<PAGE>
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON March 28, 2000.
FILE NO. 33-83430
FILE NO. 811-8738
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-IA
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 9 (X)
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11 (X)
WHITEHALL FUNDS TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
4400 Computer Drive
Westborough, Massachusetts 01581 (617) 535-0526
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (REGISTRANT'S TELEPHONE NUMBER)
Marc A. Schuman, Esq.
PFPC Inc.
3200 Horizon Drive
KING OF PRUSSIA, PENNSYLVANIA 19406
(NAME AND ADDRESS OF AGENT FOR SERVICE)
With a Copy to:
Steven R. Howard, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
It is proposed that this filing become effective (check appropriate
box):
X immediately upon filing pursuant to Paragraph (b);
-----
_____ on (date) pursuant to Paragraph (b);
_____ 60 days after filing pursuant to paragraph (a)(i);
_____ on (date) pursuant to Paragraph (a)(i);
_____ 75 days after filing pursuant to paragraph (a)(ii); or
_____ on (date) pursuant to paragraph (a)(ii) of Rule 485.
<PAGE>
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WHITEHALL FUNDS TRUST
PROSPECTUS
March 28, 2000
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This Prospectus describes the following four funds (the "Funds") of the
Whitehall Funds Trust:
o WHITEHALL GROWTH FUND
o WHITEHALL GROWTH AND INCOME FUND
o WHITEHALL INCOME FUND
o WHITEHALL MONEY MARKET FUND
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUNDS. PLEASE READ IT
BEFORE INVESTING AND KEEP IT ON FILE FOR FUTURE REFERENCE.
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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE PAGE
<S> <C>
Investment and Performance Summary....................... Minimum Purchase Requirements..............
Guide to Investing in the Funds.......................... Exchange of Fund Shares....................
Additional Information on Strategies and Risks........... Redemption of Fund Shares..................
Management of the Funds.................................. Dividends and Distributions................
Pricing of Fund Shares................................... Tax Information............................
Purchase of Fund Shares.................................. Distribution Arrangements..................
Financial Highlights.......................
</TABLE>
2
<PAGE>
INVESTMENT AND PERFORMANCE SUMMARY
INVESTMENT OBJECTIVES AND STRATEGIES
GROWTH FUND
o INVESTMENT OBJECTIVE:
To provide long-term capital appreciation.
o INVESTMENT STRATEGIES:
The Growth Fund intends to invest primarily in a
diversified portfolio of common stocks and securities convertible
into common stock of publicly traded, U.S. companies. The Fund may
also invest in the common stock, convertible securities, preferred
stocks and warrants of any U.S. companies, the equity securities of
foreign companies (if traded "over-the-counter"), and American
Depository Receipts ("ADRs"). At all times, at least 65% of the
Fund's total assets will consist of one or more of the types of
securities mentioned in this paragraph. In determining which
securities to buy or sell, the Adviser emphasizes both growth and
value.
In addition, the Fund may hold debt obligations, U.S.
Government securities, or cash or cash equivalents. The Fund has the
ability to invest up to 25% of its total assets in debt obligations
in the top four rating categories as measured by Moody's or Standard
& Poor's. Except for temporary defensive purposes, the Fund will not
hold more than 20% of its total assets in the form of cash or cash
equivalents at any given time.
GROWTH AND INCOME FUND
o INVESTMENT OBJECTIVES:
To provide long-term capital appreciation and current
income.
o INVESTMENT STRATEGIES:
The Growth and Income Fund will invest in varying
proportions of equities and debt securities depending on the
projected strength of the equity and debt markets at the time of
purchase. With regard to its equities, the Fund intends to invest
primarily in a diversified portfolio of common stock and securities
convertible into common stock of publicly traded, U.S. companies.
The Fund may also invest in the common stock, convertible
securities, preferred stocks and warrants of any U.S. companies, the
equity securities of foreign companies (if traded
"over-the-counter"), and
3
<PAGE>
American Depository Receipts ("ADRs"). In determining which equity
securities to buy or sell, the Adviser emphasizes both growth and
value.
With regard to debt securities, the Fund may invest in
U.S. Government securities, corporate bonds, high yield bonds,
asset-backed securities (including mortgage-backed securities),
savings and loan and U.S. and foreign bank obligations, commercial
paper, repurchase agreements, convertible securities, preferred
stocks and the debt of foreign governments or corporations. The Fund
will always maintain an average rating of investment grade on the
debt portion of the portfolio. The Fund also may enter into certain
futures and options contracts for hedging purposes. The Fund has no
limitation as to average maturity or maturity of individual debt
securities.
The Growth and Income Fund will generally invest 30-70%
of its total assets in equity securities and the remaining 30-70% in
debt securities. Except for temporary defensive purposes, the Fund
will not hold more than 20% of its total assets in the form of cash
or cash equivalents.
INCOME FUND
o INVESTMENT OBJECTIVE:
To provide a high total return (current income plus
appreciation).
o INVESTMENT STRATEGIES:
The Income Fund will invest at least 65% of its total
assets in fixed income securities such as U.S. Government
securities, corporate bonds, asset-backed securities (including
mortgage-backed securities), savings and loan and U.S. and foreign
bank obligations, commercial paper, and related repurchase
agreements. The Fund may also invest in convertible securities,
preferred stocks, the debt of foreign governments or corporations,
and, for hedging purposes, futures and options contracts.
At least 65% of the Fund's portfolio will be invested in
securities rated "A" or better by an NRSRO, or, if unrated,
determined to be of like quality. However, the Fund may also invest
in below-investment grade (high yield) bonds. The Fund has no
limitation as to average maturity or maturity of individual
securities. The Fund may use interest rate futures and/or options
and options on interest rate futures to protect the portfolio
against reinvestment and interest rate risk. For example, when
interest rates are increasing and portfolio values are falling, the
Fund may enter into a futures contract whose value will increase
when interest rates fall in an attempt to offset a decline in the
value of the Fund's current portfolio securities. In addition, the
Fund may hold cash reserves for temporary defensive or emergency
purposes.
4
<PAGE>
MONEY MARKET FUND
o INVESTMENT OBJECTIVES:
To provide current income, liquidity and the maintenance
of a stable $1.00 net asset value.
o INVESTMENT STRATEGIES:
The Money Market Fund will invest in high quality,
short-term U.S. dollar-denominated obligations. Such obligations may
include (1) obligations issued or guaranteed by the U.S. government
or its agencies or instrumentalities; (2) commercial paper, loan
participation interests, medium-term notes, asset-backed securities
and other promissory notes, including floating or variable rate
obligations; (3) domestic, Yankee dollar and Eurodollar certificates
of deposit, time deposits, money market accounts, bankers'
acceptances, commercial paper and bearer deposit notes; and (4)
related repurchase agreements.
The Money Market Fund may also invest in variable amount
master demand obligations, which permit both the amount of the
obligation and the interest rate to vary. In addition, the Fund may
purchase securities on a "when-issued" basis and purchase or sell
securities on a "forward commitment" basis. It may invest more than
25% of its total assets in the securities issued by domestic banks.
The Money Market Fund will invest only in securities or
issuers of securities that at the time of purchase (1) have received
the highest short-term rating by at least two nationally recognized
statistical rating organizations ("NRSROs"), such as "A-1" by
Standard & Poor's Corporation ("S&P") and "P-1" by Moody's Investors
Service, Inc. ("Moody's"); (2) have only one rating, provided that
rating is the highest rating by an NRSRO, or (3) are unrated, but
are of "top rating" quality.
The Fund's investments generally mature within one year,
however, the average maturity of the Fund's investments is 90 days
or less.
RISKS OF THE FUNDS
An investment in any of the Funds is not a deposit of a bank nor is
it insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. There can be no assurance that any Fund will achieve
its investment objective or be successful in preventing or minimizing the risk
of loss inherent in investing in certain types of securities. To the extent a
Fund invests in foreign issuers, special risks are involved not typically
associated with investing in U.S. issuers. These include fluctuations in the
rates of exchange between currencies of different nations, changes in investment
or exchange control regulation (which may prohibit the transfer of currency from
a country), and by economic and political developments within a specific foreign
country.
5
<PAGE>
The Money Market Fund may not achieve as high a level of current
income as other funds that do not limit their investments to the high quality
securities in which the Fund invests. Although the Money Market Fund seeks to
preserve the net asset value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
The price per share of the Growth Fund, the Growth and Income Fund,
and the Income Fund, will fluctuate with changes in the value of the investments
held by each Fund. The risk of these Funds includes a potential loss of money in
the event that investments held by a Fund decline in price.
Positions in options, futures and options on futures held by these
Funds involve the risks that such options and futures may fail as hedging
techniques, that the loss from investing in futures transactions is potentially
unlimited and that closing transactions may not be effected where a secondary
liquid market does not exist.
Bonds involve the risk that their price will decrease if interest
rates increase. An additional risk is that the issuers of bonds may default on
their obligations to pay principal and/or interest on the bonds or may have
their credit rating downgraded. With respect to mortgage-backed securities,
risks include a sensitivity to the rate of prepayments in that, although the
value of fixed-income securities generally increases during periods of falling
interest rates as a result of prepayments and other factors, this is not always
the case with respect to mortgage-backed securities. Asset-backed securities
involve the risk that such securities do not usually have the benefit of a
complete security interest in the related collateral. Below-investment grade,
high yield securities are considered to have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than in the case of
higher rated securities.
PERFORMANCE
The bar charts and tables shown below provide an indication of the
risks of investing in the Funds by showing changes in each Fund's performance
from year to year (since the Funds commenced operations), and by showing how
each Fund's average annual returns for one year and for the life of the Fund
compare to those of a broad-based securities market index (in the case of the
Non-Money Market Funds) or a Treasury bill index (in the case of the Money
Market
6
<PAGE>
Fund). Fee waivers and expense reimbursements that were applicable during
the indicated periods are reflected in both the chart and the table. Without
these fee waivers and expense reimbursements, the Funds' performance would have
been lower. In addition, for the Non-Money-Market Funds, effective February 2,
2000, the advisory fees were increased and a 12b-1 Plan was implemented, and the
performance of the Funds for such periods prior to such date does not reflect
such changes. How a Fund has performed in the past is not necessarily an
indication of how it will perform in the future.
o GROWTH FUND
- --------------------------------------------------------------------------------
12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------
20.64% 29.91% 24.89% 42.54%
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During the period shown in the bar chart, the highest return for a
quarter was 28.29% (quarter ended December 31, 1998) and the lowest return for a
quarter was (11.06)% (quarter ended September 30, 1998).
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Since February 1,
(for the periods ended December 31, 1999) One Year Three Years 1995*
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Fund 42.54% 32.23% 30.26%
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Standard & Poor's 500 Stock Index** 21.03% 27.55% 28.40%
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* The Fund began operations on February 1, 1995.
** This Index is a widely recognized index of 500 stocks designed to
reflect the overall equity market's industry weightings.
o GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------
12.27% 16.96% 17.90% 16.76%
- --------------------------------------------------------------------------------
During the period shown in the bar chart, the highest return for a
quarter was 12.41% (quarter ended December 31, 1999) and the lowest return for a
quarter was (1.77)% (quarter ended September 30, 1998.
- ----------------------------------------------------------------------------------------------------
Average Annual Total Returns Since February 1,
(for the periods ended December 31, 1999) One Year Three Years 1995*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth and Income Fund 16.76% 17.20% 17.51%
- ----------------------------------------------------------------------------------------------------
60% Standard & Poor's 500 Stock Index**/ 11.46% 18.70% 18.75%
40% Lehman Government/Corporate Bond Index***
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</TABLE>
* The Fund began operations on February 1, 1995.
7
<PAGE>
** This is a blended index since the Fund has a dual investment objective
of capital appreciation and income. This Index is a widely recognized
index of 500 stocks designed to mimic the overall equity market's
industry weightings.
*** This Index reflects the performance of U.S. Treasury and Government
issues with maturities of 1 to 30 years, and investment grade corporate
bonds with maturities of 1 to 30 years.
o INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/96 12/31/97 12/31/98 12/31/99
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2.22% 8.91% 8.76% (2.71)%
- --------------------------------------------------------------------------------
During the period shown in the bar chart, the highest return for a
quarter was 4.72% (quarter ended September 30, 1998) and the lowest return for a
quarter was (1.99%) (quarter ended March 31, 1996).
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Average Annual Total Returns Since February 1,
(for the periods ended December 31, 1999) One Year Three Years 1995*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Fund (2.71)% 4.83% 6.11%
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Lehman Government/Corporate Bond Index** (2.15)% 5.53% 7.32%
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* The Fund began operations on February 1, 1995.
** This Index reflects the performance of U.S. Treasury and Government
issues with maturities of 1 to 30 years, and investment grade corporate
bonds with maturities of 1 to 30 years.
o MONEY MARKET FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------
4.85% 5.00% 5.24% 4.57%
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</TABLE>
During the period shown in the bar chart, the highest return for a
quarter was 1.32% (quarter ended September 30, 1998) and the lowest return for a
quarter was 1.04% (quarter ended June 30, 1999).
8
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ended December 31, 1999) One Year Three Years Since February 1,
1995*
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund 4.57% 4.94% 5.02%
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U.S. Treasury Bill (3 month) Index** 4.74% 4.94% 5.09%
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</TABLE>
* The Fund began operations on February 1, 1995.
** This Index reflects the performance of interest rates for 3 month U.S.
Treasury bills.
The Money Market Fund's seven-day yield for the period ended December
31, 1999 was 5.31%. You may call 1-800-99-IBJFD (1-800-994-2533) to
obtain more current yield information.
FEE TABLE
This table describes the fees and expenses that you may pay if you
buy and hold shares of a Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
GROWTH AND MONEY
GROWTH INCOME INCOME MARKET
FUND(1) FUND(1) FUND(1) FUND
------- ------- ------- ----
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)........................ None None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds)................... None None None None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends (as a percentage of offering price).............. None None None None
Redemption Fee................................................... None None None None
Exchange Fee..................................................... None None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from a Fund's assets)
Management Fees.................................................. 0.85% 0.85% 0.65% 0.35%
Distribution (12b-1) Fees........................................ 0.25% 0.25% 0.25% None
Other Expenses................................................... 0.44% 0.51% 0.63% 0.72%
----- ----- ----- -----
Total Annual Fund Operating Expenses............................. 1.54% 1.61% 1.53% 1.07%
===== ===== ===== =====
LESS: Management Fee Waiver.................................... 0.00% 0.00% 0.00% 0.35%2
Reimbursement of Other Expenses.......................... 0.00% 0.00% 0.00% 0.08%2
Distribution (12b-1) Fee Waiver.......................... 0.17%(3) 0.15%(3) 0.16%3 NONE
----- ----- ----- -----
Net Expenses..................................................... 1.37% 1.46% 1.37% 0.64%
===== ===== ===== =====
</TABLE>
- --------------
9
<PAGE>
1. Effective February 2, 2000, the advisory fees were increased, and a Rule
12b-1 Plan was added. The information in the table reflects these
changes.
2. Through November 30, 2000, the Adviser has contractually agreed to waive
its management fee and to reimburse the Fund up to $35,000 for its other
expenses. These waivers and reimbursements at the current asset levels
will result in the net expenses described above. The Adviser may reimburse
less than $35,000 and charge up to its full management fee if in doing so
the Fund's Net Expenses would not exceed 0.64%, the Net Expense ratio set
forth above.
3. The Distributor has agreed to contractually limit its Rule 12b-1 fee to
.09%, .08% and .10% of average daily net assets for Income, Growth, and
Growth and Income Fund, respectively, until January 28, 2001.
EXAMPLE
This Example is intended to help you compare the cost of investing
in a Fund with the cost of investing in other mutual funds. The Example assumes
that:
o You invest $10,000 in a Fund for the time periods indicated;
o You redeem all of your shares at the end of each time periods;
o Your investment has a hypothetical 5% return each year;
o Each Fund's operating expenses for the one year period are
calculated net of any fee waivers and/or expenses assumed, and
each Fund's operating expenses for the three year, five year and
ten year periods, as applicable, do not reflect fee waivers and/or
expenses assumed.
The example is for comparison purposes only. Actual return and
expenses will be different and each Fund's performance and expenses may be
higher or lower. Based on the above assumptions, your costs for each Fund would
be:
GROWTH AND MONEY
GROWTH INCOME INCOME MARKET
FUND FUND FUND FUND
---- ---- ---- ----
1 year................. $ 139 $ 149 $ 139 $ 65
3 years................ $ 470 $ 493 $ 468 $ 298
5 years................ $ 823 $ 862 $ 819 $ 548
10 years............... $ 1,820 $ 1,898 $ 1,810 $ 1,267
GUIDE TO INVESTING IN THE FUNDS
PURCHASE ORDERS FOR THE MONEY MARKET FUND RECEIVED BY 12:00 NOON
EASTERN STANDARD TIME WILL BECOME EFFECTIVE THAT DAY. PURCHASE ORDERS FOR THE
NON-MONEY MARKET FUNDS RECEIVED
10
<PAGE>
BY YOUR INVESTMENT REPRESENTATIVE IN "GOOD ORDER" PRIOR TO 4:00 P.M., EASTERN
STANDARD TIME, AND TRANSMITTED TO PROVIDENT DISTRIBUTORS, INC. ("PDI"), THE
FUNDS' DISTRIBUTOR, PRIOR TO 4:00 P.M. EASTERN STANDARD TIME, WILL BECOME
EFFECTIVE THAT DAY.
o Minimum Initial Investment ......................... $ 1,000
o Minimum Initial Investment for Individual
Retirements Accounts ("IRAs")
or Roth Individual Retirements Accounts
("Roth IRAs")....................................... $ 250
o Minimum Subsequent Investment ...................... $ 50
THE FUNDS ARE PURCHASED AT NET ASSET VALUE.
SHAREHOLDERS MAY EXCHANGE SHARES BETWEEN THE FUNDS BY TELEPHONE OR
MAIL. EXCHANGES MAY NOT BE EFFECTED BY FACSIMILE.
o Minimum initial exchange ........................... $ 500
(NO MINIMUM FOR SUBSEQUENT EXCHANGES)
Shareholders may redeem shares by telephone, mail or wire. Shares
may not be redeemed by facsimile.
o If a redemption request is received by 12:00 noon Eastern
Standard Time, proceeds for the Money Market Fund will be
transferred to a designated account that day.
o The Funds reserve the right to redeem upon not less than 30
days' notice all shares in a Fund's account which have an
aggregate value of $500 or less.
(Redemption by telephone and wire is not available for IRAs,
Roth IRAs and trust relationships of the Funds' adviser.)
ALL DIVIDENDS AND DISTRIBUTIONS WILL BE AUTOMATICALLY PAID IN
ADDITIONAL SHARES AT NET ASSET VALUE OF THE APPLICABLE FUND UNLESS CASH PAYMENT
IS REQUESTED.
o Distributions for the Growth Fund are paid at least once
annually, distributions for the Growth and Income Fund are
paid quarterly and distributions for the other Funds are paid
monthly.
ADDITIONAL INFORMATION ON STRATEGIES AND RISKS
INVESTMENT SECURITIES AND STRATEGIES OF THE FUNDS
This section of the Prospectus provides a more complete description
of the principal strategies, policies, and principal risks of the Funds.
Additional descriptions of the Funds' risks, strategies, and investments, as
well as other strategies and investments not described below, may be found in
the Funds' Statement of Additional Information.
11
<PAGE>
IBJ Whitehall Bank & Trust Company ("IBJW" or the "Adviser"), as the
Funds' adviser, selects investments and makes investment decisions based on the
investment objective and policies of each Fund. The following is a description
of securities and investment practices of the Funds.
U.S. TREASURY OBLIGATIONS (ALL FUNDS). The Funds may invest in U.S.
Treasury obligations, which are backed by the full faith and credit of the U.S.
Government as to the timely payment of principal and interest. U.S. Treasury
obligations consist of bills, notes, and bonds and separately traded interest
and principal component parts of such obligations known as STRIPS which
generally differ in their interest rates and maturities.
U.S. GOVERNMENT SECURITIES (ALL FUNDS). U.S. Government securities
are obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. U.S. Government securities include debt securities issued or
guaranteed by U.S. Government-sponsored enterprises and federal agencies and
instrumentalities. Some types of U.S. Government securities are supported by the
full faith and credit of the U.S. Government or U.S. Treasury guarantees, such
as mortgage-backed certificates guaranteed by Ginnie Mae ("GNMA") (formerly
known as the Government National Mortgage Association). Other types of U.S.
Government securities, such as obligations of the Student Loan Marketing
Association, provide recourse only to the credit of the agency or
instrumentality issuing the obligation.
COMMERCIAL PAPER (ALL FUNDS). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by both domestic and foreign bank holding companies,
corporations and financial institutions and U.S. Government agencies and
instrumentalities (but only includes taxable securities).
CORPORATE DEBT SECURITIES (ALL FUNDS). The Funds may purchase
corporate debt securities, subject to the rating and quality requirements for
each Fund described in the "Investment and Performance Summary."
MORTGAGE-RELATED SECURITIES (ALL FUNDS). The Funds are permitted to
invest in mortgage-related securities, subject to the rating and quality
requirements for each Fund described in the "Investment and Performance
Summary." One example of mortgage-related securities would be mortgage
pass-through securities, which are securities representing interests in "pools"
of mortgages. Payments of both interest and principal are made monthly on the
securities. These payments are a "pass through" of monthly payments made by the
individual borrowers on the mortgage loans which underlie the securities (minus
fees paid to the issuer or guarantor of the securities).
Another example of mortgage-related securities would be
collateralized mortgage obligations ("CMOs"). interest and prepaid principal on
a CMO are paid, in most cases, semi-annually. CMOs may be collateralized by
whole mortgage loans but are usually collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, Federal Home Loan Mortgage
Corporation ("FHLMC") or Federal National Mortgage Association ("FNMA").
12
<PAGE>
CMOs are structured in multiple classes, with each class bearing a different
stated maturity or interest rate.
ASSET-BACKED SECURITIES (ALL FUNDS). The Funds are permitted to
invest in asset-backed securities, subject to each Fund's rating and quality
requirements for debt securities. Through the use of trusts and special purpose
subsidiaries, various types of assets, primarily home equity loans and
automobile and credit card receivables, are being securitized in pass-through
structures similar to the mortgage pass-through structures described above. A
Fund may invest in these and other types of asset-backed securities which may be
developed in the future, provided they are consistent with the Fund's investment
objectives, policies and quality standards.
COMMON STOCKS (GROWTH FUND, GROWTH AND INCOME FUND, AND INCOME
FUND). Common stock represents the ownership interest in the issuer that remains
after all of the issuer's obligations and preferred stocks are satisfied. Common
stock fluctuates in price in response to many factors, including past and
expected future earnings of the issuer, the value of the issuer's assets,
general economic conditions, interest rates, investor perceptions and market
swings.
PREFERRED STOCKS (GROWTH FUND, GROWTH AND INCOME FUND, AND INCOME
FUND). Preferred stockholders have a greater right to receive liquidation
payments and usually dividends than do common stockholders. However, preferred
stock is subordinated to the liabilities of the issuer in all respects.
Preferred stock may or may not be convertible into common stock.
AMERICAN DEPOSITORY RECEIPTS (GROWTH FUND, GROWTH AND INCOME FUND,
AND INCOME FUND). ADRs are U.S. dollar-denominated receipts generally issued by
domestic banks. ADRs are evidence of a deposit with the bank of a foreign
issuer. They are publicly traded on exchanges or over-the-counter in the United
States.
INVESTMENT IN FOREIGN SECURITIES (ALL FUNDS). The Funds may each
invest in securities of foreign governmental and private issuers. These
investments must be U.S. dollar-denominated with respect to the Money Market
Fund.
CONVERTIBLE AND EXCHANGEABLE SECURITIES (GROWTH FUND, GROWTH AND
INCOME FUND, AND INCOME FUND). These Funds are permitted to invest in
convertible and exchangeable securities, subject to the rating and quality
requirements specified with respect to equity securities for the Growth Fund.
Convertible securities generally offer fixed interest or dividend yields and may
be converted at a stated price or rate for common or preferred stock.
Exchangeable securities may be exchanged on specified terms for common or
preferred stock. The Funds may invest in convertible securities rated below
investment grade.
DOMESTIC AND FOREIGN BANK OBLIGATIONS (ALL FUNDS). Examples of these
obligations are certificates of deposit, commercial paper, Yankee certificates
of deposit, bankers' acceptances, Eurodollar certificates of deposit and time
deposits, promissory notes and medium term deposit notes.
13
<PAGE>
ZERO COUPON SECURITIES (ALL FUNDS). The Funds may invest in zero
coupon securities. A zero coupon security pays no interest to its holder during
its life and is sold at a discount to its face value at maturity.
VARIABLE RATE DEMAND OBLIGATIONS (ALL FUNDS). Variable rate demand
obligations have a maturity of 397 days or less with respect to the Money Market
Fund or generally five to 20 years with respect to the Non-Money Market Funds.
However, these obligations carry with them the right of the holder to put the
securities to a remarketing agent or other entity on short notice, typically
seven days or less. Generally, the remarketing agent will adjust the interest
rate every seven days (or at other intervals corresponding to the notice period
for the put), in order to maintain the interest rate at the prevailing rate for
securities with a seven-day maturity. The remarketing agent is typically a
financial intermediary that has agreed to perform these services. Variable rate
master demand obligations permit a Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Fund, as lender,
and the borrower.
"WHEN-ISSUED" AND "FORWARD COMMITMENT" TRANSACTIONS (ALL FUNDS). The
Funds may purchase securities on a when-issued and delayed delivery basis and
may purchase or sell securities on a forward commitment basis. When-issued or
delayed delivery transactions arise when securities are purchased by a Fund with
payment and delivery taking place in the future. A Fund purchases these
securities in order to obtain an advantageous price and yield to the Fund at the
time of entering into the transaction. In a forward commitment transaction, a
Fund agrees to purchase or sell securities at a specified future date.
LOANS OF PORTFOLIO SECURITIES (ALL FUNDS). To increase current
income, each Fund may lend its portfolio securities in an amount up to 33-1/3%
of its total assets to brokers, dealers and financial institutions, provided
certain conditions are met.
REPURCHASE AGREEMENTS (ALL FUNDS). The Funds may enter into
repurchase agreements with any bank or broker-dealer which presents a minimum
risk of bankruptcy. Under a repurchase agreement, a Fund acquires securities and
obtains a simultaneous commitment from the seller to repurchase the securities
at a specified time and at an agreed upon price. The agreements will be fully
collateralized.
ILLIQUID INVESTMENTS (ALL FUNDS). No Fund may invest more than 15%
(10% with respect to the Money Market Fund) of the aggregate value of its net
assets in investments which are illiquid, or not readily marketable.
MATURITY OF FIXED INCOME SECURITIES. Neither the debt portion of the
Growth and Income Fund nor the Income Fund has any limitation on average
maturity or the maturity of individual securities.
SELECTION OF SECURITIES. Each stock selected by the Growth Fund and
the equity portion of the Growth and Income Fund will be selected based on
certain factors, including but not limited to: (1) the company's fundamental
business outlook and competitive position, (2) the valuation of the security
relative to its own historical norms, to the industry in which the company
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competes, and to the market as a whole, and (3) the momentum of earnings growth
expected to be generated by the company.
Each fixed income security selected by the debt portion of the
Growth and Income Fund and the Income Fund and will be selected based on certain
factors, including but not limited to: (1) the impact of overall duration risk
of the total portfolio, (2) the attractiveness of the relevant market sector
versus benchmark allocation, (3) the creditworthiness of corporate debt issuers
and rating trends, and (4) the overall structure of the debt issue being
considered for purchase.
TEMPORARY DEFENSIVE POSITIONS (GROWTH FUND, GROWTH AND INCOME FUND,
AND INCOME FUND). In order to meet liquidity needs or for temporary defensive
purposes, each Fund may invest up to 100% of its assets in fixed income
securities, money market securities, certificates of deposit, bankers'
acceptances, commercial paper or in equity securities which in the Adviser's
opinion are more conservative than the types of securities that the Fund
typically invests in. To the extent a Fund is engaged in temporary defensive
investments, it will not be pursuing its investment objective.
PORTFOLIO TURNOVER. The Funds generally will not engage in the
trading of securities for short-term profits. However, under certain market
conditions, the Non-Money Market Funds may seek profits by short-term trading.
In addition, each Fund will adjust its portfolio in view of current or
anticipated market conditions or fluctuations in interest rates to accomplish
its respective investment objective. For example, each Fund may sell portfolio
securities in anticipation of a downturn in the market. Frequency of portfolio
turnover (that is, a change in the number of securities owned by a Fund) will
not be a limiting factor if a Fund considers it advantageous to purchase or sell
securities. A high rate of portfolio turnover involves correspondingly greater
transaction expenses than a lower rate. Each Fund and its shareholders must bear
these expenses. Further, portfolio turnover may result in the realization of
taxable gains, which would in turn lower a Fund's return to shareholders.
ADDITIONAL RISKS OF INVESTING IN THE FUNDS
The Funds may not be able to prevent or lessen the risk of loss that
is involved in investing in particular types of securities. Any of the Funds may
invest in the securities of issuers in a foreign country, which involves special
risks and considerations not typically associated with investing in U.S.
issuers. There may be less publicly available information about a foreign issuer
than about a domestic issuer. Foreign issuers also are not generally subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic issuers. In addition, with respect to certain
foreign countries, interest may be withheld at the source under foreign income
tax laws, and there is a possibility of expropriation or confiscatory taxation,
political or social instability or diplomatic developments that could adversely
affect investments in securities of issuers located in those countries.
Investments in ADRs also present many of the same risks as foreign securities.
Below-investment grade (high-yield) bonds, which are also known as
junk bonds, may be purchased by the Growth and Income Fund and the Income Fund
or may be issued to these Funds as a result of corporate restructurings, such as
leveraged buy-outs, mergers, acquisitions,
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debt recapitalizations or similar events. These bonds are also often issued by
smaller, less creditworthy companies or by highly leveraged firms which are
generally less able than more financially stable firms to make scheduled
payments of interest and principal. The high yield bonds in which these Funds
may invest are rated "BB" and higher by S&P or "B" and higher by Moody's. The
risks posed by bonds issued under such circumstances are substantial. Also,
during an economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which would adversely
affect their ability to service principal and interest payment obligations, to
meet projected business goals and to obtain additional financing. Changes by
recognized rating agencies in the rating of any security and in the ability of
an issuer to make payments of interest and principal will also ordinarily have a
more dramatic effect on the values of these investments than on the values of
high-rated securities. Such changes in value will not affect cash income derived
from these securities, unless the issuers fail to pay interest or dividends when
due. Such changes will, however, adversely affect a Fund's net asset value per
share.
Any of the Non-Money Market Funds may invest in smaller companies
which may involve greater risks than investments in large companies due to such
factors as limited product lines, markets and financial or managerial resources,
and less frequently traded securities that may be subject to more abrupt price
movements than securities of larger companies.
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MANAGEMENT OF THE FUNDS
The business and affairs of each Fund are managed under the
direction of the Board of Trustees.
THE ADVISER: IBJ WHITEHALL BANK & TRUST COMPANY ("WHITEHALL")
Whitehall provides investment advisory services to
the Funds. For these services Whitehall receives a
fee based on the average daily net assets of each
Fund at the following rates: Growth Fund, 0.85%;
Growth and Income Fund, 0.85%; Income Fund, 0.65%;
and Money Market Fund, 0.35%. After fee waivers,
Whitehall received the following fees based on
average daily net assets for the year ended
November 30, 1999: Growth Fund, 0.50%; Growth and
Income Fund, 0.50%; Income Fund, 0.40%; and Money
Market Fund, 0.00%.
Whitehall, founded in 1929, provides banking,
trust and investment services to individuals and
institutions. It acts as the investment adviser to
a wide variety of trusts, individuals,
institutions and corporations. Whitehall, as of
December 31, 1999, acted as investment adviser to
accounts with aggregate assets of approximately
$3.7 billion. The principal business address of
Whitehall is One State Street, New York, New York
10004.
THE PORTFOLIO Mr. Paul Blaustein, Senior Vice President, has
MANAGERS: been affiliated with Whitehall since 1997 and is
responsible for the day-to-day management of the
Growth Fund and the equity portion of the Growth
and Income Fund. He has held these positions since
August 1998 and January 1999, respectively. Mr.
Blaustein was a Vice President and portfolio
manager at Desai Capital Management from 1996 to
1997, and was a Vice President of the Investment
Research Department at Legg Mason from 1994 to
1996.
Mr. John Curry, Senior Vice President has been
affiliated with Whitehall since 1999 and is
responsible for the day-to-day management of the
Income Fund and the income portion of the Growth
and Income Fund. He has held
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these positions since October, 1999. Mr. Curry was
formerly a fixed income portfolio manager at UBS
Brinson.
Marc Keller, Chief Investment Officer, has been
affiliated with Whitehall since 1998 and is also
involved in the day-to-day management of the
Growth and Income Fund. He has held these
positions since March 1, 2000. Mr. Keller was
previously a founder and principal of Delphi Asset
Management, Inc.
Messrs. Blaustein, Curry and Keller are part of
the investment management team of Whitehall which
has overall responsibility for rendering
investment advice to the Funds.
PRICING OF FUND SHARES
Each Fund's shares are priced at net asset value. The net asset
value per share of the Funds is calculated at 4:00 p.m. (Eastern Standard Time)
for each of the Non-Money Market Funds and at 12:00 noon (Eastern Standard Time)
for the Money Market Fund, Monday through Friday, on each day that the New York
Stock Exchange is open for trading. The net asset value is not calculated on the
following business holidays: New Year's Day, Martin Luther King, Jr.'s Birthday,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day; and the following additional business
holidays for the Money Market Fund: Columbus Day and Veterans Day. The net asset
value per share of each Fund is computed by dividing the value of each Fund's
net assets (i.e., the value of the assets less the liabilities) by the total
number of such Fund's outstanding shares. All expenses, including fees paid to
the Adviser and any affiliate of PDI or PFPC Inc. ("PFPC"), the Funds'
administrator, are accrued daily and taken into account for the purpose of
determining the net asset value.
Securities are valued using market quotations. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by or at the direction of the Board of Trustees. Bonds
and other fixed income securities may be valued on the basis of prices provided
by a pricing service approved by the Board of Trustees. All assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars.
The Money Market Fund uses the amortized cost method to value its
portfolio securities. It seeks to maintain a constant net asset value of $1.00
per share, although there may be circumstances under which this goal cannot be
achieved. The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless of
the impact of fluctuating interest rates on the market value of the security.
To the extent a Fund has portfolio securities that are primarily
listed on foreign exchanges that trade on weekends or other days when the Fund
does not price its shares, the net asset value of the Fund's shares may change
on days when shareholders will not be able to purchase or redeem the Fund's
shares.
PURCHASE OF FUND SHARES
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Shares offered in this prospectus are sold at net asset value
without a sales load. Orders for the purchase of shares will be executed at the
net asset value per share next determined after an order has been received in
"good order."
The following purchase procedures do not apply to certain fund or
trust accounts that are managed by IBJW. The customer should consult his or her
trust administrator for proper instructions.
All funds received are invested in full and fractional shares of the
appropriate Fund. Certificates for shares are not issued. The Funds reserve the
right to reject any purchase. The Funds will not accept any third party or
foreign checks.
An investment may be made using any of the following methods:
THROUGH IBJW. Shares are available to new and existing shareholders
through IBJW or its affiliates or other authorized investment advisers. To make
an investment using this method, simply complete a Purchase Application and
contact your IBJW representative or investment adviser with instructions as to
the amount you wish to invest. They will then contact the Fund to place the
order on your behalf on that day.
Orders received by your IBJW representative for the Non-Money Market
Funds in "good order" prior to the determination of net asset value and
transmitted to the Fund prior to the close of its business day (which is
currently 4:00 p.m., Eastern Standard Time), will become effective that day.
Orders for the Money Market Fund received in "good order" prior to 12:00 noon
Eastern Standard Time will become effective that day. You should receive written
confirmation of your order within a few days of receipt of instructions from
your representative.
OTHER PURCHASE INFORMATION. Requests in "good order" must include
the following documents: (a) A letter of instruction, if required, signed by all
registered owners of the shares in the exact names in which they are registered;
(b) Any required signature guarantees (see "Signature Guarantees" below); and
(c) Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit sharing
plans and other organizations.
SIGNATURE GUARANTEES. To protect shareholder accounts, the Funds,
and their transfer agent from fraud, signature guarantees are required to enable
the Funds to verify the identity of the person who has authorized a redemption
from an account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareowner(s) and
the registered address and (2) share transfer requests. Shareholders may contact
the Funds at 1-800-99-IBJFD (1-800-994-2533) for further details.
BY WIRE. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the applicable Fund. Your bank
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may charge a fee for handling the transaction. Please call 1-800-99-IBJFD
(1-800-994-2533) for wiring instructions. A completed application must be sent
by overnight delivery to the Fund in advance of the wire to Whitehall Funds
Trust, P.O. Box 5183, Westborough, MA 01581-5183. Notification must be given to
the Fund at 1-800-99-IBJFD (1-800-994-2533) prior to 4:00 p.m. Eastern Standard
Time in the case of the Non-Money Market Funds and prior to 12:00 p.m. Eastern
Standard Time, of the wire date for the Money Market Fund.
BY MAIL. Payments to open new accounts should be sent to Whitehall
Funds Trust, P.O. Box 5183, Westborough, MA 01581-5183, together with a
completed application. If fund shares purchased by check are redeemed, payment
of redemption proceeds will be delayed until payment of the purchase has been
collected, which may take up to fifteen days after purchase. Checks should be
made payable to the order of Whitehall Funds Trust.
INSTITUTIONAL ACCOUNTS. Bank trust departments and other
institutional accounts may place orders directly with the Funds by telephone at
1-800-99-IBJFD (1-800-994-2533).
MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Funds is $1,000 unless the
purchaser has at least $1,000 or more in any of the Whitehall Funds, is a
purchaser through a trust or investment account administered by the Adviser, is
an employee or an ex-employee of IBJW or is an employee of any of its
affiliates, PDI, PFPC, or any other service provider, or is an employee of any
trust customer of IBJW or any of its affiliates. Note that the minimum is $250
for an IRA or Roth IRA, other than an IRA or Roth IRA for which IBJW or any of
its affiliates acts as trustee or custodian. Any subsequent investments must be
at least $50, including an IRA or Roth IRA investment. All initial investments
should be accompanied by a completed Purchase Application. A Purchase
Application accompanies this Prospectus. A separate application is required for
IRA or Roth IRA investments. (For more IRA or Roth IRA information, call
1-800-99-IBJFD (1-800-994-2533)). The Funds reserve the right to reject purchase
orders.
EXCHANGE OF FUND SHARES
Shareholders may exchange shares of one Fund for shares of another
Fund by either telephone or mail. A shareholder should first read carefully the
Prospectus describing the Fund into which the exchange will occur, which is
available without charge and can be obtained by writing to the Fund at P.O. Box
5183, Westborough, MA 01581-5183 or by calling 1-800-99-IBJFD (1-800-994-2533).
The minimum amount for an initial exchange is $500. No minimum is required in
subsequent exchanges. The Trust may terminate or amend the terms of the exchange
privilege at any time, upon 60 days' notice to shareholders.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by a Fund in "good order."
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An exchange is taxable as a sale of a security on which a gain or
loss may be recognized. Shareholders should receive written confirmation of the
exchange within a few days of the completion of the transaction.
EXCHANGE BY MAIL. A letter of instruction should be sent by mail to
Whitehall Funds Trust, P.O. Box 5183, Westborough, MA 01581-5183. The letter of
instruction must include: (i) your account number; (ii) the Fund from and the
Fund into which you wish to exchange your investment; (iii) the dollar or share
amount you wish to exchange; and (iv) the signatures of all registered owners or
authorized parties. No signature guarantee is required. You must have held
shares used in the exchange for at least 10 days before you can exchange into
another Fund.
EXCHANGE BY TELEPHONE. To exchange Fund shares by telephone or if
you have any questions, simply call the Funds at 1-800-99-IBJFD
(1-800-994-2533). You should be prepared to give the telephone representative
the following information: (i) your account number, social security or tax
identification number and account registration; (ii) the name of the Fund from
and the Fund into which you wish to transfer your investment; and (iii) the
dollar or share amount you wish to exchange. The conversation may be recorded to
protect you and the Funds. Telephone exchanges are available only if the
shareholder so indicates by checking the "yes" box on the Purchase Application.
See "Redemption of Fund Shares - By Telephone" in this Prospectus for a
discussion of telephone transactions generally.
AUTOMATIC INVESTMENT PROGRAM. An eligible shareholder may also
participate in the Automatic Investment Program, an investment plan that
automatically debits money from the shareholder's bank account and invests it in
one or more of the Funds in the Trust through the use of electronic funds
transfers or automatic bank drafts. Shareholders may elect to make subsequent
investments by transfers of a minimum of $500 on either the fifth or twentieth
day of each month into their established Fund account. Contact the Funds for
more information about the Automatic Investment Program.
REDEMPTION OF FUND SHARES
Shareholders may redeem their shares on any business day. Shares
will be redeemed at the net asset value next determined after the applicable
Fund receives your redemption request in "good order." A redemption is a taxable
transaction on which gain or loss may be recognized. Generally, however, gain or
loss is not expected to be realized on a redemption of shares of the Money
Market Fund which seeks to maintain a net asset value per share of $1.00.
Where the shares to be redeemed have been purchased by check, the
payment of redemption proceeds may be delayed if the purchasing check has not
cleared, which may take up to 15 days. Shareholders may avoid this delay by
investing through wire transfers of Federal funds.
Once the shares are redeemed, a Fund will ordinarily send the
proceeds by check to the shareholder at the address of record on the next
business day. The Funds may, however, take up to seven days to make payment. If
the New York Stock Exchange is closed (or when trading is
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restricted) for any reason other than the customary weekend or holiday closing
or if an emergency condition as determined by the Securities and Exchange
Commission (the "SEC") merits such action, the Funds may suspend redemptions or
postpone payment dates.
REDEMPTION METHODS. You may redeem your shares using any of the
methods set forth below:
THROUGH AN IBJW REPRESENTATIVE OR AUTHORIZED INVESTMENT ADVISER. You
may redeem your shares by contacting your IBJW representative or investment
adviser and instructing him or her to redeem your shares. He or she will then
contact the Fund and place a redemption trade on your behalf. He or she may
charge you a fee for this service.
BY MAIL. Requests should be addressed to Whitehall Funds Trust, P.O.
Box 5183, Westborough, MA 01581-5183. To protect shareholder accounts, the
Funds, and the transfer agent from fraud, a signature guarantee will be required
when redemption proceeds are to be sent to an address other than the registered
address, or if the redemption is greater than $50,000. To be accepted, a letter
requesting redemption must include: (i) the Fund name and account registration
from which you are redeeming shares; (ii) your account number; (iii) the amount
to be redeemed, (iv) the signatures of all registered owners; and (v) a
signature guarantee by any eligible guarantor institution including a member of
a national securities exchange or a commercial bank or trust company,
broker-dealers, credit unions and savings associations, if required (see
"Purchase of Fund Shares"). Corporations, partnerships, trusts or other legal
entities must submit additional documentation.
BY CHECK. You may redeem your Money Market Fund shares by drawing
checks on your account. You must first complete the signature card provided with
the purchase application. Upon receiving the properly completed application and
signature card, PFPC will provide you with checks free of charge. These checks
may be made payable to the order of any person in the amount of $500 or more.
When a check is presented for payment, a sufficient number of full and
fractional shares in the shareholder's account will be redeemed to cover the
amount of the check. You cannot use a check to close out your account since
additional shares accrue daily.
BY TELEPHONE. You may redeem your shares by calling the Funds at
1-800-99-IBJFD (1-800-994-2533). You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming shares; and (iii) the dollar or share amount to be redeemed. The
conversation may be recorded to protect you and the Funds. Telephone redemptions
are available only if the shareholder so indicates by checking the "yes" box on
the Purchase Application or on the Optional Services Form. The Funds employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine. If the Funds fail to employ such reasonable procedures, they may be
liable for any loss, damage or expense arising out of any telephone transactions
purporting to be on a shareholder's behalf. In order to assure the accuracy of
instructions received by telephone, the Funds require some form of personal
identification prior to acting upon instructions received by telephone. They
also record telephone instructions and provide written confirmation to investors
of such transactions.
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Redemption requests transmitted via facsimile will not be accepted. Although
other redemption methods may be used, telephone redemption and telephone
exchanges will be suspended for a period of 10 days following an address change
made by telephone.
BY WIRE. You may redeem your shares by contacting the Funds by mail
or telephone and instructing them to send a wire transmission to your personal
bank. Proceeds of wire redemption for the Money Market Fund generally will be
transferred to the designated account on the day the request is received,
provided that it is received by 12:00 Noon (Eastern Standard Time).
Your instructions should include: (i) your account number, social
security or tax identification number and account registration; (ii) the Fund
name from which you are redeeming shares; and (iii) the dollar or share amount
to be redeemed. Wire redemptions can be made only if the "yes" box has been
checked on your Purchase Application, and you attach a copy of a void check from
the account where proceeds are to be wired. Your bank may charge you a fee for
receiving a wire payment on your behalf.
OTHER REDEMPTION INFORMATION. Requests in "good order" must include
the documents listed in "Purchase of Fund Shares --- Other Purchase
Information."
The above-mentioned services --- "By Telephone," "By Check," and "By
Wire" --- are not available for IRAs or Roth IRAs and trust relationships of
IBJW.
SYSTEMATIC WITHDRAWAL PLAN. An owner of $10,000 or more of shares of
a Fund may elect to have periodic redemptions from his or her account to be paid
on a monthly, quarterly, semi annual or annual basis. The minimum periodic
payment is $100. A sufficient number of shares to make the scheduled redemption
will normally be redeemed on the date selected by the shareholder. Depending on
the size of the payment requested and fluctuation in the net asset value, if
any, of the shares redeemed, redemptions for the purpose of making such payments
may reduce or even exhaust the account. A shareholder may request that these
payments be sent to a predesignated bank or other designated party. Capital
gains and dividend distributions paid to the account will automatically be
reinvested at net asset value on the distribution payment date.
REDEMPTION OF SMALL ACCOUNTS. Due to the high cost of servicing
small accounts, each Fund may redeem, on 30 days' notice, an account in a Fund
that has been reduced by a shareholder to $500 or less. However, if during the
30-day notice period the shareholder purchases sufficient shares to bring the
value of the account above $500, this restriction will not apply.
REDEMPTION IN KIND. All redemptions of Fund shares shall be made in
cash. However, this commitment applies only to redemption requests made by a
Fund shareholder during any 90-day period of up to the lesser of $250,000 or 1%
of the net asset value of that Fund at the beginning of such period. If a
redemption request exceeds these amounts, a Fund may make full or partial
payment in securities or other assets.
ACCOUNT SERVICES
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All transactions in Fund shares will be reflected in a statement for
each shareholder. In those cases where a nominee is a shareholder of record for
shares purchased for its customer, the nominee decides whether the statement
will be sent to the customer.
DIVIDENDS AND DISTRIBUTIONS
Each Fund intends to distribute to its shareholders substantially
all of its net investment income. The Growth Fund will declare and pay
distributions annually and the Growth and Income Fund will declare and pay
dividends at least quarterly; the Income Fund and the Money Market Fund and the
will declare distributions of such income daily and pay those dividends
monthly;. Each Fund intends to distribute, at least annually, substantially all
realized net capital gain. It is expected that the distributions of both the
Income Fund and the Money Market Fund will consist primarily of ordinary income.
Distributions will be paid in additional Fund shares based on the
net asset value at the close of business on the payment date of the
distribution, unless the shareholder elects in writing, at least five full
business days before the record date, to receive such distributions in cash.
Dividends for a given month will be paid within five business days after the end
of such month.
In the case of the Money Market Fund, shares purchased will begin
earning dividends on the day the shares are bought and shares redeemed will earn
dividends through the day before redemption. Net investment income for a
Saturday, Sunday or a holiday will be declared as a dividend on the previous
business day. In the case of the other Funds that declare daily dividends,
shares purchased will begin earning dividends on the day after the shares are
bought, and shares redeemed will earn dividends through the day the redemption
is executed.
Dividends and distributions from a Fund are taxable to shareholders
whether received in additional shares or in cash.
If you elect to receive distributions in cash and checks (1) are
returned and marked as "undeliverable" or (2) remain uncashed for six months,
your cash election will be changed automatically. Your future dividend and
capital gains distribution will be reinvested in the Fund at the per share net
asset value determined as of the day the distribution is paid. In addition, any
undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
TAX INFORMATION
Each Fund intends to distribute substantially all of its income. The
income dividends a shareholder receives from a Fund may be taxed as ordinary
income and capital gains (which may be taxable at different rates depending on
the length of time the Fund holds its assets), regardless of whether the
shareholder receives the dividends in cash or in additional shares.
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A distribution will be treated as paid on December 31 of the
calendar year if it is declared by a Fund during October, November, or December
of that year and paid by a Fund during January of the following calendar year.
Those Funds that may invest in securities of foreign issuers may be
subject to withholding and other similar income taxes imposed by a foreign
country. Each of these Funds intends to elect, if it is eligible to do so under
the Internal Revenue Code, to "pass through" to its shareholders the amount of
such foreign taxes paid. Each shareholder will be notified within 60 days after
the close of a Fund's taxable year whether the foreign taxes paid by the Fund
will "pass through" for that year.
Shareholders will be notified annually as to the Federal tax status
of distributions made by the Fund(s) in which they invest. Depending on the
residence of the shareholder for tax purposes, distributions also may be subject
to state and local taxes, including withholding taxes. Shareholders should
consult their own tax advisers as to their Federal, state and local tax
liability.
DISTRIBUTION ARRANGEMENTS
The Funds do not charge up-front or deferred sales charges. The
Non-Money Market Funds have each adopted a Rule 12b-1 Distribution Plan, which
will enable each Non-Money Market Fund to make payments to third parties of up
to .25% of the value of its net assets. Because these fees are paid out of Fund
assets on an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
Under the 12b-1 Plan, PDI, the Funds' distributor, will receive the
distribution fees, payable as an expense of the Funds, which will be drawn in
amounts reflecting 0.25% of new monies invested in the Funds after February 2,
2000, the effective date of the 12b-1 Plan. The Distributor provides for the
preparation of advertising and sales literature and bears any distribution
related expenses not covered by the amounts it receives under the 12b-1 Plan.
Such expenses may include the cost of printing and mailing prospectuses to
persons other than shareholders.
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FINANCIAL HIGHLIGHTS
These financial highlights tables are intended to help you
understand each Fund's financial performance since it began operations on
February 1, 1995. The total returns in these tables represent the rate that an
investor would have earned on an investment in a Fund (assuming reinvestment of
all dividends and distributions). The information for the years ended November
30, 1998 and November 30, 1999 has been audited by Ernst & Young LLP, whose
report, along with the Funds' financial statements, is included in the annual
report, which is available upon request. The information for periods prior to
the year ended November 30, 1998 were audited by other independent auditors,
whose reports thereon were unqualified.
<TABLE>
<CAPTION>
GROWTH FUND
-----------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED FEB. 1, 1995*
NOV. 30, NOV. 30, NOV. 30, NOV. 30, TO NOV. 30,
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, Beginning of the Period...... $16.51 $16.67 $15.37 $12.97 $10.00
------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income (loss)................ (0.05) 0.07 0.35 0.14 0.13
Net realized and unrealized gain on
investment transactions................ 6.46 2.37 3.03 2.90 2.84
---- ---- ---- ---- ----
Total income from investment operations..... 6.41 2.44 3.38 3.04 2.97
---- ---- ---- ---- ----
Less Distributions from:
Net investment income....................... ---- (0.05) (0.31) (0.19) ----
In excess of net investment income.......... ---- ---- (0.24) ---- ----
Realized gains.............................. (1.95) (2.55) (1.53) (0.45) ----
------ ----- ------ ----- ----
Net change in net asset value per share..... 4.46 (0.16) 1.30 2.40 2.97
------ ----- ---- ----- ----
NET ASSET VALUE, End of Period................ $20.97 $16.51 $16.67 $15.37 $12.97
====== ====== ====== ====== ======
Total Return(a)............................... 44.49% 17.87% 24.68% 24.61% 29.70%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)...... $131,496 $124,485 $105,386 $93,640 $86,596
Ratios to average net assets:
Expenses before waivers/reimbursements+..... 1.04% 1.04% 0.99% 0.99% 1.09%**
Expenses net waivers/reimbursements......... 0.93% 0.94% 0.89% 0.89% 0.89%**
Net investment income (loss)................ (0.23%) 0.32% 0.74% 0.93% 1.29%**
Portfolio Turnover Rate....................... 6% 92% 44% 27% 37%
</TABLE>
--------------------------
* Commencement of operations.
** Annualized.
+ During the period, certain fees were either
contractually or voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as
indicated.
(a) Total return is based on the change in net asset value
during the period and assumes reinvestment of all
dividends and distributions. Total Return for periods
less than one year have not been annualized.
26
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED FEB. 1, 1995*
NOV. 30, NOV. 30, NOV. 30, NOV. 30, TO NOV. 30,
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.90 $ 13.51 $ 12.76 $ 11.79 $ 10.00
------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
Net investment income .................. 0.26 0.38 0.50 0.34 0.31
Net realized and unrealized gains on
investment transactions ........... 1.50 1.41 1.27 1.26 1.79
------------- ------------- ------------- ------------- -------------
Total income from investment operations. 1.76 1.79 1.77 1.60 2.10
------------- ------------- ------------- ------------- -------------
Less Distributions from:
Net investment income .................. (0.20) (0.38) (0.50) (0.36) (0.31)
Realized gains ......................... (1.13) (2.02) (0.52) (0.27) --
------------- ------------- ------------- ------------- -------------
Net change in net asset value per share. 0.43 (0.61) 0.75 0.97 1.79
------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period ........... $ 13.33 $ 12.90 $ 13.51 $ 12.76 $ 11.79
============= ============= ============= ============= =============
Total Return(a) 15.23% 15.98% 14.69% 14.08% 20.82%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) . $ 59,572 $ 66,262 $ 61,867 $ 64,232 $ 50,583
Ratios to average net assets:
Expenses before waivers/reimbursements+. 1.11% 1.01% 1.07% 1.09% 1.15%**
Expenses net waivers/reimbursements .... 1.00% 0.91% 0.97% 0.99% 1.05%**
Net investment income .................. 2.02% 2.95% 2.91% 2.98% 3.04%**
Portfolio Turnover Rate .................. 42% 76% 138% 77% 78%
</TABLE>
- --------------------
* Commencement of operations.
** Annualized.
+ During the period, certain fees were either
contractually or voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as
indicated.
(a) Total return is based on the change in net asset value
during the period and assumes reinvestment of all
dividends and distributions. Total return for periods
less than one year have not been annualized.
27
<PAGE>
<TABLE>
<CAPTION>
INCOME FUND
-----------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED FEB. 1, 1995*
NOV. 30, NOV. 30, NOV. 30, NOV. 30, TO NOV. 30,
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.61 $ 10.36 $ 10.22 $ 10.72 $ 10.00
------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
Net investment income ...................... 0.55 0.59 0.57 0.54 0.48
Net realized and unrealized gains (losses)
on investment transactions ................ (0.72) 0.33 0.14 (0.12) 0.72
------------- ------------- ------------- ------------- -------------
Total income from investment operations .... (0.17) 0.92 0.71 0.42 1.20
------------- ------------- ------------- ------------- -------------
Less Dividends from:
Net investment income ...................... (0.57) (0.59) (0.57) (0.54) (0.48)
In excess of Net investment income ......... (0.01) -- -- -- --
Realized gains ............................. (0.07) (0.08) -- (0.38) --
------------- ------------- ------------- ------------- -------------
Net change in net asset value per share ...... (0.82) 0.25 0.14 (0.50) 0.72
------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period ............... $ 9.79 $ 10.61 $ 10.36 $ 10.22 $ 10.72
============= ============= ============= ============= =============
Total Return(a) .............................. (1.79)% 9.27% 7.20% 4.25% 12.28%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) ..... $ 35,760 $ 38,803 $ 31,628 $ 27,768 $ 26,849
Ratios to average net assets:
Expenses before waivers/reimbursements+ .... 1.13% 0.90% 1.17% 1.22% 1.22%**
Expenses net waivers/reimbursements ........ 1.02% 0.80% 1.07% 1.12% 1.12%**
Net investment income ...................... 5.37% 5.63% 5.61% 5.07% 5.59%**
Portfolio Turnover Rate ...................... 70% 93% 210% 160% 297%
</TABLE>
* Commencement of operations.
** Annualized.
+ During the period, certain fees were either
contractually or voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as
indicated.
(a) Total return is based on the change in net asset value
during the period and assumes reinvestment of all
dividends and distributions. Total return for periods
less than one year have not been annualized.
28
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
-----------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED FEB. 1, 1995*
NOV. 30, NOV. 30, NOV. 30, NOV. 30, TO NOV. 30,
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
Net investment income ............... 0.04 0.05 0.05 0.05 0.04
Less Dividends from:
Net investment income ............... (0.04) (0.05) (0.05) (0.05) (0.04)
------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
Total Return(a) ....................... 4.54% 5.27% 4.96% 4.88% 4.55%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) $ 20,500 $ 18,585 $ 25,784 $ 34,269 $ 28,943
Ratios to average net assets:
Expenses before waivers/reimbursements+ 1.07% 0.76% 0.99% 0.95% 0.92%**
Expenses net waivers/reimbursements . 0.64% 0.41% 0.64% 0.65% 0.64%**
Net investment income ............... 4.46% 5.16% 4.84% 4.82% 5.40%**
</TABLE>
- -----------------
* Commencement of operations.
** Annualized.
+ During the period, certain fees were either
contractually or voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as
indicated.
(a) Total return is based on the change in net asset value during the
period and assumes reinvestment of all dividends and distributions.
29
<PAGE>
WHITEHALL FUNDS TRUST
Additional information about the Funds is included in a
Statement of Additional Information dated March 28, 2000 (the
"SAI"). The SAI is incorporated by reference into this
Prospectus and, therefore, is legally a part of this
Prospectus.
Information about each Fund's investments is available in the
Funds' annual and semi-annual reports to shareholders. In the
Funds' annual report, you will find a discussion of the market
conditions and investment strategies that significantly
affected each Fund's performance during its last fiscal year.
You may make inquiries about the Funds or obtain a copy of the
SAI, or of the annual or semi-annual reports, without charge
by calling 1-800-99-IBJFD (1-800-994-2533).
Information about the Funds (including the SAI) can be
reviewed and copied at the SEC Public Reference Room in
Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at
1-202-942-8090. Reports and other information about the Funds
are available on the EDGAR Database on the SEC's Internet site
at http://www.sec.gov. You may request documents from the SEC,
upon payment of a duplicating fee, by electronic request at
[email protected], or by writing to the Securities and
Exchange Commission, Public Reference Section, Washington, DC
20549-0102. To aid you in obtaining this information, the
Funds' 1940 Act registration number is 811-8738.
30
<PAGE>
- --------------------------------------------------------------------------------
WHITEHALL FUNDS TRUST
STATEMENT OF ADDITIONAL INFORMATION
March 28, 2000
- --------------------------------------------------------------------------------
This Statement of Additional Information (the "SAI"), which is not a
prospectus, describes the following four Funds of the Whitehall Funds Trust (the
"Funds"):
o Whitehall Growth Fund
o Whitehall Growth and Income Fund
o Whitehall Income Fund
o Whitehall Money Market Fund
This SAI should be read in conjunction with the Funds' Prospectus dated
March 28, 2000. The Financial Statements included in the Funds' November 30,
1999 Annual Report are incorporated by reference into this SAI. The Prospectuses
and the Annual Report may be obtained without charge by writing or calling the
Funds at the address and telephone number printed below.
4400 Computer Drive
Westborough, Massachusetts 01581-5120
General and Account Information: 1-800-99-IBJFD (1-800-994-2533)
<PAGE>
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION.............................................................
INVESTMENT STRATEGIES AND RISKS.................................................
INVESTMENT RESTRICTIONS.........................................................
MANAGEMENT......................................................................
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS......................................
INVESTMENT ADVISORY AND OTHER SERVICES..........................................
DISTRIBUTION OF FUND SHARES.....................................................
COMPUTATION OF NET ASSET VALUE..................................................
PORTFOLIO TRANSACTIONS..........................................................
TAXATION........................................................................
DESCRIPTION OF THE FUNDS' SHARES................................................
CALCULATION OF PERFORMANCE DATA.................................................
FINANCIAL STATEMENTS............................................................
APPENDIX........................................................................
<PAGE>
GENERAL INFORMATION
The Funds are separately managed, diversified portfolios of Whitehall
Funds Trust (the "Trust"), an open-end, management investment company. The Trust
was organized as a Delaware business trust under a Declaration of Trust dated
August 25, 1994.
IBJ Whitehall Bank & Trust Company ("IBJW" and/or the "Adviser") serves
as the Funds' Investment Adviser. PFPC Inc. ("PFPC"), 4400 Computer Drive,
Westborough, Massachusetts 01581-5120, is the Funds' Administrator, and
Provident Distributors, Inc. ("PDI"), located at Four Falls Corporate Center,
6th Floor, West Conshohocken, Pennsylvania 19428-2961, is the Distributor.
INVESTMENT STRATEGIES AND RISKS
The Prospectus discusses the investment objectives of the Funds and
the principal strategies to be employed to achieve those objectives. This
section contains supplemental information concerning certain types of securities
and other instruments in which the Funds may invest, additional investment
strategies that the Funds may utilize, and certain risks associated with such
investments and strategies.
U.S. TREASURY OBLIGATIONS. (ALL FUNDS). U.S. Treasury bills, which have
maturities of up to one year, notes, which have original maturities ranging from
one year to 10 years, and bonds, which have original maturities of 10 to 30
years, are direct obligations of the U.S. Government. The Funds may invest in
privately placed U.S. Treasury obligations.
U.S. GOVERNMENT AGENCY OBLIGATIONS. (ALL FUNDS). The Funds may invest
in obligations of agencies of the United States Government. Such agencies
include, among others, Farmers Home Administration, Federal Farm Credit System,
Federal Housing Administration, Government National Mortgage Association,
Maritime Administration, Small Business Administration, and The Tennessee Valley
Authority. The Funds may purchase securities issued or guaranteed by Ginnie Mae
("GNMA") (formerly known as the Government National Mortgage Association) which
represent participation in Veterans Administration and Federal Housing
Administration backed mortgage pools. Obligations of instrumentalities of the
United States Government include securities issued by, among others, Federal
Home Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Land
Banks, Federal National Mortgage Association ("FNMA") and the United States
Postal Service. Some of these securities are supported by the full faith and
credit of the United States Treasury (e.g., GNMA). Guarantees of principal by
agencies or instrumentalities of the U.S. Government may be a guarantee of
payment at the maturity of the obligation so that in the event of a default
prior to maturity there might not be a market and thus no means of realizing the
value of the obligation prior to maturity.
MORTGAGE-RELATED SECURITIES. (ALL FUNDS). The Funds are permitted to
invest in mortgage-related securities. Early repayment of principal on mortgage
pass-through securities (arising from prepayments of principal due to sale of
the underlying property, refinancing, or foreclosure, net of fees and costs
which may be incurred) may expose a Fund to a lower rate of return upon
reinvestment of principal. Also, if a security subject to prepayment has been
purchased at a premium, in the event of prepayment the value of the premium
would be lost. Like other fixed-income securities, when interest rates rise, the
value of mortgage-related securities generally will decline; however, when
interest rates decline, the value of mortgage-related securities with prepayment
features may not increase as much as other fixed-income securities.
In recognition of this prepayment risk to investors, the Public
Securities Association (the "PSA") has standardized the method of measuring the
rate of mortgage loan principal prepayments. The PSA formula, the Constant
Prepayment Rate or other similar models that are standard in the industry will
be used by the Funds in calculating maturity for purposes of investment in
mortgage-related securities. A rise in interest rates will also likely increase
inherent volatility of these securities as lower than estimated prepayment rates
will alter the expected life of the securities to effectively convert short-term
investments into long-term investments.
<PAGE>
Payment of principal and interest on some mortgage pass-through
securities (but not the market value of the securities themselves) may be
guaranteed by the full faith and credit of the U.S. Government (in the case of
securities guaranteed by GNMA) or guaranteed by agencies or instrumentalities of
the U.S. Government (in the case of securities guaranteed by the FNMA or the
FHLMC, which are supported only by the discretionary authority of the U.S.
Government to purchase the agency's obligations). Mortgage pass-through
securities created by non-governmental issuers (such as commercial banks,
savings and loan institutions, private mortgage insurance companies, mortgage
bankers and other secondary market issuers) may be supported in various forms of
insurance or guarantees issued by governmental entities.
ASSET-BACKED SECURITIES. (ALL FUNDS). The Funds are permitted to invest
in asset-backed securities. Asset-backed securities involve certain risks that
are not posed by mortgage-related securities, resulting mainly from the fact
that asset-backed securities do not usually contain the benefit of a complete
security interest in the related collateral. For example, credit card
receivables generally are unsecured and the debtors are entitled to the
protection of a number of state and Federal consumer credit laws, some of which
may reduce the ability of the Fund, as an investor, to obtain full payment in
the event of default insolvency. In the case of automobile receivables, due to
various legal and economic factors, proceeds from repossessed collateral may not
always be sufficient to support payments on these securities. The risks
associated with asset-backed securities are often reduced by the addition of
credit enhancements such as a letter of credit from a bank, excess collateral or
a third-party guarantee. With respect to an asset-backed security arising from
secured debt (such as automobile receivables), there is a risk that parties
other than the originator and servicer of the loan may acquire a security
interest superior to that of the security's holders.
COMMERCIAL PAPER. (ALL FUNDS). Commercial paper includes short-term,
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies, corporations
and financial institutions and similar taxable instruments issued by government
agencies and instrumentalities. All commercial paper purchased by the Funds is,
at the time of investment, rated in one of the top two rating categories of at
least one Nationally Recognized Statistical Rating Organization ("NRSRO") or, if
not rated, is, in the opinion of the Adviser, of an investment quality
comparable to rated commercial paper in which the Funds may invest, or, with
respect to the shares of the Money Market Fund, (i) rated "P-1" by Moody's
Investors Service, Inc. ("Moody's") and "A-1" or better by Standard & Poor's
Corporation ("S&P") or in a comparable rating category by any two NRSROs that
have rated the commercial paper or (ii) rated in a comparable category by only
one such organization if it is the only organization that has rated the
commercial paper (and provided the purchase is approved or ratified by the Board
of Trustees).
CORPORATE DEBT SECURITIES. (ALL FUNDS). Fund investments in these
securities are limited to corporate debt securities (corporate bonds,
debentures, notes and similar corporate debt instruments) of domestic and
foreign issuers which meet the rating criteria established for each Fund.
After purchase by a Fund, a security may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require a sale of such security by the Fund. However, the
Fund's Adviser will consider such event in its determination of whether the Fund
should continue to hold the security. To the extent the ratings given by a NRSRO
may change as a result of changes in such organizations or their rating systems,
the Fund will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the Prospectuses and in
this SAI.
CONVERTIBLE AND EXCHANGEABLE SECURITIES. (GROWTH FUND, GROWTH AND
INCOME FUND, AND INCOME FUND). Although to a lesser extent than with fixed
income securities generally, the market value of convertible securities tends to
decline as interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the conversion or exchange
feature, the market value of convertible or exchangeable securities tends to
vary with fluctuations in the market value of the underlying common or preferred
stock. Debt securities that are convertible into or exchangeable for preferred
or common stock are liabilities of the issuer but are generally subordinated to
senior debt of the issuer. The Growth and Income Fund and the Income Fund may
invest in convertible securities rated below investment grade, including
convertible debt rated as having predominantly speculative characteristics with
respect to capacity to pay interest and repay principal. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.
2
<PAGE>
BANK OBLIGATIONS. (ALL FUNDS). The Funds may invest in bank obligations
which include, but are not limited to, domestic, Eurodollar and Yankee dollar
certificates of deposits, time deposits, bankers' acceptances, commercial paper,
bank deposit notes and other promissory notes including floating or variable
rate obligations issued by U.S. or foreign bank holding companies and their bank
subsidiaries, branches and agencies. Each Fund limits its investment in United
States bank obligations to obligations of United States banks (including foreign
branches). Each Fund limits its investment in foreign bank obligations to United
States dollar-denominated obligations of foreign banks (including United States
branches of foreign banks) which in the opinion of the Adviser, are of an
investment quality comparable to obligations of United States banks which may be
purchased by the Funds. There is no limitation on the amount of the Funds'
assets which may be invested in obligations of foreign banks which meet the
conditions set forth herein.
Certificates of deposit are issued against funds deposited in an
eligible bank (including its domestic and foreign branches, subsidiaries and
agencies), are for a definite period of time, earn a specified rate of return
and are normally negotiable. Fixed time deposits may be withdrawn on demand by
the investor, but may be subject to early withdrawal penalties which vary
depending upon market conditions and the remaining maturity of the obligations.
There are no contractual restrictions on the right to transfer a beneficial
interest in a fixed time deposit to a third party, although there is no market
for such deposits. Investments in fixed time deposits subject to withdrawal
penalties maturing from two days through seven days may not exceed 15% of the
value of the net assets of the Growth Fund, Growth and Income Fund, and Income
Fund and 10% of the value of the net assets of the Money Market Fund. A bankers'
acceptance is a short-term draft drawn on a commercial bank by a borrower,
usually in connection with a commercial transaction. The borrower is liable for
payment as is the bank, which unconditionally guarantees to pay the draft at its
face amount on the maturity date. Eurodollar obligations are U.S. dollar
obligations issued outside the United States by domestic or foreign entities.
Yankeedollar obligations are U.S. dollar obligations issued inside the United
States by foreign entities. Bearer deposit notes are obligations of a bank,
rather than a bank holding company. Similar to certificates of deposit, deposit
notes represent bank level investments and, therefore, are senior to all holding
company corporate debt.
Obligations of foreign banks involve somewhat different investment
risks than those affecting obligations of United States banks, including the
possibilities that their liquidity could be impaired because of future political
and economic developments, that the obligations may be less marketable than
comparable obligations of United States banks, that a foreign jurisdiction might
impose withholding taxes on interest income payable on those obligations, that
foreign deposits may be seized or nationalized, that foreign governmental
restrictions such as exchange controls may be adopted which might adversely
affect the payment of principal and interest on those obligations and that the
selection of those obligations may be more difficult because there may be less
publicly available information concerning foreign banks or the accounting,
auditing and financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to United States
banks.
Investments in Eurodollar and Yankeedollar obligations involve
additional risks. Most notably, there generally is less publicly available
information about foreign companies; there may be less governmental regulation
and supervision; they may use different accounting and financial standards; and
the adoption of foreign governmental restrictions may adversely affect the
payment of principal and interest on foreign investments. In addition, not all
foreign branches of United States banks are supervised or examined by regulatory
authorities as are United States banks, and such branches may not be subject to
reserve requirements.
ZERO COUPON SECURITIES. (ALL FUNDS). The market prices of zero coupon
securities in which the Funds may invest generally are more volatile than the
market prices of securities that pay interest periodically and are more
sensitive to changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities. Although zero coupon securities do not
pay interest to holders prior to maturity, federal income tax law requires a
Fund to recognize as interest income a portion of the security's discount each
year and that this income must then be distributed to shareholders along with
other income earned by the Fund. To the extent that any shareholders in a Fund
elect to receive their dividends in cash rather than reinvest such dividends in
additional shares, cash to make these distributions will have to be provided
from the assets of the Fund or other sources such as proceeds of sales of Fund
shares and/or sales of portfolio securities. In such cases, the Fund will not be
able to purchase additional income producing securities with cash used to make
such distributions, and its current income may ultimately be reduced as a
result.
3
<PAGE>
VARIABLE AND FLOATING RATE DEMAND AND MASTER DEMAND OBLIGATIONS. (ALL
FUNDS). The Funds may, from time to time, buy variable rate demand obligations
issued by corporations, bank holding companies and financial institutions and
similar taxable and tax-exempt instruments issued by government agencies and
instrumentalities. These securities will typically have a maturity of 397 days
or less with respect to the Money Market Fund or generally five to 20 years with
respect to the Non-Money Market Funds, but carry with them the right of the
holder to put the securities to a remarketing agent or other entity on short
notice, typically seven days or less. The obligation of the issuer of the put to
repurchase the securities may or may not be backed by a letter of credit or
other obligation issued by a financial institution. The purchase price is
ordinarily par plus accrued and unpaid interest.
The Funds may also buy variable rate master demand obligations. The
terms of these obligations permit the investment of fluctuating amounts by the
Funds at varying rates of interest pursuant to direct arrangements between a
Fund, as lender, and the borrower. They permit weekly, and in some instances,
daily, changes in the amounts borrowed. The Funds have the right to increase the
amount under the obligation at any time up to the full amount provided by the
note agreement, or to decrease the amount, and the borrower may prepay up to the
full amount of the obligation without penalty. The obligations may or may not be
backed by bank letters of credit. Because the obligations are direct lending
arrangements between the lender and the borrower, it is not generally
contemplated that they will be traded, and there is no secondary market for
them, although they are redeemable (and thus, immediately repayable by the
borrower) at principal amount, plus accrued interest, upon demand. The Funds
have no limitations on the type of issuer from whom the obligations will be
purchased. The Funds will invest in variable rate master demand obligations only
when such obligations are determined by the Adviser, pursuant to guidelines
established by the Board of Trustees, to be of comparable quality to rated
issuers or instruments eligible for investment by the Funds.
VARIABLE AMOUNT MASTER DEMAND OBLIGATIONS. (MONEY MARKET FUND). The
Money Market Fund may invest in variable amount master demand obligations which
are unsecured demand notes that permit the indebtedness thereunder to vary, and
provide for periodic adjustments in the interest rate. Because master demand
obligations are direct lending arrangements between the Money Market Fund and
the issuer, they are not normally traded. There is no secondary market for the
notes; however, the period of time remaining until payment of principal and
accrued interest can be recovered under a variable amount master demand
obligation generally shall not exceed seven days. To the extent this period is
exceeded, the obligation in question would be considered illiquid. Issuers of
variable amount master demand obligations must satisfy the same criteria as set
forth for other promissory notes (e.g., commercial paper). The Money Market Fund
will invest in variable amount master demand obligations only when such
obligations are determined by the Adviser, pursuant to guidelines established by
the Board of Trustees, to be of comparable quality to rated issuers or
instruments eligible for investment by the Money Market Fund. In determining
weighted average dollar portfolio maturity, a variable amount master demand
obligation will be deemed to have a maturity equal to the longer of the period
of time remaining until the next readjustment of the interest rate or the period
of time remaining until the principal amount can be recovered from the issuer on
demand.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS. (ALL FUNDS). The Funds
may purchase securities on a when-issued or delayed-delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the transaction. The securities so purchased are subject to
market fluctuation during this period and no income accrues to the Fund until
settlement takes place. To facilitate such acquisitions, the Funds will maintain
with the custodian a separate account with a segregated portfolio of cash or
liquid securities in an amount at least equal to the value of such commitments.
On the delivery dates for such transactions, each Fund will meet obligations
from maturities or sales of the securities held in the separate account and/or
from cash flow. While the Funds normally enter into these transactions with the
intention of actually receiving or delivering the securities, they may sell
these securities before the settlement date or enter into new commitments to
extend the delivery date into the future, if the Adviser considers such action
advisable as a matter of investment strategy. Such securities have the effect of
leveraging a Fund's assets and may contribute to volatility of the Fund's net
asset value. When a Fund engages in a forward commitment transaction, the Fund
relies on the buyer or the seller, as the case may be, to consummate the sale.
Failure to do so may result in the Fund missing the opportunity to obtain a
price or yield considered to be advantageous.
OTHER MUTUAL FUNDS. (ALL FUNDS). Each Fund may invest in shares of
other open-end, management investment companies, subject to the limitations of
the Investment Company Act of 1940, as amended (the "1940 Act") and subject to
such investments being consistent with the overall objective and policies of the
Fund making such investment, provided that any such purchases will be limited to
shares of unaffiliated investment companies. The
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purchase of securities of other mutual funds results in duplication of expenses
such that investors indirectly bear a proportionate share of the expenses of
such mutual funds including operating costs, and investment advisory and
administrative fees.
LOANS OF PORTFOLIO SECURITIES. (ALL FUNDS). The Funds may lend their
portfolio securities to brokers, dealers and financial institutions, provided:
(1) the loan is secured continuously by collateral consisting of U.S. Government
securities or cash or approved bank letters of credit maintained on a daily
mark-to-market basis in an amount at least equal to the current market value of
the securities loaned; (2) the Funds may at any time call the loan and obtain
the return of the securities loaned within five business days; (3) the Funds
will receive any interest or dividends paid on the loaned securities; and (4)
the aggregate market value of securities loaned will not at any time exceed 33
1/3% of the total assets (including the market value of the collateral received)
of a particular Fund.
The Funds will earn income for lending their securities because cash
collateral pursuant to these loans will be invested in short-term money market
instruments. In connection with lending securities, the Funds may pay reasonable
finders, administrative and custodial fees. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.
REPURCHASE AGREEMENTS. (ALL FUNDS). The Funds may invest in securities
subject to repurchase agreements with any bank or registered broker-dealer who,
in the opinion of the Trustees, present a minimum risk of bankruptcy. Such
agreements may be considered to be loans by the Funds for purposes of the 1940
Act. A repurchase agreement is a transaction in which the seller of a security
commits itself at the time of the sale to repurchase that security from the
buyer at a mutually agreed-upon time and price. The repurchase price exceeds the
sale price, reflecting an agreed-upon interest rate effective for the period the
buyer owns the security subject to repurchase. The agreed-upon rate is unrelated
to the interest rate on that security. IBJW will monitor the value of the
underlying security at the time the transaction is entered into and at all times
during the term of the repurchase agreement to insure that the value of the
security always equals or exceeds the repurchase price. If the seller should
default on its obligation to repurchase the securities, a Fund may experience a
loss of income from the loaned securities and a decrease in the value of any
collateral, problems in exercising its rights to the underlying securities and
costs and time delays in connection with the disposition of securities. The
Money Market Fund may not invest more than 10%, and each of the Growth Fund,
Growth and Income Fund, and Income Fund may not invest more than 15%, of its net
assets in repurchase agreements maturing in more than seven business days and in
securities for which market quotations are not readily available.
REVERSE REPURCHASE AGREEMENTS. (ALL FUNDS). The Funds may also enter
into reverse repurchase agreements to avoid selling securities during
unfavorable market conditions to meet redemptions. Pursuant to a reverse
repurchase agreement, a Fund will sell portfolio securities and agree to
repurchase them from the buyer at a particular date and price. Whenever a Fund
enters into a reverse repurchase agreement, it will establish a segregated
account in which it will maintain liquid assets in an amount at least equal to
the repurchase price marked to market daily (including accrued interest), and
will subsequently monitor the account to ensure that such equivalent value is
maintained. The Fund pays interest on amounts obtained pursuant to reverse
repurchase agreements. Reverse repurchase agreements are considered to be
borrowings by a Fund under the 1940 Act.
FOREIGN SECURITIES. (ALL FUNDS). Investing in the securities of issuers
in any foreign country, including American Depository Receipts ("ADRs"),
involves special risks and considerations not typically associated with
investing in U.S. companies. These include differences in accounting, auditing
and financial reporting standards; generally higher commission rates on foreign
portfolio transactions; the possibility of nationalization, expropriation or
confiscatory taxation; adverse changes in investment or exchange control
regulations (which may include suspension of the ability to transfer currency
from a country); and political instability which could affect U.S. investments
in foreign countries. Additionally, foreign securities and dividends and
interest payable on those securities may be subject to foreign taxes, including
taxes withheld from payments on those securities. Foreign securities often trade
with less frequency and volume than domestic securities and, therefore, may
exhibit greater price volatility. Additional costs associated with an investment
in foreign securities may include higher custodial fees than apply to domestic
custodial arrangements and transaction costs of foreign currency conversions.
Changes in foreign exchange rates also will affect the value of securities
denominated or quoted in currencies other than the U.S. dollar and, with respect
to the Money Market Fund, may affect the ability to maintain net asset value. A
Fund's objectives may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange
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control regulations and by indigenous economic and political developments.
Through a Fund's policies, management endeavors to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places a Fund's investments.
ILLIQUID SECURITIES. (ALL FUNDS). Each Fund has adopted a fundamental
policy with respect to investments in illiquid securities. See "Investment
Restrictions." Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended ("Securities Act"),
securities that are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven calendar days. Securities that have not
been registered under the Securities Act are referred to as private placements
or restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.
A large institutional market exists for certain securities that are not
registered under the Securities Act, including repurchase agreements, commercial
paper, foreign securities, municipal securities and corporate bonds and notes.
Institutional investors depend on either an efficient institutional market in
which the unregistered security can be readily resold or on the issuer's ability
to honor a demand for repayment. The fact that there are contractual or legal
restrictions on resale to the general public or to certain institutions may not
be indicative of the liquidity of such investments.
Each Fund may also invest in restricted securities issued under Section
4(2) of the Securities Act, which exempts from registration "transactions by an
issuer not involving any public offering." Section 4(2) instruments are
restricted in the sense that they can only be resold through the issuing dealer
and only to institutional investors; they cannot be resold to the general public
without registration.
The Commission has adopted Rule 144A, which allows a broader
institutional trading market for securities otherwise subject to restrictions on
resale to the general public. Rule 144A establishes a "safe harbor" from the
registration requirements of the Securities Act applicable to resales of certain
securities to qualified institutional buyers. Pursuant to procedures established
by the Board of Trustees and subject to applicable investment restrictions, the
Funds intend to invest in securities eligible for resale under Rule 144A which
are determined to be liquid because trading markets exist for the securities.
Pursuant to guidelines set forth by and under the supervision of the
Board of Trustees, the Adviser will monitor the liquidity of restricted
securities in a Fund's portfolio. In reaching liquidity decisions, the Adviser
will consider, among others, the following factors: (1) the frequency of trades
and quotes for the security over the course of six months or as determined in
the discretion of the Adviser; (2) the number of dealers wishing to purchase or
sell the security and the number of other potential purchasers over the course
of six months or as determined in the discretion of the Adviser; (3) dealer
undertakings to make a market in the security; (4) the nature of the security
and the marketplace in which it trades (e.g., the time needed to dispose of the
security, the method of soliciting offers and the mechanics of the transfer);
and (5) other factors, if any, which the Adviser deems relevant. Rule 144A
securities and Section 4(2) instruments which are determined to be liquid based
upon their trading markets will not, however, be required to be included among
the securities considered to be illiquid for purposes of Investment Restriction
No. 1. Investments in Rule 144A securities and Section 4(2) instruments could
have the effect of increasing Fund illiquidity.
MUNICIPAL COMMERCIAL PAPER. (ALL FUNDS). Municipal commercial paper is
a debt obligation with a stated maturity of one year or less which is issued to
finance seasonal working capital needs or as short-term financing in
anticipation of longer-term debt. Investments in municipal commercial paper are
limited to commercial paper which is rated at the date of purchase: (i) "P-1" by
Moody's and "A-1" or "A-1+" by S&P "P-2" (Prime-2) or better by Moody's and
"A-2" or better by S&P or (ii) in a comparable rating category by any two of the
NRSROs that have rated commercial paper or (iii) in a comparable rating category
by only one such organization if it is the only organization that has rated the
commercial paper or (iv) if not rated, is, in the opinion of IBJW, of comparable
investment quality and within the credit quality policies and guidelines
established by the Board of Trustees.
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Issuers of municipal commercial paper rated "P-1" have a "superior
capacity for repayment of short-term promissory obligations". The "A-1" rating
for commercial paper under the S&P classification indicates that the "degree of
safety regarding timely payment is either overwhelming or very strong."
Commercial paper with "overwhelming safety characteristics" will be rated
"A-1+". Commercial paper receiving a "P-2" rating has a strong capacity for
repayment of short-term promissory obligations. Commercial paper rated "A-2" has
the capacity for timely payment although the relative degree of safety is not as
overwhelming as for issues designated "A-1".
MUNICIPAL NOTES. (ALL FUNDS). Municipal notes are generally sold as
interim financing in anticipation of the collection of taxes, a bond sale or
receipt of other revenue. Municipal notes generally have maturities at the time
of issuance of one year or less. Investments in municipal notes are limited to
notes which are rated at the date of purchase: (i) MIG 1 or MIG 2 by Moody's and
in a comparable rating category by at least one other nationally recognized
statistical rating organization that has rated the notes, or (ii) in a
comparable rating category by only one such organization, including Moody's, if
it is the only organization that has rated the notes, or (iii) if not rated,
are, in the opinion of IBJW, of comparable investment quality and within the
credit quality policies and guidelines established by the Board of Trustees.
Notes rated "MIG 1" are judged to be of the "best quality" and carry
the smallest amount of investment risk. Notes rated "MIG 2" are judged to be of
"high quality, with margins of protection ample although not as large as in the
preceding group." See the Appendix for a more complete description of securities
ratings.
MUNICIPAL BONDS. (ALL FUNDS). Municipal bonds generally have a maturity
at the time of issuance of more than one year. Municipal bonds may be issued to
raise money for various public purposes -- such as constructing public
facilities and making loans to public institutions. There are generally two
types of municipal bonds: general obligation bonds and revenue bonds. General
obligation bonds are backed by the taxing power of the issuing municipality and
are considered the safest type of municipal bond. Revenue bonds are backed by
the revenues of a project or facility -- tolls from a toll road, for example.
Certain types of municipal bonds are issued to obtain funding for privately
operated facilities. Industrial development revenue bonds (which are private
activity bonds) are a specific type of revenue bond backed by the credit and
security of a private user, and therefore investments in these bonds have more
potential risk. Investments in municipal bonds are limited to bonds which are
rated at the date of purchase "A" or better by a NRSRO. Municipal bonds
generally have a maturity at the time of issuance of more than one year.
PREFERRED STOCKS. (GROWTH FUND, GROWTH AND INCOME FUND, AND INCOME
FUND). As a general rule, the market value of preferred stock with a fixed
dividend rate and no conversion element will decline as interest rates and
perceived credit risk rises. Because preferred stock is junior to debt
securities and other obligations of the issuer, deterioration in the credit
quality of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar stated yield
characteristics.
AMERICAN DEPOSITORY RECEIPTS. (GROWTH FUND, GROWTH AND INCOME FUND, AND
INCOME FUND). These Funds each may invest in both sponsored and unsponsored ADR
programs. There are certain risks associated with investments in unsponsored ADR
programs. Because the non-U.S. securities issuer does not actively participate
in the creation of the ADR program, the underlying agreement for service and
payment will be between the depository and the shareholder. The company issuing
the stock underlying the ADR pays nothing to establish the unsponsored facility
because fees for ADR issuance and cancellation are paid by brokers. Investors
directly bear the expenses associated with certificate transfer, custody and
dividend payment.
In an unsponsored ADR program, there also may be several depositories
with no defined legal obligations to the non-U.S. company. The duplicate
depositories may lead to marketplace confusion because there would be no central
source of information for buyers, sellers and intermediaries. The efficiency of
centralization gained in a sponsored program can greatly reduce the delays in
delivery of dividends and annual reports. In addition, with respect to all ADRs
there is always the risk of loss due to currency fluctuations.
Investments in ADRs involve certain risks not typically involved in
purely domestic investments. These risks are set forth under "Foreign
Securities" in this SAI.
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OPTIONS ON SECURITIES. (GROWTH FUND, GROWTH AND INCOME FUND, AND INCOME
FUND). The Funds may purchase put and call options and write covered put and
call options on securities in which each Fund may invest directly and that are
traded on registered domestic securities exchanges or that result from separate,
privately negotiated transactions (i.e., over-the-counter (OTC) options). The
writer of a call option, who receives a premium, has the obligation, upon
exercise, to deliver the underlying security against payment of the exercise
price during the option period. The writer of a put, who receives a premium, has
the obligation to buy the underlying security, upon exercise, at the exercise
price during the option period.
The Funds may write put and call options on securities only if they are
covered, and such options must remain covered as long as the Fund is obligated
as a writer. A call option is covered if a Fund owns the underlying security
covered by the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration if the underlying security is held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A put option is covered if a Fund maintains cash, U.S. Treasury bills
or other liquid securities with a value equal to the exercise price in a
segregated account with its custodian.
The principal reason for writing put and call options is to attempt to
realize, through the receipt of premiums, a greater current return than would be
realized on the underlying securities alone. In return for the premium received
for a call option, the Funds forego the opportunity for profit from a price
increase in the underlying security above the exercise price so long as the
option remains open, but retain the risk of loss should the price of the
security decline. In return for the premium received for a put option, the Funds
assume the risk that the price of the underlying security will decline below the
exercise price, in which case the put would be exercised and the Fund would
suffer a loss. The Funds may purchase put options in an effort to protect the
value of a security it owns against a possible decline in market value.
Writing of options involves the risk that there will be no market in
which to effect a closing transaction. An exchange-traded option may be closed
out only on an exchange that provides a secondary market for an option of the
same series. OTC options are not generally terminable at the option of the
writer and may be closed out only by negotiation with the holder. There is also
no assurance that a liquid secondary market on an exchange will exist. In
addition, because OTC options are issued in privately negotiated transactions
exempt from registration under the Securities Act of 1933, there is no assurance
that the Funds will succeed in negotiating a closing out of a particular OTC
option at any particular time. If a Fund, as covered call option writer, is
unable to effect a closing purchase transaction in the secondary market or
otherwise, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise.
The staff of the Securities and Exchange Commission (the "SEC") has
taken the position that purchased options not traded on registered domestic
securities exchanges and the assets used as cover for written options not traded
on such exchanges are generally illiquid securities. However, the staff has also
opined that, to the extent a mutual fund sells an OTC option to a primary dealer
that it considers creditworthy and contracts with such primary dealer to
establish a formula price at which the fund would have the absolute right to
repurchase the option, the fund would only be required to treat as illiquid the
portion of the assets used to cover such option equal to the formula price minus
the amount by which the option is in-the-money. Pending resolution of the issue,
the Funds will treat such options and, except to the extent permitted through
the procedure described in the preceding sentence, assets as subject to each
such Fund's limitation on investments in securities that are not readily
marketable.
FUTURES, RELATED OPTIONS AND OPTIONS ON STOCK INDICES. (GROWTH FUND,
GROWTH AND INCOME FUND, AND INCOME FUND). Each Fund may attempt to reduce the
risk of investment in securities by hedging a portion of its portfolio through
the use of certain futures transactions, options on futures traded on a board of
trade and options on stock indices traded on national securities exchanges. In
addition, each Fund may hedge a portion of its portfolio by purchasing such
instruments during a market advance or when IBJW anticipates an advance. In
attempting to hedge a portfolio, a Fund may enter into contracts for the future
delivery of securities and futures contracts based on a specific security, class
of securities or an index, purchase or sell options on any such futures
contracts, and engage in related closing transactions. Each Fund will use these
instruments primarily as a hedge against changes resulting from market
conditions in the values of securities held in its portfolio or which it intends
to purchase.
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A stock index assigns relative weighting to the common stocks in the
index, and the index generally fluctuates with changes in the market values of
these stocks. A stock index futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made.
When a futures contract is executed, each party deposits with a broker
or in a segregated custodial account up to 5% or more (in foreign markets) of
the contract amount, called the "initial margin," and during the term of the
contract, the amount of the deposit is adjusted based on the current value of
the futures contract by payments of variation margin to or from the broker or
segregated account.
In the case of options on stock index futures, the holder of the option
pays a premium and receives the right, upon exercise of the option at a
specified price during the option period, to assume the option writer's position
in a stock index futures contract. If the option is exercised by the holder
before the last trading day during the option period, the option writer delivers
the futures position, as well as any balance in the writer's futures margin
account. If it is exercised on the last trading day, the option writer delivers
to the option holder cash in an amount equal to the difference between the
option exercise price and the closing level of the relevant index on the date
the option expires. In the case of options on stock indexes, the holder of the
option pays a premium and receives the right, upon exercise of the option at a
specified price during the option period, to receive cash equal to the dollar
amount of the difference between the closing price of the relevant index and the
option exercise price times a specified multiple, called the "multiplier."
During a market decline or when IBJW anticipates a decline, each Fund
may hedge a portion of its portfolio by selling futures contracts or purchasing
puts on such contracts or on a stock index in order to limit exposure to the
decline. This provides an alternative to liquidation of securities positions and
the corresponding costs of such liquidation. Conversely, during a market advance
or when IBJW anticipates an advance, each Fund may hedge a portion of its
portfolio by purchasing futures, options on these futures or options on stock
indices. This affords a hedge against a Fund not participating in a market
advance at a time when it is not fully invested and serves as a temporary
substitute for the purchase of individual securities which may later be
purchased in a more advantageous manner. Each Fund will sell options on futures
and on stock indices only to close out existing positions.
INTEREST RATE FUTURES CONTRACTS. (GROWTH FUND, GROWTH AND INCOME FUND,
AND INCOME FUND). These Funds may, to a limited extent, enter into interest rate
futures contracts--i.e., contracts for the future delivery of securities or
index-based futures contracts--that are, in the opinion of IBJW, sufficiently
correlated with the Fund's portfolio. These investments will be made primarily
in an attempt to protect a Fund against the effects of adverse changes in
interest rates (i.e., "hedging"). When interest rates are increasing and
portfolio values are falling, the sale of futures contracts can offset a decline
in the value of a Fund's current portfolio securities. The Funds will engage in
such transactions primarily for bona fide hedging purposes.
OPTIONS ON INTEREST RATE FUTURES CONTRACTS. (GROWTH FUND, GROWTH AND
INCOME FUND, AND INCOME FUND). These Funds may purchase put and call options on
interest rate futures contracts, which give a Fund the right to sell or purchase
the underlying futures contract for a specified price upon exercise of the
option at any time during the option period. Each Fund may also write (sell) put
and call options on such futures contracts. For options on interest rate futures
that a Fund writes, such Fund will receive a premium in return for granting to
the buyer the right to sell to the Fund or to buy from the Fund the underlying
futures contract for a specified price at any time during the option period. As
with futures contracts, each Fund will purchase or sell options on interest rate
futures contracts primarily for bona fide hedging purposes.
RISKS OF OPTIONS AND FUTURES CONTRACTS. One risk involved in the
purchase and sale of futures and options is that a Fund may not be able to
effect closing transactions at a time when it wishes to do so. Positions in
futures contracts and options on futures contracts may be closed out only on an
exchange or board of trade that provides an active market for them, and there
can be no assurance that a liquid market will exist for the contract or the
option at any particular time. To mitigate this risk, each Fund will ordinarily
purchase and write options only if a secondary market for the options exists on
a national securities exchange or in the over-the-counter market. Another risk
is that during the option period, if a Fund has written a covered call option,
it will have given up the opportunity to profit from a price increase in the
underlying securities above the exercise price in return for the premium on the
option (although the premium can be used to offset any losses or add to a Fund's
income) but, as long as its obligation as a
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writer continues, such Fund will have retained the risk of loss should the price
of the underlying security decline. Investors should note that because of the
volatility of the market value of the underlying security, the loss from
investing in futures transactions is potentially unlimited. In addition, a Fund
has no control over the time when it may be required to fulfill its obligation
as a writer of the option. Once a Fund has received an exercise notice, it
cannot effect a closing transaction in order to terminate its obligation under
the option and must deliver the underlying securities at the exercise price.
The Funds' successful use of stock index futures contracts, options on
such contracts and options on indices depends upon the ability of IBJW to
predict the direction of the market and is subject to various additional risks.
The correlation between movements in the price of the futures contract and the
price of the securities being hedged is imperfect and the risk from imperfect
correlation increases in the case of stock index futures as the composition of
the Funds' portfolios diverge from the composition of the relevant index. Such
imperfect correlation may prevent the Funds from achieving the intended hedge or
may expose the Funds to risk of loss. In addition, if the Funds purchase futures
to hedge against market advances before they can invest in common stock in an
advantageous manner and the market declines, the Funds might create a loss on
the futures contract. Particularly in the case of options on stock index futures
and on stock indices, the Funds' ability to establish and maintain positions
will depend on market liquidity. The successful utilization of options and
futures transactions requires skills different from those needed in the
selection of the Funds' portfolio securities. The Funds believe that IBJW
possesses the skills necessary for the successful utilization of such
transactions.
The Funds are permitted to engage in bona fide hedging transactions (as
defined in the rules and regulations of the Commodity Futures Trading
Commission) without any quantitative limitations. Futures and related option
transactions which are not for bona fide hedging purposes may be used provided
the total amount of the initial margin and any option premiums attributable to
such positions does not exceed 5% of each Fund's liquidating value after taking
into account unrealized profits and unrealized losses, and excluding any
in-the-money option premiums paid. The Funds will not market, and are not
marketing, themselves as commodity pools or otherwise as vehicles for trading in
futures and related options. The Funds will segregate liquid assets such as
cash, U.S. Government securities or other liquid securities to cover the futures
and options.
INVESTMENT RESTRICTIONS
The following restrictions are fundamental policies of each Fund, which
may not be changed without the approval of the holders of a majority of the
applicable Fund's outstanding voting shares as described under "Description of
the Funds' Shares - Voting Rights."
Each Fund, except as indicated, may not:
(1) Invest more than 15% (10% with respect to the Money Market
Fund) of the value of its net assets in investments which are
illiquid (including repurchase agreements having maturities of
more than seven calendar days, variable and floating rate
demand and master demand notes not requiring receipt of
principal note amount within seven days notice and securities
of foreign issuers which are not listed on a recognized
domestic or foreign securities exchange);
(2) Borrow money or pledge, mortgage or hypothecate its assets,
except that a Fund may enter into reverse repurchase
agreements or borrow from banks up to 10% of the current value
of its net assets for temporary or emergency purposes and
those borrowings may be secured by the pledge of not more than
15% of the current value of its total net assets (but
investments may not be purchased by the Fund while any such
borrowings exist);
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(3) Issue senior securities, except insofar as a Fund may be
deemed to have issued a senior security in connection with any
repurchase agreement or any permitted borrowing;
(4) Make loans, except loans of portfolio securities and except
that a Fund may enter into repurchase agreements with respect
to its portfolio securities and may purchase the types of debt
instruments described in its Prospectus or the SAI;
(5) Invest in companies for the purpose of exercising control or
management;
(6) Invest more than 10% of its net assets in shares of other
investment companies;
(7) Invest in real property (including limited partnership
interests but excluding real estate investment trusts and
master limited partnerships), commodities, commodity
contracts, or oil, gas and other mineral resource,
exploration, development, lease or arbitrage transactions;
(8) Engage in the business of underwriting securities of other
issuers, except to the extent that the disposal of an
investment position may technically cause it to be considered
an underwriter as that term is defined under the Securities
Act of 1933;
(9) Sell securities short, except to the extent that a Fund
contemporaneously owns or has the right to acquire at no
additional cost securities identical to those sold short;
(10) Purchase securities on margin, except that a Fund may obtain
such short-term credits as may be necessary for the clearance
of purchases and sales of securities;
(11) Purchase or retain the securities of any issuer, if those
individual officers and Trustees of the Trust, IBJW, or the
Distributor, each owning beneficially more than 1/2 of 1% of
the securities of such issuer, together own more than 5% of
the securities of such issuer;
(12) Purchase a security if, as a result, more than 25% of the
value of its total assets would be invested in securities of
one or more issuers conducting their principal business
activities in the same industry, provided that (a) this
limitation shall not apply to obligations issued or guaranteed
by the U.S. Government or its agencies and instrumentalities
or, for the Money Market Fund, securities issued by domestic
banks; (b) wholly-owned finance companies will be considered
to be in the industries of their parents; and (c) utilities
will be divided according to their services. For example, gas,
gas transmission, electric and gas, electric, and telephone
will each be considered a separate industry;
(13) Invest more than 5% of its net assets in warrants which are
unattached to securities, included within that amount, no more
than 2% of the value of the Fund's net assets, may be warrants
which are not listed on the New York or American Stock
Exchanges;
(14) Write, purchase or sell puts, calls or combinations thereof,
except that the Growth Fund, Growth and Income Fund, and
Income Fund may purchase or sell puts and calls as otherwise
described in the Prospectus or SAI; however, no Fund will
invest more than 5% of its total assets in these classes of
securities for purposes other than bona fide hedging; or
(15) Invest more than 5% of the current value of its total assets
in the securities of companies which, including predecessors,
have a record of less than three years' continuous operation.
Additionally, each Fund is a diversified fund and is therefore subject
to the following limitations which are non-fundamental policies. With respect to
75% of its total assets, a Fund will not invest more than 5% of its total assets
in the securities of any one issuer (except for U.S. Government securities) or
purchase more than 10% of the outstanding voting securities of any such issuer.
The Money Market Fund is subject to further diversification requirements. It
will not invest more than 5% of its total assets in the securities (including
securities collateralizing a repurchase agreement) of a single issuer except
that the Fund may invest in U.S. Government securities or repurchase agreements
that are collateralized by U.S. Government securities without any such
limitation.
11
<PAGE>
If a percentage restriction on the investment or use of assets set
forth in the Prospectuses or this SAI is adhered to at the time a transaction is
effected, later changes in percentage resulting from changing asset values will
not be considered a violation.
The Money Market Fund's diversification tests are measured at the time
of initial purchases, and are calculated as specified in Rule 2a-7 of the 1940
Act which may allow the Fund to exceed limits specified in the Prospectuses and
SAI for certain securities subject to guarantees or demand features. The Fund
will be deemed to satisfy the maturity requirements described in the
Prospectuses and SAI to the extent the Fund satisfies Rule 2a-7 maturity
requirements.
It is the intention of the Funds, unless otherwise indicated, that with
respect to the Funds' policies that are a result of application of law, the
Funds will take advantage of the flexibility provided by rules or
interpretations of the SEC currently in existence or promulgated in the future,
or changes to such laws.
MANAGEMENT
TRUSTEES AND OFFICERS
Under Delaware law, the Trust's Board of Trustees is responsible for
establishing the Funds' policies and for overseeing the management of the Funds.
The Board also elects the Trust's officers who conduct the daily business of the
Funds. The principal occupations of the Trustees and executive officers of the
Trust for the past five years as well as their ages are listed below. The
address of each, unless otherwise indicated, is 4400 Computer Drive,
Westborough, Massachusetts 01581-5120. Currently, no Trustee is deemed to be an
"interested person" of the Trust for purposes of the 1940 Act.
ROBERT H. DUNKER, TRUSTEE, CHAIRMAN OF NOMINATING COMMITTEE AND MEMBER OF AUDIT
COMMITTEE; (RETIRED); Director, E.J. Brooks Co. (a manufacturing company); 410
NE Plantation Road #322, Stuart, Florida 34996; Age: 69.
STEPHEN V.R. GOODHUE, TRUSTEE, CHAIRMAN OF AUDIT COMMITTEE AND MEMBER OF
NOMINATING COMMITTEE; (RETIRED); Director and Member of Executive Committee,
Visiting Nurse Service of New York; 237 Mount Holly Road, Katonah, New York
10536; Age: 71.
GEORGE H. STEWART, TRUSTEE, CHAIRMAN OF THE BOARD OF TRUSTEES, MEMBER OF
NOMINATING COMMITTEE AND AUDIT COMMITTEE; (RETIRED); formerly, Vice President
and Treasurer, Ciba-Geigy Corporation; 4425 SE Waterford Drive, Stuart, Florida
34997; Age: 68.
JYLANNE M. DUNNE, PRESIDENT; Senior Vice President at PFPC (12/99-Present);
Senior Vice President and General Manager of Distribution Services at FDISG
(1992-12/99); Age: 40.
BRIAN R. CURRAN, TREASURER; Vice President/Director of Fund Accounting and
Administration at PFPC (12/99 to Present); Director of Director of Fund
Administration at FDISG (10/97-12/99); Assistant Secretary of Fund
Administration, State Street Bank and Trust Company (2/97-10/97); Senior
Auditor, PricewaterhouseCoopers, LLP (2/94-2/97); Age: 32.
WILLIAM J. GREILICH, VICE PRESIDENT; Vice President and Division Manager at PFPC
(12/99 to Present); Vice President and Division Manager of Client Services at
FDISG (1990-12/99); Age: 46.
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<PAGE>
MARC A. SCHUMAN, SECRETARY; Vice President of PFPC (12/99-Present); Counsel of
FDISG (6/99-12/99); Vice President and Associate General Counsel of Salomon
Smith Barney (8/97-6/99); various Law firms (4/87-6/99); Age: 39.
Trustees of the Trust not affiliated with the Investment Adviser
receive from the Trust an annual retainer of $5,000 ($7,000 for the Chairman), a
fee of $500 for each Board of Trustees meeting, and $500 for each Board
committee meeting of the Trust attended ($500 additional for the Audit Committee
Chairman). They also are reimbursed for all out-of-pocket expenses relating to
attendance at such meetings. Trustees who are affiliated with the Investment
Adviser do not receive compensation from the Trust.
<TABLE>
<CAPTION>
COMPENSATION TABLE*
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ANNUAL FROM THE
COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON RETIREMENT
NAME OF PERSON, POSITION THE TRUST TRUST EXPENSES EXPENSES FUND COMPLEX
- ------------------------ --------- -------------- -------- ------------
<S> <C> <C> <C> <C>
Robert H. Dunker, Trustee $ 7,500 0 N/A $ 7,500
Stephen V.R. Goodhue, Trustee 8,500 0 N/A 8,500
Edward F. Ryan, Trustee 8,000 0 N/A 8,000
George Stewart, Trustee 10,000 0 N/A 10,000
</TABLE>
- ----------------------
* Represents the total compensation paid to such persons for the fiscal year
ended November 30, 1999.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of March 3, 2000, the following persons owned of record or
beneficially 5% or more of the voting securities of a particular Fund. Any
person owning more than 25% of the voting securities of a Fund may be deemed to
have effective voting control over the operation of that Fund, which would
diminish the voting rights of other shareholders:
WHITEHALL GROWTH FUND
Shareholder(s) Percentage Owned
- -------------- ----------------
Wendel & Co. 12.82%
AC# 179082
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
Wendel & Co. 10.48%
AC# 179054
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
Wendel & Co. 9.50%
AC# 179056
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
13
<PAGE>
Wendel & Co. 6.17%
AC# 179085
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
FTC & Co. 27.37%
P.O. Box 173736
Denver, CO 80217-3736
FTC & Co. 9.76%
P.O. Box 173736
Denver, CO 80217-3736
WHITEHALL GROWTH AND INCOME FUND
SHAREHOLDER(S) PERCENTAGE OWNED
Wendel & Co. 62.83%
AC# 179067
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
FTC & Co. 15.88%
P.O. Box 173736
Denver, CO 80217-3736
WHITEHALL INCOME FUND
SHAREHOLDER(S) PERCENTAGE OWNED
Wendel & Co. 22.53%
AC# 179082
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
Wendel & Co. 19.75%
AC# 179056
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
Wendel & Co. 18.33%
AC# 179054
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
14
<PAGE>
Wendel & Co. 10.80%
AC# 179085
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
Wendel & Co. 6.71%
AC# 179055
c/o The Bank of New York
P.O. Box 1066 Wall Street Station
New York, NY 10286
FTC & Co. 6.99%
P.O. Box 173736
Denver, CO 80217-3736
WHITEHALL MONEY MARKET FUND
SHAREHOLDER(S) PERCENTAGE OWNED
FTC & Co. 57.04%
P.O. Box 173736
Denver, CO 80217-3736
IBJ Schroder Bank & Trust Company 35.09%
One State Street
New York, NY 10004-1505
As of March 3, 2000, Officers and Trustees of the Trust, as a group,
owned less than 1% of the outstanding shares of the Funds.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
IBJW provides investment advisory services to the Funds pursuant to an
Advisory Agreement with the Trust (the "Advisory Agreement"). Subject to such
policies as the Trust's Board of Trustees may determine, IBJW makes investment
decisions for the Funds. The Advisory Agreement provides that, as compensation
for services thereunder, IBJW is entitled to receive from each Fund it manages a
monthly fee at an annual rate based upon average daily net assets of the Fund as
set forth in the Fee Table in the Prospectus. For the fiscal year ended November
30, 1999, IBJW earned investment advisory fees of $750,655, $369,277, $185,017,
and $70,587 for the Growth Fund, Growth and Income Fund, Income Fund, and Money
Market Fund, respectively. For the same period, IBJW voluntarily waived
investment advisory fees of $125,111, $61,546, $37,003, and $70,587,
respectively. For the fiscal year ended November 30, 1998, IBJW earned
investment advisory fees of $670,551, $378,308, $182,051, and $77,459 for the
Growth Fund, Growth and Income Fund, Income Fund, and Money Market Fund,
respectively. For the same period, IBJW voluntarily waived investment advisory
fees of $112,286, $62,992, $38,173, and $77,459, respectively. For the fiscal
year ended November 30, 1997, IBJW earned investment advisory fees of $588,328,
$381,947, $141,947, and $101,221 for the shares of the Growth Fund, Growth and
Income Fund, Income Fund, and Money Market Fund, respectively. For the same
period, IBJW voluntarily waived investment advisory fees of $98,055, $63,658,
$28,390, and $101,221, respectively.
15
<PAGE>
IBJW, formed in 1929, provides banking, trust and investment services
to individuals and institutions. It is a wholly-owned subsidiary of The
Industrial Bank of Japan, Limited, a commercial bank. IBJW acts as the
investment adviser to a wide variety of trusts, individuals, institutions and
corporations. Its investment management responsibilities, as of December 31,
19989, included accounts with aggregate assets of approximately $3.7 billion.
The principal business address of IBJW is One State Street, New York, New York
10004. The name of the bank was changed from IBJ Schroder Bank & Trust Company
to IBJ Whitehall Bank & Trust Company, effective January 1, 1999. The Industrial
Bank of Japan does not perform services for the Trust or any of the Funds.
The Advisory Agreement for the Funds will continue in effect for a
period beyond two years from the date of its execution only as long as such
continuance is approved annually (i) by the holders of a majority of the
outstanding voting securities of the Funds or by the Board of Trustees and (ii)
by a majority of the Trustees who are not parties to such Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Advisory Agreement may be terminated without penalty by vote of the Trustees or
the shareholders of the Funds, or by IBJW, on 60 days written notice by either
party to the Advisory Agreement and will terminate automatically if assigned.
The Advisory Agreement was last approved by the Board of Trustees, including a
majority of Trustees who are not "interested persons," on October 28, 1999.
DISTRIBUTOR
PDI is the principal underwriter of the Funds pursuant to a
Distribution Agreement dated December 1, 1999. PDI is an independent mutual fund
underwriter, owned and operated independently from PNC and PFPC, has been
providing mutual fund distribution services since 1992 and is a 50 state
broker-dealer which currently provides distribution services to ten fund
complexes. Prior to March 1, 1998, IBJ Funds Distributor, Inc. served as the
Funds' Distributor. PDI offers the Funds' shares to the public on a continuous
basis.
ADMINISTRATIVE SERVICES
As of March 1, 1998, the Trust entered into an Administration Agreement
(the "Administration Agreement") with PFPC. PFPC provides management and
administrative services necessary for the operation of the Funds, including
among other things, (i) preparation of shareholder reports and communications,
(ii) regulatory compliance, such as reports to and filings with the SEC and
state securities commissions and (iii) general supervision of the operation of
the Funds, including coordination of the services performed by IBJW, PDI,
transfer agent, custodians, independent accountants, legal counsel and others.
In addition, PFPC furnishes office space and facilities required for conducting
the business of the Funds and pays the compensation of the Funds' officers,
employees and Trustees affiliated with PFPC. For these services, PFPC receives a
fee from each Fund computed daily and payable monthly, at the annual rate of:
0.15% of average daily net assets of each Fund up to $500 million; 0.10% of
average daily net assets of each Fund in excess of $500 million up to $1
billion; 0.075% of average daily net assets of each Fund in excess of $1
billion. Pursuant to the Administration Agreement between the Trust and PFPC,
PFPC assists the Trust in calculating net asset values and provides certain
other accounting services for each Fund described therein, for an annual fee of
$35,000 per Fund plus out of pocket expenses. For the fiscal year ended November
30, 19989, the following fees were paid to FDISG for its services under the
Administration Agreement: Growth Fund - $187,666; Growth and Income Fund -
$92,319; Income Fund - $55,505; and Money Market Fund - $30,251.
16
<PAGE>
The Administration Agreement was approved by the Board of Trustees at a
meeting held on December 18, 1997 and shall remain in effect for a period of
five years from its effective date. Thereafter, the Administration Agreement
will continue subject to termination without penalty upon sixty days prior
notice.
Additionally, in September 1998, IBJW entered into a Co-Administration
Services Contract with the Trust. Under this contract, IBJW performs
supplemental administrative services, including (i) supervising the activities
of FDISG and the Funds' other service providers, (ii) serving as liaison with
the Trustees and (iii) providing general product management and oversight to the
extent not provided by FDISG. In consideration of IBJW's services under this
contract, the Trust pays IBJW a monthly fee with respect to each Fund at an
annual rate of 0.03% of the average daily value of the net assets of the Fund
during the preceding month. For the fiscal year ended November 30, 1999, IBJW
received co-administration fees of $37,533, $18,464, $11,101, and $6,050 and has
waived fees of $13,558, $6,740, $3,903, and $6,050 for the Growth Fund, Growth
and Income Fund, Income Fund, and Money Market Fund, respectively.
Prior to March 1, 1998, BISYS Fund Services, Inc. ("BISYS") acted as
the Fund's administrator and performed substantially identical services for the
Funds as FDISG now performs. For these services, BISYS received from each Fund a
fee, payable monthly, at the annual rate of 0.15% of each Fund's average daily
net assets. For the period from December 1, 1997 to February 28, 1998, BISYS
earned Administrative Services fees of $52,551, $30,673, $16,331, and $12,118
for the shares of the Growth Fund, Growth and Income Fund, Income Fund, and
Money Market Fund, respectively. For the fiscal year ended November 30, 1997,
BISYS earned Administrative Services fees of $147,082, $95,487, $42,584, and
$43,380 for the shares of the Growth Fund, Growth and Income Fund, Income Fund,
and Money Market Fund, respectively.
Prior to March 1, 1998, pursuant to a Fund Accounting Agreement between
the Trust and BISYS, BISYS assisted the Trust in calculating net asset values
and provided certain other accounting services for each Fund, for an annual fee
of $30,000 per Fund plus out of pocket expenses. For the period from December 1,
1997 to February 28, 1998, BISYS earned Fund Accounting fees of $11,767,
$13,488, $14,413, and $9,886 for the shares of the Growth Fund, Growth and
Income Fund, Income Fund, and Money Market Fund, respectively. For the fiscal
year ended November 30, 1997, BISYS Fund Services earned Fund Accounting fees of
$30,000, $35,000, $29,999, and $35,000 for the shares of the Growth Fund, Growth
and Income Fund, Income Fund, and Money Market Fund, respectively. Pursuant to a
Transfer Agency Agreement between the Trust and BISYS, BISYS assisted the Trust
with certain transfer and dividend disbursing agent functions and received a fee
of $15 per account per year per Fund plus out of pocket expenses.
17
<PAGE>
FUND EXPENSES
Each Fund bears all costs of its operations other than expenses
specifically assumed by PDI, PFPC or IBJW. The costs borne by the Funds include
advisory fees, distribution (12b-1) fees, legal and auditing expenses; Trustees'
fees and expenses; insurance premiums; custodian and transfer agent fees and
expenses; expenses incurred in acquiring or disposing of the Funds' portfolio
securities; expenses of registering or qualifying the Funds' shares for sale
with the SEC and with various state securities commissions; expenses of
obtaining quotations on the Funds' portfolio securities and pricing of the
Funds' shares; expenses of maintaining the Funds' legal existence and of
shareholders' meetings; and expenses of preparation and distribution to existing
shareholders of reports, proxies and prospectuses. Trust expenses directly
attributable to a Fund are charged to that Fund; other expenses are allocated
proportionately among all of the Funds in the Trust in relation to the net
assets of each Fund.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
IBJW acts as Custodian of the Trust's assets. The Custodian (itself or
through a sub-custodian) maintains separate accounts for the Funds; receives,
holds and releases portfolio securities on account of the Funds, receives and
disburses money on behalf of the Funds and collects and receives income and
other payments on account of the Funds' portfolio securities. For the fiscal
year ended November 30, 1999, IBJW received total compensation of $97,680 from
the Funds for its services as Custodian.
PFPC (the "Transfer Agent") acts as transfer agent for the Funds. The
Trust compensates the Transfer Agent for providing personnel and facilities to
perform transfer agency related services for the Trust at a rate intended to
represent the cost of providing such services.
INDEPENDENT AUDITORS
Ernst & Young LLP serves as the independent auditors for the Trust.
Ernst & Young LLP provides audit services, tax return review and assistance and
consultation in connection with review of certain SEC filings. Ernst & Young
LLP's address is 787 7th Avenue, New York, New York 10019.
COUNSEL
Paul, Weiss, Rifkind, Wharton & Garrison serves as counsel to the
Trust.
18
<PAGE>
DISTRIBUTION OF FUND SHARES
The Distribution Agreement between the Trust and PDI provides that PDI
will use its best efforts to maintain a broad distribution of the Funds' shares
among bona fide investors and may enter into selling group agreements with
responsible dealers and dealer managers as well as sell the Funds' shares to
individual investors. PDI is not obligated to sell any specific amount of
shares.
DISTRIBUTION PLAN
The Trust has adopted a Master Distribution Plan (the "Plan") effective
February 2, 2000 pursuant to Rule 12b-1 of the 1940 Act for shares of each - Non
Money Market Fund. Shareholders of each of the Non-Money Market Funds approved
the Plan on January 28, 2000. Pursuant to the Plan, a Fund may pay PDI on a
monthly basis for certain costs and expenses incurred under the Plan, subject to
periodic Board approval, provided that each such payment is based on the average
daily value of the Fund's net assets during the preceding month and is
calculated at an annual rate not to exceed 0.25%. These costs and expenses
include (i) advertising by radio, television, newspapers, magazines, brochures,
sales literature, direct mail or any other form of advertising, (ii) expenses of
sales employees or agents of PDI, including salary, commissions, travel and
related expenses, (iii) payments to broker-dealers and financial institutions
for services in connection with the distribution of shares, including
promotional incentives and fees calculated with reference to the average daily
net asset value of shares held by shareholders who have a brokerage or other
service relationship with the broker-dealer or other institution receiving such
fees, (iv) costs of printing prospectuses, statements of additional information
and other materials to be given or sent to prospective investors, (v) such other
similar services as the Trustees determine to be reasonably calculated to result
in the sale of shares of the Funds, (vi) costs of shareholder servicing which
may be incurred by broker-dealers, banks or other financial institutions, and
(vii) other direct and indirect distribution-related expenses, including the
provision of services with respect to maintaining the assets of the Funds.
PDI will use all amounts received under the Plan for payments to
broker-dealers or financial institutions for their assistance in distributing
the shares and otherwise promoting the sale of such shares, including payments
in amounts based on the average daily value of Fund shares owned by shareholders
in respect of which the broker-dealer or financial institution has a
distributing relationship.
The Plan provides for PDI to prepare and submit to the Board of
Trustees on a quarterly basis written reports of all amounts expended pursuant
to the Plan and the purpose for which such expenditures were made. The Plan
provides that it may not be amended to increase materially the costs which the
shares of the Funds may bear pursuant to the Plan without shareholder approval.
Any other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who neither are "interested persons" (as defined
in the 1940 Act) of the Trust nor have any direct or indirect financial interest
in the operation of the Plan or in any related agreement, by vote cast in person
at a meeting called for the purpose of considering such amendments. The
selection and nomination of the Trustees of the Trust has been committed to the
discretion of the Trustees who are not "interested persons" of the Trust.
The Plan is subject to annual approval, by the Board of Trustees and by
the Trustees who neither are "interested persons" nor have any direct or
indirect financial interest in the operation of the Plan, by vote cast in person
at a meeting called for the purpose of voting on the Plan. The Board of Trustees
of the Trust last approved the Plan at a meeting held on December 2, 1999. The
Plan is terminable with respect to the Funds at any time by a vote of a majority
of the Trustees who are not "interested persons" of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or in the
Administration Agreement or by vote of the holders of a majority of the shares
of the Funds.
COMPUTATION OF NET ASSET VALUE
The Funds value their portfolio securities and compute their net asset
values per share in accordance with the procedures discussed in the Prospectus.
This section provides a more detailed description of the Funds' methods for
valuing their portfolio securities.
19
<PAGE>
The Growth Fund, Growth and Income Fund, and Income Fund each value
portfolio securities listed on an exchange on the basis of the last sale prior
to the time the valuation is made. If there has been no sale since the
immediately previous valuation, then the current bid price is used. Quotations
are taken from the exchange where the security is primarily traded. Portfolio
securities which are primarily traded on foreign exchanges may be valued with
the assistance of a pricing service and are generally valued at the preceding
closing values of such securities on their respective exchanges, except that
when an occurrence subsequent to the time a foreign security is valued is likely
to have changed such value, then the fair value of those securities will be
determined by consideration of other factors by or under the direction of the
Board of Trustees. Over-the-counter securities are valued on the basis of the
bid price at the close of business on each business day. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by or at the direction of the Board of Trustees.
Notwithstanding the above, bonds and other fixed income securities are valued by
using market quotations and may be valued on the basis of prices provided by a
pricing service approved by the Board of Trustees. All assets and liabilities
initially expressed in foreign currencies will be converted into U.S. dollars at
the mean between the bid and asked prices of such currencies against U.S.
dollars as last quoted by any major bank.
The Money Market Fund uses the amortized cost method to determine the
value of its portfolio securities pursuant to Rule 2a-7 under the 1940 Act. The
amortized cost method involves valuing a security at its cost and amortizing any
discount or premium over the period until maturity regardless of the impact of
fluctuating interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods during which
the value, as determined by amortized cost, is higher or lower than the price
which the Fund would receive if the security were sold. During these periods,
the yield to a shareholder may differ somewhat from that which could be obtained
from a similar fund which utilizes a method of valuation based upon market
prices. Thus, during periods of declining interest rates, if the use of the
amortized cost method resulted in a lower value of the Fund's portfolio on a
particular day, a prospective investor in the Fund would be able to obtain a
somewhat higher yield than would result from an investment in a fund utilizing
solely market values and existing Fund shareholders would receive
correspondingly less income. The converse would apply during periods of rising
interest rates.
Rule 2a-7 provides that in order to value its portfolio using the
amortized cost method, the Money Market Fund must maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase securities having
remaining maturities of 397 days or less and invest only in U.S. dollar
denominated eligible securities determined by the Trust's Board of Trustees to
be of minimal credit risks and which (1) have received the highest short-term
rating by at least two NRSROs, such as "A-1" by Standard & Poor's and "P-1" by
Moody's; (2) are single rated and have received the highest short-term rating by
a NRSRO; or (3) are unrated, but are determined to be of comparable quality by
the Adviser pursuant to guidelines approved by the Board. Investments in rated
securities not rated in the highest category by at least two rating
organizations (or one rating organization if the instrument was rated by only
one such organization), and unrated securities not determined by the Board of
Trustees or IBJW to be comparable to those rated in the highest rating category,
will be limited.
Pursuant to Rule 2a-7, the Board of Trustees is also required to
establish procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Money Market Fund, as computed for the purpose of
sales and redemptions, at $1.00. Such procedures include review of the Fund's
portfolio holdings by the Board of Trustees, at such intervals as it may deem
appropriate, to determine whether the net asset value of the Fund calculated by
using available market quotations deviates from $l.00 per share based on
amortized cost. The extent of any deviation will be examined by the Board of
Trustees. If such deviation exceeds 1/2 of 1%, the Board of Trustees will
promptly consider what action, if any, will be initiated. In the event the Board
of Trustees determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, the
Board of Trustees will take such corrective action as it regards as necessary
and appropriate, which may include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity, withholding dividends or establishing a net asset value per share by
using available market quotations.
PORTFOLIO TRANSACTIONS
Investment decisions for the Funds and for the other investment
advisory clients of IBJW are made with a view to achieving their respective
investment objectives. Investment decisions are the product of many factors in
20
<PAGE>
addition to basic suitability for the particular client involved. Thus, a
particular security may be bought or sold for certain clients even though it
could have been bought or sold for other clients at the same time. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling the security. In some instances, one client may sell a
particular security to another client. It also sometimes happens that two or
more clients simultaneously purchase or sell the same security, in which event
each day's transactions in such security are, insofar as possible, averaged as
to price and allocated between such clients in a manner which in the opinion of
IBJW is equitable to each and in accordance with the amount being purchased or
sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.
Pursuant to the Advisory Agreement, IBJW places orders for the purchase
and sale of portfolio investments for the Funds' accounts with brokers or
dealers selected by it in its discretion. In effecting purchases and sales of
portfolio securities for the account of the Funds, IBJW will seek the best
available price and most favorable execution of the Funds' orders. Trading does,
however, involve transaction costs. Transactions with dealers serving as primary
market makers reflect the spread between the bid and asked prices. Purchases of
underwritten issues may be made, which will include an underwriting fee paid to
the underwriter. Purchases and sales of securities are generally placed by IBJW
with broker-dealers which, in the Adviser's judgment, provide prompt and
reliable execution at favorable security prices and reasonable commission rates.
IBJW selects broker-dealers on the basis of a variety of factors such as
reputation, capital strength, size and difficulty of order, sale of Fund shares
and research provided to IBJW.
The cost of executing portfolio securities transactions for the Money
Market Fund primarily consists of dealer spreads and underwriting commissions.
Under the 1940 Act, persons affiliated with the Funds or PFPC are prohibited
from dealing with the Funds as a principal in the purchase and sale of
securities unless a permissive order allowing such transactions is obtained from
the SEC.
IBJW may, in circumstances in which two or more broker-dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to IBJW. By allocating
transactions in this manner, IBJW is able to supplement its research and
analysis with the views and information of securities firms. These items, which
in some cases may also be purchased for cash, include such matters as general
economic and securities market reviews, industry and company reviews,
evaluations of securities and recommendations as to the purchase and sale of
securities. Some of these services are of value to IBJW in advising various of
their clients (including the Funds), although not all of these services are
necessarily useful and of value in managing the Funds. The management fee paid
by the Funds is not reduced because IBJW or its affiliates receive such
services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934
(the "Act"), IBJW may cause the Funds to pay a broker-dealer which provides
"brokerage and research services" (as defined in the Act) to IBJW a higher
commission for effecting a securities transaction for the Funds than another
broker-dealer would have charged for effecting that transaction. Such higher
commission would be paid only if IBJW believes that the commission is reasonable
in relation to the value of the brokerage and research services received.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, IBJW
may consider sales of shares of the Funds as a factor in the selection of
broker-dealers to execute portfolio transactions for the Funds.
The following table depicts total brokerage commissions paid by the
Funds during the fiscal years ended November 30, 1997, 1998 and 1999.
<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Growth Fund $137,378 $276,174 $59,491
Growth and Income Fund $129,698 $76,099 $36,320
Income Fund $ 0 $ 0 $ 0
Money Market Fund $ 0 $ 0 $ 0
</TABLE>
21
<PAGE>
TAXATION
Each Fund has elected to be treated as a regulated investment company
and qualifies as such for the fiscal year ended November 30, 1999. The Funds
intend to continue to qualify by complying with the provisions of Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a
regulated investment company, a Fund must (a) distribute to shareholders at
least 90% of its investment company taxable income (which includes, among other
items, dividends, taxable interest and the excess of net short-term capital
gains over net long-term capital losses); (b) derive in each taxable year at
least 90% of its gross income from dividends, interest, payments with respect to
securities loans and gains from the sale or other disposition of stock,
securities or foreign currencies or other income derived with respect to its
business of investing in such stock, securities or currencies; and (c) diversify
its holdings so that, at the end of each quarter of the taxable year, (i) at
least 50% of the market value of the Fund's assets is represented by cash and
cash items (including receivables), U.S. Government securities, the securities
of other regulated investment companies and other securities, with such other
securities of any one issuer limited for the purposes of this calculation to an
amount not greater than 5% of the value of the Fund's total assets and not
greater than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets is invested in the securities
of any one issuer (other than U.S. Government securities or the securities of
other regulated investment companies). By meeting these requirements, the Funds
generally will not be subject to Federal income tax on their investment company
taxable income and net capital gains which are distributed to shareholders. If a
Fund does not meet all of these Code requirements, it will be taxed as an
ordinary corporation and its distributions will be taxed to shareholders as
ordinary income.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, each Fund must distribute for each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (excluding any capital gains or losses) for the calendar year, (2) at
least 98% of the excess of its capital gains over capital losses (adjusted for
certain ordinary losses) for the one-year period ending October 31 of such year,
and (3) all ordinary income and capital gains net income (adjusted for certain
ordinary losses) for previous years that were not distributed during such years.
A distribution, including an "exempt-interest dividend," will be treated as paid
on December 31 of a calendar year if it is declared by a Fund during October,
November or December of that year to shareholders of record on a date in such a
month and paid by the Fund during January of the following year. Such
distributions will be taxable to shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in which the
distributions are received.
Some Funds may invest in stocks of foreign companies that are
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign company is classified as a PFIC under the Code if at least
one-half of its assets constitutes investment-type assets or 75% or more of its
gross income is investment-type income. Under the PFIC rules, an "excess
distribution" received with respect to PFIC stock is treated as having been
realized ratably over the period during which the Fund held the PFIC stock. A
Fund itself will be subject to tax on the portion, if any, of the excess
distribution that is allocated to the Fund's holding period in prior taxable
years (and an interest factor will be added to the tax, as if the tax actually
had been payable in such prior taxable years) even though the Fund distributes
the corresponding income to shareholders. Excess distributions include any gain
from the sale of PFIC stock as well as certain distributions from a PFIC. All
excess distributions are taxable as ordinary income.
A Fund may be able to elect alternative tax treatment with respect to
PFIC stock. Under an election that currently may be available, a Fund generally
would be required to include in its gross income its share of the earnings of a
PFIC on a current basis, regardless of whether any distributions are received
from the PFIC. If this election is made, the special rules, discussed above,
relating to the taxation of excess distributions, would not apply. In addition,
other elections may become available that would affect the tax treatment of PFIC
stock held by a Fund. Each Fund's intention to qualify annually as a regulated
investment company may limit its elections with respect to PFIC stock.
Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC stock, as well as subject a Fund
itself to tax on certain income from PFIC stock, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC stock.
22
<PAGE>
Distributions of investment company taxable income generally are
taxable to shareholders as ordinary income. Distributions from certain of the
Funds may be eligible for the dividends-received deduction available to
corporations. Distributions of net long-term capital gains, if any, designated
by the Funds as long term capital gain dividends are taxable to shareholders as
long-term capital gain, regardless of the length of time the Funds' shares have
been held by a shareholder. All distributions are taxable to the shareholder in
the same manner whether reinvested in additional shares or received in cash.
Shareholders will be notified annually as to the Federal tax status of
distributions.
Distributions by a Fund reduce the net asset value of the Fund's
shares. Should a distribution reduce the net asset value below a shareholder's
cost basis, such distribution, nevertheless, would be taxable to the shareholder
as ordinary income or capital gain as described above, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution by the Funds. The price of shares
purchased at that time includes the amount of the forthcoming distribution.
Those purchasing just prior to a distribution will receive a distribution which
will nevertheless generally be taxable to them.
Upon the taxable disposition (including a sale or redemption) of shares
of a Fund, a shareholder may realize a gain or loss depending upon his basis in
his shares. Such gain or loss generally will be treated as capital gain or loss
if the shares are capital assets in the shareholder's hands. Such gain or loss
will be long-term or short-term, generally depending upon the shareholder's
holding period for the shares. However, a loss realized by a shareholder on the
disposition of Fund shares with respect to which capital gain dividends have
been paid will, to the extent of such capital gain dividends, be treated as long
term capital loss if such shares have been held by the shareholder for six
months or less. A loss realized on the redemption, sale or exchange of Fund
shares will be disallowed to the extent an exempt-interest dividend was received
with respect to those shares if the shares have been held by the shareholder for
six months or less. Further, a loss realized on a disposition will be disallowed
to the extent the shares disposed of are replaced (whether by reinvestment of
distributions or otherwise) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss.
Shareholders receiving distributions in the form of additional shares will have
a cost basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Funds on the reinvestment date.
The taxation of equity options is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Certain of the options, futures contracts, and forward foreign currency
exchange contracts that several of the Funds may invest in are so-called
"section 1256 contracts." With certain exceptions, gains or losses on section
1256 contracts generally are considered 60% long-term and 40% short-term capital
gains or losses ("60/40"). Also, section
23
<PAGE>
1256 contracts held by a Fund at the end of each taxable year (and, generally,
for purposes of the 4% excise tax, on October 31 of each year) are
"marked-to-market" with the result that unrealized gains or losses are treated
as though they were realized and the resulting gain or loss is treated as 60/40
gain or loss.
Generally, the hedging transactions undertaken by a Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character of gains (or losses) realized by a Fund. In addition, losses realized
by a Fund on a position that are part of a straddle may be deferred under the
straddle rules, rather than being taken into account in calculating the taxable
income for the taxable year in which such losses are realized. Because only a
few regulations implementing the straddle rules have been promulgated, the tax
consequences to a Fund of hedging transactions are not entirely clear. Hedging
transactions may increase the amount of short-term capital gain realized by a
Fund, which is taxed as ordinary income when distributed to stockholders.
A Fund may make one or more of the elections available under the Code,
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
Certain requirements that must be met under the Code in order for a
Fund to qualify as a regulated investment company may limit the extent to which
a Fund will be able to engage in transactions in options, futures, and forward
contracts.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues interest, dividends
or other receivables, or accrues expenses or other liabilities denominated in a
foreign currency, and the time the Fund actually collects such receivables, or
pays such liabilities, generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in a foreign
currency and on disposition of certain options and forward and futures
contracts, gains or losses attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of disposition also are treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "section 988" gains or losses, may
increase, decrease, or eliminate the amount of a Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.
Income received by a Fund from sources within foreign countries may be
subject to withholding and other similar income taxes imposed by the foreign
country. If more than 50% of the value of a Fund's total assets at the close of
its taxable year consists of securities of foreign governments and corporations,
the Fund will be eligible and intends to elect to "pass-through" to its
shareholders the amount of such foreign taxes paid by the Fund. Pursuant to this
election, a shareholder would be required to include in gross income (in
addition to taxable dividends actually received) his pro rata share of the
foreign taxes paid by a Fund, and would be entitled either to deduct his pro
rata share of foreign taxes in computing his taxable income or to use it as a
foreign tax credit against his U.S. Federal income tax liability, subject to
limitations. No deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions, but such a shareholder may be eligible to claim the
foreign tax credit (see below). Each shareholder will be notified within 60 days
after the close of a Fund's taxable year whether the foreign taxes paid by a
Fund will "pass-through" for that year and, if so, such notification will
designate (a) the shareholder's portion of the foreign taxes paid to each such
country and (b) the portion of the dividend which represents income derived from
foreign sources.
Generally, a credit for foreign taxes is subject to the limitation that
it may not exceed the shareholder's U.S. tax attributable to his total foreign
source taxable income. For this purpose, if a Fund makes the election described
in the preceding paragraph, the source of the Fund's income flows through to its
shareholders. With respect to a Fund, gains from the sale of securities will be
treated as derived from U.S. sources and certain currency fluctuations gains,
including fluctuation gains from foreign currency-denominated debt securities,
receivables and payables, will be treated as ordinary income derived from U.S.
sources. The limitation on the foreign tax credit is applied separately to
foreign
24
<PAGE>
source passive income (as defined for purposes of the foreign tax credit)
including foreign source passive income of a Fund. The foreign tax credit may
offset only 90% of the alternative minimum tax imposed on corporations and
individuals, and foreign taxes generally may not be deducted in computing
alternative minimum taxable income.
The Funds are required to report to the Internal Revenue Service
("IRS") all distributions except in the case of certain exempt shareholders. All
such distributions generally are subject to withholding of Federal income tax at
a rate of 31% ("backup withholding") in the case of non-exempt shareholders if
(1) the shareholder fails to furnish the Funds with and to certify the
shareholder's correct taxpayer identification number or social security number,
(2) the IRS notifies the Funds or a shareholder that the shareholder has failed
to report properly certain interest and dividend income to the IRS and to
respond to notices to that effect, or (3) when required to do so, the
shareholder fails to certify that he is not subject to backup withholding. If
the withholding provisions are applicable, any such distributions, whether
reinvested in additional shares or taken in cash, will be reduced by the amounts
required to be withheld. Backup withholding is not an additional tax. Any amount
withheld may be credited against the shareholder's U.S. Federal income tax
liability. Investors may wish to consult their tax advisors about the
applicability of the backup withholding provisions.
The foregoing discussion relates only to Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Funds also
may be subject to state and local taxes and their treatment under state and
local income tax laws may differ from the Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local taxes in certain states. Shareholders should consult their
tax advisors with respect to particular questions of Federal, state and local
taxation. Shareholders who are not U.S. persons should consult their tax
advisers regarding U.S. and foreign tax consequences of ownership of shares of
the Funds, including the likelihood that distributions to them would be subject
to withholding of U.S. tax at a rate of 30% (or at a lower rate under a tax
treaty).
DESCRIPTION OF THE FUNDS' SHARES
CAPITALIZATION
The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest with a par value of $0.001 each. The Board of
Trustees may establish additional Funds (with different investment objectives
and fundamental policies) or additional classes at any time in the future.
Establishment and offering of additional Funds will not alter the rights of the
Trust's shareholders. When issued, shares are fully paid, non-assessable,
redeemable and freely transferable. Shares do not have preemptive rights or
subscription rights. In any liquidation of a Fund, each shareholder is entitled
to receive his pro rata share of the net assets of that Fund.
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims liability of the shareholders, Trustees or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust and requires that notice of the
disclaimer be given in each contract or obligation entered into or executed by
the Trust or the Trustees. The Declaration of Trust provides for indemnification
out of Trust property for all loss and expense of any shareholder held
personally liable for the obligations of the Trust. The risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations
and should be considered remote.
VOTING RIGHTS
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in the SAI, the phrase "vote of a
majority of the outstanding shares" of a Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of a Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy; or (2) more than 50% of the outstanding shares of a Fund (or
the Trust).
25
<PAGE>
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. Under the Declaration of Trust, the
Trust is not required to hold annual meetings of each Fund's shareholders to
elect Trustees or for other purposes. When certain matters affect only one class
of shares but not another, the shareholders would vote as a class regarding such
matters. It is not anticipated that the Trust will hold shareholders' meetings
unless required by law or the Declaration of Trust. In this regard, the Trust
will be required to hold a meeting to elect Trustees to fill any existing
vacancies on the Board if, at any time, fewer than a majority of the Trustees
have been elected by the shareholders of the Trust. In addition, the Declaration
of Trust provides that the holders of not less than two-thirds of the
outstanding shares of the Trust may remove persons serving as Trustee either by
declaration in writing or at a meeting called for such purpose. The Trustees are
required to call a meeting for the purpose of considering the removal of persons
serving as Trustee if requested in writing to do so by the holders of not less
than 10% of the outstanding shares of the Trust. To the extent required by
applicable law, the Trustees shall assist shareholders who seek to remove any
person serving as Trustee.
The Trust's shares do not have cumulative voting rights, so that the
holders of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.
CALCULATION OF PERFORMANCE DATA
The Funds may, from time to time, include their yield, effective yield,
tax equivalent yield and average annual total return in advertisements or
reports to shareholders or prospective investors.
Current yield for the shares of the Money Market Fund will be based on
the change in the value of a hypothetical investment (exclusive of capital
changes such as gains or losses from the sale of securities and unrealized
appreciation and depreciation) over a particular seven-day period, less a
pro-rata share of each Fund's expenses accrued over that period (the "base
period"), and stated as a percentage of the investment at the start of the base
period (the "base period return"). The base period return is then annualized by
multiplying by 365/7, with the resulting yield figure carried to at least the
nearest hundredth of one percent. "Effective yield" for the shares of the Money
Market Fund assumes that all dividends received during the base period have been
reinvested. Calculation of "effective yield" begins with the same "base period
return" used in the calculation of yield, which is then annualized to reflect
weekly compounding pursuant to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7] - 1.
For the period ended November 30, 1999, the seven-day yield and
seven-day effective yield of the shares of the Money Market Fund was 4.99% and
5.11%, respectively.
Quotations of yield for the Growth Fund, Growth and Income Fund, and
Income Fund will be based on the investment income per share earned during a
particular 30-day (or one month) period, less expenses accrued during a period
("net investment income") and will be computed by dividing net investment income
by the maximum offering price per share on the last day of the period, according
to the following formula:
YIELD = 2[(a-b + 1)6 -1]
--
cd
where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of any reimbursements), c = the average daily number of
shares outstanding during the period that were entitled to receive dividends,
and d = the maximum offering price per share on the last day of the period.
For the period ended November 30, 1999, the 30-day (or one month) yield
for shares of the Growth Fund, Growth and Income Fund, and Income Fund was
0.83%, 2.84%, and 5.95% respectively.
26
<PAGE>
Quotations of average annual total return will be expressed in terms of
the average annual compounded rate of return of a hypothetical investment in a
Fund over periods of 1, 5 and 10 years and since inception (up to the life of
the Fund), calculated pursuant to the following formula:
P (1 + T)N = ERV
(where P = a hypothetical initial payment of $l,000, T = the average annual
total return, n = the number of years, and ERV = the ending redeemable value of
a hypothetical $1,000 payment made at the beginning of the period). All total
return figures will reflect the deduction of the maximum sales charge and a
proportional share of Fund expenses (net of certain reimbursed expenses) on an
annual basis, and will assume that all dividends and distributions are
reinvested when paid.
The average annual total return for the shares of the Growth Fund,
Growth and Income Fund, and Income Fund for the fiscal year ended November 30,
1999 was 44.49%, 15.23%, and (1.79)%, respectively, and for the period February
1, 1995 (commencement of operations) to November 30, 1999 was 29.10%, 16.76%,
and 6.36%.
Quotations of yield and total return will reflect only the performance
of a hypothetical investment in the Funds during the particular time period
shown. Yield and total return for the Funds will vary based on changes in the
market conditions and the level of the Fund's expenses, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.
In connection with communicating its yields or total return to current
or prospective unit holders, the Funds also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indices which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.
Performance information for the Funds may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index, Dow Jones
Industrial Average, or other unmanaged indices so that investors may compare the
Funds' results with those of a group of unmanaged securities widely regarded by
investors as representative of the securities markets in general; (ii) other
groups of mutual funds tracked by Lipper Analytical Services, a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.
Investors who purchase and redeem shares of the Funds through a
customer account maintained at a Service Organization may be charged one or more
of the following types of fees as agreed upon by the Service Organization and
the investor, with respect to the customer services provided by the Service
Organization: account fees (a fixed amount per month or per year); transaction
fees (a fixed amount per transaction processed); compensating balance
requirements (a minimum dollar amount a customer must maintain in order to
obtain the services offered); or account maintenance fees (a periodic charge
based upon a percentage of the assets in the account or of the dividends paid on
those assets). Such fees will have the effect of reducing the yield and average
annual total return of the Funds for those investors. Investors who maintain
accounts with the Trust as transfer agent will not pay these fees.
FINANCIAL STATEMENTS
The Funds' financial statements and financial highlights for the fiscal
year ended November 30, 1999, and the report of Ernst & Young LLP, independent
auditors, are included in the Funds' Annual Report. The Funds' financial
statements, including the financial highlights and report of the independent
auditors are incorporated herein by reference. For a free copy of the Annual
Report, please contact the Funds at 1-800-99-IBJFD (1-800-994-2533).
27
<PAGE>
APPENDIX
DESCRIPTION OF MOODY'S BOND RATINGS:
Excerpts from Moody's description of its four highest bond ratings are
listed as follows: Aaa - judged to be the best quality and they carry the
smallest degree of investment risk; Aa - judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds; A - possess many favorable investment attributes and are to
be considered as "upper medium grade obligations"; Baa - considered to be medium
grade obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Other Moody's bond, descriptions
include: Ba - judged to be below-investment grade and have speculative elements,
their future cannot be considered as well assured; B - generally lack
characteristics of the desirable investment; Caa - are of poor standing. Such
issues may be in default or there may be present elements of danger with respect
to principal or interest; Ca - speculative in a high degree, often in default; C
- - lowest rated class of bonds, regarded as having extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the higher end of
its rating category; the modifier 2 indicates a mid-range ranking; and modifier
3 indicates a ranking toward the lower end of the category.
DESCRIPTION OF S&P BOND RATINGS:
Excerpts from S&P's description of its four highest bond ratings are
listed as follows: AAA - highest grade obligations, in which capacity to pay
interest and repay principal is extremely strong; AA - also qualify as high
grade obligations, having a very strong capacity to pay interest and repay
principal, and differs from AAA issues only in a small degree; A - regarded as
upper medium grade, having a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories; BBB - regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories. BB, B, CCC, CC - below-investment
grade (high yield), predominately speculative with respect to capacity to pay
interest and repay principal in accordance with terms of the obligations-, BB
indicates the highest grade and CC the lowest within the speculative rating
categories.
S&P applies indicators "+, -," no character, and relative standing
within the major rating categories.
DESCRIPTION OF MOODY'S RATINGS OF NOTES AND VARIABLE RATE DEMAND INSTRUMENTS:
Moody's ratings for state and municipal short term obligations will be
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short term credit and long-term risk. Short term ratings on
issues with demand features (variable rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payments
relying on external liquidity.
MIG 1/VMIG 1: This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG 2/VMIG 2: This denotes high quality. Margins of protection are
ample although not as large as in the preceding group.
A-1
<PAGE>
PART C. OTHER INFORMATION
Item 23. EXHIBITS.
(a) Trust Instrument, filed with Post-Effective Amendment
No. 2 to Registration Statement No. 33-83430 on March
27, 1996, and incorporated herein by reference.
(b)(1) Amended Bylaws of Registrant, dated March 20, 1997,
filed with Post-Effective Amendment No. 4 to
Registration Statement No. 33-83430 on March 27,
1997, and incorporated herein by reference.
(b)(2) Amendment effective December 17, 1998 to Amended
Bylaws of Registrant, dated March 20, 1997, filed
with post-Effective Amendment No. 7 to Registration
Statement No. 33-83430 on March 30, 1999, and
incorporated herein by reference.
(c) None.
(d)(1) Form of Master Investment Advisory Contract and
Supplements dated November 18, 1994 between
Registrant and IBJ Whitehall Bank & Trust Company,
filed with Post-Effective Amendment No. 2 to
Registration Statement No. 33-83430 on March 27,
1996, and incorporated herein by reference.
(d)(2) Amended Supplements, dated January 28, 2000, between
the Non-Money Market Funds and IBJ Whitehall Bank &
Trust Company, are filed herewith.
(e)(1) Distribution Agreement dated March 1, 1998 between
IBJ Funds Trust and First Data Distributors, Inc.,
filed with Post-Effective Amendment No. 5 to
Registration Statement No. 33-83430 on March 30,
1998, and incorporated herein by reference.
(e)(2) Distribution Agreement dated October 28, 1999 between
IBJ Funds Trust and Provident Distributors, Inc., is
filed herewith.
(f) None.
(g)(1) Custodian Contract between Registrant and IBJ
Whitehall Bank & Trust Company, filed with
Post-Effective Amendment No. 2 to Registration
Statement No. 33-83430 on March 27, 1996, and
incorporated herein by reference.
(g)(2) Sub-Custodian Contract between IBJ Whitehall Bank &
Trust Company and The Bank of New York dated February
7, 2000, is filed herewith.
<PAGE>
(h)(1)(i)Transfer Agency and Services Agreement dated March 1,
1998 between IBJ Funds Trust and First Data Investor
Services Group, Inc., filed with Post-Effective
Amendment No. 5 to Registration Statement No.
33-83430 on March 30, 1998, and incorporated herein
by reference.
(h)(1)(ii)Amendment to Transfer Agency and Services Agreement
dated October 28, 1999 between IBJ Funds Trust and
First Data Investor Services Group, Inc., is filed
herewith.
(h)(2)(i)Administration Agreement dated March 1, 1998 between
First Data Investor Services Group, Inc. and IBJ
Funds Trust, filed with Post-Effective Amendment No.
5 to Registration Statement No. 33-83430 on March 30,
1998, and incorporated herein by reference.
(h)(2)(ii)Amendment to Administration Agreement dated October
28, 1999 between IBJ Funds Trust and First Data
Investor Services Group, Inc., is filed herewith.
(h)(3) Co-Administration Agreement between IBJ Whitehall
Bank & Trust Company and IBJ Funds Trust, filed with
Post-Effective Amendment No. 7 to Registration
Statement No. 33-83430 on March 30, 1999, and
incorporated herein by reference.
(i) Consent of Paul, Weiss, Rifkind, Wharton & Garrison,
Trust Counsel, is filed herewith.
(j)(1) Consent of Ernst & Young LLP, independent auditors,
is filed herewith.
(k) None.
(l) Subscription Agreement, filed with Post-Effective
Amendment No. 2 to Registration Statement No.
33-83430 on March 27, 1996, and incorporated herein
by reference.
(m)(1) Form of Distribution and Service Plan pursuant to
Rule 12b-1 for Premium Class shareholders, filed with
Post-Effective Amendment No. 5 to Registration
Statement No. 33-83430 on March 30, 1998, and
incorporated herein by reference.
(m)(2) Form of Supplements to Distribution and Service Plan,
filed with Post-Effective Amendment No. 5 to
Registration Statement No. 33-83430 on March 30,
1998, and incorporated herein by reference.
(m)(3) Distribution and Service Plan and Supplements, dated
January 28, 2000 pursuant to Rule 12b-1 for Service
Class shareholders of the Non-Money Market Funds is
filed herewith.
<PAGE>
(m)(4) Form of Servicing Organization Agreement, filed with
Post-Effective Amendment No. 5 to Registration
Statement No. 33-83430 on March 30, 1998, and
incorporated herein by reference.
(n) Financial Data Schedules are filed herewith.
(o) Rule 18f-3 Plan, filed with Post-Effective Amendment
No. 2 to Registration Statement No. 33-83430 on March
27, 1996, and incorporated herein by reference.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 25. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment
Company Act of 1940, as amended (the "1940 Act") and pursuant
to Article X of the Registrant's Trust Instrument, Section 4
of the Master Investment Advisory Contract between Registrant
and IBJ Whitehall Bank & Trust Company, and Section 1.13 of
the Distribution Agreement between Registrant and First Data
Distributors, Inc., officers, trustees, employees and agents
of the Registrant will not be liable to the Registrant, any
shareholder, officer, trustee, employee, agent or other person
for any action of failure to act, except for bad faith,
willful misfeasance, gross negligence or reckless disregard of
duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the
same exceptions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted
to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant understands that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
trustee, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
The Registrant purchased an insurance policy insuring its
officers and trustees against liabilities, and certain costs
of defending claims against such officers and trustees, to the
extent such officers and trustees are not found to have
committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of
their duties. The insurance policy also insures the
<PAGE>
Registrant against the cost of indemnification payments to
officers under certain circumstances.
Section 4 of the Master Investment Advisory Contract between
Registrant and IBJ Whitehall Bank & Trust Company and Section
1.11 of the Distribution Agreement between Registrant and
First Data Distributors, Inc. limit the liability of IBJ
Whitehall Bank & Trust Company and First Data Distributors,
Inc. to liabilities arising from willful misfeasance, bad
faith or gross negligence in the performance of their
respective duties or from reckless disregard by them of their
respective obligations and duties under the agreements.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Trust Instrument, By-Laws,
Investment Advisory Contracts and Distribution Agreement in a
manner consistent with Release No. 11330 of the Securities and
Exchange Commission under the 1940 Act so long as the
interpretations of Section 17(h) of such Act remain in effect
and are consistently applied.
Item 26. BUSINESS AND OTHER CONNECTIONS OF IBJ WHITEHALL BANK & TRUST
COMPANY.
IBJ Whitehall Bank & Trust Company is a wholly owned
subsidiary of The Industrial Bank of Japan, Limited, a bank
holding company headquartered in Japan. IBJ Whitehall Bank &
Trust Company provides investment advisory services to the
Funds pursuant to an Advisory Agreement with the Trust.
The executive officers of IBJ Whitehall Bank & Trust Company
and The Industrial Bank of Japan, Limited and such executive
officers' positions during the past two years are as follows:
NAME POSITION AND OFFICES
IBJ WHITEHALL BANK & TRUST COMPANY
Dennis G. Buchert President and Chief
Executive Officer
Alva O. Way Chairman of the Board
Haruhiko Takenaka Vice Chairman
Donald H. McCree, Jr. Vice Chairman
THE INDUSTRIAL BANK OF JAPAN
Yoh Kurosawa Chairman
Masao Nishimuran President and Chief
Executive Officer
Yoshiyuki Fujisawa Deputy President
Yoshiomi Matsumoto Deputy President
<PAGE>
Item 27. PRINCIPAL UNDERWRITER.
(a) Provident Distributors, Inc. (the "Distributor") acts as
principal underwriter for the following investment
companies as of 12/1/99:
International Dollar Reserve Fund I, Ltd.
Provident Institutional Funds Trust
Pacific Innovations Trust
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc.
GAMNA Series Funds, Inc.
WT Investment Trust
Kalmar Pooled Investment Trust
The RBB Fund, Inc.
Robertson Stephens Investment Trust
HT Insight Funds, Inc.
Harris Insight Funds Trust
Hilliard-Lyons Government Fund, Inc
Hilliard-Lyons Growth Fund, Inc.
Hilliard-Lyons Research Trust
Senbanc Fund
ABN AMRO Funds
Alleghany Funds
BT Insurance Funds Trust
First Choice Funds Trust
Forward Funds, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Growth Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Taxable Fixed Income Series Fund, Inc.
IBJ Funds Trust
Light Index Funds, Inc.
LKCM Funds
Matthews International Funds
McM Funds
Metropolitan West Funds
New Covenant Funds, Inc.
Panorama Trust
Smith Breeden Series Funds
<PAGE>
Smith Breeden Trust
Stratton Growth Fund, Inc.
Stratton Monthly Dividend REIT Shares, Inc.
The Stratton Funds, Inc.
The Galaxy Fund
The Galaxy VIP Fund
Galaxy Fund II
The Govett Funds, Inc.
Trainer, Wortham First Mutual Funds
Undiscovered Managers Funds
Wilshire Target Funds, Inc.
Weiss, Peck & Greer Funds Trust
Weiss, Peck & Greer International Fund
WPG Growth and Income Fund
WPG Growth Fund
WPG Tudor Fund
RWB/WPG U.S. Large Stock Fund
Tomorrow Funds Retirement Trust
The BlackRock Funds, Inc. (Distributed by BlackRock
Distributors, Inc. a wholly owned subsidiary of
Provident Distributors, Inc.)
Northern Funds Trust (Distributed by Northern Funds
Distributors, LLC. a wholly owned subsidiary of
Provident Distributors, Inc.)
The Offit Investment Fund, Inc. (Distributed by Offit
Funds Distributor, Inc. a wholly owned subsidiary of
Provident Distributors, Inc.)
The Offit Variable Insurance Fund, Inc. (Distributed
by Offit Funds Distributor, Inc. a wholly owned
subsidiary of Provident Distributors, Inc.)
Provident Distributors, Inc. is registered with the
Securities and Exchange Commission as a broker-dealer
and is a member of the National Association of
Securities Dealers. Provident Distributors, Inc. is
located at Four Falls Corporate Center, Suite 600,
West Conshohocken, Pennsylvania 19428-2961.
(b) The following table provides the information required
by Item 27(b) with respect to each director, officer,
or partner of PROVIDENT DISTRIBUTORS, INC.:
<TABLE>
<CAPTION>
NAME OWNERSHIP DIRECTOR TITLE
<S> <C> <C> <C> <C>
Philip H. Rinnander President & Treasurer
Jane Haegele 100% Owner Director Secretary
Jason A. Greim Vice President
Barbara A. Rice Vice President
Jennifer K. Rinnander Vice President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME OWNERSHIP DIRECTOR TITLE
<S> <C> <C>
Lisa M. Buono Vice President &
Compliance Officer
</TABLE>
(c) Not Applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS.
(a) IBJ Whitehall Bank & Trust Company, One State Street,
New York, New York 10004 (records relating to its
functions as investment adviser)
(b) Provident Distributors, Inc., Four Falls Corporate
Center, 6th Floor, West Conshohocken, Pennsylvania
19428 (records relating to its function as
distributor)
(c) PFPC Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania, 19406 (records relating to its
functions as administrator, dividend and transfer
agent, fund account and custody administrator and
agent, Minute Books, Declaration of Trust and
By-Laws)
(d) IBJ Whitehall Bank & Trust Company, One State Street,
New York, New York 10004 (records relating to its
functions as custodian).
Item 29. MANAGEMENT SERVICES.
Not Applicable.
Item 30. UNDERTAKINGS.
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 9 to its Registration Statement under the Securities Act of 1933
and Amendment No. 11 to its Registration Statement under the Investment Company
Act of 1940 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York on the 28th day of
March, 2000.
IBJ FUNDS TRUST
By: *
-----------------------------------
JYLANNE M. DUNNE, PRESIDENT
* By: /s/ MARC A. SCHUMAN
--------------------------------------------
MARC A. SCHUMAN
AS ATTORNEY-IN-FACT
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement of IBJ Funds Trust has been signed below by the following persons in
the capacities indicated and on the 28th day of March, 2000.
SIGNATURE CAPACITY
* Chairman, Board of Trustees
- ------------------------------------
George H. Stewart
*
- ------------------------------------ Trustee
Robert H. Dunker
* Trustee
- ------------------------------------
Stephen V. R. Goodhue
* President
- ------------------------------------
JYLANNE M. DUNNE
(Chief Executive Officer)
/s/BRIAN R. CURRAN Treasurer
- ------------------
BRIAN R. CURRAN
(Principal Financial & Accounting Officer)
* By: /s/ MARC A. SCHUMAN
------------------------
Marc A. Schuman
as Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(d)(2) Amended Investment Advisory Supplements, dated
January 28, 2000, between the Non-Money Market Funds
and IBJ Whitehall Bank & Trust Company.
(e)(2) Distribution Agreement dated October 28, 1999 between
IBJ Funds Trust and Provident Distributors, Inc.
(g)(2) Sub-Custodian Contract between IBJ Whitehall Bank &
Trust Company and The Bank of New York dated February
7, 2000.
(h)(1)(ii) Amendment to Transfer Agency and Services Agreement
dated October 28, 1999 between IBJ Funds Trust and
First Data Investor Services Group, Inc.
(h)(2)(ii) Amendment to Administration Agreement dated October
28, 1999 between IBJ Funds Trust and First Data
Investor Services Group, Inc.
(i) Consent of Paul, Weiss, Rifkind, Wharton & Garrison,
Trust Counsel.
(j)(1) Consent of Ernst & Young LLP, independent auditors.
(m)(3) Distribution and Service Plan and Supplements, dated
January 28, 2000 pursuant to Rule 12b-1 for Service
Class shareholders of the Non-Money Market Funds.
(n) Financial Data Schedules.
Exhibit (d)(2)
IBJ BLENDED TOTAL RETURN FUND
IBJ CORE EQUITY FUND
IBJ CORE FIXED INCOME FUND
Each A SERIES OF IBJ FUNDS TRUST
January 28, 2000
IBJ Whitehall Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust")
and IBJ Whitehall Bank & Trust Company (the "Adviser") as follows:
IBJ Blended Total Return Fund, IBJ Core Equity Fund and IBJ Core
Fixed Income Fund (each a "Fund" and collectively, "the Funds") are series
portfolios 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 November 18, 1994 (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 Funds. Each 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
<PAGE>
Exhibit (d)(2)
IBJ BLENDED TOTAL RETURN FUND
IBJ CORE EQUITY FUND
IBJ CORE FIXED INCOME FUND
Each A SERIES OF IBJ FUNDS TRUST
January 28, 2000
IBJ Whitehall Bank & Trust Company
One State Street
New York, New York 10004
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust")
and IBJ Whitehall Bank & Trust Company (the "Adviser") as follows:
IBJ Blended Total Return Fund, IBJ Core Equity Fund and IBJ Core
Fixed Income Fund (each a "Fund" and collectively, "the Funds") are series
portfolios 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 November 18, 1994 (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 Funds. Each 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
<PAGE>
furnished and expenses paid or assumed by the Adviser as provided in the Master
Advisory Contract and herein, each 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 each Fund during the preceding
month, at the annual rate of 0.85%, 0.85% and 0.65% for the IBJ Blended Total
Return Fund, IBJ Core Equity Fund and IBJ Core Fixed Income Fund, respectively.
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,
IBJ BLENDED TOTAL RETURN FUND
IBJ CORE EQUITY FUND
IBJ CORE FIXED INCOME FUND,
each a Series of IBJ Funds Trust
By:______________________________
Title:
The foregoing Contract
is hereby agreed to as of
the date hereof:
IBJ WHITEHALL BANK & TRUST COMPANY
By:___________________________
Title:
<PAGE>
Exhibit (e)(2)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 28th day of October, 1999 (the
"Agreement") by and between IBJ Funds Trust, a Delaware business trust (the
"Company") and Provident Distributors, Inc. (the "Distributor"), a Delaware
corporation.
WHEREAS, the Company is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and is currently offering units of beneficial interest (such units
of all series are hereinafter called the "Shares"), representing interests in
investment portfolios of the Company identified on Schedule A hereto (the
"Funds") which are registered with the Securities and Exchange Commission (the
"SEC") pursuant to the Company's Registration Statement on Form N-1A (the
"Registration Statement"); and
WHEREAS, the Company desires to retain the Distributor as distributor for
the Funds to provide for the sale and distribution of the Shares of the Funds
identified on Schedule A and for such additional classes or series as the
Company may issue, and the Distributor is prepared to provide such services
commencing on the date first written above.
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby the parties hereto agree
as follows:
1. SERVICE AS DISTRIBUTOR
----------------------
1.1 The Distributor will act on behalf of the Company for the distribution of
the Shares covered by the Registration Statement under the Securities Act
of 1933, as amended (the "1933 Act"). The Distributor will have no
liability for payment for the purchase of Shares sold pursuant to this
Agreement or with respect to redemptions or repurchases of Shares.
1.2 The Distributor agrees to use efforts deemed appropriate by the Distributor
to solicit orders for the sale of the Shares and will undertake such
advertising and promotion as it believes reasonable in connection with such
solicitation. To the extent that the Distributor receives shareholder
services fees under any shareholder services plan adopted by the Company,
the Distributor agrees to furnish, and/or enter into arrangements with
others for the furnishing of, personal and/or account maintenance services
with respect to the relevant shareholders of the Company as may be required
pursuant to such plan. It is contemplated that the Distributor will enter
into sales or servicing agreements with securities dealers, financial
institutions and other industry professionals, such as investment advisers,
accountants and estate planning firms to the extent permitted by SEC and
NASD regulations or other governing law.
1.3 The Company understands that the Distributor is now, and may in the future
be, the distributor of the shares of several investment companies or series
(collectively, the "Investment Entities"), including Investment Entities
having investment objectives similar to those of the Company. The Company
further understands that investors and potential investors in the Company
may invest in shares of such other Investment
<PAGE>
Entities. The Company agrees that the Distributor's duties to such
Investment Entities shall not be deemed in conflict with its duties to the
Company under this Section 1.3.
1.4 The Distributor shall not utilize any materials in connection with the sale
or offering of Shares except the Company's prospectus and statement of
additional information and such other materials as the Company shall
provide or approve.
1.5 All activities by the Distributor and its employees, as distributor of the
Shares, shall comply with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted by
the SEC or the National Association of Securities Dealers.
1.6 The Distributor will transmit any orders received by it for purchase or
redemption of the Shares to the transfer agent for the Company.
1.7 Whenever in its judgment such action is warranted by unusual market,
economic or political conditions or abnormal circumstances of any kind, the
Company may decline to accept any orders for, or make any sales of, the
Shares until such time as the Company deems it advisable to accept such
orders and to make such sales, and the Company advises the Distributor
promptly of such determination.
1.8 The Company agrees to pay all reasonable costs and expenses in connection
with the registration of Shares under the Securities Act of 1933, as
amended, and all reasonable expenses in connection with maintaining
facilities for the issue and transfer of Shares and for supplying
information, prices and other data to be furnished by the Fund hereunder,
and all reasonable expenses in connection with the preparation and printing
of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders.
1.9 The Company agrees at its own expense to execute any and all documents and
to furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the
Shares for sale in such states as the Distributor may designate. The
Company shall notify the Distributor in writing of the states in which the
Shares may be sold and shall notify the Distributor in writing of any
changes to the information contained in the previous notification.
1.10 The Company shall furnish from time to time, for use in connection with
the sale of the Shares, such information with respect to the Company and
the Shares as the Company may reasonably request; and the Company warrants
that the statements contained in any such information shall fairly show or
represent what they purport to show or represent. The Company shall also
furnish the Distributor upon request with: (a) audited annual statements
and unaudited semi-annual statements of a Fund's books and accounts
prepared by the Company, (b) quarterly earnings statements prepared by the
Company, (c) a monthly itemized list of the securities in the Funds, and
(d) monthly balance sheets as soon as practicable after the end of each
month.
2
<PAGE>
1.11 The Company represents to the Distributor that all Registration Statements
and prospectuses filed by the Company with the SEC under the 1933 Act with
respect to the Shares have been prepared in conformity with the
requirements of the 1933 Act and the rules and regulations of the SEC
thereunder. As used in this Agreement, the term "Registration Statement"
shall mean any Registration Statement and any prospectus and any statement
of additional information relating to the Company filed with the SEC and
any amendments or supplements thereto at any time filed with the SEC.
Except as to information included in the Registration Statement in reliance
upon information provided to the Company by the Distributor or any
affiliate of the Distributor expressly for use in the Registration
Statement, the Company represents and warrants to the Distributor that any
Registration Statement, when such Registration Statement becomes effective,
will contain statements required to be stated therein in conformity with
the 1933 Act and the rules and regulations of the SEC; that all statements
of fact contained in any such Registration Statement will be true and
correct when such Registration Statement becomes effective; and that no
Registration Statement when such Registration Statement becomes effective
will include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares. The
Distributor may but shall not be obligated to propose from time to time
such amendment or amendments to any Registration Statement and such
supplement or supplements to any prospectus as, in the light of future
developments, may, in the opinion of the Distributor's counsel, be
necessary or advisable. The Distributor shall promptly notify the Company
of any advice given to it by its counsel regarding the necessity or
advisability of amending or supplementing such Registration Statement. If
the Company shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by the Company
of a reasonable written request from the Distributor to do so, the
Distributor may, at its option, terminate this Agreement. The Company
shall not file any amendment to any Registration Statement or supplement to
any prospectus without giving the Distributor reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall
in any way limit the Company's right to file at any time such amendments to
any Registration Statements and/or supplements to any prospectus, of
whatever character, as the Company may deem advisable, such right being in
all respects absolute and unconditional.
1.12 The Company authorizes the Distributor to use in connection with the
sale of the Shares any prospectus or statement of additional information in
the form furnished from time to time. The Company agrees to indemnify and
hold harmless the Distributor, its officers, directors, and employees, and
any person who controls the Distributor within the meaning of Section 15 of
the 1933 Act, free and harmless (a) from and against any and all claims,
costs, expenses (including reasonable attorneys' fees) losses, damages,
charges, payments and liabilities of any sort or kind which the
Distributor, its officers, directors, employees or any such controlling
person may incur under the 1933 Act, under any other statute, at common law
or otherwise, arising out of or based upon: (i) any untrue statement, or
alleged untrue statement, of a material fact contained in the Company's
Registration Statement, prospectus, statement of additional information, or
sales literature (including amendments and supplements thereto), or (ii)
any omission, or alleged omission, to state a material fact required to be
stated in the Company's Registration
3
<PAGE>
Statement, prospectus, statement of additional information or sales
literature (including amendments or supplements thereto), necessary to make
the statements therein not misleading, provided, however, that insofar as
losses, claims, damages, liabilities or expenses arise out of or are based
upon any such untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information furnished
to the Company by the Distributor or its affiliated persons for use in the
Company's Registration Statement, prospectus, or statement of additional
information or sales literature (including amendments or supplements
thereto), such indemnification is not applicable; and (b) from and against
any and all such claims, demands, liabilities and expenses (including such
costs and counsel fees) which you, your officers and directors, or such
controlling person, may incur in connection with this Agreement or the
Distributor's performance hereunder (but excluding such claims, demands,
liabilities and expenses (including such costs and counsel fees) arising
out of or based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any prospectus
or arising out of or based upon any omission, or alleged omission, to state
a material fact required to be stated in either any registration statement
or any prospectus or necessary to make the statements in either thereof not
misleading), unless such claims, demands, liabilities and expenses
(including such costs and counsel fees) arise by reason of the
Distributor's willful misfeasance, bad faith or negligence in the
performance of the Distributor's duties hereunder. The Company acknowledges
and agrees that in the event that the Distributor, at the request of the
Company, is required to give indemnification comparable to that set forth
in clause (a) of this Section 1.12 to any broker-dealer selling Shares of
the Company and such broker-dealer shall make a claim for indemnification
against the Distributor, the Distributor shall make a similar claim for
indemnification against the Company.
1.13 The Distributor agrees to indemnify and hold harmless the Company, its
several officers and Trustees and each person, if any, who controls a Fund
within the meaning of Section 15 of the 1933 Act against any and all
claims, costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which the
Company, its officers, Trustees or any such controlling person may incur
under the 1933 Act, under any other statute, at common law or otherwise,
but only to the extent that such liability or expense incurred by the
Company, its officers or Trustees, or any controlling person resulting from
such claims or demands arise out of the acquisition of any Shares by any
person which may be based upon any untrue statement, or alleged untrue
statement, of a material fact contained in the Company's Registration
Statement, prospectus or statement of additional information (including
amendments and supplements thereto), or any omission, or alleged omission,
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, if such statement or omission was
made in reliance upon information furnished or confirmed in writing to the
Company by the Distributor or its affiliated persons (as defined in the
1940 Act) or in connection with the Distributor's willful misfeasance, bad
faith or negligence.
1.14 In any case in which one party hereto (the "Indemnifying Party") may be
asked to indemnify or hold the other party hereto (the "Indemnified Party")
harmless, the Indemnified Party will notify the Indemnifying Party promptly
after identifying any
4
<PAGE>
situation which it believes presents or appears likely to present a claim
for indemnification (an "Indemnification Claim") against the Indemnifying
Party, although the failure to do so shall not prevent recovery by the
Indemnified Party, and shall keep the Indemnifying Party advised with
respect to all developments concerning such situation. The Indemnified
Party will not confess any Indemnification Claim or make any compromise in
any case in which the Indemnifying Party will be asked to provide
indemnification, except with the Indemnifying Party's prior written
consent. The obligations of the parties hereto under this Section 1.14 and
Section 3.1 shall survive the termination of this Agreement.
The Indemnifying Party's indemnification agreement contained in this
Section 1.14 and Section 3.1 and the Indemnifying Party's representations
and warranties in this Agreement shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Party, its officers, directors and employees, or any
controlling person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to the Indemnified Party's
benefit, to the benefit of its several officers, directors and employees,
and their respective estates and to the benefit of the controlling persons
and their successors. The Indemnifying Party agrees promptly to notify the
Indemnified Party of the commencement of any litigation or proceedings
against the Indemnifying Party or any of its officers or directors in
connection with the issue and sale of any Shares.
1.15 No Shares shall be offered by either the Distributor or the Company under
any of the provisions of this Agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Company if and so long as
effectiveness of the Registration Statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
1933 Act, or if and so long as a current prospectus as required by Section
5(b)(2) of the 1933 Act is not on file with the SEC; provided, however,
that nothing contained in this Section 1.15 shall in any way restrict or
have any application to or bearing upon the Company's obligation to redeem
Shares tendered for redemption by any shareholder in accordance with the
provisions of the Company's Registration Statement, Declaration of Trust,
or bylaws.
1.16 The Company agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(a) of any request by the SEC for amendments to the Registration Statement,
prospectus or statement of additional information then in effect or for
additional information;
(b) in the event of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement, prospectus or statement of
additional information then in effect or the initiation by service of
process on the Company of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the Registration Statement, prospectus or statement
of additional information
5
<PAGE>
then in effect or that requires the making of a change in such Registration
Statement, prospectus or statement of additional information in order to
make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendments to any
Registration Statement, prospectus or statement of additional information
which may from time to time be filed with the SEC.
For purposes of this section, informal requests by or acts of the Staff of
the SEC shall not be deemed actions of or requests by the SEC.
2. TERM
----
2.1 This Agreement shall become effective immediately upon the consummation of
the acquistion of First Data Investor Services Group, Inc. by a subsidiary
of PNC Bank Corp., which the parties anticipate to occur on or about
December 1, 1999, and, unless sooner terminated as provided herein, shall
continue for an initial one-year term and thereafter shall be renewed for
successive one-year terms, provided such continuance is specifically
approved at least annually by (i) the Company's Board of Trustees or (ii)
by a vote of a majority (as defined in the 1940 Act and Rule 18f-2
thereunder) of the outstanding voting securities of the Company, provided
that in either event the continuance is also approved by a majority of the
Trustees who are not parties to this Agreement and 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 such
approval. This Agreement is terminable without penalty, on at least sixty
days' written notice, by the Company's Board of Trustees, by vote of a
majority (as defined in the 1940 Act and Rule 18f-2 thereunder) of the
outstanding voting securities of the Company, or by the Distributor. This
Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act and the rules thereunder).
2.2 In the event a termination notice is given by the Company, all reasonable
expenses associated with movement of records and materials and conversion
thereof will be borne by the Company.
3. LIMITATION OF LIABILITY
-----------------------
3.1 Each party to this Agreement shall not be liable to the other party for any
error of judgment or mistake of law or for any loss suffered by the other
party in connection with the performance of its obligations and duties
under this Agreement, except a loss resulting from the such party's willful
misfeasance, bad faith or negligence in the performance of such obligations
and duties, or by reason of its reckless disregard thereof. Each party
(the "Indemnifying Party") will indemnify the other party (the "Indemnified
Party") against and hold it harmless from any and all claims, costs,
expenses (including reasonable attorneys' fees), losses, damages, charges,
payments and liabilities of any sort or kind which may be asserted against
the Indemnified Party for which the Indemnified Party may be held to be
liable in connection with this Agreement or the Indemnified Party's
performance hereunder (a "Section 3.1 Claim"), unless such Section 3.1
Claim
6
<PAGE>
resulted from a negligent act or omission to act or bad faith by the
Indemnified Party in the performance of its duties hereunder. The
provisions of Section 1.14 shall apply to any indemnification provided by
the Indemnifying Party pursuant to this Section 3.1. The obligations of the
parties hereto under this Section 3.1 shall survive termination of this
Agreement.
3.2 Each party shall have the duty to mitigate damages for which the other
party may become responsible.
3.5 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR CONSEQUENTIAL
DAMAGES.
4. MODIFICATIONS AND WAIVERS
-------------------------
No change, termination, modification, or waiver of any term or condition of
the Agreement shall be valid unless in writing signed by each party. A
party's waiver of a breach of any term or condition in the Agreement shall
not be deemed a waiver of any subsequent breach of the same or another term
or condition.
5. NO PRESUMPTION AGAINST DRAFTER
------------------------------
The Distributor and the Company have jointly participated in the
negotiation and drafting of this Agreement. The Agreement shall be
construed as if drafted jointly by the Company and the Distributor, and no
presumptions arise favoring any party by virtue of the authorship of any
provision of this Agreement.
6. PUBLICITY
---------
Neither the Distributor nor the Company shall release or publish news
releases, public announcements, advertising or other publicity relating to
this Agreement or to the transactions contemplated by it without prior
review and written approval of the other party; provided, however, that
either party may make such disclosures as are required by legal, accounting
or regulatory requirements.
7. SEVERABILITY
------------
The parties intend every provision of this Agreement to be severable. If a
court of competent jurisdiction determines that any term or provision is
illegal or invalid for any reason, the illegality or invalidity shall not
affect the validity of the remainder of this Agreement. In such case, the
parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality
of this paragraph, if a court determines that any remedy stated in this
Agreement has failed of its essential purpose, then all other provisions of
this Agreement, including the limitations on liability and exclusion of
damages, shall remain fully effective.
7
<PAGE>
8. FORCE MAJEURE
-------------
No party shall be liable for any default or delay in the performance of its
obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature
or other acts of God; (ii) any outbreak or escalation of hostilities, war,
riots or civil disorders in any country, (iii) any act or omission of the
other party or any governmental authority; (iv) any labor disputes (whether
or not the employees' demands are reasonable or within the party's power to
satisfy); or (v) nonperformance by a third party or any similar cause
beyond the reasonable control of such party, including without limitation,
failures or fluctuations in telecommunications or other equipment. In any
such event, the non-performing party shall be excused from any further
performance and observance of the obligations so affected only for so long
as such circumstances prevail and such party continues to use commercially
reasonable efforts to recommence performance or observance as soon as
practicable.
9. MISCELLANEOUS
-------------
9.1 Any notice or other instrument authorized or required by this Agreement to
be given in writing to the Company or the Distributor shall be sufficiently
given if addressed to the party and received by it at its office set forth
below or at such other place as it may from time to time designate in
writing.
To the Company:
IBJ Funds Trust
One State Street
New York, New York 10004
Attention: President
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1325 Avenue of the Americas
New York, New York 10022
Attention: Steven Howard
To the Distributor:
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, Pennsylvania 19428-2961
Attention: Philip Rinnander
9.2 The laws of the State of New York, excluding the laws on conflicts of laws,
and the applicable provisions of the 1940 Act shall govern the
interpretation, validity, and
8
<PAGE>
enforcement of this Agreement. To the extent the provisions of New York law
or the provisions hereof conflict with the 1940 Act, the 1940 Act shall
control. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of New York,
and the Distributor and the Company hereby submit themselves to the
exclusive jurisdiction of those courts.
9.3 This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and which collectively shall be deemed to
constitute only one instrument.
9.4 The captions of this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
9.5 This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and is not intended to
confer upon any other person any rights or remedies hereunder.
9.6 The Distributor agrees to grant to the auditors and regulators of the
Company the same access to the books and records of the Company held by the
Distributor as if such were held by the Company.
10. CONFIDENTIALITY
---------------
10.1 The parties agree that the Proprietary Information (defined below)
(collectively "Confidential Information") are confidential information of
the parties and their respective licensers. The Company and the
Distributor shall exercise reasonable care to safeguard the confidentiality
of the Confidential Information of the other. The Company and the
Distributor may each use the Confidential Information only to exercise its
rights or perform its duties under this Agreement. The Company and the
Distributor shall not sell or disclose to others the Confidential
Information of the other, in whole or in part, without the prior written
permission of the other party. The Company and the Distributor may,
however, disclose Confidential Information to its employees who have a need
to know the Confidential Information to perform work for the other,
provided that each shall use reasonable efforts to ensure that the
Confidential Information is not duplicated or disclosed by its employees in
breach of this Agreement. The Company and the Distributor may also
disclose the Confidential Information to independent contractors, auditors
and professional advisors and as required by law or regulatory authorities.
Notwithstanding the previous sentence, in no event shall either the Company
or the Distributor disclose the Confidential Information to any competitor
of the other without specific, prior written consent.
10.2 Proprietary Information means:
(a) any data or information that is sensitive material, and not generally
known to the public, including, but not limited to, information about
product plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates,
9
<PAGE>
business plans, and internal performance results relating to the past,
present or future business activities of the Company or the Distributor,
their respective subsidiaries and affiliated companies and the customers,
clients and suppliers of any of them;
(b) any scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in the
sense that its confidentiality affords the Company or the Distributor a
competitive advantage over its competitors: and
(c) all confidential or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade secrets, whether or not
patentable or copyrightable.
10.3 Confidential Information may be memorialized in, without limitation,
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment,
prototypes or models, and any other tangible manifestation of the foregoing
of either party which now exist or come into the control or possession of
the other.
10.4 Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information of the other
party would result in immediate and irreparable harm, and money damages
would be inadequate to compensate the other party for that harm. Each
Party shall be entitled to equitable relief, in addition to all other
available remedies, to redress any such breach.
11. The Company and the Distributor agree that the obligations of the Company
under the Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Company individually, but are binding only upon
the assets and property of the Company, as provided in the Declaration of
Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Company, and signed by an authorized officer of the
Company, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them or any shareholder of the Company individually or
to impose any liability on any of them or any shareholder of the Company
personally, but shall bind only the assets and property of the Company as
provided in the Declaration of Trust.
12. ENTIRE AGREEMENT
----------------
This Agreement, including all Schedules hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous proposals, agreements, contracts,
representations, and understandings, whether written or oral, between the
parties with respect to the subject matter hereof.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
IBJ FUNDS TRUST
By:_________________________
Name:_______________________
Title:________________________
PROVIDENT DISTRIBUTORS, INC.
By:_________________________
Name:_______________________
Title:________________________
11
<PAGE>
SCHEDULE A
----------
Name of Funds
-------------
The Reserve Money Market Fund
The Core Fixed Income Fund
The Core Equity Fund
The Blended Total Return Fund
A-1
<PAGE>
Exhibit (g)(2)
THE
BANK OF
NEW YORK
GLOBAL CUSTODY AGREEMENT
(Banks and Broker/Dealers)
AGREEMENT, dated as of February 7, 2000 between IBJ Whitehall Bank and
Trust Company ("Customer") and The Bank of New York ("Custodian").
WHEREAS, Customer acts as trustee, custodian or subcustodian of
securities and cash on behalf of certain of its customers;
WHEREAS, Customer wishes to establish Accounts (hereinafter defined)
with Custodian to hold and maintain Securities (as hereinafter defined) and cash
delivered to Custodian from time to time;
WHEREAS, Custodian agrees to establish the Accounts and to hold and
maintain all Securities and cash in the Accounts pursuant to the terms and
conditions herein set forth;
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, Customer and Custodian agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "AUTHORIZED PERSON" shall be any person, whether or not an
officer or employee of Customer, duly authorized by Customer to give Oral and/or
Written Instructions with respect to one or more Accounts, such persons to be
designated in a Certificate of Authorized Persons which contains a specimen
signature of such person.
2. "BNY AFFILIATE" shall mean any office, branch or subsidiary of
The Bank of New York Company, Inc.
3. "BOOK-ENTRY SYSTEM" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
4. "BUSINESS DAY" shall mean any day on which Custodian, Book-Entry
System and relevant Depositories are open for business.
5. "COMPOSITE CURRENCY UNITS" shall mean the Euro or any other
composite unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
6. "DEPOSITORY" shall include the Book-Entry System, the Depository
Trust Company, Euroclear, Cedei, S.A. and any other securities depository,
book-entry system or clearing agency (and their respective successors and
nominees) authorized to act as a securities depository, book-entry system or
clearing agency pursuant to applicable law and identified to Customer from time
to time.
7. "ORAL INSTRUCTIONS" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
8. "SECURITIES" shall include, without limitation, any common stock
and other equity securities, bonds, debentures and other debt securities, notes,
mortgages or other obligations, and any instruments representing rights to
receive, purchase, or subscribe for the same, or representing any other rights
or interests therein (whether represented by a certificate or held in a
Depository or a Subcustodian).
<PAGE>
-2-
9. "SUBCUSTODIAN" shall mean a bank or other financial institution
(other than a Depository) which is utilized by Custodian in connection with the
purchase, sale or custody of Securities hereunder and identified to Customer
from time to time.
10. "WRITTEN INSTRUCTIONS" shall mean any notices, instructions or
other instruments in writing received by Custodian from an Authorized Person or
from a person reasonably believed by Custodian to be an Authorized Person by
letter, telex, facsimile transmission, Custodian's on-line communication system,
or any other method whereby Custodian is able to verify with a reasonable degree
of certainty the identity of the sender of such communications or the sender is
required to provide a password or other identification code.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS AND WARRANTIES
1. (a) Customer hereby appoints Custodian as custodian of all
Securities and cash at any time delivered to Custodian during the term of this
Agreement, and authorizes Custodian to hold Securities in registered form in its
name or the name of its nominees. Custodian hereby accepts such appointment and
agrees to establish and maintain one or more securities accounts and cash
accounts in which Custodian will hold Securities and cash as provided herein.
Such accounts (each, an "Account"; collectively, the "Accounts") shall be in the
name of Customer, or with Custodian's prior approval (which may be withheld in
Custodian's sole discretion), in the names of Customer's clients as directed by
Customer. Customer may instruct Custodian to identify any Account as holding
Securities and cash on behalf of Customer's clients and customers, and Custodian
shall comply with such instructions. Certificated Securities shall be held
separate from Securities beneficially owned by Custodian and all of its other
customers unless held in a fungible bulk as part of a Filing of Securities by
Issue (FOSBI) arrangement.
(b) Customer agrees that it is liable to Custodian for satisfaction
of all obligations and liabilities arising or incurred in connection with each
Account as a principal, without regard to any rights or recourse Customer may
have against any third party for reimbursement of such obligations and
liabilities.
2. (a) Except as otherwise provided by law, a cash account
(including subdivisions maintained in different currencies, including Composite
Currency Units) shall constitute one single and indivisible current account.
Consequently, Custodian has the right, among others, to transfer the balance of
any subaccount of a cash account to any other subaccount at any time and without
prior notice.
(b) Custodian may in accordance with customary practice hold any
currency or Composite Currency Unit in which any subdivision of a cash account
is denominated on deposit in, and effect transactions relating thereto through,
an account (a "Foreign Account") with a BNY Affiliate or another bank in the
country where such currency is the lawful currency or in other countries where
such currency or Composite Currency Unit may be lawfully held on deposit.
(c) Custodian shall have no liability for any loss or damage arising
from the applicability of any law or regulation now or hereafter in effect, or
from the occurrence of any event, which may affect the transferability,
convertibility, or availability of any currency or Composite Currency Unit in
the countries where such Foreign Accounts are maintained and in no event shall
Custodian be obligated to substitute another currency for a currency (including
a currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected by such law,
regulation or event. To the extent that any such law, regulation or event
imposes a cost or charge upon Custodian in relation to the transferability,
convertibility, or availability of any cash currency or Composite Currency Unit,
such cost or charge shall be for the account of Customer. If pursuant to any
such law or regulation, or as a result of any such event, Custodian cannot deal
in any component currency of a Composite Currency Unit or effect a particular
transaction in a Composite Currency Unit on Customer's behalf, Custodian may
thereafter treat any account denominated in an affected Composite Currency Unit
as a group of separate accounts denominated in the relevant component
currencies.
3. Customer hereby represents and warrants, which representations
and warranties shall be continuing and shall be deemed to be reaffirmed upon
each Oral or Written Instruction given by Customer, that:
(a) Customer is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by Customer, constitutes a valid and legally binding obligation of Customer,
enforceable in accordance with its terms, and no statute, regulation, rule,
order, judgment or contract binding on Customer prohibits Customer's execution
or performance of this Agreement;
<PAGE>
-3-
(c) With respect to Accounts established in the name of third
parties, Customer has been duly authorized to enter into and perform all
transactions contemplated hereby and to take actions and give Oral and Written
Instructions with legal and binding effect upon such third parties and their
respective Accounts;
(d) Either Customer owns the Securities in the Accounts free and
clear of all liens, claims, security interests and encumbrances (except those
granted herein) or, if the Securities in an Account are owned beneficially by
others, Customer has the right to pledge such Securities to the extent necessary
to secure Customer's obligations hereunder, free of any right of redemption or
prior claim by the beneficial owner. Custodian's security interest pursuant to
Article V hereof shall be a first lien and security interest subject to no
setoffs, counterclaims or other liens prior to or on a parity with it in favor
of any other party (other than specific liens granted preferred status by
statute), and Customer shall take any and all additional steps which Custodian
requires to assure itself of such priority and status, including notifying third
parties or obtaining their consent to, Custodian's security interest;
(e) Customer has established and presently maintains policies and
procedures requiring Customer to obtain and verify information about the
identity of its customers and which are reasonably designed to ensure that
Customer is not being used as a conduit for money laundering or other illicit
purposes; and
(f) Customer has verified the identity of each third party in whose
name an Account is established and maintained hereunder and made reasonable
inquiries regarding the source of funds credited to such Account, and to the
best of Customer's knowledge, no transaction through any Account is prohibited
by applicable law, regulation or rule.
5. Custodian hereby represents and warrants, which representations
and warranties shall be continuing and shall be deemed to be reaffirmed upon
each Oral or Written Instruction received by Custodian, that:
(a) Custodian is a banking institution incorporated under the laws
of the State of New York, with full power to carry on its business as now
conducted, to enter into this Agreement and to perform its obligations
hereunder;
(b) Custodian has shareholders equity in excess of $200,000,000 and
upon Customer's written request from time to time shall confirm whether it
continues to maintain shareholders equity in such amount. If Custodian is unable
to provide such confirmation at the time of any request therefor, Customer shall
have the right to terminate this Agreement upon prior written notice to
Custodian; and
(c) This Agreement has been duly authorized, executed and delivered
by Custodian, constitutes a valid and legally binding obligation of Custodian,
enforceable in accordance with its terms, and no statute, regulation, rule,
order, judgment or contract binding on Custodian prohibits Custodian's execution
or performance of this Agreement.
6. Customer and Custodian each hereby warrants to the other that it
will use commercially reasonable efforts to ensure that the computer software
and hardware systems ("Systems") that are owned by it and used by it to provide
services to its clients ("Services") are 2000 Compliant. With respect to
software that Custodian or Customer licenses from third parties and uses in
providing Services ("Third Party Software"), Custodian and Customer each
warrants to the other that it has used commercially reasonable efforts to test
the same to certify, in accordance with its standard practices, that the Third
Party Software is 2000 Compliant. If Custodian or Customer cannot certify any
Third Party Software as 2000 Compliant, Custodian or Customer, as the case may
be, will use commercially reasonable efforts to replace such Third Party
Software with software that is warranted or certified by its vendor as 2000
Compliant, if such replacement is available, compatible with Custodian's or
Customer's Systems (as the case may be) and deemed by Custodian or Customer as
appropriate under the circumstances. In the event that Custodian or Customer
uses third party service providers to provide Services or any portion thereof,
("Third Party Services"), Custodian and Customer each warrants to the other that
it has in place a program under which it will use commercially reasonable
efforts to contact such service providers and obtain from them assurances that
the Systems that they use in providing Services are 2000 Compliant. As used
herein, the term "2000 Compliant" means that the Systems will function without
material error caused by introduction of dates falling on or after January 1,
2000. Notwithstanding the foregoing, the parties hereto acknowledge and agree
that Custodian and Customer cannot and do not warrant that the Systems, Third
Party Software or Third Party Services used by it will continue to interface
with the hardware, firmware, software (including operating systems), records or
data used by the other party or third parties, nor does Custodian or Customer
make any warranties hereunder with respect to any public utility, communications
service provider, correspondent bank, Depository, securities or commodities
exchange, or funds transfer network.
<PAGE>
-4-
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, Customer hereby authorizes
Custodian to hold any Securities received by it from time to time for Customer's
account. The Accounts shall be used exclusively to hold, receive, deliver or
otherwise care for Securities, cash and cash equivalents as are transferred to
Custodian or as are received by Custodian in payment of any transfer of, or as
payment on or in respect of any such Securities. Custodian shall be entitled to
utilize Depositories and Subcustodians to the extent possible in connection with
its performance hereunder, provided that while so maintained, such Securities
and cash shall be subject only to the directions of Custodian. Securities and
cash deposited by Custodian in a Depository will be held subject to the rules,
terms and conditions of such Depository. Securities and cash held through
Subcustodians shall be held subject to the terms and conditions of Custodian's
agreements with such Subcustodians. Subcustodians may be authorized to hold
Securities in central securities depositories or clearing agencies in which such
Subcustodians participate. Custodian shall, in accordance with its normal
operating procedures transmit to Depositories and Subcustodians any Written
Instructions received from Customer concerning the acquisition, custody or
disposition of Securities held by any of them. Unless otherwise required by
local law or practice or a particular subcustodian agreement, Securities
deposited with Subcustodians will be held in a commingled account in the name of
Custodian as custodian or trustee for its customers. Custodian shall identify on
its books and records the Securities and cash belonging to Customer and each of
Customer's clients in whose name an Account is opened hereunder (as
appropriate), whether held directly or indirectly through Depositories or
Subcustodians.
(b) Unless Custodian has received Oral or Written Instructions to
the contrary or applicable law otherwise requires, Custodian shall hold
Securities indirectly through a Subcustodian only if (i) the Securities are not
subject to any right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian or its creditors, including a receiver or trustee in
bankruptcy or similar authority, except for a claim of payment for the safe
custody or administration of Securities or for funds advanced on behalf of
Customer by such Subcustodian, and (ii) beneficial ownership of the Securities
is freely transferable without the payment of money or value other than for safe
custody or administration.
2. Custodian shall furnish Customer with an advice of daily
transactions, a monthly summary of all transfers to or from the Accounts, and
such other advices and reports as the parties shall agree from time to time.
3. With respect to all Securities held hereunder, Custodian shall,
unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise Customer as
promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all
Securities which may mature and advise Customer as promptly as practicable of
any such amounts due but not paid;
(c) Forward to Customer as promptly as practicable under the
circumstances copies of all information or documents that it may receive from an
issuer of Securities which, in the opinion of Custodian, are intended for the
beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now or
hereafter in effect in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository or Subcustodian all rights
and similar Securities issued with respect to any Securities credited to an
Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify Customer of such rights or
discretionary actions or of the date or dates by when such rights must be
exercised or such action must be taken provided that Custodian has received,
from the issuer or the relevant Depository (with respect to Securities issued in
the United States) or from the relevant Subcustodian, Depository or a nationally
or internationally recognized bond or corporate action service to which
Custodian subscribes, timely notice of such rights or discretionary corporate
action or of the date or dates such rights must be exercised or such action must
be taken. Absent actual receipt of such notice, Custodian shall have no
liability for failing to so notify Customer.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
optional rights on Customer or provide for discretionary action or alternative
courses of action by Customer, Customer shall be responsible for making any
decisions relating thereto and for directing Custodian to act. In order for
Custodian to
<PAGE>
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act, it must receive Customer's Written Instructions at Custodian's offices,
addressed as Custodian may from time to time request, not later than noon (New
York time) at least two (2) Business Days prior to the last scheduled date to
act with respect to such Securities (or such earlier date or time as Custodian
may notify Customer). Absent Custodian's timely receipt of such Written
Instructions, Custodian shall not be liable for failure to take any action
relating to or to exercise any rights conferred by such Securities.
5. All voting rights with respect to Securities, however
registered, shall be exercised by Customer or its designee. For Securities
issued in the United States, Custodian's only duty shall be to mail to Customer
any documents (including proxy statements, annual reports and signed proxies)
relating to the exercise of such voting rights. With respect to Securities
issued outside of the United States, Custodian's only duty shall be to provide
Customer with access to a provider of global proxy services at Customer's
request. Customer shall be responsible for all costs associated with its use of
such services.
6. Custodian shall promptly advise Customer upon its notification
of the partial redemption, partial payment or other action affecting less than
all Securities of the relevant class. If Custodian, any Subcustodian or
Depository holds any Securities in which Customer has an interest as part of a
fungible mass, Custodian, such Subcustodian or Depository may select the
Securities to participate in such partial redemption, partial payment or other
action in any non-discriminatory manner that it customarily uses to make such
selection.
7. Custodian shall not under any circumstances accept bearer
interest coupons which have been stripped from United States federal, state or
local government or agency securities unless explicitly agreed to by Custodian
in writing.
8. Customer shall be liable for all taxes, assessments, duties and
other governmental charges, including any interest or penalty with respect
thereto ("Taxes"), with respect to any cash or Securities held on behalf of
Customer or any transaction related thereto. Customer shall indemnify Custodian
and each Subcustodian for the amount of any Tax that Custodian, any such
Subcustodian or any other withholding agent is required under applicable laws
(whether by assessment or otherwise) to pay on behalf of, or in respect of
income earned by or payments or distributions made to or for the account of
Customer (including any payment of Tax required by reason of an earlier failure
to withhold). Custodian shall, or shall instruct the applicable Subcustodian or
other withholding agent to, withhold the amount of any Tax which is required to
be withheld under applicable law upon collection of any dividend, interest or
other distribution made with respect to any Security and any proceeds or income
from the sale, loan or other transfer of any Security. In the event that
Custodian or any Subcustodian is required under applicable law to pay any Tax on
behalf of Customer, Custodian is hereby authorized to withdraw cash from any
subaccount of the appropriate cash account in the amount required to pay such
Tax and to use such cash, or to remit such cash to the appropriate Subcustodian,
for the timely payment of such Tax in the manner required by applicable law. If
the aggregate amount of cash in all subaccounts of the cash account is not
sufficient to pay such Tax, Custodian shall promptly notify Customer of the
additional amount of cash (in the appropriate currency) required, and Customer
shall directly deposit such additional amount in the cash account promptly after
receipt of such notice, for use by Custodian as specified herein. In the event
that Customer or its client is eligible, pursuant to applicable law or to the
provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax
which is otherwise required to be withheld or paid on behalf of Customer or its
client under any applicable law, Custodian shall, or shall instruct the
applicable Subcustodian or withholding agent to, either withhold or pay such Tax
at such reduced rate or refrain from withholding or paying such Tax, as
appropriate; PROVIDED that Custodian shall have received from Customer all
documentary evidence of residence or other qualification for such reduced rate
or exemption required to be received under such applicable law or treaty. In the
event that a reduced rate of, or exemption from, any Tax is obtainable only by
means of an application for refund, Custodian and the applicable Subcustodian
shall have no responsibility for the accuracy or validity of any forms or
documentation provided by Customer to Custodian hereunder, and Customer hereby
indemnifies and agrees to hold harmless Custodian and each Subcustodian in
respect of any liability arising from any underwithholding or underpayment of
any Tax which results from the inaccuracy or invalidity of any such forms or
other documentation.
9. (a) For the purpose of settling Securities and foreign
exchange transactions, Customer shall provide Custodian with sufficient
immediately available funds for all transactions by such time and date as
conditions in the relevant market dictate. As used herein, "sufficient
immediately available funds" shall mean either (i) sufficient cash denominated
in the currency of Customer's home jurisdiction to purchase the necessary
foreign currency, or (ii) sufficient applicable foreign currency, to settle the
transaction. Custodian shall credit the appropriate Account with immediately
available funds each day which result from the actual settlement of all sale
transactions, based upon advices received by Custodian from its Subcustodians
and Depositories. Such funds shall be in the currency of Customer's home
jurisdiction or such other currency as Customer may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a BNY Affiliate
acting as principal or otherwise through customary banking channels. Customer
may issue standing Written Instructions with respect to foreign exchange
transactions but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to Customer. Customer shall bear all
risks of investing in Securities or holding cash
<PAGE>
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denominated in a foreign currency. Without limiting the foregoing, Customer
shall bear the risks that rules or procedures imposed by Depositories, exchange
controls, asset freezes or other laws, rules, regulations or orders shall
prohibit or impose burdens or costs on the transfer to, by or for the account of
Customer of Securities or cash held outside Customer's jurisdiction or
denominated in a currency other than its home jurisdiction or the conversion of
cash from one currency into another currency. Custodian shall not be obligated
to substitute another currency for a currency (including a currency that is a
component of a Composite Currency Unit) whose transferability, convertibility or
availability has been affected by such law, regulation, rule or procedure.
Neither Custodian nor any Subcustodian shall be liable to Customer for any loss
resulting from any of the foregoing events.
10. To the extent that Custodian has agreed to provide pricing or
other information services in connection with this Agreement, Custodian is
authorized to utilize any vendor (including brokers and dealers of Securities)
reasonably believed by Custodian to be reliable to provide such information.
Customer understands that certain pricing information with respect to complex
financial instruments (E.G., derivatives) may be based on calculated amounts
rather than actual market transactions and may not reflect actual market values,
and that the variance between such calculated amounts and actual market values
may or may not be material. Where vendors do not provide information for
particular Securities or other property, an Authorized Person may advise
Custodian regarding the fair market value of, or provide other information with
respect to, such Securities or property as determined by it in good faith.
Custodian shall not be liable for any loss, damage or expense incurred as a
result of errors or omissions with respect to any pricing or other information
utilized by Custodian hereunder.
11. As an accommodation to Customer, Custodian may provide
consolidated recordkeeping services pursuant to which Custodian reflects on
Account statements Securities positions for which Custodian has no safekeeping
or other responsibility under this Agreement ("Non-Custody Securities").
Non-Custody Securities shall be designated on Custodian's books as "shares not
held" or by other similar characterization. Customer acknowledges and agrees
that Custodian shall rely, without independent verification, on information
provided by Customer regarding Non-Custody Securities (including but not limited
to Account positions and market valuations) and shall have no responsibility
whatsoever with respect to Non-Custody Securities or the accuracy of any
information maintained on Custodian's books or set forth on account statements
concerning Non-Custody Securities.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by Customer,
Customer shall deliver to Custodian Written Instructions specifying all
information necessary for Custodian to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
2. Customer understands that when Custodian is instructed to
deliver Securities against payment, delivery of such Securities and receipt of
payment therefor may not be completed simultaneously. Customer assumes full
responsibility for all credit risks involved in connection with Custodian's
delivery of Securities pursuant to instructions of Customer.
3. Custodian may, as a matter of bookkeeping convenience, or by
separate agreement with Customer, credit the appropriate Account with the
proceeds from the sale, redemption or other disposition of Securities or
interest, dividends or other distributions payable on Securities prior to its
actual receipt of final payment therefor. All such credits shall be conditional
until Custodian's actual receipt of final payment and may be reversed by
Custodian to the extent that final payment is not received. Payment with respect
to a transaction will not be "final" until Custodian shall have received
immediately available funds which under applicable local law, rule and/or
practice are irreversible and not subject to any security interest, levy or
other encumbrance, and which are specifically applicable to such transaction.
4. Upon Customer's Oral or Written Instructions, Custodian shall
purchase or sell Securities and is authorized to utilize any broker or agent in
connection with any such transactions, including BNY Affiliates, which it
selects using reasonable care. Custodian shall not be liable for the acts or
omissions of any such broker or agent, other than a BNY Affiliate. Upon
Customer's Oral or Written Instructions (which may include standing
instructions), Custodian shall also invest cash balances in certificates of
deposit, savings accounts or other similar instruments issued by Custodian or a
BNY Affiliate or in money market or other mutual funds for which Custodian or a
BNY Affiliate may serve as investment advisor, administrator, custodian,
shareholder servicing agent or other capacity, notwithstanding that Custodian or
a BNY Affiliate collects fees from such mutual funds for providing such
services.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
<PAGE>
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1. If Custodian in its sole discretion advances funds in any
currency hereunder or there shall arise for whatever reason an overdraft in an
Account (including, without limitation, overdrafts incurred in connection with
the settlement of securities transactions, funds transfers or foreign exchange
transactions) or if Customer is for any other reason indebted to Custodian,
Customer agrees to repay Custodian on demand the amount of the advance,
overdraft or indebtedness plus accrued interest at a rate ordinarily charged
by Custodian to its institutional custody customers in the relevant currency.
2. In order to secure repayment of Customer's obligations to
Custodian hereunder, Customer hereby pledges and grants to Custodian a
continuing lien and security interest in, and right of set-off against, all of
Customer's right, title and interest in and to all Accounts in Customer's name
and the Securities, money and other property now or hereafter held in such
Accounts (including proceeds thereof). In addition, if any advance of funds is
made by Custodian to purchase, or to make payment on or against delivery of
Securities for any Account in the name of a third party hereunder, Custodian
shall have a continuing security interest in and right of setoff against such
Securities and the proceeds thereof, until such time as Custodian is repaid the
amount of such advance. In this regard, Custodian shall be entitled to all the
rights and remedies of a pledgee and secured creditor under applicable laws,
rules or regulations as then in effect.
ARTICLE VI
CONCERNING CUSTODIAN
1. (a) Custodian shall exercise reasonable care in the
performance of its duties hereunder, and except as otherwise expressly provided
herein, Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees (collectively,
"Losses"), incurred by or asserted against Customer, except those Losses arising
out of the negligence or wilful misconduct of Custodian. Custodian shall have no
liability whatsoever for the action or inaction of any Depository. Subject to
Section 1(b) below, Custodian's responsibility with respect to any Securities or
cash held by a Subcustodian is limited to the failure on the part of Custodian
to exercise reasonable care in the selection or retention of such Subcustodian
in light of prevailing settlement and securities handling practices, procedures
and controls in the relevant market. With respect to any Losses incurred by
Customer as a result of the acts or the failure to act by any Subcustodian
(other than a BNY Affiliate), Custodian shall take appropriate action to recover
such Losses from such Subcustodian; and Custodian's sole responsibility and
liability to Customer shall be limited to amounts so received from such
Subcustodian (exclusive of costs and expenses incurred by Custodian). In no
event shall Custodian be liable to Customer or any third party for special,
indirect or consequential damages, or lost profits or loss of business, arising
in connection with this Agreement.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms and conditions
as it deems necessary or appropriate to perform its services hereunder. No such
subcontract, agreement or understanding shall discharge Custodian from its
obligations hereunder.
(c) Customer agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a successful
defense of claims by Customer; provided however, that Customer shall not
indemnify Custodian for those Losses arising out of Custodian's negligence or
wilful misconduct. This indemnity shall be a continuing obligation of Customer,
its successors and assigns, notwithstanding the termination of this Agreement.
2. Without limiting the generality of the foregoing, Custodian
shall be under no obligation to inquire into, and shall not be liable for, any
losses incurred by Customer or any other person as a result of the receipt or
acceptance of fraudulent, forged or invalid Securities, or Securities which are
otherwise not freely transferable or deliverable without encumbrance in any
relevant market.
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice.
4. Custodian shall be under no obligation to take action to collect
any amount payable on Securities in default, or if payment is refused after due
demand and presentment.
5. Custodian shall have no duty or responsibility to inquire into,
make recommendations, supervise, or determine the suitability of any
transactions affecting any Account.
6. Customer shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. Customer
shall reimburse Custodian
<PAGE>
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for all costs associated with the transfer of Securities and records kept in
connection with this Agreement. Customer shall also reimburse Custodian for
reasonable out-of-pocket expenses which are a normal incident of the services
provided hereunder.
7. Custodian has the right to debit any cash account (or any
subaccount thereof) in customer's name for any amount payable by Customer in
connection with any and all obligations of Customer to Custodian arising under
this Agreement. In addition to the rights of Custodian under applicable law, at
any time when Customer shall not have honored any and all of its obligations to
Custodian under this Agreement, Custodian shall have the right without notice to
Customer to retain or set-off against such obligations, (a) the money now or
hereafter held in all Accounts in Customer's name, (b) the money now or
hereafter held in each Account in respect of which the obligation relates, and
(c) any obligations (whether matured or unmatured) that Custodian or BNY
Affiliate may have to Customer in respect of services provided hereunder.
8. Custodian shall be entitled to rely upon any Written or Oral
Instruction actually received by Custodian and reasonably believed by Custodian
to be duly authorized and delivered. Customer agrees to forward to Custodian
Written Instructions confirming Oral Instructions by the close of business of
the same day that such Oral Instructions are given to Custodian. Customer agrees
that the fact that such confirming Written Instructions are not received or that
contrary Written Instructions are received by Custodian shall in no way affect
the validity or enforceability of transactions authorized by such Oral
Instructions and effected by Custodian. If Customer elects to transmit Written
Instructions through an on-line communication system offered by Custodian,
Customer's use thereof shall be subject to the Terms and Conditions attached
hereto as Appendix I.
9. Upon reasonable request and provided Custodian shall suffer no
significant disruption of its normal activities, Customer, its representatives
and regulatory authorities with jurisdiction over Customer shall have access to
Custodian's books and records relating to the Accounts during Custodian's normal
business hours. Upon reasonable request, copies of any such books and records
shall be provided to Customer at Customer's expense.
10. It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law, regulation or
rule now or hereafter in effect.
11. Custodian shall not be responsible or liable for any failure or
delay in the performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control and not due to its negligence or wilful misconduct, including without
limitation, acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications service; accidents;
labor disputes; acts of civil or military authority or governmental actions; it
being understood that Custodian shall use its best efforts to resume performance
as soon as practicable under the circumstances.
12. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
ARTICLE VII
TERMINATION
Either party may terminate this Agreement by giving to the other party a
notice in writing specifying the date of such termination, which shall be not
less than one hundred eighty (180) days after the date of such notice. Upon
termination hereof, Customer shall pay to Custodian such compensation as may be
due to Custodian, and shall likewise reimburse Custodian for other amounts
payable or reimbursable to Custodian hereunder. Custodian shall follow such
reasonable Oral or Written Instructions concerning the transfer of custody of
records, Securities and other items as Customer shall give; provided, that (a)
Custodian shall have no liability for shipping and insurance costs associated
therewith, and (b) full payment shall have been made to Custodian of its
compensation, costs, expenses and other amounts to which it is entitled
hereunder. If any Securities or cash remain in any Account, Custodian may
deliver to Customer such Securities and cash. Upon termination of this
Agreement, except as otherwise provided herein, all obligations of the parties
to each other hereunder shall cease.
ARTICLE VIII
MISCELLANEOUS
1. Customer agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Oral Instructions and Written Instructions of such
present Authorized Persons.
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-9-
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Custodian, shall be sufficiently given
if addressed to Custodian and received by it at its offices at One Wall Street,
New York, New York 10286, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Customer shall be sufficiently given
if addressed to Customer and received by it at its offices at One State Street,
New York, New York 10004, ATTENTION: Thomas A. Pepe, Senior Vice President, or
at such other place as Customer may from time to time designate in writing.
4. Each and every right granted to either party hereunder or under
any other document delivered hereunder or in connection herewith, or allowed it
by law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
by either party of any right preclude any other or future exercise thereof or
the exercise of any other right.
5. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties. This Agreement shall
extend to and shall be binding upon the parties hereto, and their respective
successors and assigns; provided, however, that this Agreement shall not be
assignable by either party without the written consent of the other but shall
bind any successor in interest of Customer and Custodian respectively.
6. (a) This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of laws
principles thereof. Customer and Custodian hereby consent to the jurisdiction of
a state or federal court situated in New York City, New York in connection with
any dispute arising hereunder. The parties hereby irrevocably waive, to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court and any claim that such proceeding brought in such a court has been
brought in an inconvenient forum. Customer and Custodian each hereby irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Agreement.
(b) FOR GOVERNMENTAL ENTITIES: To the extent that in any
jurisdiction Customer or Custodian may now or hereafter be entitled to claim,
for itself or its assets, immunity from suit, execution, attachment (before or
after judgment) or other legal process, Customer irrevocably agrees not to
claim, and it hereby waives, such immunity.
7. Notwithstanding the fact that Custodian may from time to time
maintain an Account in the name of a third party, the parties hereto agree that
in performing hereunder, Custodian is acting solely on behalf of Customer and no
contractual or service relationship shall be deemed to be established hereby
between Custodian and any such third party or any other person.
8. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
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IN WITNESS WHEREOF, Customer and Custodian have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as of the
day and year first above written.
IBJ WHITEHALL BANK AND TRUST COMPANY
By: /s/ THOMAS A. PEPE
---------------------------------
Thomas A. Pepe
Title: Senior Vice President
Tax Identification No: 13-5375195
THE BANK OF NEW YORK
By: /s/ MARTIN GEFFON
---------------------------------
Martin Geffon
Title: Vice President
THE
BANK OF
NEW YORK
<PAGE>
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. LICENSE; USE. Upon delivery to Customer of software enabling
Customer to obtain access to the System (the "Software"), Custodian grants to
Customer a personal, nontransferable and nonexclusive license to use the
Software solely for the purpose of transmitting Written Instructions, receiving
reports, making inquiries or otherwise communicating with Custodian in
connection with the Account(s). Customer shall use the Software solely for its
own internal and proper business purposes and not in the operation of a service
bureau. Except as set forth herein, no license or right of any kind is granted
to Customer with respect to the Software. Customer acknowledges that Custodian
and its suppliers retain and have title and exclusive proprietary rights to the
Software, including any trade secrets or other ideas, concepts, know-how,
methodologies, or information incorporated therein and the exclusive rights to
any copyrights, trademarks and patents (including registrations and applications
for registration of either), or other statutory or legal protections available
in respect thereof. Customer further acknowledges that all or a part of the
Software may be copyrighted or trademarked (or a registration or claim made
therefor) by Custodian or its suppliers. Customer shall not take any action with
respect to the Software inconsistent with the foregoing acknowledgments, nor
shall Customer attempt to decompile, reverse engineer or modify the Software.
Customer may not copy, sell, lease or provide, directly or indirectly, any of
the Software or any portion thereof to any other person or entity without
Custodian's prior written consent. Customer may not remove any statutory
copyright notice or other notice included in the Software or on any media
containing the Software. Customer shall reproduce any such notice on any
reproduction of the Software and shall add any statutory copyright notice or
other notice to the Software or media upon Custodian's request.
2. EQUIPMENT. Customer shall obtain and maintain at its own cost
and expense all equipment and services, including but not limited to
communications services, necessary for it to utilize the Software and obtain
access to the System, and Custodian shall not be responsible for the reliability
or availability of any such equipment or services.
3. PROPRIETARY INFORMATION. The Software, any data base and any
proprietary data, processes, information and documentation made available to
Customer (other than which are or become part of the public domain or are
legally required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of Custodian or its
suppliers. Customer shall keep the Information confidential by using the same
care and discretion that Customer uses with respect to its own confidential
property and trade secrets, but not less than reasonable care. Upon termination
of the Agreement or the Software license granted herein for any reason, Customer
shall return to Custodian any and all copies of the Information which are in its
possession or under its control.
4. MODIFICATIONS. Custodian reserves the right to modify the
Software from time to time and Customer shall install new releases of the
Software as Custodian may direct. Customer agrees not to modify or attempt to
modify the Software without Custodian's prior written consent. Customer
acknowledges that any modifications to the Software, whether by Customer or
Custodian and whether with or without Custodian's consent, shall become the
property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS
MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT
TO THE SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN
LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE. CUSTOMER ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY
DATABASE ARE PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE
LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL,
WHICH CUSTOMER MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY
DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS
OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR
MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR
OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.
6. SECURITY; RELIANCE; UNAUTHORIZED USE. Customer will cause all
persons utilizing the Software and System to treat all applicable user and
authorization codes, passwords and authentication keys with extreme care.
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Written Instructions received by it through the System. Customer acknowledges
that it is its sole responsibility to assure that only Authorized Persons use
the System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. SYSTEM ACKNOWLEDGMENTS. Custodian shall acknowledge through the
System its receipt of each transmission communicated through the System, and in
the absence of such acknowledgment Custodian shall not be liable for any failure
to act in accordance with such transmission and Customer may not claim that such
transmission was received by Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY
UNITED STATES LAW. CUSTOMER MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT,
TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO
ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO CUSTOMER OUTSIDE OF
THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN
ACCORDANCE WITH THE EXPORT ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO
U.S. LAW IS PROHIBITED. Customer hereby authorizes Custodian to report its name
and address to government agencies to which Custodian is required to provide
such information by law.
9. ENCRYPTION. Customer acknowledges and agrees that encryption may
not be available for every communication through the System, or for all data.
Customer agrees that Custodian may deactivate any encryption features at any
time, without notice or liability to Customer, for the purpose of maintaining,
repairing or troubleshooting the System or the Software.
<PAGE>
CERTIFICATE OF AUTHORIZED PERSONS
(Investment Manager - Foreign Exchange)
Re: Account Name:
Account Number:
The undersigned hereby certifies that he/she is the duly elected and
acting ___________________ of ________________________ (the "Investment
Manager"), and further certifies that the following officers or employees of the
Investment Manager have been duly authorized in conformity with the Investment
Manager's organizational documents to enter into contracts with The Bank of New
York ("BNY") to buy and sell foreign currency (on a spot and forward basis) and
options to buy and sell foreign currency on behalf of the above-referenced
Account ("F/X Transactions"), and that the signatures appearing opposite their
names are true and correct:
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
and further certifies that the following officers or employees of the Investment
Manager have been duly authorized in conformity with the Investment Manager's
organizational documents to confirm, orally and in writing, the terms of F/X
Transactions entered by the Investment Manager with BNY, and that the signatures
appearing opposite their names are true and correct:
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
This certificate supersedes any certificate of authorized individuals
you may currently have on file.
[seal] --------------------------------
Title:
Date:
<PAGE>
CERTIFICATE OF AUTHORIZED PERSONS
(Customer - Foreign Exchange)
The undersigned hereby certifies that he/she is the duly elected and
acting ___________________ of ________________________ (the "Corporation"), and
further certifies that the following officers or employees of the Corporation
have been duly authorized in conformity with the Corporation's Articles of
Incorporation and By-Laws to enter into contracts with The Bank of New York
("BNY") to buy and sell foreign currency (on a spot and forward basis) and
options to buy and sell foreign currency on behalf of the Corporation or any
Account ("F/X Transactions"), and that the signatures appearing opposite their
names are true and correct:
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
and further certifies that the following officers or employees of the
Corporation have been duly authorized in conformity with the Corporation's
Articles of Incorporation and By-Laws to confirm, orally and in writing, the
terms of F/X Transactions entered with BNY, and that the signatures appearing
opposite their names are true and correct:
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
- --------------------- ----------------------- ------------------------
Name Title Signature
This certificate supersedes any certificate of authorized individuals
you may currently have on file.
[corporate --------------------------------
seal] Title:
Date:
<PAGE>
CERTIFICATION
The undersigned, ____________________, hereby certifies that he or she
is the duly elected and acting _____________________ of _______________________,
a _______________________ corporation (the "Corporation"), and further certifies
that the following resolution was adopted by the Board of Directors of the
Corporation on ______________________, and that such resolution has not been
modified or rescinded and is in full force and effect as of the date hereof:
RESOLVED, that the Corporation is hereby authorized to
enter into any contracts to buy and sell foreign currency (on a
spot and forward basis) and options to buy and sell foreign
currency, whether pursuant to oral, telex, SWIFT, telecopier or
electronic instructions or otherwise, and that The Bank of New York
is hereby authorized to act and rely on any such instructions, as
understood by it and believed by it to be genuine; and, in
connection with any such transaction, any officer, employee or
agent as designated by the Corporation may execute and deliver, in
the name and on behalf of the Corporation, any and all agreements
and confirmations containing any terms, conditions,
representations, warranties, covenants, amendments, waivers,
releases and instructions whatsoever and incur and pay any fees,
costs, expenses, liabilities and claims, all without limitation.
[seal] --------------------------------
Secretary
<PAGE>
ERISA SUPPLEMENT
TO
CUSTODY AGREEMENT
In addition to the provisions of that certain Custody Agreement dated as
of 2/7/00 (the "Agreement") pursuant to which IBJ Whitehall Bank and Trust
Company ("Customer") has appointed The Bank of New York ("Custodian") as its
custodian, the following provisions shall apply to those Accounts established
under the Agreement in the names of third parties which contain Plan Assets (as
defined below) subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). Capitalized terms used but not defined herein shall have
the meanings given them in the Agreement.
1. "ERISA Account" shall mean an account identified as such on
Custodian's books and records for the purpose of holding Plan Assets on behalf
of Customer.
2. "Plan" shall mean an employee benefit plan subject to ERISA
which has heretofore been adopted by a client of Customer, as such Plan may be
amended from time to time.
3. "Plan Assets" shall mean employee benefit plan assets consisting
of Securities and funds subject to ERISA.
4. Customer agrees to deposit all Plan Assets transferred to
Custodian in the appropriate ERISA Account and shall not deposit Securities and
funds that are not Plan Assets into any ERISA Account.
5. Custodian acknowledges and agrees that it shall not have any
lien or right of setoff against Plan Assets deposited into ERISA Accounts.
6. Custodian acknowledges and agrees that it may in its sole
discretion effect foreign exchange transactions in connection with Plan Assets,
provided that any such transaction shall be effected only in accordance with
Custodian's established procedures for effecting foreign exchange transactions
with Plan Assets.
7. It is expressly understood that Custodian shall have no
responsibility for the management of Plan Assets in any ERISA Account or the
investment of Plan Assets for any ERISA Account, except as it may be directed
under the Agreement by Oral or Written Instructions, and the duties of Custodian
shall be only those expressly stated in the Agreement as amended by this
Supplement.
8. Customer may by Oral or Written Instructions direct Custodian to
invest all or any portion of any cash balances in any ERISA Account in short
term obligations, including, without limitation (i) part interests in
obligations, irrespective of whether Custodian is acting as a participator, and
(ii) any collective investment trust for short-term investments created and
administered by Custodian for the collective investment of the property of
employee benefit trusts provided that such fund is qualified under the
provisions of Section 401(a) of the Internal Revenue Code (the "Code") and
exempt under the provisions of Section 501(a) of the Code. To the extent cash
balances are invested in any such collective investment trust, the declaration
of trust pertaining to such fund, as amended from time to time, and the trust
thereby created, shall be a part of the Agreement and of the affected Plan.
Custodian shall not be liable for interest on any cash balances it may be
authorized to invest in its discretion and may hold cash balances uninvested as
it deems to be in the best interest of the Customer. Custodian shall not be
liable for interest on any cash balances it holds uninvested pending receipt of
Oral or Written Instructions from Customer, in the absence of authorization from
Customer to invest the same.
9. (a) Upon receipt of Written Instructions from Customer,
Custodian shall make payments and disbursements from an ERISA Account to such
persons and in such amounts as Customer shall direct. Written Instructions need
not specify the purpose of the payments or disbursements so directed, and
Custodian shall not be responsible in any way, including any duty of inquiry,
concerning the purpose or propriety of such payments or disbursements or for the
administration of Plan Assets. Any such Written Instruction shall constitute a
<PAGE>
certification that the payment or distribution so directed is one which Customer
is authorized to direct. If a dispute arises as to who is entitled to or should
receive any benefit or payment. Custodian may withhold such payment until the
dispute has been resolved.
(b) It is understood and agreed that, in connection with each
payment and disbursement, the amount of such payment and disbursement (the
"Disbursement Amount") shall be transferred from the appropriate ERISA Account
into a disbursement account established for such purpose (the "Disbursement
Account"). It is also understood and agreed that, so long as the Disbursement
Amount remains in the Disbursement Account, any amounts earned by Custodian on
such Disbursement Amount shall inure solely and exclusively to the benefit of
Custodian and shall constitute compensation to Custodian in addition to any
other compensation to which it is entitled under the Agreement.
(c) In the event that any payment or disbursement directed by
Customer shall be mailed by Custodian and (I) such payment or disbursement shall
be returned to Custodian because the addressee cannot be located at such
address, or (II) any check so mailed shall not be presented for payment within
six months of the date thereof, Custodian shall promptly notify Customer of such
return or failure to present. The Disbursement Amount of such payment or
disbursement shall remain in the Disbursement Account as specified in and in
accordance with Paragraph 9(b) hereof unless and until a Written Instruction is
received by Custodian from Customer with respect to such Disbursement Amount.
The Custodian shall maintain records of all payments and disbursements that are
returned or not presented for payment, which records shall specify the name,
address and tax identification number of each such payee, the Disbursement
Amount, and the date when such Disbursement Amount was first transferred to the
Disbursement Account and shall periodically report such information to Customer.
Custodian shall not be obligated to search for or ascertain the whereabouts of
any payee (or his or her duly appointed representative).
10. All brokerage costs and transfer taxes incurred in connection
with the investment and reinvestment of the Securities and funds in an ERISA
Account, all expenses incurred in connection with the acquisition or holding of
Securities, all income taxes or other taxes of any kind whatsoever which may be
levied or assessed under existing or future laws upon or in respect of an ERISA
Account, all other administrative expenses incurred by Custodian in the
performance of its duties, including fees for legal services rendered to
Custodian, and all other proper charges and disbursements of Custodian shall be
charged to the appropriate ERISA Account, with an advice of charge provided to
Customer, and, until paid, shall constitute a charge upon such ERISA Account.
11. Custodian agrees that it shall value each ERISA Account on a
monthly basis and provide Customer with a monthly written report with respect to
such valuation.
12. The fees payable by Customer for Custodian's services in
connection with ERISA Accounts, other than charges set forth in Section 9(b)
hereof, shall be as set forth in the Agreement, as amended from time to time,
and shall constitute a charge on the appropriate ERISA Account.
13. The provisions of this Supplement shall apply solely to ERISA
Accounts maintained hereunder. All other provisions of the Agreement shall
nevertheless remain in full force and effect; PROVIDED, that in the event of any
conflict between the provisions of the Agreement and the provisions of this
Supplement, the provisions of this Supplement shall control.
<PAGE>
Dated: 2/7/00 IBJ WHITEHALL BANK AND TRUST
----------------------- COMPANY
By: /s/ THOMAS A. PEPE
----------------------------
Thomas A. Pepe
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ MARTIN GEFFON
----------------------------
Martin Geffon
Title: Vice President
<PAGE>
THE BANK OF NEW YORK
NEW YORK'S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON
DATE
ONE WALL STREET, NEW YORK, N.Y. 10286
Dear Client:
As part of our continuing effort to improve our services we are instituting a
revised policy with regard to the acceptance of facsimile instructions. The
agreement between yourself and the Bank did not contemplate the use of facsimile
as a means of providing instructions to us.
In addition, for our mutual protection, we are instituting a "Call Back" policy.
If we receive a faxed instruction for a Lump Sum disbursement of $100,000.00 or
more or a Recurring monthly disbursement of $10,000.00 or more, we will call the
party who has signed the directive in order to verify that they did, in fact,
authorize the disbursement.
Please confirm by signing below that you hereby authorize the use of facsimile
as a means for the Benefits Administration Committee or its duly authorized
agents to provide instructions to The Bank of New York, and that The Bank of New
York shall have the right to rely on and shall be fully protected in acting in
accordance with any such facsimile instructions which it believes to be genuine.
If you utilize the services of a Recordkeeper, please indicate their name.
We would appreciate if you return this signed letter to us no later than two
weeks from date of letter. If you have any additional questions, please contact
your Benefit Payment Administrator or the undersigned at (212)635-8581.
Sincerely,
Barbara A. McManus
Assistant Treasurer
WE AUTHORIZE THE BANK OF NEW YORK TO ACCEPT BENEFIT DISBURSEMENT INSTRUCTIONS
VIA FACSIMILE. AN AUTHORIZED SIGNER MUST APPROVE EACH INSTRUCTION. THIS
FACSIMILE AGREEMENT REMAINS IN EFFECT UNTIL THE CLIENT NOTIFIES THE BANK OF NEW
YORK OTHERWISE.
Thomas A. Pepe, Senior Vice President
- --------------------------------------------------------------------------------
(PRINT NAME AND TITLE)
/s/ THOMAS A. PEPE 2/7/00
- -------------------------------------------- -----------------------
(AUTHORIZED SIGNATURE) (DATE)
Instructions will only come from IBJ Whitehall
- --------------------------------------------------------------------------------
(RECORDKEEPER NAME)
<PAGE>
THE BANK OF NEW YORK
MASTER TRUST/CUSTODY
FEE SCHEDULE
PREPARED FOR:
IBJ TRUST COMPANY
JANUARY, 2000
SERVICE MONTHLY FEE
- --------------------------------------------------------------------------------
*ASSET HOLDING/ADMINISTRATION
First $200,000,000 1.0 b.p.
Next $300,000,000 .5 b.
Excess .33 b.p.
*Applied to the combined market value of the domestic funds as of the end of the
billing period.
ACCOUNT/ACCOUNTING FEE ANNUAL FEE
- --------------------------------------------------------------------------------
Active Domestic Portfolio $5,000
Passive Domestic Portfolio 3,000
Cash Flow Account (STIF) 1,500
FEE PER
TRANSACTIONS TRANSACTION
- --------------------------------------------------------------------------------
Book Entry $ 5.00
Physical 20.00
Euroclear/Cedel 20.00
P & I 4.00
Wire In 5.50
Wire Out (Automated) 9.00
Manual Entries 20.00
Options 20.00
ANNUAL MINIMUM
- --------------------------------------------------------------------------------
There is an annual minimum fee of $350,000 for the Master Trust/Custody
relationships.
There is a one time programming fee of $7,500 for creation of a customized
monthly statement. This fee will be charged over a three month period ($2,500
per month).
/s/ THOMAS A. PEPE 2/7/00
<PAGE>
THE BANK OF NEW YORK
MUTUAL FUNDS CUSTODY
FEE SCHEDULE
PREPARED FOR:
IBJ TRUST COMPANY
JULY, 1999
I. SECURITIES SETTLED AND SAFEKEPT WITHIN THE UNITED STATES
The Bank of New York's fee for custody services for each account is as
follows:
SERVICE ANNUAL FEE
------------------------------------------------------------------------
ASSET HOLDING - MARKET VALUE 1 b.p.
FEE PER
TRANSACTIONS TRANSACTION
------------------------------------------------------------------------
Book Entry $ 5.00
Physical 20.00
Euroclear/Cedel 20.00
P & I 4.00
Wire In 5.50
Wire Out 9.00
Manual Entries 20.00
Options 20.00
/s/ THOMAS A. PEPE 2/7/00
<PAGE>
Exhibit (h)(1)(ii)
AMENDMENT TO THE TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AMENDMENT, dated as of October 28, 1999, is made to the Transfer
Agency and Services Agreement dated March 1, 1998 (the "Transfer Agent
Agreement") between IBJ Funds Trust (the "Fund") and First Data Investor
Services Group, Inc. ("Investor Services Group").
WITNESSETH
WHEREAS, Investor Services Group has developed a recordkeeping service link
("DCXchange(R)") between investment companies and benefit plan consultants (the
"Recordkeepers") which administer employee benefit plans, including plans
qualified under Section 401(a) of the Internal Revenue Code (the "Plans"); and
WHEREAS, Investor Services Group has entered into agreements with various
Recordkeepers relating to the recordkeeping and related services performed on
behalf of such Plans in connection with daily valuation and processing of orders
for investment and reinvestment of assets of the Plans in various investment
options available to the participants under such Plans (the "Participants"); and
WHEREAS, each portfolio of the Fund set forth in Exhibit 1 hereto (each, a
"Portfolio") desires to participate in the DCXchange(R) Program and further
desires to retain Investor Services Group to perform such services with respect
to shares of the Portfolios ("Shares") held by or on behalf of the Participants
as further described herein and Investor Services Group is willing and able to
furnish such services on the terms and conditions hereinafter set forth.
NOW THEREFORE, the Fund and Investor Services Group agree that as of the
date first referenced above, the Transfer Agent Agreement shall be amended as
follows:
1. Investor Services Group agrees to perform recordkeeping and related
services for the benefit of the Plan Participants that maintain shares of a
Portfolio through Plans administered by certain Recordkeepers. Investor
Services Group shall subcontract with Recordkeepers to link the Investor
Services Group recordkeeping system with the Recordkeepers, in order for
the Recordkeepers to maintain Portfolio shares positions for each
Participant. In connection with the performance of such services, the Fund
shall pay the amounts set forth in Exhibit 2 to this Amendment. In
addition, the Fund agrees to waive all minimum and maximum investment
requirements for the Portfolios listed on Exhibit 1 hereto, as well as all
CDSC fees (except in the case of full plan liquidations).
<PAGE>
2. The parties hereto agree and acknowledge that the Fund may amend the
Transfer Agent Agreement at any time, and from time to time, solely for the
purpose of adding a Portfolio to, or deleting a Portfolio from, the list of
Portfolios set forth in Exhibit 1 hereto, which amendment shall become
effective as soon as reasonably practicable after Investor Services Group's
receipt of an executed revised Exhibit 1 unless Investor Services Group
promptly notifies the Fund of its objection to any such amendment; provided
that in no event shall such procedure be used to amend the list of
Portfolios covered under the Transfer Agent Agreement (with respect to
services other than the services set forth in this Amendment), in that the
procedures for amending such list of Portfolios shall remain as set forth
in the Transfer Agent Agreement; and provided further that in no event
shall any portfolio (whether or not appearing on the list of Portfolios) be
entitled to receive the services described in this Amendment during any
period for which such portfolio is not a Portfolio covered under the
Transfer Agent Agreement (with respect to services other than the services
described in this Amendment).
3. This Amendment contains the entire understanding between the parties with
respect to the transactions contemplated hereby. To the extent that any
provision of this Amendment modifies or is otherwise inconsistent with any
provision of the Transfer Agent Agreement and related agreements, this
Amendment shall control, but the Transfer Agent Agreement and all related
documents shall otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
IBJ FUNDS TRUST
By:_____________________________
Title:__________________________
FIRST DATA INVESTOR SERVICES
GROUP, INC.
By:_____________________________
Title:__________________________
<PAGE>
EXHIBIT 1
LIST OF PORTFOLIOS
The Reserve Money Market Fund
The Core Fixed Income Fund
The Core Equity Fund
The Blended Total Return Fund
<PAGE>
Exhibit 2
DCXCHANGE(R) FEES
Upon execution of this Amendment, the Fund's portfolios, other than the Reserve
Money Market Fund, shall pay Investor Services Group annualized fees of $3.00 on
each Plan Participant account that is open during any monthly period. These fees
shall be billed by Investor Services Group monthly in arrears on a prorated
basis of 1/12 of the annualized fee for all accounts that are open during such
month.
The Fund shall also reimburse Investor Services Group monthly for such
miscellaneous expenses reasonably incurred by Investor Services Group in
performing its duties and responsibilities under this Agreement, as pre-approved
by such Fund. The Fund further agrees that any volume discounts achieved by
Investor Services Group on behalf of its clients shall be retained by Investor
Services Group, unless otherwise agreed to by Investor Services Group and the
Fund.
<PAGE>
Exhibit (h)(2)(ii)
AMENDMENT TO ADMINISTRATION AGREEMENT
This Amendment dated as of October 28, 1999, is entered into by IBJ FUNDS
TRUST (the "Company") and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor
Services Group").
WHEREAS, the Company and Investor Services Group have entered into an
Administration Agreement dated as of March 1, 1998 (as amended or supplemented,
the "Agreement"); and
WHEREAS, the Company and Investor Services Group wish to amend the
Agreement to revise the description of services to be provided by Investor
Services Group to the Company and related matters;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
hereby agree as follows:
I. The following is hereby added to Schedule B of the Agreement:
SALES SUPPORT SERVICES
. Sales literature review and recommendations for compliance with NASD and
SEC rules and regulations
. Preparation of training materials for use by personnel of the Company or
the Adviser
. Preparation of ongoing compliance updates
. Provision of advice and counsel to the Company with respect to
regulatory matters, including monitoring regulatory and legislative
developments that may affect the Company
. Assistance in the preparation of quarterly board materials with regard
to sales and other distribution related data reasonably requested by the
board
II. The last sentence of paragraph (a) of Section 13 of the Agreement is
hereby deleted in its entirety and revised to read as follows:
Notwithstanding the previous sentence, in no event shall either the Company
or FDISG disclose the Confidential Information to any competitor of the
other, including an affiliate of either party, without specific prior
written consent.
III. This Amendment shall become effective immediately upon the
consummation of the acquisition of Investor Services Group by a subsidiary of
PNC Bank Corp., which the parties anticipate to occur on or about December 1,
1999.
<PAGE>
IV. Except to the extent amended hereby, the Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date and year first written above.
IBJ FUNDS TRUST
By: __________________________
FIRST DATA INVESTOR SERVICES
GROUP, INC.
By: __________________________
James L. Fox
President
<PAGE>
Exhibit (i)
March 28, 2000
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
IBJ Funds Trust (File Nos. 33-83430 and 811-8738)
Dear Sir/Madam:
As counsel to IBJ Funds Trust (the "Trust"), we have reviewed
Post-Effective Amendment No. 9 to the Trust's Registration Statement on Form
N-1A (the "Amendment"). The Amendment is being filed pursuant to Rule 485 of the
1933 Act and it is proposed that it will become effective on March 30, 1999.
Based on our review, we advise you that the Amendment does not
include disclosure which we believe would render it ineligible to become
effective under paragraph (b) of Rule 485.
It is our opinion that the securities being registered will
when sold, be legally issued, fully paid and non-assessable. We hereby consent
to the filing of this opinion as an exhibit to Post-Effective Amendment No. 9
and consent to the reference to our firm as Counsel.
Very truly yours,
Paul, Weiss, Rifkind, Wharton & Garrison
JMJ:52189
<PAGE>
Exhibit (j)(i)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights", "Independent Auditors" and "Financial Statements" and to the use of
our report dated January 6, 2000, which is incorporated by reference, in this
Registration Statement (Form N-1A No. 33-83430) of Whitehall Funds Trust.
ERNST & YOUNG LLP
New York, New York
March 28, 2000
<PAGE>
Exhibit (m)(3)
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT
(SERVICE CLASS)
IBJ FUNDS TRUST
January 28,2000
Provident Distributors, Inc.
Four Falls Corporate Center
West Conshohocken, PA 19428
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust") and
Provident Distributors, Inc.(the "Distributor") as follows:
1. DEFINITIONS. (a) The Trust is an open-end management investmentcompany
organized under the laws of the State of Delaware. The Trust is registered under
the Investment Company Act of 1940, as amended (the "Act"). TheTrust's shares of
beneficial interest may be classified into series in which each series
represents the entire undivided interests of a separate portfolio ofassets. Each
series may be divided into multiple classes. For all purposes of this Agreement
and Plan, a "Fund" shall mean a separate portfolio of assets of the Trust which
has entered into a Rule 12b-1 Distribution Plan and AgreementSupplement, and a
"Series" shall mean the series of shares of beneficial interest representing
undivided interests in a Fund. All references herein tothis Agreement and Plan
shall be deemed to be references to this Agreement andPlan as it may from time
to time be supplemented by Rule 12b- 1 DistributionPlan and Agreement
Supplements. (b) As permitted by Rule 12b-1 (the "Rule") under the Act, the
Trust hasadopted a Distribution Plan and Agreement (the "Plan") for the Service
Class ofShares of each Fund pursuant to which the Trust may make certain
payments to theDistributor for direct and indirect expenses incurred in
connection with thedistribution of shares of the Funds. The Trust's Board of
Trustees hasdetermined that there is a reasonable likelihood that the Plan,
ifimplemented, will benefit each Fund and its shareholders.
2. ADOPTION OF PLAN. The Trust hereby adopts this Plan, and the parties
hereto enter into this Plan, on the terms and conditions specified herein.
3. DISTRIBUTION-RELATED FEE.
<PAGE>
(a) For Service Class shares, the Trust shall pay the Distributoron
the first business day of each month in such an amount as the Distributor may
have requested for distribution activities, provided that each suchpayment shall
not exceed an annual rate of 0.25% of the average daily value of aFund's net
assets attributable to its Service Class shares (as determined oneach business
day at the time set forth in the Trust's currently effectiveprospectus for
determining net asset value per share) during the preceding monthin which the
Plan is implemented.
(b) For purposes of calculating the maximum of each such monthlyfee,
the value of a Fund's net assets shall be computed in the mannerspecified in the
Trust's Declaration of Trust, and in the Trust's Prospectus orProspectuses, as
the same may be amended from time to time. All expensesincurred by the Trust
hereunder shall be charged against the relevant Fund'sassets. For purposes of
this Plan, a "business day" is any day the New York Stock Exchange is open for
trading.
4. PURPOSES OF PAYMENTS.
(a) The Distributor must use all amounts received under the Plan for
(i)advertising by radio, television, newspapers, magazines, brochures,
salesliterature, direct mail or any other form of advertising, (ii) expenses of
salesemployees or agents of the Distributor, including salary,
commissions,travel and related expenses, (iii) payments to broker-dealers and
financialinstitutions in connection with the distribution of shares, including
paymentsin amounts based on the average daily value of Fund shares owned by
shareholdersin respect of which the broker-dealer or institution has a
distributingrelationship, (iv) costs of printing prospectuses, statements of
additionalinformation and other materials to be given or sent to prospective
investors,(v) such other similar services as the Board of Trustees determines to
bereasonably calculated to result in the sale of shares of the Funds, (vi)costs
of shareholder servicing and administrative services support which maybe
incurred by broker-dealers, banks or other financial institutions, and (vii)
other direct and indirect distribution-related activities, including
theprovision of services with respect to maintaining the assets of the Funds.
(b) The services rendered by the Distributor hereunder are in addition
to the distribution and administrative services reasonably necessary for
theoperation of the Trust and the Fund pursuant to the AdministrativeServices
Agreement between the Trust and First Data Investor Services Group,Inc. and the
Distribution Contract between the Trust and the Distributor, other than those
services which are to be provided by the investment adviserpursuant to the
Master Investment Advisory Agreement between the Trust and IBJ Schroder Bank &
Trust Company.
5. RELATED AGREEMENTS. All other agreements relating to the implementation
of this Plan (the "related agreements") shall be in writing, and such related
agreements shall be subject to termination, without penalty, on not more than
sixty days' written notice to any other party to the agreement, in accordance
with the provisions of clauses (a) and (b) of paragraph 9 hereof.
<PAGE>
6. APPROVALS BY TRUSTEES AND SHAREHOLDERS. This Plan shall become effective
upon approval by (a) a majority of the Board of Trustees of the Trust for each
Fund, including a majority of the Trustees who are not "interestedpersons" (as
defined in the Act) of the Trust and who have no direct or indirectfinancial
interest in the operation of the Plan or in any related agreements(the "Plan
Trustees"), pursuant to a vote cast in person at a meeting called forthe purpose
of voting on the Plan, and (b) the holders of a majority of theoutstanding
securities of a Fund (as defined in the Act). Related agreementsshall be subject
to approval by the Trustees in the manner provided in clause(a) of the preceding
sentence.
7. DURATION AND ANNUAL APPROVAL BY TRUSTEES. This Plan and any related
agreements shall continue in effect for a period of more than one year from
thedate of their adoption or execution, provided such continuances are
approvedannually by a majority of the Board of Trustees, including a majority of
thePlan Trustees, pursuant to a vote east in person at a meeting called for the
purpose of voting on the continuance of this Plan or any related agreement.
8. AMENDMENTS. This Plan may be amended at any time with the approval of a
majority of the Board of Trustees, provided that (a) any material amendment
ofthis Plan must be approved by the Trustees in accordance with procedures
setforth in paragraph 7 hereof, and (b) any amendment to increase materially
theamount to be expended by a particular Fund pursuant to this Plan must also
beapproved by the vote of the holders of a "majority of the outstanding
votingsecurities" of the Fund (as defined in the Act), provided that no approval
shallbe required in respect of a Rule 12b-1 Distribution Plan and Agreement
Supplement entered into to add a Fund to those covered by this Plan (or to
amendor terminate such supplement) by the holders of the outstanding voting
securities of any Series other than that of such Fund.
9. TERMINATION. This Plan may be terminated at any time, without the
payment of any penalty, by (a) the vote of a majority of the Plan Trustees or(b)
the vote of the holders of a "majority of the outstanding voting securities"of a
Fund (as defined in the Act). If this Plan is terminated with respect toany
Fund, it shall nonetheless remain in effect with respect to any remaining Funds.
10. SELECTION AND NOMINATION OF TRUSTEES. While this Plan is in effect, the
selection and nomination of the Trustees who are not "interested persons" ofthe
Trust (as defined in the Act) shall be committed to the discretion of the
Trustees then in office who are not "interested persons" of the Trust.
11. EFFECT OF ASSIGNMENT. To the extent that this Plan constitutes a plan
of distribution adopted pursuant to the Rule, it shall remain in effect as such
so as to authorize the use of the Fund's assets in the amounts and for the
purposes set forth herein, notwithstanding the occurrence of an assignment (as
defined in the Act). To the extent this Plan concurrently constitutes an
agreement relating to implementation of the plan of distribution, it shall
terminate automatically in the event of its assignment, and the Trust may
continue to make payments pursuant to this Plan only (a) upon the approval of
the Board of Trustees in
<PAGE>
accordance with the procedures set forth in paragraph 7hereof, and (b) if the
obligations of the Distributor under this Plan are to be performed by any
organization other than the Distributor, upon suchorganization's adoption and
assumption in writing of all provisions of this Plan as party hereto.
12. QUARTERLY REPORTS TO TRUSTEES. The Distributor shall prepare and
furnish to the Board of Trustees, at least quarterly, a written report setting
forth all amounts expended pursuant to this Plan and any related agreements and
the purposes for which such expenditures were made. The written report shall
include a detailed description of the continuing services provided by
broker-dealers and other financial intermediaries pursuant to paragraph 4 of
this Plan.
13. PRESERVATION OF RECORDS. The Trust shall preserve copies of this Plan,
any related agreements and any reports made pursuant to this Plan for aperiod of
not less than six years from the date of this Plan or any such relatedagreement
or report. For the first two years, copies of such documents shall be preserved
in an easily accessible place.
14. LIMITATIONS ON LIABILITY OF DISTRIBUTOR. The Distributor shall give the
Trust the benefit of the Sponsor's best judgment and efforts in rendering
services under this Plan. As an inducement to the Distributor's undertaking to
render these services, the Trust agrees that the Distributor shall not be
liableunder this Plan for any mistake in judgment or in any other event
whatsoever except for lack of good faith, provided that nothing in this Plan
shall be deemed to protect or purport to protect the Distributor against any
liability to the Trust or its shareholders to which the Distributor would
otherwise besubject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Distributor's duties under this Plan or by
reason of the Distributor's reckless disregard of its obligations and duties
hereunder.
15. OTHER DISTRIBUTION-RELATED EXPENDITURES. Nothing in this Plan shall
operate or be construed to limit the extent to which the Distributor or any
other person other than the Trust may incur costs and pay expenses associated
with the distribution of Fund shares.
16. MISCELLANEOUS. The Trust's Certificate of Trust, dated as of August 25,
1994, as amended, is on file 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.
IN WITNESS WHEREOF, each of the parties has caused this nstrument to be
executed in its name and on its behalf by its duly authorized representative as
of the date first above written.
Very truly yours,
<PAGE>
IBJ FUNDS TRUST
By:___________________________
Title:
PROVIDENT DISTRIBUTORS, INC.
By:___________________________
Title:
<PAGE>
IBJ BLENDED TOTAL RETURN FUND
A Series of IBJ Funds Trust
January 28, 2000
Provident Distributors, Inc.
Four Falls Corporate Center
West Conshohocken, PA 19428
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust")
and Provident Distributors, Inc. (the "Distributor") as follows:
IBJ Blended Total Return Fund, IBJ Core Equity Fund and IBJ Core Fixed
Income Fund (each a "Fund" and collectively, "the Funds") are each 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 Distributor have entered into a Rule 12b-1 Distribution Plan
and Agreement, dated January 28, 2000 (as from time to time amended and
supplemented, the "Master Agreement"), pursuant to which the Distributor has
agreed to pay broker-dealers and other financial intermediaries for rendering
certain distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
21. Adoption of Master Agreement. The Master Agreement is hereby adopted
for the Funds. Each Fund shall be one of the "Funds" referral to in the Master
Agreement; and its shares shall be a "Series" of shares as referred to therein.
22. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.25% of the average daily value of the net
assets of the Service Class of each Fund.
<PAGE>
If the foregoing correctly sets forth the agreement between the Trust and
the Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By:_________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
PROVIDENT DISTRIBUTORS, INC.
By:________________________
Title:
<PAGE>
IBJ CORE EQUITY FUND
A Series of IBJ Funds Trust
January 28, 2000
Provident Distributors, Inc.
Four Falls Corporate Center
West Conshohocken, PA 19428
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust")
and Provident Distributors, Inc. (the "Distributor") as follows:
IBJ Blended Total Return Fund, IBJ Core Equity Fund and IBJ Core Fixed
Income Fund (each a "Fund" and collectively, "the Funds") are each 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 Distributor have entered into a Rule 12b-1 Distribution Plan
and Agreement, dated January 28, 2000 (as from time to time amended and
supplemented, the "Master Agreement"), pursuant to which the Distributor has
agreed to pay broker-dealers and other financial intermediaries for rendering
certain distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
21. Adoption of Master Agreement. The Master Agreement is hereby adopted
for the Funds. Each Fund shall be one of the "Funds" referral to in the Master
Agreement; and its shares shall be a "Series" of shares as referred to therein.
22. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.25% of the average daily value of the net
assets of the Service Class of each Fund.
<PAGE>
If the foregoing correctly sets forth the agreement between the Trust and
the Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By:_________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
PROVIDENT DISTRIBUTORS, INC.
By:________________________
Title:
<PAGE>
IBJ CORE FIXED INCOME FUND
(Service Class)
A Series of IBJ Funds Trust
January 28, 2000
Provident Distributors, Inc.
Four Falls Corporate Center
West Conshohocken, PA 19428
Rule 12b-1 Distribution Plan and Agreement Supplement
Dear Sirs or Madams:
This will confirm the agreement between IBJ Funds Trust (the "Trust")
and Provident Distributors, Inc. (the "Distributor") as follows:
IBJ Blended Total Return Fund, IBJ Core Equity Fund and IBJ Core Fixed
Income Fund (each a "Fund" and collectively, "the Funds") are each 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 Distributor have entered into a Rule 12b-1 Distribution Plan
and Agreement, dated January 28, 2000 (as from time to time amended and
supplemented, the "Master Agreement"), pursuant to which the Distributor has
agreed to pay broker-dealers and other financial intermediaries for rendering
certain distribution related services, as more fully set forth therein. Certain
capitalized terms used without definition in this Supplement have the meaning
specified in the Master Agreement.
The Trust agrees with the Sponsor as follows:
21. Adoption of Master Agreement. The Master Agreement is hereby adopted
for the Funds. Each Fund shall be one of the "Funds" referral to in the Master
Agreement; and its shares shall be a "Series" of shares as referred to therein.
22. Payment of Fees. Payments pursuant to the Master Agreement and this
Supplement are paid in accordance with paragraph 3 of the Master Agreement and
at an annual rate not in excess of 0.25% of the average daily value of the net
<PAGE>
assets of the Service Class of each Fund.
If the foregoing correctly sets forth the agreement between the Trust and
the Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
IBJ FUNDS TRUST
By:_________________________
Title:
The foregoing Plan and Agreement is hereby agreed to as of the date hereof:
PROVIDENT DISTRIBUTORS, INC.
By:________________________
Title:
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 042
<NAME> IBJ BLENDED TOTAL RETURN FUND-SERVICE CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 44,156,262
<INVESTMENTS-AT-VALUE> 59,329,175
<RECEIVABLES> 351,164
<ASSETS-OTHER> 4,414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 59,684,753
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 93,843
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43,991,480
<SHARES-COMMON-STOCK> 4,467,920
<SHARES-COMMON-PRIOR> 5,137,039
<ACCUMULATED-NII-CURRENT> 266,241
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 160,276
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,172,913
<NET-ASSETS> 59,590,910
<DIVIDEND-INCOME> 383,994
<INTEREST-INCOME> 1,477,355
<OTHER-INCOME> 0
<EXPENSES-NET> (616,897)
<NET-INVESTMENT-INCOME> 1,244,452
<REALIZED-GAINS-CURRENT> 164,669
<APPREC-INCREASE-CURRENT> 7,272,465
<NET-CHANGE-FROM-OPS> 8,681,586
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (981,730)
<DISTRIBUTIONS-OF-GAINS> (5,724,142)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 395,393
<NUMBER-OF-SHARES-REDEEMED> 1,632,376
<SHARES-REINVESTED> 567,864
<NET-CHANGE-IN-ASSETS> (6,686,802)
<ACCUMULATED-NII-PRIOR> 6,018
<ACCUMULATED-GAINS-PRIOR> 5,718,957
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 369,277
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 685,183
<AVERAGE-NET-ASSETS> 61,528,822
<PER-SHARE-NAV-BEGIN> 12.90
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> 1.50
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> (1.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.33
<EXPENSE-RATIO> 1.11
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> IBJ CORE EQUITY FUND-SERVICE CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 66,478,054
<INVESTMENTS-AT-VALUE> 131,583,031
<RECEIVABLES> 103,064
<ASSETS-OTHER> 4,453
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 131,690,548
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 169,304
<TOTAL-LIABILITIES> 169,304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,187,275
<SHARES-COMMON-STOCK> 6,270,769
<SHARES-COMMON-PRIOR> 7,538,496
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,228,992
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 65,104,977
<NET-ASSETS> 131,521,244
<DIVIDEND-INCOME> 879,043
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (1,161,933)
<NET-INVESTMENT-INCOME> (282,890)
<REALIZED-GAINS-CURRENT> 14,568,242
<APPREC-INCREASE-CURRENT> 32,359,170
<NET-CHANGE-FROM-OPS> 46,644,522
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (14,694,987)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 951,004
<NUMBER-OF-SHARES-REDEEMED> 3,254,310
<SHARES-REINVESTED> 1,035,579
<NET-CHANGE-IN-ASSETS> 7,018,471
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14,640,682
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 750,665
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,300,602
<AVERAGE-NET-ASSETS> 125,089,676
<PER-SHARE-NAV-BEGIN> 16.51
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 6.46
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.95)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.97
<EXPENSE-RATIO> 1.04
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> IBJ CORE FIXED INCOME FUND-SERVICE CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 37,000,805
<INVESTMENTS-AT-VALUE> 35,875,328
<RECEIVABLES> 555,410
<ASSETS-OTHER> 4,414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,435,152
<PAYABLE-FOR-SECURITIES> 596,869
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64,090
<TOTAL-LIABILITIES> 660,959
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36,961,168
<SHARES-COMMON-STOCK> 3,651,043
<SHARES-COMMON-PRIOR> 3,655,513
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 61,498
<ACCUM-APPREC-OR-DEPREC> (1,125,477)
<NET-ASSETS> 35,774,193
<DIVIDEND-INCOME> 24,168
<INTEREST-INCOME> 2,337,892
<OTHER-INCOME> 0
<EXPENSES-NET> (376,269)
<NET-INVESTMENT-INCOME> 1,985,791
<REALIZED-GAINS-CURRENT> (41,725)
<APPREC-INCREASE-CURRENT> (2,615,002)
<NET-CHANGE-FROM-OPS> (670,936)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,076,255)
<DISTRIBUTIONS-OF-GAINS> (253,847)
<DISTRIBUTIONS-OTHER> (24,367)
<NUMBER-OF-SHARES-SOLD> 488,803
<NUMBER-OF-SHARES-REDEEMED> 725,186
<SHARES-REINVESTED> 231,913
<NET-CHANGE-IN-ASSETS> (3,043,415)
<ACCUMULATED-NII-PRIOR> 100,752
<ACCUMULATED-GAINS-PRIOR> 225,090
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 185,017
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 417,175
<AVERAGE-NET-ASSETS> 36,989,026
<PER-SHARE-NAV-BEGIN> 10.61
<PER-SHARE-NII> 0.55
<PER-SHARE-GAIN-APPREC> (0.72)
<PER-SHARE-DIVIDEND> (0.57)
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.79
<EXPENSE-RATIO> 1.13
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> IBJ RESERVE MONEY MARKET FUND-SERVICE CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 20,603,704
<INVESTMENTS-AT-VALUE> 20,603,704
<RECEIVABLES> 19,379
<ASSETS-OTHER> 4,414
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,627,497
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 113,027
<TOTAL-LIABILITIES> 113,027
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,523,830
<SHARES-COMMON-STOCK> 20,509,648
<SHARES-COMMON-PRIOR> 18,593,490
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 9,360
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 20,514,470
<DIVIDEND-INCOME> 15,348
<INTEREST-INCOME> 1,013,727
<OTHER-INCOME> 0
<EXPENSES-NET> (129,093)
<NET-INVESTMENT-INCOME> 899,982
<REALIZED-GAINS-CURRENT> (559)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 899,423
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (899,361)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 41,324,463
<NUMBER-OF-SHARES-REDEEMED> 40,307,779
<SHARES-REINVESTED> 899,474
<NET-CHANGE-IN-ASSETS> 1,916,188
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,800
<GROSS-ADVISORY-FEES> 70,587
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 216,187
<AVERAGE-NET-ASSETS> 20,153,645
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.07
</TABLE>
