual Compensation
From the Benefits Benefits From the Trust
Trust Accrued As Upon And Fund
Part of Fund Retirement Complex Paid to
Expenses Trustees
<S> <C> <C> <C> <C>
Beverly S. Bunch,
Trustee $7,000 $0 $0 $7,000
William J. Cochran,
Trustee $7,000 $0 $0 $7,000
Maynard H. Jackson
Trustee $5,500 $0 $0 $5,500
</TABLE>
Interested Trustees and Executive Officers of the Trust receive no compensation
from the Trust or the Funds.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION
OF EACH NOMINEE.
II. APPROVAL OR DISAPPROVAL OF THE NEW ADVISORY CONTRACTS
WITH GE INVESTMENT MANAGEMENT INCORPORATED
BACKGROUND
Each of the Funds is currently advised by FGIC Advisors, Inc. pursuant to
advisory agreements dated March 15, 1994 between the Trust and FGIC on behalf of
each Fund (each, an "Advisory Contract" or collectively, "Advisory Contracts").
The continuance of the Advisory Contracts were last approved by the Trustees,
including a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act), at a meeting held April 26, 1996.
On January 20, 1997, by vote of the Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act), by vote
cast in person at a meeting called for the purpose of voting on the approval,
the Trustees approved the New Advisory Contracts. If the New Advisory Contracts
are approved by shareholders of each Fund at the Meeting, each existing Advisory
Contract with FGIC will terminate. If the New Advisory Contract for a Fund is
not approved by the shareholders of such Fund, the Trustees would attempt to
make other investment advisory arrangements which, in their
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judgment, would be in the best interest of such Fund and its shareholders until
such time as an investment advisory agreement is approved by shareholders, or
the Trustees may consider liquidating the Fund.
DESCRIPTION OF CURRENT ADVISORY CONTRACTS
Each existing Advisory Contract provides that FGIC will manage the portfolio of
each Fund and will furnish to each Fund investment guidance and policy direction
in connection therewith. FGIC provides to each Fund, among other things,
information relating to money market portfolio composition, credit conditions
and average maturity of the portfolio of each Fund. FGIC also furnishes to the
Trust's Board of Trustees periodic reports on the investment performance of each
Fund.
FGIC also provides administrative assistance in connection with the operation
of each Fund under the Advisory Contracts. Administrative services provided by
FGIC include, among other things, (i) compiling statistical and research data
required for the preparation of reports and statements which are periodically
distributed to the Trust's officers and Trustees, (ii) providing to the Trust
and the Funds information relating to the composition, credit conditions and
average maturity of the Funds' portfolios, (iii) furnishing periodic reports on
the investment performance of the Funds to the Trustees, and (iv) monitoring the
Trust's and the Funds' 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 Funds under the Securities Act of
1933, as amended.
Under the Advisory Contracts, as compensation for its services, FGIC is entitled
to a monthly advisory fee at the annual rate of 0.35% and 0.15% of the average
daily net assets for the Treasury Fund and the Government Fund, respectively.
FGIC has to date voluntarily waived a portion of the advisory fee otherwise
payable and/or reimburses Trust expenses to the extent necessary to maintain a
total expense ratio of not more than 0.30% of average net assets with respect to
the Treasury Fund and 0.20% of average net assets with respect to the Government
Fund. FGIC reserves the right to terminate the fee waiver at any time. The
Adviser earned $742,238 and $264,224 in advisory fees for the Treasury Fund (all
of which was voluntarily waived) for the fiscal year ended April 30, 1996 and
for the period May 25, 1994 (commencement of operations) to April 30, 1995,
respectively. FGIC earned $136,073 and $215,432 in advisory fees from the
Government Fund, (of which $85,725 and $109,039 was voluntarily waived) for the
fiscal year ended April 30, 1996 and for the period June 7, 1994 (commencement
of operations) to April 30, 1995, respectively.
Except for the expenses paid by FGIC under the Advisory Contracts, each Fund
bears all costs of its operations. Expenses attributable to the Funds are
charged against the assets of each Fund, respectively.
13
<PAGE>
COMPARISON OF THE NEW ADVISORY CONTRACTS AND THE EXISTING ADVISORY CONTRACTS
ADVISORY SERVICES
The management, advisory and administrative services provided by GEIM to each
Fund under the New Advisory Contracts are substantially similar in all material
respects to the existing Advisory Contracts. Copies of the New Advisory
Contract for the Treasury Fund and the Government Fund are attached to this
Proxy Statement as Exhibits A and B, respectively. As is the case under the
existing Advisory Contracts with FGIC, the New Advisory Contracts with GEIM
provide that GEIM will provide administrative assistance in connection with the
operation of each Fund on the same terms as FGIC currently provides. Please see
the discussion of administrative services in "Description of Current Advisory
Contracts" above for more information.
ADVISORY FEES AND EXPENSES
The New Advisory Contracts provide for advisory fees to GEIM for its services at
the annual rates of 0.15% and 0.08% of average daily net assets for the Treasury
Fund and the Government Fund, respectively. By comparison, the advisory fee
rates under FGIC's Advisory Contracts with the Trust are 0.35% and 0.15% of
average daily net assets for the Treasury Fund and the Government Fund,
respectively. In addition, the New Advisory Contracts provide that GEIM will
waive its fees in accordance with the following table:
TREASURY FUND:
PORTION OF AVERAGE DAILY ADVISORY FEE RATE
NET ASSETS OF THE FUND AFTER WAIVERS
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%
GOVERNMENT FUND:
PORTION OF AVERAGE DAILY ADVISORY FEE RATE
NET ASSETS OF THE FUND AFTER WAIVERS
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%
Although FGIC's contractual advisory fee rates under the Advisory Contracts are
higher
14
<PAGE>
than the advisory fee rates agreed to in the New Advisory Contracts, FGIC, as
stated above, has voluntarily waived a portion of its advisory fees and
reimbursed Trust expenses to maintain total expense ratios of 0.30% and 0.20%
of average net assets for the Treasury Fund and the Government Fund,
respectively. By comparison, GEIM will waive a portion of its advisory fees
in accordance with the table set forth above, but will not reimburse Trust
expenses as FGIC has done heretofore. The Trust currently expects that if
the New Advisory Contract for the Government Fund is approved by
shareholders, the fee waiver and/or reimbursement policy to maintain a total
expense ratio of not more than 0.20% with respect to the Government Fund will
continue. The Government Fund's total expense ratio will be maintained
through reimbursements by the Fund's distributor, ALPS Mutual Funds Services,
Inc. rather than GEIM.
With respect to the Treasury Fund, the Trust will consider whether to maintain
the current total expense ratio at 0.30% of average net assets or whether
such ratio should be increased. It is not currently anticipated that this
ratio would increase by more than 0.05% to a total expense ratio of not more
than 0.35% of average net assets for the Treasury Fund. Any reimbursements of
Fund expenses to maintain the ratio for the Treasury Fund will be borne by
ALPS. Shareholders should note that the aforementioned waivers and
reimbursements for each Fund could be discontinued at any time and without
further notice.
LIMITATIONS OF LIABILITY
Each Advisory Contract and New Advisory Contract provides that the adviser shall
not be liable to the Trust and the Funds for any error in judgment or mistake of
law except willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations duties.
TERM AND TERMINATION
The New Advisory Contracts 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. A New Advisory 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 1940 Act) or by a
vote of a majority of the Trustees. The New Advisory Contracts shall terminate
automatically in the event of their assignment (as defined in the 1940 Act).
CONSIDERATION OF NEW ADVISORY CONTRACTS BY TRUSTEES
In considering each New Advisory Contract, the Trustees requested and reviewed
various materials, including materials furnished by GEIM. These materials
included information regarding GEIM (and its affiliated companies) and its
personnel, operations, financial condition and investment philosophy. GEIM also
provided information regarding performance records and comparative ranking data
for the GE Money Market Fund, a money market mutual fund managed by GEIM, a
profitability analysis, and total assets
15
<PAGE>
under management. Based on the representations of Trust management and the
materials presented at the meeting, the Trustees also considered that the
terms of the New Advisory Contracts were substantially similar to the
Advisory Contracts with FGIC.
In connection with the approval of each New Advisory Contract, the Trustees
considered that each Fund's total operating expenses prior to effective fee
waivers and/or reimbursements were expected to be the same, that the Funds'
investment objectives and policies were expected to remain the same and that
GEIM was expected to provide the same level, quality and types of investment
advisory and administrative services as FGIC provided to the Funds under the
Advisory Contracts. The Trustees also considered each New Advisory Contract in
light of comparative fee data for funds of similar size and investment style, as
well as the current and anticipated voluntary fee waivers and/or reimbursements
in effect for each Fund. See discussion of such fee waivers and reimbursements
under "Comparison of the New Advisory Contracts and the Existing Advisory
Contracts - Advisory Fees and Expenses" above.
The Trustees also took into account the financial strength of GEIM, management,
personnel and operations of GEIM, and the commitment of GEIM to the financial
services industry. The Trustees based their determinations in this regard on
discussions with representatives of GEIM at a meeting of the Board of Trustees
held on January 20, 1997, and a review of materials forwarded by GEIM prior to
the meeting and presented by representatives of GEIM at the meeting. These
materials included various documents outlining the current operations of GEIM
and the mutual funds and institutional accounts it advises and other information
which counsel for the Trust requested be provided to the Trustees, including the
disinterested Trustees.
The Trustees, in determining to recommend the approval of the New Advisory
Contracts, considered the advantages to each Fund of being associated with GEIM.
These factors included the investment performance of the money market funds
currently advised by GEIM, the quality and experience of GEIM's investment
personnel, the financial stability and size of GEIM and the impact upon the
Funds' marketing and distribution plans of retaining GEIM as investment adviser
to the Funds.
INFORMATION ABOUT THE PROPOSED NEW INVESTMENT ADVISER
GEIM, located at 3003 Summer Street, P.O. Box 7900 Stamford, Connecticut
06904, was formed under the laws of Delaware in 1988. It is a wholly-owned
subsidiary of General Electric Company ("GE") and is a registered investment
adviser under the Investment Advisers Act of 1940, as amended. GEIM and
General Electric Investment Corporation ("GEIC"), a sister company of GEIM
wholly-owned by GE, collectively provide investment management services to
various institutional accounts with total assets, as of December 31, 1996, in
excess of $57 billion, including $910 million in money market funds.
GEIM is the investment adviser and administrator of the GE Funds, an open-end
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management investment company currently comprised of eleven series of funds
with different investment objectives. It has served as the investment adviser
of the investment portfolios of Variable Investment Trust, which are offered
only to insurance company separate accounts that fund certain variable
annuity contracts, since their inception in 1994, and other institutional
accounts, including PaineWebber Global Equity Fund, a series of Paine Webber
Investment Trust, since its inception in 1991, the Global Growth Portfolio of
PaineWebber Series Trust and Global Small Cap Fund Inc. since March, 1995.
GEIM's principal officers and directors serve in similar capacities with
respect to GEIC which currently acts as the investment adviser of Elfun
Global Fund, Elfun Trusts, Elfun Income Fund, Elfun Money Market Fund, Elfun
Tax-Exempt Income Fund and Elfun Diversified Fund (collectively, the "Elfun
Funds"). The first Elfun Fund, Elfun Trusts, was established in 1935.
Investment in the Elfun Funds is generally limited to regular and senior
members of the Elfun Society, whose regular members are selected from active
employees of GE and/or its majority-owned subsidiaries, and whose senior
Society members are former members who have retired from those companies. In
addition, under the General Electric Savings and Security Program, GEIC
serves as investment adviser to the GE S&S Program Mutual Fund and GE S&S
Long Term Interest Fund. GEIC also serves as the investment adviser to the
General Electric Pension Trust. Through GEIM and GEIC and their predecessors,
GE has over 60 years of investment management experience. If Proposal II is
approved, the new portfolio manager for the Funds will be Mr. Bob MacDougall.
Mr. MacDougall, currently the portfolio manager of GEIM's and GEIC's money
market funds, has over 13 years of experience in the cash management industry.
As a Fund's investment adviser, GEIM, subject to the supervision and
direction of the Trust's Board of Trustees, manages the Fund's portfolio in
accordance with its investment objective and stated policies, makes
investment decisions for the Fund and places purchase and sale orders for the
Fund's portfolio transactions. GEIM also pays the salaries of all personnel
employed by both it and the Trust and provides each Fund with investment
officers who are authorized by the Board of Trustees to execute purchases and
sales of securities on behalf of the Fund.
RECOMMENDATION OF TRUSTEES
Based on the considerations set forth above under "Consideration of New
Advisory Contracts by Trustees", the Trustees, including the disinterested
Trustees, have determined that the New Advisory Contracts are in the best
interest of each Fund and its shareholders. The Trustees believe that the
Funds should receive investment advisory services under the New Advisory
Contracts equal to those that shareholders received under the Advisory
Contracts.
If the New Advisory Contracts for the Funds are not approved by shareholders
of each Fund, the Trustees would make other investment advisory arrangements
which, in their judgment, would be in the best interest of each Fund and its
shareholders until such time as an investment advisory agreement is approved
by shareholders.
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THE TRUSTEES, INCLUDING ALL OF THE TRUSTEES WHO ARE NOT "INTERESTED PERSONS"
OF THE TRUST, RECOMMEND THAT THE SHAREHOLDERS OF THE FUNDS VOTE TO APPROVE
THE NEW ADVISORY CONTRACTS.
III. TO CHANGE THE NAME OF THE TRUST TO
INSTITUTIONAL INVESTORS TRUST
In conjunction with the proposal to approve the New Advisory Contracts with
GEIM, it is proposed that the name of the Trust be changed from FGIC Public
Trust to Institutional Investors Trust. This change reflects the fact that
FGIC Advisors, Inc. would no longer act as investment adviser to the Trust.
THE TRUSTEES, INCLUDING ALL OF THE TRUSTEES WHO ARE NOT "INTERESTED PERSONS"
OF THE TRUST, RECOMMEND THAT THE SHAREHOLDERS OF THE TRUST VOTE TO APPROVE
THE CHANGE OF NAME FOR THE TRUST.
IV. TO RATIFY OR REJECT THE SELECTION OF DELOITTE AND TOUCHE LLP AS
INDEPENDENT ACCOUNTANTS OF THE TRUST
By a unanimous vote of the current non-interested Trustees at a meeting held
on July 22, 1996, the firm of Deloitte and Touche LLP has been selected as
independent accountants for the Trust to sign or certify any financial
statements of the Trust required by any law or regulation to be certified by
an independent accountant and filed with the Securities and Exchange
Commission or any state. Pursuant to the 1940 Act, such selection requires
the ratification or rejection by shareholders at the next succeeding annual
meeting of shareholders. Deloitte and Touche LLP has advised the Trust that
it has no direct or material indirect ownership interest in the Trust.
The independent accountants examine annual financial statements for the Trust
and the Funds and provide other audit and tax-related services. In
recommending the selection of the Trust's accountants, the Audit Committee
reviewed the nature and scope of the services to be provided (including
non-audit services) and whether the performance of such services would affect
the accountants' independence. Representatives of Deloitte and Touche LLP
are not expected to be present at the Meeting, but have been given the
opportunity to make a statement if they so desire and will be available
should any matter arise requiring their presence.
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THE TRUSTEES, INCLUDING ALL OF THE TRUSTEES WHO ARE NOT "INTERESTED PERSONS" OF
THE TRUST, RECOMMEND THAT THE SHAREHOLDERS OF THE TRUST VOTE TO RATIFY THE
SELECTION OF DELOITTE AND TOUCHE LLP AS INDEPENDENT AUDITORS OF THE TRUST.
V. OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. However,
if any other matters properly come before the Meeting, it is the intention that
proxies that do not contain specific instructions to the contrary will be voted
on such matters in accordance with the judgment of the persons therein
designated.
VI. MISCELLANEOUS
VOTING; QUORUM
Each share of the Trust is entitled to one vote on each matter submitted to a
vote of the shareholders of the Trust at the Meeting; no shares have cumulative
voting rights. Shares held by two or more persons (whether as joint tenants,
co-fiduciaries or otherwise) will be voted as follows unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Trust: (1) if only one votes, his or her vote will bind all;
(2) if more than one votes, the vote of the majority will bind all; and (3) if
more than one votes and the vote is evenly divided, the shares will be voted in
accordance with the determination of a majority of such persons and any person
appointed to act by a court of competent jurisdiction, or in the absence of such
appointment, the vote will be cast proportionately.
Shares will be voted in accordance with the specifications made on the Proxy. If
no specification is made with respect to a particular matter, shares will be
voted in accordance with the recommendation of the Trustees. Proxies may be
revoked at any time before they are voted by a written revocation received by
the Secretary of the Trust, by properly executing a later-dated proxy or by
attending the Meeting and voting in person. The Trust will request broker-dealer
firms, custodians, nominees and fiduciaries to forward proxy material to the
beneficial owners of the shares of record held by such persons. The Trust will
reimburse such persons for their reasonable expenses incurred in connection with
such proxy solicitation. Votes cast by proxy or in person will be counted by
persons appointed by the Trust to act as proxies for the Meeting.
Approval of Proposal II regarding the New Advisory Contracts requires the
affirmative vote of (i) 67% or more of the shares of each Fund present in person
at the Meeting or represented by proxy, if holders of more than 50% of the
shares of each Fund outstanding on the Record Date are present, in person or by
proxy, or (ii) more than 50% of the
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outstanding shares of each Fund on the Record Date, whichever is less.
Proposal I regarding the Election of Trustees requires the affirmative vote
of a plurality of shares voted. Approval of Proposals III and IV regarding
the change in name of the Trust and the ratification of the selection of the
independent accountants for the Trust requires the approval of a majority of
votes cast.
A quorum for the transaction of business at the Meeting is constituted with
respect to a Fund by the presence in person or by proxy of the holders of not
less than a majority of the outstanding shares of the Fund entitled to vote at
the Meeting. A quorum for the transaction of business at the Meeting is
constituted with respect to the Trust (i.e., in connection with Proposals I,
III and IV) by the presence in person or by proxy of the holders of not less
than a majority of the outstanding shares of the Trust entitled to vote at the
Meeting. If, by the time scheduled for the Meeting, a quorum of shareholders of
the Trust, or as the case may be, the Funds, is not present or if a quorum of
the Trust's shareholders is present but sufficient votes in favor of the
Proposals described in this Proxy Statement are not received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies from shareholders of the Trust. Any such adjournment
will require the affirmative vote of a majority of the shares of the Trust. The
persons named as proxies will vote in favor of any such adjournment if they
determine that such adjournment and additional solicitation are reasonable and
in the interests of the Trust's shareholders. If such adjournment is for more
than 120 days after the Record Date, the Trust will give notice of the adjourned
Meeting to shareholders.
In tallying shareholder votes, abstentions and broker non-votes (i.e., proxies
sent in by brokers and other nominees which cannot be voted on a Proposal
because instructions have not been received from the beneficial owners) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the Meeting. If a Proposal must be approved by a percentage of "votes
cast" on the Proposal, abstentions and broker non-votes will not be counted as
"votes cast" on the Proposal and will have no effect on the result of the vote.
If a Proposal must be approved by (i) a percentage of voting securities present
at the Meeting, or (ii) a majority of the shares issued and outstanding,
abstentions and broker nonvotes will be considered to be both present and issued
and outstanding and, as a result, will have the effect of being counted as votes
against the Proposal.
If the accompanying form of proxy is properly executed and returned in time to
be voted at the Meeting, the shares covered thereby will be voted in accordance
with the instructions marked thereon by the shareholder. Executed proxies that
are unmarked will be voted FOR each Proposal submitted to a vote of the
shareholders.
SOLICITATION OF PROXIES
The cost of the solicitation, including the cost of the Meeting and the cost of
preparing, printing, assembling and mailing the proxy materials, is estimated to
be $15,000 plus reimbursement of expenses. The cost of proxy solicitation and
expenses incurred in
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connection with the preparation of this Proxy Statement and its enclosures
will be paid by the Funds.
Proxy solicitations will be made primarily by mail, but proxy solicitations may
also be made by telephone, telegraph or personal solicitations conducted by
officers and employees of ALPS Mutual Funds Services, Inc. ("ALPS") or their
affiliates or other representatives of the Funds (who will not be paid for their
solicitation activities). ALPS will assist in soliciting proxies, and may
contact certain shareholders of the Fund by telephone. Shareholders who are
contacted by ALPS may be asked to cast their vote by telephonic proxy. Such
proxies will be recorded in accordance with the procedures set forth below.
ALPS believes these procedures are reasonably designed to ensure that the
identity of the shareholder casting the vote is accurately determined and that
the voting instructions of the shareholder are accurately reflected.
In all cases where a telephonic proxy is solicited, the ALPS representative will
ask you for your full name, address, social security or employer identification
number, title (if you are authorized to act on behalf of an entity, such as a
corporation), and number of shares owned. If the information solicited agrees
with the information on file, the ALPS representative will explain the process,
read the Proposals listed in the proxy card and ask for your instructions on
each Proposal. The ALPS representative, although he or she will answer questions
about the process, will not recommend to you how you should vote, other than to
read the recommendations set forth in this Proxy Statement. Within 72 hours,
ALPS will send you a letter or mailgram to confirm your vote and asking you to
call them immediately if your instructions are not correctly reflected in the
confirmation.
If you wish to participate in the Meeting and any adjournments thereof, but do
not wish to give your proxy by telephone, you may still submit the proxy card
included with this Proxy Statement or attend the Meeting in person. Any proxy
given by you, whether in writing or by telephone, is revocable in the manner
described above.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The only voting securities of the Trust are its shares of beneficial interest,
par value $0.001 per share. As of the Record Date, the Trustees and officers of
the Trust owned as a group less than 1% of the outstanding voting securities of
each Fund.
As of the Record Date the following shareholders owned beneficially 5% or more
of the shares of a Fund:
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GOVERNMENT FUND
AMOUNT OF PERCENTAGE
NAME BENEFICIAL OWNERSHIP OWNED
City of Cranston 21,444,135 17.8%
First Union National 15,881,306 13.2%
HealthCare FAC-SAYR
c/o Mellon Bank, N.A. 6,883,775 5.7%
City of Hartford 29,559,597 24.5%
First Trust of California
as Trustee for Riverside 9,827,016 8.2%
Treasurer, County of Riverside 10,000,000 8.3%
TREASURY FUND
AMOUNT OF PERCENTAGE
NAME BENEFICIAL OWNERSHIP OWNED
City of Bridgeport 16,868,873 9.0%
City of Cranston 10,020,043 5.4%
First Interstate Bank
Trustee FBO Orange
County Transportation
Authority 17,911,592 9.6%
Johnson County, KS 9,548,127 5.1%
Metropolitan District 10,496,151 5.6%
Riverside County Transportation
Commission 10,326,782 5.5%
NEXT MEETING OF SHAREHOLDERS
The Trust is not required and does not intend to hold annual or other
periodic meetings of shareholders except as required by the 1940 Act. The next
meeting of the shareholders of the Trust will be held at such time as the Board
of Trustees may determine or at such time as may be legally required. Any
shareholder proposal intended to be presented at such meeting must be received
by the Trust at its office a reasonable time prior to the meeting, as determined
by the Board of Trustees, to be included in a Fund's proxy statement and form of
proxy relating to such meeting, and must satisfy all other legal requirements.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE.
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EXHIBIT A
INVESTMENT ADVISORY AGREEMEENT
FGIC PUBLIC TRUST
U.S. TREASURY MONEY MARKET FUND
Agreement made as of , 1997 between GE INVESTMENT MANAGEMENT
INCORPORATED ("GEIM") and FGIC PUBLIC 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, THERFFORE, 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
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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.
(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 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
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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 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 AFTER WAIVERS
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.
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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 day, 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 _____________________
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 riot 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).
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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 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.
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IN WITNESS WHFREOF, 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:
-----------------------------------
Name:
Title:
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By:
------------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
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EXHIBIT B
INVESTMENT ADVISORY AGREEMEENT
FGIC PUBLIC TRUST
U.S. GOVERNMENT MONEY MARKET FUND
Agreement made as of , 1997 between GE INVESMENT MANAGEMENT
INCORPORATED ("GEIM") and FGIC PUBLIC 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, THERFFORE, 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
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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.
(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 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
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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 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 AFTER WAIVERS
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.
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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 day, 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 _____________________
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 riot 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).
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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 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.
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IN WITNESS WHFREOF, 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:
-----------------------------------
Name:
Title:
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By:
------------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
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FGIC PUBLIC TRUST
PROXY
SPECIAL MEETING OF SHAREHOLDERS -- March 21, 1997
- ------------------------------------------------------------------------------
The undersigned appoints Jeremy May and James V. Hyatt and
each of them, attorneys and proxies of the undersigned, with
power of substitution, to vote all shares of FGIC PUBLIC TRUST
U.S. TREASURY MONEY MARKET FUND AND U.S. GOVERNMENT MONEY MARKET
FUND which the undersigned is entitled to vote at the Special
Meeting of Shareholders to be held on Friday, March 21, 1997
at 3:00 p.m., Eastern time, and at any adjournment thereof.
THE BOARD OF TRUSTEES FAVORS A VOTE FOR EACH PROPOSAL.
Proposal 1: Election of four (4) Trustees to the Board of Trustees:
W. Robert Alexander FOR AGAINST ABSTAIN
Mary K. Anstine FOR AGAINST ABSTAIN
Edwin B. Crowder FOR AGAINST ABSTAIN
John R. Moran, Jr. FOR AGAINST ABSTAIN
Proposal 2: Approval of investment advisory agreement FOR AGAINST ABSTAIN
with GE Investment Management Incorporated
with respect to the U.S. Treasury Money
Market Fund
Approval of investment advisory agreement FOR AGAINST ABSTAIN
with GE Investment Management Incorporated
with respect to the U.S. Government Money
Market Fund
Proposal 3: Approval to change the name of the Trust FOR AGAINST ABSTAIN
to Institutional Investors Trust
Proposal 4: Ratification of selection of Deloitte FOR AGAINST ABSTAIN
and Touche LLP as independent accountants
of the Trust
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. WHEN PROPERLY
EXECUTED, IT SHALL BE VOTED IN THE MANNER SPECIFIED. IF NO SPECIFICATION IS
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MADE, IT SHALL BE VOTED FOR EACH OF THE PROPOSALS INDICATED ABOVE.
Please Complete, Sign and Date on Reverse Side and Mail in Accompanying
Postpaid Envelope.
NOTE: This instrument must be signed by -----------------------------
the registered holder(s). When signing Date
as attorney, administrator, trustee or
guardian, please give your title as such. -----------------------------
Signature(s)
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