<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 14a-11(c) or 14a-12
</TABLE>
FUNDS IV TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
FUNDS IV TRUST
SHORT-TERM TREASURY INCOME FUND
INTERMEDIATE BOND INCOME FUND
BOND INCOME FUND
STOCK APPRECIATION FUND
AGGRESSIVE STOCK APPRECIATION FUND
VALUE STOCK APPRECIATION FUND
237 PARK AVENUE
NEW YORK, NEW YORK 10017
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MARCH 11, 1996
-----------------------------------------------------------------
Notice is hereby given that a combined Special Meeting (the "Meeting") of
Shareholders of the Short-Term Treasury Income Fund, Intermediate Bond Income
Fund, Bond Income Fund, Stock Appreciation Fund, Aggressive Stock Appreciation
Fund and Value Stock Appreciation Fund (each, a "Fund" and together, the
"Funds"), each of which is a series of FUNDS IV Trust (the "Trust"), will be
held at the offices of Furman Selz LLC at 237 Park Avenue, New York, New York,
Suite 910, on Monday, March 11, 1996 at 11:00 a.m., Eastern time, for the
following purposes, with each Fund voting separately in connection with item one
below and together in connection with item two below:
1. To approve or disapprove the new Investment Advisory Agreements
between the Trust, on behalf of each Fund, and Bank IV as set forth in Part
I of the attached Proxy Statement.
2. To ratify or reject the selection of Price Waterhouse LLP,
independent public accountants, as auditors for the Trust and each Fund for
the current fiscal year as described in Part II of the attached Proxy
Statement.
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Only shareholders of record of each Fund at the close of business on
January 11, 1996 (the "Record Date") are entitled to receive notice of and to
vote at the Meeting and at any adjournments thereof on matters relating to that
Fund.
At the Meeting on Monday, March 11, 1996, the matters specified in Parts I
and II of the attached Proxy Statement relating to proposed new investment
advisory arrangements between the Trust, on behalf of each Fund and Bank IV, and
ratification of independent auditors will be voted upon. Only shareholders of
the Funds are being solicited for their proxies.
By Order of the Trustees,
Joan V. Fiore
Secretary
Funds IV Trust
February 9, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. A PROXY CARD IS
ENCLOSED FOR THE FUND OR FUNDS IN WHICH YOU ARE A SHAREHOLDER IF YOU DO NOT
EXPECT TO ATTEND THE MEETING. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE
ENCLOSED PROXY OR PROXIES 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 OR PROXIES PROMPTLY.
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF EACH OF THE PROPOSALS.
<PAGE> 3
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:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
- --------------------------------------------- ---------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
<PAGE> 4
FUNDS IV TRUST
SHORT-TERM TREASURY INCOME FUND
INTERMEDIATE BOND INCOME FUND
BOND INCOME FUND
STOCK APPRECIATION FUND
AGGRESSIVE STOCK APPRECIATION FUND
VALUE STOCK APPRECIATION FUND
237 PARK AVENUE
NEW YORK, NEW YORK 10017
-------------------------
PROXY STATEMENT
-------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Trustees of FUNDS IV Trust (the "Trust") on behalf of its
publicly offered series portfolios, the Short-Term Treasury Income Fund,
Intermediate Bond Income Fund, Bond Income Fund, Stock Appreciation Fund,
Aggressive Stock Appreciation Fund and Value Stock Appreciation Fund (each a
"Fund" and together the "Funds") to be used at the combined special meeting of
shareholders of the Funds and at any adjournments thereof (the "Meeting").
The Meeting is scheduled to be held on Monday, March 11, 1996 at 11:00 a.m.
Eastern time at the offices of Furman Selz LLC, 237 Park Avenue, New York, New
York, Suite 910. This Proxy Statement and the accompanying form of proxy are
being first mailed to shareholders of the Funds on or about February 9, 1996.
COPIES OF EACH FUND'S MOST RECENT ANNUAL REPORT ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST MADE TO THE TRUST, 237 PARK AVENUE, NEW YORK, NEW YORK
10017, (800) 557-3768.
At the Meeting on Monday, March 11, 1996, the matters specified in Parts I
and II of this Proxy Statement relating to the new investment advisory
arrangements between the Trust, on behalf of each Fund, and Bank IV, and
ratification of independent auditors will be voted upon. Only shareholders of
the Funds are being solicited for their proxies.
The following shares of each Fund were outstanding on January 11, 1996 (the
"Record Date"):
<TABLE>
<S> <C>
Short-Term Treasury Income Fund.......................... 1,765,893.5730
Intermediate Bond Income Fund............................ 12,398,103.8510
Bond Income Fund......................................... 2,977,149.3990
Stock Appreciation Fund.................................. 12,742,543.9460
Aggressive Stock Appreciation Fund....................... 4,759,972.6860
Value Stock Appreciation Fund............................ 2,146,479.1600
</TABLE>
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 III of this Proxy Statement.
INTRODUCTION
The Merger. On January 31, 1996, Fourth Financial Corporation ("Fourth
Financial"), the corporate parent of BANK IV, N.A., the investment adviser to
each Fund ("Bank IV"), each with its principal offices at 100 North Broadway,
Wichita, Kansas 67202, merged, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") with Boatmen's Bancshares, Inc. ("Boatmen's"), Boatmen's
Bancshares Inc., with its principal offices at One Boatmen's Plaza, 800 Market
Street, St. Louis, Missouri 62166. The Merger Agreement provides, among other
things, for the merger of Fourth Financial with and into a wholly-owned
subsidiary of Boatmen's, subject to the terms and conditions contained in the
Merger Agreement (the
<PAGE> 5
"Merger"). The Merger resulted in one of the nation's 30 largest bank holding
companies, with estimated assets of over $40 billion. As of September 30, 1995,
Fourth Financial is the nation's 71st largest bank holding company, with assets
of over $7.5 billion, and Boatmen's is the nation's 30th largest bank holding
company with assets of approximately $33 billion.
Boatmen's is a publicly owned multibank holding company registered as a
bank holding company under the Federal Bank Holding Company Act of 1956, as
amended. Based on filings with the Securities and Exchange Commission (the
"SEC"), Boatmen's has informed the Trust that as of October 23, 1995, no person
beneficially owned more than 10% of the outstanding shares of Boatmen's voting
securities.
Boatmen's and its subsidiaries provide a broad range of financial services
to individuals and businesses through offices in 9 states. Boatmen's manages or
otherwise oversees the investment of over $45 billion in assets belonging to a
wide range of clients, including the Pilot Family of Funds.
As required by the Investment Company Act of 1940, as amended (the "1940
Act"), the investment advisory agreement pursuant to which Bank IV provided
investment advisory services to the Funds prior to the merger provided for its
automatic termination upon its "assignment." The 1940 Act defines "assignment"
to include any direct or indirect transfer or hypothecation of a contract by the
assignor, or of a controlling block of the assignor's outstanding voting
securities by a security holder of the assignor. The Merger constituted an
indirect transfer to Boatmen's of the controlling block of the outstanding
voting securities of Fourth Financial, Bank IV's parent corporation giving rise
to an "assignment" of the Funds' investment advisory agreements with Bank IV
within the meaning of the 1940 Act, necessitating shareholder approval of new
investment advisory arrangements. The Trust, on behalf of the Funds and Bank IV
(together with the Trust, the "Applicants"), have obtained pursuant to Section
6(c) of the 1940 Act, an order of the SEC to provide the Applicants an exemption
from Section 15(a) of the 1940 Act (the "Exemptive Order"). Section 15(a) of the
1940 Act generally requires the shareholders to approve in advance a new
investment advisory agreement.
The exemption has permitted the implementation, without advance formal
shareholder approval, of the new investment advisory agreement described below,
which is identical to the former investment advisory agreement except for the
date, between the Trust and Bank IV with respect to each Fund. The exemption
covers an interim period of not more than 120 days (the "Interim Period")
beginning on the date of the Merger and continuing through the date a new
investment advisory agreement is approved or disapproved by the shareholders of
the respective Funds pursuant to this proxy, but in no event later than May 30,
1996. For each Fund, the aggregate contractual rate chargeable for investment
advisory services remains the same. During the Interim Period, fees payable by
the Funds for such investment advisory services are paid into escrow.
Under the Exemptive Order, the Applicants have entered into an escrow
arrangement with an unaffiliated financial institution permitting it to serve as
escrow agent. The arrangement, in substance provides that the fees payable to
Bank IV during the Interim Period under the new investment advisory agreement
are paid into an interest-bearing escrow account maintained by the escrow agent
and that the amounts in the escrow account with respect to each Fund (including
interest earned on such paid fees) will be paid to Bank IV only if shareholders
of the Fund approve the new investment advisory agreement. If shareholders of a
Fund fail to approve the new investment advisory agreement, the escrow agent
will pay that Fund its respective share of the escrow amounts (including any
interest earned).
If shareholders of the Funds approve the proposed new investment advisory
arrangements with Bank IV, Bank IV will continue the investment advisory
functions it currently performs.
I. APPROVAL OR DISAPPROVAL OF THE NEW INVESTMENT
ADVISORY AGREEMENTS
INTRODUCTION
New Investment Advisory Agreements. In view of the Merger and the factors
discussed below, the Trustees of the Trust, including those Trustees who are not
"interested persons" (as defined in the 1940 Act)
2
<PAGE> 6
(the "Independent Trustees") of the Trust, the Funds, Bank IV or Boatmen's, are
proposing that shareholders of each Fund approve for their Fund the new
investment advisory agreement between the Trust, on behalf of each Fund, and
Bank IV (each, a "New Investment Advisory Agreement" and together, the "New
Investment Advisory Agreements"), which became effective as of the consummation
of the Merger, which, as noted earlier, occurred on January 31, 1996. A
description of the New Investment Advisory Agreements pursuant to which, if they
are approved by shareholders of the Funds, Bank IV will continue as investment
adviser to each Fund beyond May 30, 1996, as well as the services to be provided
by Bank IV pursuant thereto is set forth below under "Advisory Services." Under
the New Investment Advisory Agreements, the same investment advisory fee
schedule as currently in effect for the Funds remains in place. The same
services currently provided to the Funds by Bank IV continue to be provided to
the Funds by Bank IV. The description of the New Investment Advisory Agreements
in this Proxy Statement is qualified in its entirety by reference to the form of
the New Investment Advisory Agreement attached hereto as Exhibit A.
Section 15(f) of the 1940 Act provides that an investment adviser to a
registered investment company may receive any amount or benefit in connection
with a sale of any interest in such adviser which results in an assignment of an
investment advisory contract if two conditions are satisfied. One condition is
that, for a period of three years after such assignment, at least 75% of the
Board of Trustees of the investment company cannot be "interested persons" (as
defined in the 1940 Act) of the new investment adviser or its predecessor. The
second condition is that no "unfair burden" (as defined in the 1940 Act) be
imposed on the investment company as a result of the assignment or any express
or implied terms, conditions or understandings applicable thereto. The parties
to the Merger Agreement intend to meet the foregoing safe harbor conditions.
Former Investment Advisory Agreements. Bank IV has served as investment
adviser to each Fund since the commencement of operations of the Funds pursuant
to a Master Advisory Contract, dated August 24, 1994 and Advisory Contract
Supplements, dated August 24, 1994 in the case of all Funds except November 29,
1994 in the case of Value Stock Appreciation Fund. As used herein, the Master
Advisory Contract and the Advisory Contract Supplement for a Fund, taken
together, are referred to, for each Fund, as such Fund's "Former Investment
Advisory Agreement" and together, for all Funds, as the "Former Investment
Advisory Agreements". At a meeting of the Trustees of the Trust held on January
15, 1996, the Trustees, including a majority of the Independent Trustees,
approved the New Investment Advisory Agreements for the Funds to become
effective upon the Merger and approved submission of the New Investment Advisory
Agreements to the Funds shareholders for their approval. For a discussion of the
reasons for the Trustees' approval of the New Investment Advisory Agreements,
see "Consideration of the New Investment Advisory Agreements by the Trustees".
If the New Investment Advisory Agreement for a Fund is not approved by
shareholders of such Fund, the Trustees would make other investment advisory
arrangements which, in their 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. The Former Investment Advisory Agreements were most
recently approved by shareholders of all Funds, except Value Stock Appreciation
Fund on August 24, 1994 and by shareholders of Value Stock Appreciation Fund on
November 29, 1994. The Former Investment Advisory Agreements were last approved
by the Trustees, including a majority of the Independent Trustees, on August 24,
1994 for all Funds except the Value Stock Appreciation Fund which was approved
on November 29, 1994.
During the fiscal year ended June 30, 1995, the Adviser received from the
Funds and the Adviser waived, respectively, the following advisory fees.
<TABLE>
<CAPTION>
ADVISORY FEES ADVISORY FEES
FUND PAID WAIVED
---------------------------------------------------- ------------- -------------
<S> <C> <C>
Short-Term Treasury Income Fund..................... $ 33,341 $15,251
Intermediate Bond Income Fund....................... 393,828 15,904
Bond Income Fund.................................... 50,141 --
Stock Appreciation Fund............................. 625,646 19,024
Aggressive Stock Appreciation Fund.................. 249,385 --
Value Stock Appreciation Fund....................... 46,639 --
</TABLE>
3
<PAGE> 7
It is currently expected that if the New Investment Advisory Agreements are
approved by the Funds' shareholders, the fee waiver policy currently in effect
will continue; however, shareholders should note that any existing fee waivers
could be discontinued at any time and without further notice.
COMPARISON OF THE NEW INVESTMENT ADVISORY AGREEMENTS AND THE
FORMER INVESTMENT ADVISORY AGREEMENTS
Advisory Services. The management and advisory services being provided by
Bank IV under the New Investment Advisory Agreements are identical to those
formerly provided by Bank IV under the Former Investment Advisory Agreements.
Under the New Investment Advisory Agreements, as under the Former Investment
Advisory Agreements, Bank IV serves as investment adviser and furnishes to each
Fund investment guidance and policy direction in connection therewith. Bank IV
provides to each Fund, among other things, information relating to portfolio
composition, credit conditions and average maturity of the portfolio of each
Fund. Bank IV also furnishes to the Trustees periodic reports on the investment
performance of each Fund.
Pursuant to the New Investment Advisory Agreements and Former Investment
Advisory Agreements, Bank IV is obligated to provide certain administrative
assistance in connection with the operations of each Fund. Administrative
services which Bank IV is obligated to provide include, among other things, (i)
data processing, clerical and bookkeeping services required in connection with
maintaining the financial accounts and records for the Fund, (ii) compiling
statistical and research data required for the preparation of reports and
statements which are periodically distributed to the Trust's Officers and the
Trustees, and (iii) compiling information required in connection with the
Trust's filings with the SEC.
Pursuant to a Master Administrative Services Contract (the "Existing
Administrative Services Contract") between the Trust and Furman Selz, Furman
Selz acts as the Administrator of the Funds. Furman Selz has its offices at 230
Park Avenue, New York, New York 10169. Furman Selz provides personnel, office
space and all management and administrative services reasonably necessary for
the operation of the Funds (such as maintaining each Fund's books and records,
monitoring compliance with various state and Federal laws and assisting the
Trustees in the execution of their duties) other than those services which are
provided by Bank IV pursuant to the Existing Investment Advisory Agreements.
Fees and Expenses. The investment advisory fees and expense limitations
for the Funds under the Former Investment Advisory Agreements and the New
Investment Advisory Agreements are set forth below, along with a discussion of
how such fees and expenses compare.
The investment advisory fee payable by the Funds is the same under the New
Investment Advisory Agreement as under the Former Investment Advisory Agreement.
Both Agreements, express the fee as an annual rate based on a percentage of a
Fund's average daily net assets. Under both Agreements, the advisory fee accrues
daily and is paid monthly.
The schedule of the compensation for investment advisory services payable
to Bank IV under the Former Investment Advisory Agreement for each Fund and the
schedule of fees currently payable to Bank IV under the New Investment Advisory
Agreement for each Fund are described below:
FORMER AND NEW INVESTMENT ADVISORY FEE SCHEDULE
<TABLE>
<CAPTION>
FUND ANNUAL FEE
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<S> <C>
Short-Term Treasury Income Fund.................................. 0.300%
Intermediate Bond Income Fund.................................... 0.400
Bond Income Fund................................................. 0.400
Stock Appreciation Fund.......................................... 0.650
Aggressive Stock Appreciation Fund............................... 0.745
Value Stock Appreciation Fund.................................... 0.650
</TABLE>
4
<PAGE> 8
Under the Existing Administrative Services Agreement Furman Selz is paid at
an annual rate of 0.15% of each Fund's average daily net assets for the
administrative services it performs for each Fund.
Expense Reimbursement. The Former Investment Advisory Agreements and the
New Investment Advisory Agreements include a provision calling for expense
limitations equal to the most restrictive limitation imposed from time to time
by states where a Fund's shares are qualified for sale.
Payment of Expenses and Transaction Charges. The New Investment Advisory
Agreements and the Former Investment Advisory Agreements contain identical
provisions relating to the respective parties' responsibilities for bearing
certain expenses of each Fund.
Under each Former Investment Advisory Agreement and each New Investment
Advisory Agreement, a Fund pays the costs of all of its expenses and
liabilities, including expenses and liabilities incurred in connection with
maintaining its registration under the 1940 Act and the Securities Act of 1933,
as amended, and maintaining any registrations or qualifications under the
securities laws of the states in which the Fund's shares are registered or
qualified for sale, subsequent registrations and qualifications, share
certificates, mailing, brokerage, issue and transfer taxes on sales of the
Fund's portfolio securities, custodian and stock transfer charges, printing,
legal and auditing expenses, expenses of shareholders' meetings, and reports to
shareholders.
Under each Former Investment Advisory Agreement and each New Investment
Advisory Agreement, a Fund is responsible for all of its expenses and
liabilities, including compensation of its Independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Fund's independent
accountants and legal counsel; trade association membership dues; fees and
expenses of any custodian (including fees and expenses for keeping books and
accounts and calculating the net asset value of shares of the Fund), transfer
agent, registrar and dividend disbursing agent of the Fund; expenses of issuing,
redeeming, registering and qualifying for sale the Fund's shares; expenses of
preparing and printing share certificates, prospectuses, shareholders' reports,
notices, proxy statements and reports to regulatory agencies; the cost of office
supplies; travel expenses of all officers, Trustees and employees; insurance
premiums; brokerage and other expenses of executing portfolio transactions;
expenses of shareholders' meetings; organizational expenses; and extraordinary
expenses.
Limitations of Liability. Each Former Investment Advisory Agreement and
each New Investment Advisory Agreement provides that Bank IV shall not be liable
to the Trust for any error of judgment, or mistake of law except willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties.
Each Former Investment Advisory Agreement and each New Investment Advisory
Agreement provides that Bank IV shall not be liable for any mistake of judgment
or in any other event whatsoever, except for lack of good faith, provided that
nothing in the New Investment Advisory Agreements shall be deemed to protect
Bank IV against any liability to a Fund or to the shareholders of the Fund to
which it would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of Bank IV's duties thereunder or by
reason of the reckless disregard by Bank IV of its obligations and duties.
Term. The proposed New Investment Advisory Agreement between a Fund and
Bank IV became effective (pursuant to the Funds' SEC Exemptive Order) upon
consummation of the Merger, which as indicated above occurred on January 31,
1996. If approved by the shareholders of each Fund, each New Investment Advisory
Agreement will continue in effect for an initial term of two years. Thereafter,
the New Investment Advisory Agreements will each be continued from year to year,
provided that their continuation is specifically approved at least annually, in
the manner required by the 1940 Act. The 1940 Act requires that each New
Investment Advisory Agreement and any renewal thereof be approved by a vote of a
majority of Trustees of the Trust who are not parties thereto or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting duly called for the purpose of voting on such approval, and by a vote of
the Trustees of the Trust or a majority of the outstanding voting securities of
the relevant Fund. A vote of a majority of the outstanding voting securities of
a Fund is defined in the 1940 Act to mean a vote of the lesser of (i) more than
50% of the outstanding voting securities of the Fund or (ii) 67% or more of
5
<PAGE> 9
the voting securities which are present or represented by proxy. The Former
Investment Advisory Agreement contained comparable provisions.
Termination; Assignment. Each Former Investment Advisory Agreement and
each New Investment Advisory Agreement provides that it may be terminated
without penalty upon 60 days' written notice by a majority of the Trustees or by
the affirmative vote of the holders of a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the relevant Fund or by Bank IV.
Also, each proposed New Investment Advisory Agreement will automatically
terminate in the event of its "assignment" (as defined in the 1940 Act).
INFORMATION ABOUT THE FUNDS' FORMER AND NEW INVESTMENT ADVISERS
Bank IV. Bank IV, whose predecessor was formed in 1887, is the largest
commercial bank in Kansas and provides banking, trust and investment services to
individuals and institutions. Prior to the Merger it was a wholly-owned
subsidiary of Fourth Financial Corporation. Bank IV acts as the investment
adviser to a wide variety of trusts, individuals, institutions and corporations.
Its investment management responsibilities, as of December 31, 1995, included
accounts with aggregate assets of approximately $3.6 billion. The principal
business address of Bank IV is 100 N. Broadway, Wichita, KS 67202.
Attached to this Proxy Statement as Exhibit B is a table that provides
information with respect to the current directors and principal executive
officers of Bank IV. Boatmen's has informed the Funds that these directors and
officers may be replaced upon consummation of the Merger.
During the fiscal year ended June 30, 1995, the Funds paid no brokerage
commissions to Furman Selz or to any affiliated broker.
Boatmen's Bancshares, Inc. Boatmen's Bancshares, Inc. is a bank holding
company headquartered in St. Louis, which had over $33 billion in consolidated
assets as of December 31, 1995. Boatmen's and its subsidiaries provide a broad
range of financial services to individuals and businesses through offices in 9
states. Boatmen's manages or otherwise oversees the investment of over $45
billion in assets belonging to a wide range of clients, including the Pilot
family of funds for which Boatmen's has served as investment adviser for one or
more of the funds since 1982.
During Boatmen's fiscal year ended December 31, 1995, there were no
transactions in Boatmen's securities by any officer, current Trustee of the
Trust or officer or director of Boatmen's or Bank IV in an amount equal to or
exceeding 1% of the outstanding securities of Boatmen's.
Consideration of the New Investment Advisory Agreements by the
Trustees. In considering each New Investment Advisory Agreement, the Trustees
requested and reviewed various materials, including materials furnished by
Boatmen's . These materials included information regarding Boatmen's (and its
affiliated companies) and its personnel, operations, financial condition and
investment philosophy. Boatmen's also provided information regarding the
performance records and expenses of the mutual funds advised by Boatmen's. Based
on the representations of Boatmen's, the Trustees also considered that the terms
of the New Investment Advisory Agreements were identical to the Former
Investment Advisory Agreements.
In connection with the approval of each New Investment Advisory Agreement,
the Trustees considered that each Fund's total operating expenses prior to
effective fee waivers were expected to be the same, that the Funds' investment
objectives and policies were expected to remain the same and that Bank IV was
expected to provide the same level, quality and types of investment advisory
services as Bank IV provided to the Funds under the Former Investment Advisory
Agreement. The Trustees noted the expectation of Bank IV to continue the fee
waiver currently in effect; recognizing, however, that any existing fee waivers
could be discontinued at any time and without further notice.
The Trustees also took into account the financial strength of Boatmen's,
the management, personnel and operations of Boatmen's , and the commitment of
Boatmen's to the financial services industry. The Trustees based their
determinations in this regard on discussions with representatives of Boatmen's
at a meeting of the
6
<PAGE> 10
Trustees held on January 15, 1996, and a review of materials forwarded by
Boatmen's in connection with the meeting. These materials included Boatmen's
annual report and various documents outlining the history and current operations
of Boatmen's and mutual funds it advises, as well as opportunities for the Funds
within this structure, and other information which counsel for the Independent
Trustees requested be provided to the Trustees.
The Trustees, in determining to recommend the approval of the New
Investment Advisory Agreements, considered the advantages to each Fund of being
associated with Boatmen's Trust Company ("BTC"), a subsidiary of Boatmen's,
advisors for Pilot Funds, a family of registered mutual funds. The factors
considered by the Trustees included information furnished by Boatmen's and BTC,
the investment performance of the Pilot Funds and other funds previously advised
by BTC's investment staff, the quality and experience of BTC's investment
personnel, the possibility of changes in Bank IV investment personnel in
connection with the Merger, BTC's arrangements for distribution of shares of the
funds for which it serves as investment adviser, its legal compliance
capabilities, and the nature of BTC's mutual fund shareholder services. The
Board also considered the possibility that one or more of the Funds might merge
with and into one or more funds advised by BTC. Any such merger would require
the approval of the Board of Trustees and of shareholders.
RECOMMENDATION OF THE TRUSTEES
Based on the considerations set forth above under "Consideration of the New
Investment Advisory Arrangements by the Trustees", the Trustees, including the
Independent Trustees, have determined that the New Investment Advisory
Agreements are in the best interests of each Fund and its shareholders. In
addition, Bank IV expects that there will be no diminution in the scope and
quality of services provided by it to the Funds as a result of these
transactions. The Trustees believe that the Funds should receive investment
advisory services under the New Investment Advisory Agreements equal to those
that shareholders received under the Former Investment Advisory Agreements.
If the respective New Investment Advisory Agreement is not approved by
shareholders of a Fund, the Trustees will determine the appropriate actions to
be taken with respect to such Fund's investment advisory arrangements at that
time.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE TO APPROVE
THE NEW INVESTMENT ADVISORY AGREEMENT FOR THEIR FUND.
II. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
At their August 24, 1995 meeting, the Trust's current Trustees selected
Price Waterhouse LLP as the independent public accountants for the Trust and its
Funds for the fiscal year ending June 30, 1996, subject to shareholder
ratification at the Meeting. Price Waterhouse LLP have acted as independent
public accountants with respect to the Funds since the Funds' inception in 1994.
Price Waterhouse LLP has advised the Trust that it has no direct or indirect
financial interest in the Trust. Price Waterhouse LLP also act as independent
public accountants for other investment companies and series of investment
companies. If the Trust receives a written request from any shareholder at least
five days prior to the Meeting stating that the shareholder will be present in
person at the Meeting and desires to ask questions of the accountants concerning
either Fund's financial statements, the Trust will arrange for a representative
of Price Waterhouse LLP to be available at the Meeting to respond to appropriate
questions.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE RATIFICATION
OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE TRUST'S INDEPENDENT ACCOUNTANTS.
7
<PAGE> 11
III. MISCELLANEOUS
VOTING; QUORUM
Each share of each Fund is entitled to one vote on each matter submitted to
a vote of the shareholders of their Fund at the Meeting; no shares have
cumulative voting rights. Shares held by two or more persons (whether as joint
tenants, co-fiduciaries or otherwise) will be voted as follows unless a written
instrument or court order providing to the contrary has been filed with the
Secretary of the Trust: (1) if only one votes, his or her vote will bind all;
(2) if more than one votes, the vote of the majority will bind all; and (3) if
more than one votes and the vote is evenly divided, the shares will be voted in
accordance with the determination of a majority of such persons and any person
appointed to act by a court of competent jurisdiction, or in the absence of such
appointment, the vote will be cast proportionately.
Shares represented by duly appointed proxies in the form included with this
Proxy Statement will be voted for the election of the persons named herein as
nominees for Trustees, unless such authority has been withheld. With respect to
the other matters specified in the accompanying proxy, shares will be voted in
accordance with the specifications made. 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 Funds 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. Bank IV will reimburse such persons for their
reasonable expenses incurred in connection with such proxy solicitation. Votes
cast by proxy or in person will be counted by persons appointed by the Fund to
act as proxies for the Meeting.
Approval of the proposals regarding the New Investment Advisory Agreements
between the Trust, on behalf of each Fund, and Bank IV requires, with respect to
a Fund, the affirmative vote of (i) 67% or more of the shares of the Fund
present in person at the Meeting or represented by proxy, if holders of more
than 50% of the shares of the Fund outstanding on the Record Date are present,
in person or by proxy, or (ii) more than 50% of the outstanding shares of the
Fund on the Record Date, whichever is less. Approval of the proposal regarding
the ratification of the selection of Price Waterhouse LLP as independent public
accountants of the Trust requires the approval of a majority of votes cast. If
any other business comes before the Meeting, the persons named as proxies intend
to take such actions as they consider to be in the best interests of
shareholders of each Fund.
A quorum for the transaction of business at the Meeting is constituted with
respect to a Fund (i.e., in connection with Proposal 1) by the presence in
person or by proxy of the holders of not less than a majority of the outstanding
shares of such Fund entitled to vote at the Meeting. A quorum for the
transaction of business is constituted with respect to the Trust (i.e., in
connection with Proposals 2 by the presence in person or by proxy of the holders
of not less than a majority of the outstanding shares of the Funds entitled to
vote at the Meeting. If, by the time scheduled for the Meeting, a quorum of
shareholders of a Fund or, as the case may be, the Funds, is not present or if a
quorum of a Fund's (or, as the case may be, the Funds') shareholders is present
but sufficient votes in favor of each 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 Fund which has not received sufficient votes. Any such
adjournment will require the affirmative vote of a majority of the shares of the
Fund with respect to which the Meeting is being adjourned or, as the case may
be, shares of the Funds present in person or represented by proxy at the session
of the Meeting to be adjourned. The persons named as proxies will vote in favor
of any such adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interests of the Fund's shareholders. If
such adjournment is for more than 120 days after the Record Date, the Fund as to
which the Meeting is being adjourned will give notice of the adjourned Meeting
to shareholders.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees which cannot be voted on a
Proposal because instructions have not been received from the beneficial
8
<PAGE> 12
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 (i.e., Proposal 2), abstentions and
broker non-votes will not be counted as "votes cast" on the Proposal and will
have no effect on the result of the vote. If a Proposal must be approved by (i)
a percentage of voting securities present at the Meeting, or (ii) a majority of
the shares issued and outstanding (i.e., Proposal 1), abstentions and broker
non-votes will be considered to be both present and issued and outstanding and,
as a result, will have the effect of being counted as votes against the
Proposal.
If the accompanying form of proxy is properly executed and returned in time
to be voted at the Meeting, the shares covered thereby will be voted in
accordance with the instructions marked thereon by the shareholder. Executed
proxies that are unmarked will be voted FOR each Proposal submitted to a vote of
the shareholders.
SOLICITATION OF PROXIES
The cost of the solicitation, including the cost of the Meeting and the
cost of printing, assembling and mailing the proxy materials, will not be borne
by shareholders.
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 Bank IV or their affiliates or other representatives
of the Funds (who will not be paid for their solicitation activities).
Management Information Services Corp. ("MIS") has been engaged by Bank IV to
assist in soliciting proxies, and may contact certain shareholders of the Funds
by telephone. Shareholders who are contacted by MIS may be asked to cast their
vote by telephonic proxy. Such proxies will be recorded in accordance with the
procedures set forth below. Bank IV 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 MIS representative
will ask you for your full name, address, social security or employer
identification number, title (if you are authorized to act on behalf of an
entity, such as a corporation), and number of shares owned. If the information
solicited agrees with the information provided to MIS by Bank IV, then the MIS
representative will explain the process, read the Proposals listed in the proxy
card and ask for your instructions on each Proposal. The MIS 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, MIS will send you a letter or mailgram to
confirm your vote and asking you to call MIS 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.
9
<PAGE> 13
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The only voting securities of each Fund are its shares of beneficial
interest, par value $0.001 per share. As of the Record Date, the Trustees and
officers of the Trust owned as a group less than 1% of the outstanding voting
securities of the Funds.
As of the Record Date the following shareholders owned beneficially 5% or
more of the shares of a Fund:
<TABLE>
<S> <C> <C>
SHORT-TERM TREASURY INCOME FUND
BANK IV FBO........................................ 203,809.68 Shares 11.54%
Miller's Inc. -- PST
100 North Market Street
Wichita, KS 67202
BANK IV FBO........................................ 182,457.92 Shares 10.33%
Palmer P/S Plan
100 Market Street
Wichita, KS 67202
BANK IV............................................ 152,595.35 Shares 8.64%
WTA Surg. Group, P.A.
100 Market Street
Wichita, KS 67202
INTERMEDIATE BOND INCOME FUND
BANK IV FBO........................................ 680,128.65 Shares 5.49%
FFC S&I
100 North Market Street
Wichita, KS 67202
BOND INCOME FUND
BANK IV FBO........................................ 164,940.76 Shares 5.54%
WTA Surg. Gr. P.A.
100 North Market Street
Wichita, KS 67202
BANK IV FBO........................................ 302,901.05 Shares 10.17%
Fourth Fin. Pension
100 Market Street
Wichita, KS 67202
BANK IV FBO........................................ 180,536.23 Shares 6.06%
NORA SAV RET-4th
100 North Market Street
Wichita, KS 67202
STOCK APPRECIATION INCOME FUND
BANK IV FBO........................................ 898,079.20 Shares 7.05%
Fourth Fin. Pension
100 North Market Street
Wichita, KS 67202
BANK IV FBO........................................ 1,222,840.83 Shares 9.60%
FFC S&I
100 Market Street
Wichita, KS 67202
</TABLE>
10
<PAGE> 14
<TABLE>
<S> <C> <C>
AGGRESSIVE STOCK APPRECIATION FUND
BANK IV FBO........................................ 309,861.09 Shares 6.51%
Fourth Fin. Pension
100 Market Street
Wichita, KS 67202
VALUE STOCK APPRECIATION FUND
BANK IV FBO........................................ 143,828.21 Shares 6.70%
McElroy MPP
100 North Market Street
Wichita, KS 67202
BANK IV FBO........................................ 227,238.11 Shares 10.59%
Explorer Retirement
100 Market Street
Wichita, KS 67202
BANK IV FBO........................................ 110,866.63 Shares 5.17%
Chandler USA
100 Market Street
Wichita, KS 67202
</TABLE>
IV. OTHER BUSINESS
The Board of Trustees knows of no other business to be brought before the
Meeting.
V. 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.
11
<PAGE> 15
EXHIBIT A
FORM OF MASTER INVESTMENT ADVISORY CONTRACT
FUNDS IV TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
, 1996
BANK IV, N.A.
100 N. Broadway
Wichita, Kansas 67202
Dear Sirs or Madams:
This will confirm the agreement between FUNDS IV Trust (the "Trust") and
BANK IV, N.A. (the "Adviser") as follows:
1. DEFINITIONS AND DELIVERY OF DOCUMENTS. The Trust has been organized as
a business trust under the laws of the State of Delaware and is an open-end
management investment company. The Trust's shares of beneficial interest may be
classified into series in which each series represents the entire undivided
interests of a separate portfolio of assets. For all purposes of this Contract,
a "Fund" shall mean a separate portfolio of assets of the Trust with respect to
which the Trust has entered into an Investment Advisory Contract Supplement, and
a "Series" shall mean the series of shares of beneficial interest representing
undivided interests in a Fund. All references herein to this Contract shall be
deemed to be references to this Contract as it may from time to time be
supplemented by Investment Advisory Contract Supplements. The Trust engages in
the business of investing and reinvesting the assets of each Fund in the manner
and in accordance with the investment objective and restrictions specified in
the Trust's Certificate of Trust, dated May 2, 1994 (the "Certificate of
Trust"), and the Prospectus or Prospectuses (the "Prospectus") relating to the
Trust and the Funds included in the Trust's Registration Statement, as amended
from time to time (the "Registration Statement"), filed by the Trust under the
Investment Company Act of 1940 (the "1940 Act") and the Securities Act of 1933
(the "1933 Act"). Copies of the documents referred to in the preceding sentence
have been furnished to the Adviser. Any amendments to those documents shall be
furnished to the Adviser promptly.
2. INVESTMENT ADVISORY AND MANAGEMENT SERVICES. (a) The Adviser shall
provide to the Trust investment guidance and policy direction in connection with
the management of the portfolio of each Fund, including oral and written
research, analysis, advice, statistical and economic data and information and
judgments, of both a macroeconomic and microeconomic character, concerning,
among other things, interest rate trends, portfolio composition, credit
conditions of both a general and special nature and the average maturity of the
portfolio of each Fund.
(b) The Adviser shall also provide to the Trust's officers administrative
assistance in connection with the operation of the Trust and each of the Funds.
Administrative services provided by the Adviser shall include (i) data
processing, clerical and bookkeeping services required in connection with
maintaining the financial accounts and records for the Trust and each of the
Funds, (ii) the compilation of statistical and research data required for the
preparation of periodic reports and statements of each of the Funds which are
distributed to the Trust's officers and Board of Trustees, (iii) the compilation
of information required in connection with the Trust's filings with the
Securities and Exchange Commission and (iv) such other services as the Adviser
shall from time to time determine, upon consultation with the Administrator, to
be necessary or useful to the administration of the Trust and each of the Funds.
(c) As a manager of the assets of each Fund, the Adviser shall make
investments for the account of each Fund in accordance with the Adviser's best
judgment and within the investment objectives and restrictions of each such Fund
set forth in the Trust's Declaration of Trust, the Prospectus of each such Fund,
the 1940 Act and the provisions of the Internal Revenue Code relating to
regulated investment companies, subject to policy decisions adopted by the
Trust's Board of Trustees. The Adviser shall advise the Trust's Officers and
Board of
A-1
<PAGE> 16
Trustees, at such times as the Board of Trustees may specify, of investments
made for each of the Funds and shall, when requested by the Trust's officers or
Board of Trustees, supply the reasons for making particular investments.
(d) The Adviser, subject to and in accordance with any directions which the
Trust's Board of Trustees may issue from time to time, shall place, in the name
of the Funds, orders for the execution of the Fund's securities transactions.
When placing such orders the Adviser shall generally seek to obtain the best net
price and execution for the Funds, but this requirement shall not be deemed to
obligate the Adviser to place any order solely on the basis of obtaining the
lowest commission rate or spread if the other standards set forth below have
been satisfied. The parties recognize that there are likely to be many cases in
which different brokers or dealers are equally able to provide such best price
and execution and that, in selecting among such brokers or dealers with respect
to particular trades, it is desirable to choose those brokers or dealers who
furnish research, statistics, quotations and other information to the Funds and
the Adviser in accordance with the standards set forth below. Moreover, to the
extent that it continues to be lawful to do so and so long as the Board of
Trustees determines that the Funds will benefit, directly or indirectly, by
doing so, the Adviser may place orders with a broker who charges a commission
for that transaction which is in excess of the amount of commission that another
broker would have charged for effecting that transaction, provided that the
excess commission is reasonable in relation to the value of "brokerage and
research services" (as defined in Section 28(e)(3) of the Securities Exchange
Act of 1934) provided by that broker.
Accordingly, the Trust and the Adviser agree that the Adviser shall select
brokers for the execution of the Funds' transactions from among those brokers
and dealers who provide quotations and other services to the Funds, specifically
including the quotations necessary to determine the Funds' net assets, in such
amount of total brokerage as may reasonably be required in light of such
services; and those brokers and dealers who supply research, statistical and
other data to the Adviser or its affiliates which the Adviser or its affiliates
may lawfully and appropriately use in their investment advisory capacities,
which relate directly to securities, actual or potential, of the Funds, or which
place the Adviser in a better position to make decisions in connection with the
management of the Funds' assets and securities, whether or not such data may
also be useful to the Adviser and its affiliates in managing other portfolios or
advising other clients, in such amount of total brokerage as may reasonably be
required.
(e) The Adviser shall render regular reports to the Trust, not more
frequently than quarterly, of how much total business for the Funds' portfolio
transactions has been placed by the Adviser with brokers or dealers falling into
each of the categories referred to above and the manner in which the allocation
has been accomplished.
(f) The Adviser agrees that no investment decision will be made or
influenced by a desire to direct portfolio transactions for allocation in
accordance with the foregoing, and that the right to make such allocation shall
not interfere with the Adviser's paramount duty to obtain the best net price and
execution for the Funds.
(g) The Adviser shall furnish to the Board of Trustees periodic reports on
the investment performance of each Fund and on the performance of its
obligations under this Contract and shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. EXPENSES. (a) The Adviser shall, at its expense, (i) employ or
associate with itself such persons as it believes appropriate to assist in
performing its obligations under this Contract and (ii) provide all advisory
services, equipment, facilities and personal necessary to perform its
obligations under this Contract.
The Trust shall be responsible for all of its expenses and liabilities,
including compensation of its Trustees who are not affiliated with the
Administrator or the Adviser or any of their affiliates; taxes and governmental
fees; interest charges; fees and expenses of the Trust's independent accountants
and legal counsel; trade association membership dues; fees and expenses of any
custodian (including for keeping books and accounts and calculating the net
asset value of shares of each Series, transfer agent, registrar and dividend
disbursing agent of the Trust; expenses of issuing, selling, redeeming,
registering and qualifying for sale the Trust's shares of beneficial interest;
expenses of preparing and printing share certificates, prospectuses,
shareholders' reports,
A-2
<PAGE> 17
notices, proxy statements and reports to regulatory agencies; the cost of office
supplies; travel expenses of all officers, trustees and employees; insurance
premiums; brokerage and other expenses of executing portfolio transactions;
expenses of shareholders' meetings; organizational expenses; and extraordinary
expenses).
4. LIMITATION OF LIABILITY OF ADVISER. The Adviser shall give the Trust
the benefit of the Adviser's best judgment and efforts in rendering services
under this Contract. As an inducement to the Adviser's undertaking to render
these services, the Trust agrees that the Adviser shall not be liable under this
Contract for any mistake in judgment or in any other event whatsoever except for
lack of good faith, provided that nothing in this Contract shall be deemed to
protect or purport to protect the Adviser against any liability to the Trust or
its shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties under this Contract or by reason of the Adviser's reckless
disregard of its obligations and duties hereunder.
5. COMPENSATION OF THE ADVISER. In consideration of the services to be
rendered, facilities furnished and expenses paid or assumed by the Adviser under
this Contract, the Trust shall pay the Adviser a fee with respect to each Fund
in accordance with the applicable Investment Advisory Contract Supplement. Fees
under this Contract will begin to accrue on the first day of a Fund's
operations.
If the fees payable to the Adviser pursuant to this paragraph 5 and the
applicable Investment Advisory Contract Supplement begin to accrue before the
end of any month or if this Contract terminates before the end of any month, the
fees for the period from that date to the end of that month or from the
beginning of that month to the date of termination, as the case may be, shall be
prorated according to the proportion which the period bears to the full month in
which the effectiveness or termination occurs. For purposes of calculating the
monthly fees, the value of the net assets of each Fund shall be computed in the
manner specified in the Prospectus for the computation of net asset value. For
purposes of this Contract, "business day" means each weekday except those
holidays on which the Federal Reserve Bank of New York, the New York Stock
Exchange (the "Exchange") or the Adviser are closed. Currently, those holidays
include: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving and Christmas.
6. LIMITATION OF EXPENSES PAID BY THE FUNDS. The limitation of expenses
for each Fund is set forth in the applicable Investment Advisory Contract
Supplement.
7. DURATION AND TERMINATION OF THIS CONTRACT. This Contract and any
Investment Advisory Contract Supplement, shall become effective with respect to
a Fund on the date specified in the Supplement and shall thereafter continue in
effect provided, that this Contract shall continue in effect with respect to a
Fund for a period of more than two years from such date specified in the
Supplement only so long as the continuance is specifically approved at least
annually (a) by the vote of a majority of the outstanding voting securities of
that Fund (as defined in the 1940 Act) or by the Trust's Board of Trustees and
(b) by the vote, cast in person at a meeting called for the purpose, of a
majority of the Trust's Trustees who are not parties to this Contract or
"interested persons" (as defined in the 1940 Act) of any such party. This
Contract may be terminated with respect to a Fund at any time, without the
payment of any penalty, by a vote of a majority of the outstanding voting
securities of that Fund (as defined in the 1940 Act) or by a vote of a majority
of the Trust's Board of Trustees on 60 days' written notice to the Adviser or by
the Adviser on 60 days' written notice to the Trust. If this Contract is
terminated with respect to any Fund, it shall nonetheless remain in effect with
respect to any remaining Funds. This Contract shall terminate automatically in
the event of its assignment (as defined in the 1940 Act).
8. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Contract shall be effective until approved
by (a) the vote, cast in person at a meeting called for the purpose, of a
majority of the Trustees who are not parties to this Contract or "interested
persons" (as defined in the 1940 Act) of any such party, and (b) with respect to
any Fund affected by such change, waiver, discharge or termination, by the vote
of a majority of the outstanding voting securities of the Series relating to
such Fund, provided that no approval shall be required pursuant to this clause
(b) in respect
A-3
<PAGE> 18
of an Investment Advisory Contract Supplement entered into to add a Fund to
those covered by this Contract (or any amendment or termination of such
Supplement) by the holders of the outstanding voting securities of any Series
other than that of such Fund.
9. OTHER ACTIVITIES OF THE ADVISER. Except to the extent necessary to
perform the Adviser's obligations under this Contract, nothing herein shall be
deemed to limit or restrict the right of the Adviser, or any affiliate of the
Adviser, or any employee of the Adviser, to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
10. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Contract may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The Declaration of the Trust has been filed with
the Secretary of State of the State of Delaware. The obligations of the Trust
are not personally binding upon, nor shall resort be had to the private property
of, any of the Trustees, shareholders, officers, employees or agents of the
Trust, but only the Trust's property shall be bound.
The Trust recognizes that from time to time directors, officers and
employees of the Adviser may serve as trustees, directors, officers and
employees of other business trusts and corporations (including other investment
companies) and that such other entities may include the name "Resource" as part
of their name, and that the Adviser or its affiliates may enter into investment
advisory or other agreements with such other entities. If the Adviser ceases to
act as investment adviser to the Trust and its Funds, the Trust agrees that,
upon the instruction of the Adviser, the Trust will take all necessary action to
change the names of the Trust and the Funds to names not including "Resource" in
any form or combination of words.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
FUNDS IV TRUST
By:
--------------------------------------
Title:
ACCEPTED:
BANK IV, N.A.
By:
- -----------------------------------------------------
Title:
A-4
<PAGE> 19
FORM OF MASTER INVESTMENT ADVISORY CONTRACT SUPPLEMENT
SHORT-TERM TREASURY INCOME FUND
INTERMEDIATE BOND INCOME FUND
BOND INCOME FUND
STOCK APPRECIATION FUND
AGGRESSIVE STOCK APPRECIATION FUND
VALUE STOCK APPRECIATION FUND
(THE "FUND")
A SERIES OF FUNDS IV TRUST
237 PARK AVENUE
NEW YORK, NEW YORK 10017
, 1996
BANK IV, N.A.
100 N. Broadway
Wichita, Kansas 67202
Dear Sirs or Madams:
This will confirm the agreement between FUNDS IV Trust (the "Trust") and
BANK IV, N.A. (the "Adviser") as follows:
The Fund is a series portfolio of the Trust which has been organized as a
business trust under the laws of the State of Delaware and is an open-end
management investment company. The Trust and the Adviser have entered into a
Master Investment Advisory Contract, dated , 1996 (as from time to time
amended and supplemented, the "Master Advisory Contract"), pursuant to which the
Adviser has undertaken to provide or make provision for the Trust for certain
investment advisory and management services identified therein and to provide
certain other services, as more fully set forth therein. Certain capitalized
terms used without definition in this Investment Advisory Contract Supplement
have the meaning specified in the Master Advisory Contract.
The Trust agrees with the Adviser as follows:
1. ADOPTION OF MASTER ADVISORY CONTRACT. The Master Advisory Contract is
hereby adopted for the Fund. The Fund shall be one of the "Funds" referred to in
the Master Advisory Contract; and its shares shall be a "Series" of shares as
referred to therein.
2. PAYMENT OF FEES. For all services to be rendered, facilities furnished
and expenses paid or assumed by the Adviser as provided in the Master Advisory
Contract and herein, the Fund shall pay a monthly fee on the first business day
of each month, based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net asset
value per share) of the net assets of the Fund during the preceding month, at
the annual rate of %.
3. LIMITATION OF EXPENSES PAID BY THE FUND. (a) If the aggregate expenses
of every character incurred by, or allocated to, a Fund in any fiscal year,
other than interest, taxes, expenses under the Plan, brokerage commissions and
other portfolio transaction expenses, other expenditures which are capitalized
in accordance with generally accepted accounting principles and any
extraordinary expenses (including, without limitation, litigation and
indemnification expenses) but including the fees payable under the Master
Administrative Services Contract and the fees provided for in paragraph 5 of the
Master Advisory Contract ("includable expenses"), shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or lowered from time
to time, the Fund may deduct from the fees to be paid to the Adviser, or the
Adviser will bear, to the extent required by state law, that portion of such
excess which bears the same relation to the total of such excess as the fee to
be paid to the Adviser bears to the total fee otherwise payable for the fiscal
year by the Fund pursuant to the Master Advisory Contract and the Master
Administrative Services Contract between the Trust and the Administrator.
<PAGE> 20
The Adviser's obligation pursuant hereto will be limited to the amount of the
fees payable for the fiscal year by the Fund pursuant to the Master Advisory
Contract.
(b) With respect to portions of a fiscal year in which this Contract shall
be in effect, the limitation specified in subparagraph (a) of paragraph 3 above
shall be prorated according to the proportion which that portion of the fiscal
year bears to the full fiscal year. At the end of each month of the Trust's
fiscal year, the Administrator will review the includable expenses accrued
during that fiscal year to the end of the period and shall estimate the
contemplated includable expenses for the balance of that fiscal year. If, as a
result of that review and estimation, it appears likely that the includable
expenses will exceed such limitation for a fiscal year with respect to the Fund,
the monthly fees relating to that Fund payable to the Adviser under this
Contract for such month shall be reduced, subject to the later adjustments at
the end of each month through the end of the fiscal year to reflect actual
expenses, by an amount equal to the proportionate share attributable to the
Adviser as described in subparagraph (a) of paragraph 3 above of a pro rata
portion (prorated on the basis of the remaining months of the fiscal year,
including the month just ended) of the amount by which the includable expenses
for the fiscal year (less an amount equal to the aggregate of actual reductions
made pursuant to this provision with respect to prior months of the fiscal year)
are expected to exceed such limitation. For purposes of the foregoing, the value
of the net assets of the Fund shall be computed in the manner specified in the
penultimate sentence of paragraph 5 of the Master Advisory Contract, and any
payments required to be made by the Adviser shall be made once a year promptly
after the end of the Trust's fiscal year.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
SHORT-TERM TREASURY INCOME FUND
INTERMEDIATE BOND INCOME FUND
BOND INCOME FUND
STOCK APPRECIATION FUND
AGGRESSIVE STOCK APPRECIATION FUND
VALUE STOCK APPRECIATION FUND
Each a series of FUNDS IV Trust
By:
--------------------------------------
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
BANK IV, N.A.
By:
- -----------------------------------------------------
Title:
2
<PAGE> 21
EXHIBIT B
DIRECTORS AND PRINCIPAL EXECUTIVE
OFFICERS OF BANK IV
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S)
NAME DURING PAST 5 YEARS
- --------------------------------------------- ---------------------------------------------
<S> <C>
Darrell G. Knudson........................... Chairman of the Board, President, and Chief
Executive Officer of Fourth Financial
Corporation and Director of BANK IV and BANK
IV Oklahoma.
K. Gordon Greer.............................. Chairman of the Board, President, and Chief
Executive Officer of BANK IV.
Michael R. Ritchey........................... President, Trust and Asset Management, and
Senior Trust Officer of Fourth Financial
Corporation and of BANK IV.
David L. Strohm.............................. Executive Vice President and Treasurer of
Fourth Financial Corporation; Executive Vice
President of BANK IV and BANK IV Oklahoma.
William J. Rainey............................ Executive Vice President, Secretary and
General Counsel of Fourth Financial
Corporation and BANK IV.
Michael J. Shonka............................ Senior Vice President and Chief Financial
Officer of Fourth Financial Corporation;
Senior Vice President of BANK IV and BANK IV
Oklahoma.
John F. Guettler............................. Senior Vice President and Director of Human
Resources of BANK IV.
</TABLE>
B-1
<PAGE> 22
FUNDS IV TRUST
SHORT-TERM TREASURY INCOME FUND
INTERMEDIATE BOND INCOME FUND
BOND INCOME FUND
STOCK APPRECIATION FUND
AGGRESSIVE STOCK APPRECIATION FUND
VALUE STOCK APPRECIATION FUND
PROXY SPECIAL MEETING OF SHAREHOLDERS -- MARCH 1, 1996
The undersigned appoints John J. Pileggi and Joan V. Fiore and each of them,
attorneys and proxies of the undersigned, with power of substitution, to vote
all shares of the SHORT-TERM TREASURY INCOME FUND, INTERMEDIATE BOND INCOME
FUND, BOND INCOME FUND, STOCK APPRECIATION FUND, AGGRESSIVE STOCK APPRECIATION
FUND, and VALUE STOCK APPRECIATION FUND which the undersigned is entitled to
vote at the Special Meeting of Shareholders to be held on Friday, March 1, 1996
at 11:00 a.m., New York time, and at any adjournment thereof.
Please Complete, Sign and Date on Reverse Side and Mail in Accompanying Postpaid
Envelope.
(Continued on other side)
<PAGE> 23
(Continued from other side)
THE BOARD OF TRUSTEES FAVORS A VOTE FOR EACH PROPOSAL.
<TABLE>
<S> <C> <C>
Proposal 1: Approval of The Investment Advisory Agreement / / FOR / / AGAINST / / ABSTAIN
Ratification of selection of independent
Proposal 2: accountants / / FOR / / AGAINST / / ABSTAIN
</TABLE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHEN PROPERLY
EXECUTED, IT SHALL BE VOTED IN THE MANNER SPECIFIED. IF NO SPECIFICATION IS
MADE, IT SHALL BE VOTED FOR THE APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
AND PROPOSAL 2.
NOTE: This instrument must be
signed by the registered
holder(s). When signing
as attorney,
administrator, trustee
or guardian, please give
your title as such.
------------------------------
Date
------------------------------
------------------------------
Signature(s)
