As Filed with the Securities and Exchange Commission FILE NO. 811-8816
on December 7, 1999 FILE NO. 33-85196
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
Post-Effective Amendment No. 5 /x/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 6 /x/
____________________
MILLENNIUM INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
c/o TRIAS CAPITAL MANAGEMENT, INC.
140 S. Wacker Drive Suite 1620
Chicago, Illinois 60603
(Address of Principal Executive Offices, Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (815) 338-3442
Copies to:
JAMES A. CASSELBERRY, JR. JANIS S. ENGLAND
c/o TRIAS CAPITAL MANAGEMENT, INC. MILLENNIUM FINANCIAL LLC
140 S. Dearborn, Suite 1620 10814 Bull Valley Road
Chicago, Illinois 60603 Woodstock, Illinois 60098
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
/ / immediately upon filing pursuant to paragraph (b); or
/ / on (date) pursuant to paragraph (b); or
/ / 60 days after filing pursuant to paragraph (a)(1); or
/x/ on February 1, 2000 pursuant to paragraph (a)(1); or
/ / 75 days after filing pursuant to paragraph (a)(2); or
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE>
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Prospectus
February 1, 2000
LOGO MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved these securities or passed on whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
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MILLENNIUM INCOME TRUST
Treasurers' Government Money Market Fund
TABLE OF CONTENTS
About the Fund 2
Goal 3
Strategy 3
Main Risks 4
Performance 5
Fund Fees and Expenses 6
Financial Highlights 7
Fund Management 8
Dividends and Taxes 8
Transaction Policies 9
Buying and Selling 10
<PAGE>
<PAGE>
ABOUT THE FUND
The Fund is a money marekt fund which seeks to offer high money market returns
and provide additional safety by investing in a portfolio of U.S. government
securities.
The Fund is designed for
PUBLIC FUNDS, EMPLOYEE BENEFIT PLANS
and other institutional investors with the need to invest:
- Operating cash
- Proceeds of tax exempt bond issues
- Local government investment pools
- Cash balances between investments or
- Other short term investment needs
2
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<PAGE>
GOAL
The Fund seeks high current income consistent with stability of
capital and liquidity.
STRATEGY
The Fund pursues its objective by investing in marketable U.S. government
securities such as:
- U. S. Treasury bills, notes, and bonds
- other obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, including Fannie Maes, Freddie Macs and
Sallie Maes
- repurchase agreements with primary U.S. Government securities dealers
recognized by the Federal Reserve Bank of New York
All these investments must mature in one year or less.
The Fund's investment manager, Trias Capital Management, Inc. ("Trias" or the
"Manager") purchases and sells securities based on monetary conditions, the
available supply of appropriate investments, and its projections for short-
term interest rate movements. Of course, there can be no guarantee that by
following these investment strategies, the portfolio will achieve its
objective.
The portfolio maintains a dollar weighted average maturity of 90 days or less
and Trias manages the Fund to maintain a net asset value of $1 per share.
3
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MAIN RISKS
Interest rates rise and fall over time. As with any investment whose
yield reflects current interest rates, the Fund's yield will change over time.
During periods when interest rates are low, the Fund's yield (and total
return) also will be low.
Your investment is not a bank deposit. An investment in the portfolio
is not insured or guaranteed by the Federal Deposit Insurance Company or any
other government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
The Fund could lose money if an issuer or a party to a repurchase
contract defaults. Although the risk of default with U.S. Government
securities is considered unlikely, some securities issued by U.S. Government
agencies or instrumentalities are supported only by the credit of that agency
or instrumentality, while other securities have an additional line of credit
with the U.S. Treasury. There is no guarantee that the U.S. Government will
provide support to such agencies or instrumentalities. A portfolio investment
default could cause the Fund's share price or yield to fall.
The Managers' strategy may not perform as expected. The Manager's
maturity decisions will affect the Fund's yield, and in unusual circumstances,
potentially could affect its share price. To the extent the Manager
anticipates interest rate trends imprecisely, the Fund's yield could lag those
of other money market funds . The Fund's emphasis on quality and stability
also could cause it to underperform other money funds, particularly those that
take greater maturity and credit risks.
4
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PERFORMANCE
Below are a chart and table showing how the Fund's performance has varied from
year to year and how it averages out over time. These figures assume that all
distributions were reinvested. Keep in mind that future performance may
differ from past performance.
[Bar Chart] 1996 5.25%
1997 5.23%
1998 5.42%
Best quarter: 1.36% Q1 1998
Worst quarter: 1.20% Q2 1999
Average annual total returns (%) as of 12/31/98
1 Year Since
inception
(10/2/95)
----------------------
5.42 5.30
To obtain a current seven-day yield for the Fund,
call toll free 800-514-2001
5
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FUND FEES AND EXPENSES
The following table describes what you could expect to pay as a Fund investor.
FEE TABLE (%)
- ---------------------------------------------
Shareholder Fees
(charged to you directly by the Fund) None
- ---------------------------------------------
Annual operating expenses
(expenses paid by the Fund as % of the Fund's
net assets)
- ---------------------------------------------
Management fees 0.20
Administration fee 0 05
Distribution (12b-1) fees None
Other Expenses 0.44
----
Total annual operating expenses1 0.69 (1)
Expenses on a $10,000 investment
Designed to help you compare the cost of investing in the Fund with the cost
of investing in other mutual funds, this example uses the same assumptions as
all mutual fund prospectuses: a $10,000 investment and 5% return each year.
It also assumes that the Fund's operating expenses remain the same. The
expenses would be the same whether you stayed in the Fund or sold your shares
at the end of each period. Your actual costs may be higher or lower.
1 Year 3 Years 5 Years 10 Years
$ 26 $ 81 $ 142 $ 324
- ----------------------------------------------------------
(1) Trias has voluntarily agreed to temporarily reimburse the Fund's operating
expenses to the extent that such expenses, as defined, exceed 0.25% of the
average daily net assets of the Fund. The net expense the Fund actually
paid is shown below.
Expense reduction 0.44
----
Net operating expenses 0.25
====
6
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FINANCIAL HIGHLIGHTS
This section provides further details about the Fund's recent financial
history. "Total return" shows the percentage that an investor in the Fund
would have earned or lost during a given period, assuming all distributions
were reinvested. The Fund's independent accountants, Arthur Andersen LLP,
audited these figures. Their full report is included in the Fund's annual
report (see back cover).
<TABLE>
<CAPTION>
Year Ended September 30
------------------------------------
<S> <C> <C> <C> <C>
1999 1998 1997 1996
----- ----- ----- -----
PER SHARE DATA ($)
Net asset value at beginning of period 1.000 1.000 1.000 1.000
----- ----- ----- -----
Net investment income 0.049 0.053 0.051 0.052
Distributions from net investment
income (0.049) (0.053) (0.051) (0.052)
----- ----- ----- -----
Net asset value at end of period 1.000 1.000 1.000 1.000
===== ===== ===== =====
Total Return % 5.03 5.33 5.06 5.27
===== ===== ===== =====
Net assets at end of period (000's) $ 65,541 $ 33,708 $ 111 $ 132
RATIOS
Net of expenses waived or absorbed by Manager(%)
Net expenses to average net assets 0.25 0.22 0.00 0.00
Net investment income to
average net asset 4.92 5.33 5.06 5.25
Net of expenses before waivers or absorption by Manager (%)
Expenses to average net assets 0.69 0.80 30.19 14.42
Net investment income to
average net assets 4.48 4.74 (25.13) (9.17)
</TABLE>
7
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FUND MANAGEMENT
Like other investment companies, the Trust retains various organizations to
provide specialized services for the Fund.
The investment adviser for the Millennium Income Trust is Trias Capital
Management, Inc. 140 S. Dearborn, Suite 1620, Chicago, Illinois. Collectively
the principals of Trias have been engaged in the management of investment
funds for approximately 40 years. In addition to serving as the Adviser to
the Fund, Trias provides investment advice and manages investment portfolios
for endowments, foundations, corporate cash, pension, profit sharing and
individual accounts.
As the investment adviser, Trias oversees the asset management of the
Millennium Income Trust. As compensation for these services Trias receives an
annual fee not to exceed .20% of the Fund's assets. Trias has agreed to
temporarily reimburse the Fund's total operating expenses to the extent that
they exceed .25% of the Fund's assets.
DIVIDENDS AND TAXES
The Fund distributes to its shareholders substantially all of its net
investment income and any realized capital gains. The Fund declares a
dividend every business day based on its determination of its net investment
income and realized capital gains. The Fund generally pays its dividends on
the last business day of every month.
The dividends paid by the Fund are generally taxable as ordinary income. No
portion of the Fund's distributions is eligible for the dividends received
deduction available to corporations.
At the beginning of every year, the Fund provides shareholders with
information detailing the tax status of any dividends the Fund declared during
the previous calendar year.
8
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<PAGE>
TRANSACTION POLICIES
The Fund is open for business each day that the New York Stock
Exchange is open except for days on which Cincinnati or New York
banks are closed for local holidays. The Fund calculates its share
price each business day at 11:30 a.m. Central time. The Fund's share price is
its net asset value, or NAV, which is the Fund's net assets divided by the
number of its shares outstanding. The Fund seeks to maintain a stable NAV of
$1.
Orders that are received in good order are executed at the next NAV to be
calculated and will generally receive that day's dividend.
The Fund values its investment holdings on the basis of amortized cost (cost
plus any discount, or minus any premium, accrued since purchase). Most money
market funds use this method to calculate NAV.
The Fund and transfer agent reserve certain rights, including the
following:
- To automatically redeem your shares if your balance
falls below the minimum for the Fund as a result of
selling your shares.
- To refuse any purchase order
- To change or waive the Fund's investment minimum.
- To suspend the right to sell shares back to the Fund
and delay sending proceeds, during times when trading
on the NYSE is restricted or halted, or as otherwise
permitted by the SEC.
- To withdraw or suspend any part of the offering made
by this prospectus.
The Fund's minimum initial investment is $250,000.
9
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<PAGE>
BUYING AND SELLING SHARES
The information on the following pages outlines how you can place "good
orders" to buy or sell shares of the Fund.
10
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<PAGE>
Millennium Income Trust
[LOGO] Treasurers' Government Quick Reference Guide
Money Market Fund
TO OPEN AN ACCOUNT To open without an immediate purchase skip to # 3
1 Call the Fund at 888-534-2001 to tell a representative of the Fund:
The name of the account, and
The tax id number and
The dollar amount of the purchase
We will give you the new account number.
2 Instruct your bank to immediately wire Fed Funds (see other side for
instructions).
3 Complete the Account Information Form then:
a. Fax the completed form to: b. Mail the signed original
immediately to:
Millennium Capital LLC Countrywide Fund Services, Inc
800-514-2004 P. O. Box 5354
Cincinnati, OH 45201
_________________________________________________________
NO REDEMPTIONS CAN BE PROCESSED BEFORE THE FUND RECEIVES THE SIGNED ACCOUNT
FORM
FOR QUESTIONS Countrywide Fund Services, Inc
ABOUT YOUR ACCOUNT 888-534-2001
fax 513-629-2901
FOR MORE PROSPECTUSES, Millennium Capital LLC
NEW ACCOUNT FORMS, 800-514-2001
and QUESTIONS ABOUT THE FUND fax 800-514-2004
Trias Capital Management, Inc * Investment Adviser
<PAGE>
<PAGE>
Millennium Income Trust
[LOGO] Treasurers' Government Quick Reference Guide
Money Market Fund
TO BUY Purchase requests received by 11:30 am Central
SHARES Time will start to earn interest that day
provided that the Fund's custody account is
credited with Fed Funds by close of business
that day.
1 Call 888-534-2001 before 11:30 am to tell the representative of the Fund:
The account name and number; and
The dollar amount of the purchase.
If you do not have a fund account number, see other
side "TO OPEN AN ACCOUNT"
2 Instruct your bank to immediately wire Fed Funds to:
Fifth Third Bank
ABA # 042 000 314
Attn: TGMMF
Acct # 728-76052
For further credit to: insert the account
name and number
THE INVESTOR IS RESPONSIBLE FOR NOTIFYING THE FUND OF ALL PURCHASE ORDERS
BEFORE SENDING ANY MONEY
TO SELL If a redemption request is received by
SHARES 11:30 am Central Time, Fed Funds will be
wired to the investor that day.
Call 888-534-2001 before 11:30 am to tell a representative of the Fund:
The account name and number; and
The dollar amount of the redemption.
PROCEEDS OF REDEMPTIONS MAY ONLY BE SENT TO THE PRE-AUTHORIZED BANK ACCOUNT OF
THE INVESTOR
<PAGE>
<PAGE>
LOGO MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
This prospectus contains important information on the Fund
and should be read and kept for reference. You also can
obtain more information from the following sources.
Annual and Semi-annual reports, which are mailed
to current fund investors, discuss recent
performance and portfolio holdings.
The Statement of Additional Information (SAI)
includes a more detailed discussion of
investment policies and the risks associated
with various investments. The SAI is
incorporated by reference into the prospectus,
making it legally part of the prospectus.
You can obtain copies of these documents by
contacting the Fund or the SEC. All materials
from the Fund are free; the SEC charges a
duplicating fee. You can also review these
materials in person at the SEC's Public
Reference Room or on the internet.
Millennium Income Trust
140 S. Dearborn
Chicago, IL 60603
800-514-2001
Securities and Exchange Commission
Washington, D.C. 20549-6009
800-SEC-0330 (Public Reference Section)
www.sec.gov
SEC File Number
Millennium Income Trust 811-8816
<PAGE>
<PAGE>
MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
ANNUAL REPORT
September 30, 1999
<PAGE>
<PAGE>
November 29, 1999
Dear Shareholder,
We are pleased to provide you with the annual report of the Millennium Income
Trust for the year ended September 30, 1999. During the period the
Treasurers' Government Money Market Fund portfolio registered solid
performance and achieved its objective of providing maximum current income
from high quality money market securities while maintaining stability of
principal.
Thank you for choosing the Treasurers' Government Money Market Fund. We look
forward to the continued opportunity to meet your investment needs.
James A. Casselberry, Jr.
President
<PAGE>
<PAGE>
TREASURERS' GOVERNMENT MONEY MARKET FUND
YIELD SUMMARY
As of 9/30/99
7-day current yield 5.06
7-day effective yield 5.19%
Average maturity 5 days
AVERAGE ANNUAL TOTAL RETURNS
As of 9/30/99
1-year 5.03%
Since inception
(on 10/2/95) 5.27%
Treasurers Government Money Market Fund compared to 3 month
U. S. Treasury bills* from 10/1/98 through 9/30/99
[Line graph]
* Source Federal Reserve Statitiscal Release H15
Past performance is no guarantee of future results.
2
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
ASSETS:
Investment securities, at cost and value (Note 2) $ 65,380,653
Receivables
Accrued income 167,024
Receivable from related party 99,450
Other assets 8,984
---------
Total assets 65,656,111
---------
LIABILITES:
Income distribution payable 84,440
Accrued Expenses 30,897
---------
Total liabilities 115,337
---------
Net assets $ 65,540,774
=========
Net assets consist of
Paid-in capital $ 65,560,153
Accumulated net realized losses from
security transactions (19,379)
=========
Net assets $ 65,540,774
=========
Shares of beneficial interest outstanding
(Unlimited number of shares authorized,
no par value) 65,560,153
=========
Net asset value, redemption price and
offering price per share (Note 2) $ 1.00
====
See accompanying Notes to Financial StatementsSe
3
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<PAGE>
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
INVESTMENT INCOME:
Interest income
U.S. government and agency obligations $ 1,167,989
Repurchase agreements 500,574
-------
Total Income 1,668,563
EXPENSES: (Note 3)
Management fees 64,495
Administration fees 16,124
Service fees 49,914
Professional fees 15,745
Insurance expense 9,167
Trustees fees & expenses 16,485
S & P rating fee 36,667
Registration fees 9,396
Amortization of organization expenses 5,984
-------
Total Expenses 223,977
Less expenses reimbursed by the Manager (Note 3) 143,361
-------
Net Expenses 80,616
-------
NET INVESTMENT INCOME 1,587,947
-------
NET REALIZED LOSSES FROM SECURITY TRANSACTIONS (19,379)
-------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,568,568
=======
See accompanying Notes to Financial Statements
4
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<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended September 30,
1999 1998
From operations:
Net investment income $ 1,587,947 $ 673,426
Net realized loss from security transactions (19,379) -
------- -------
Net increase in net assets from operation 1,568,568 -
From dividends:
Dividends to shareholders from net
investment income (1,587,947) (673,426)
From capital share transactions:
Proceeds from shares sold 171,492,461 33,475,179
Shares issued in reinvestment of dividends 841,401 321,417
Less payments for shares redeemed (140,481,515) (200,000)
------- -------
Net increase in net assets due to
capital share transactions 31,852,346 33,596,596
------- -------
Total increase in net assets 31,832,968 33,596,596
Net assets:
Beginning of year (Note 1) 33,707,806 111,210
------- -------
End of year $ 65,540,774 $ 33,707,806
========== ==========
See accompanying Notes to Financial Statements
5
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SCHEDULE OF INVESTMENTS
September 30, 1999
U. S. GOVERNMENT AGENCY OBLIGATIONS - 23.4%
Par Value
------------ ------------
Federal Farm Credit Bank
5.17% discount rate, due 10/1/99 $ 1,216,000 $ 1,216,000
5.64%, Floating Rate Note, due 10/1/99 2,000,000 2,000,000
Federal Home Loan Bank
5.82%, due 12/2/99 500,000 500,123
7.92%, due 12/23/99 400,000 401,945
Federal Home Loan Mortgage Corp
5.19% discount rate, due 10/1/99 1,120,000 1,120,000
Federal National Mortgage Association
5.20% discount rate, due 10/1/99 1,685,000 1,685,000
5.18% discount rate, due 10/25/99 3,443,000 3,431,018
5.81%, due 10/1/99 700,000 700,000
8.40%, due 10/25/99 1,600,000 1,603,228
5.95%, due 11/5/99 610,000 610,267
Student Loan Marketing Association
5.45%, Floating Rate Note, due 2/17/00 2,000,000 2,000,000
-----------
TOTAL US GOVERNMENT & AGENCY OBLIGATIONS
(Amortized Cost $ 15,267,581) 15,267,581
REPURCHASE AGREEMENTS (1) - 76.6 % Proceeds Value
----------- -----------
Bear Stearns
5.31%, Issue date 9/30/99, due 10/1/99 $ 40,118,988 $ 40,113,072
Lehman Brothers
5.25%, Issue date 9/30/99, due 10/7/99 10,010,209 10,000,000
----------- -----------
TOTAL REPURCHASE AGREEMENTS 50,129,197 50,113,072
----------- -----------
TOTAL INVESTMENTS $ 65,380,653
(Amortized Cost $ 65,380,653) -----------
(1) Repurchase agreements are fully collateralized by U.S. Government
agency securities.
See accompanying Notes to Financial Statements
6
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NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(1) Organization
The Millennium Income Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end diversified management
investment company. The Trust was established as a Massachusetts business
trust under a Declaration of Trust dated August 19, 1994. The Trust has
established one fund series, the Treasurers' Government Money Market Fund (the
"Fund"). The Fund had no operations prior to the public offering (which
occurred on October 2, 1995) of shares except for the initial issuance of
shares; accordingly, no financial statement information is presented for the
period prior to fiscal 1996. The Fund's investment objective is to seek high
current income, consistent with protection of capital.
(2) Significant Accounting Policies
The following is a summary of the Fund's significant accounting policies:
Security valuation - Securities are valued on the amortized cost basis, which
approximates market value. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of
any discount or premium. This method of valuation is expected to enable the
Fund to maintain a constant net asset value per share.
Repurchase agreements - Repurchase agreements are collateralized by U.S.
Government securities and are valued at cost which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held in
safekeeping in the the Fund's custodian customer-only account at the Federal
Reserve Bank of Cleveland. At the time the Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will be equal to or exceed the face amount of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying security and losses. These losses would equal the
face amount of the repurchase agreement(s) and accrued interest, net of any
proceeds received in liquidation of the underlying securities. To minimize
the possibility of loss, the Fund enters into repurchase agreements only with
institutions deemed to be creditworthy.
Security transactions - Investment transactions are accounted for on the
trade date. Securities sold are valued on a specific identification basis.
Fund share valuation, investment income and distributions to shareholders -
The net asset value per share of the Fund is calculated twice a day by
dividing the total value of the Fund's assets, less liabilities, by the number
of shares outstanding. Interest income is accrued as earned. Distributions
from net investment income are declared daily and paid on or about the first
business day of each month.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
7
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<PAGE>
Federal income tax - It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of Federal income tax on the
income distributed.
Accordingly, no provision for income taxes has been made. In order to avoid
imposition of the excise tax applicable to regulated investment companies, it
is also the Fund's intention to declare as dividends in each calendar year at
least 98% of its net investment income (earned during the calendar year) and
98% of its net realized capital gains (earned during the twelve months ended
October 31) plus undistributed amounts from prior years.
(3) Transactions with Affiliates
The President of the Trust is the chairman and controlling shareholder of
Trias Capital Management, Inc. ("Trias"), the Trust's investment manager. The
Secretary/Treasurer of the Trust is the chairman and controlling member of
Millennium Financial LLC ("MFL"), the Trust's administrator, and Millennium
Capital LLC ("MCL"), the Trust's principal underwriter.
Investment Management Agreement - The Fund's investments are managed by Trias
pursuant to the terms of a management agreement. Under the terms of the
management agreement, the Fund pays Trias a fee, which is computed and accrued
daily and paid monthly at the annual rate of .20% of its average daily net
assets. For fiscal 1999 Trias agreed to reimburse the Fund the amount by which
its total operating expenses exceeded .25% of average daily net assets. For
the year ended September 30, 1999, the total of such reimbursements were
$ 143,361.
Administration Agreement - The Fund's business affairs are managed by MFL
pursuant to the terms of an administration agreement. Under the terms of the
administration agreement, the Fund pays MFL a fee, which is computed and
accrued daily and paid monthly at the annual rate of .05% of its average daily
net assets.
Transfer Agent and Shareholder Service Agreement - The Fund has a Transfer,
Dividend Disbursing, Shareholder Service and Plan Agency Agreement with
Countrywide Fund Services, Inc. ("CFS"). For the services provided under this
agreement, CFS receives a monthly fee at an annual rate of $20 per shareholder
account, subject to a minimum monthly fee not to exceed $1,500. In addition,
the Fund pays CFS' out-of-pocket expenses including, but not limited to,
postage and supplies.
Accounting Services Agreement - The Fund has an Accounting Services Agreement
with CFS. For the services provided under this agreement CFS receives a
monthly fee. Based on current asset levels this fee is $2,000 per month.
Organizational Expenses - Expenses paid by MFL amounting to $23,500, were
incurred in connection with the organization of the Trust and the initial
offering of shares. Such organizational expenses were capitalized and
amortized on a straight-line basis over the last five years.
8
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<PAGE>
Report of Independent Public Accountants
To the Shareholders and Board of Trustees of the
Treasurers' Government Money Market Fund of Millennium Income Trust:
We have audited the accompanying statement of assets and liabilities of the
Treasurers' Government Money Market Fund of Millennium Income Trust (a
Massachusetts business trust), including the schedule of investments as of
September 30, 1999, and the related statement of operations, the statements
of changes in net assets, and the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are
the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments owned as of September 30, 1999, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of the Treasurers' Government Money Market Fund of the Millennium Income
Trust as of September 30, 1999, the results of its operations, the changes
in its net assets, and the financial highlights for the periods indicated
thereon, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Cincinnati, Ohio,
November 8, 1999
<PAGE>
<PAGE>
MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
February 1, 2000
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of the Treasurers' Government Money
Market Fund dated February 1, 2000. A copy of the Prospectus can be obtained
by writing the Fund at 140 S. Dearborn, Suite 1620, Chicago, Illinois 60603.
This Statement of Additional Information shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
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TABLE OF CONTENTS
THE TRUST 2
INVESTMENT POLICIES 3
INVESTMENT LIMITATIONS 9
TRUSTEES AND OFFICERS 11
INVESTMENT MANAGEMENT AND ADMINISTRATION 13
SECURITIES TRANSACTIONS 16
NET ASSET VALUE 17
TAXES 18
REDEMPTION IN KIND 19
HISTORICAL PERFORMANCE INFORMATION 19
TRANSFER AND SHAREHOLDER SERVICE AGENT 20
DISTRIBUTOR 21
CUSTODIAN 21
INDEPENDENT PUBLIC ACCOUNTANTS 21
LEGAL COUNSEL 21
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THE TRUST
Millennium Income Trust (the "Trust") was organized as a Massachusetts
business trust on August 19, 1994. The Trust currently offers one series
of shares to investors, the Treasurers' Government Money Market Fund (the
"Fund"). This Statement of Additional Information provides information
relating to the Fund.
Each share of the Fund represents an equal proportionate interest in the
assets and liabilities belonging to the Fund with each other share of the
Fund and is entitled to such dividends and distributions out of the income
belonging to the Fund as are declared by the Board of Trustees (the
"Trustees"). The shares do not have cumulative voting rights or any
preemptive or conversion rights, and the Trustees have the authority from
time to time to divide or combine the shares of any Fund into a greater or
lesser number of shares of that Fund so long as the proportionate
beneficial interest in the assets belonging to the Fund and the rights of
shares of any other Fund are in no way affected. In case of any
liquidation of the Fund, the holders of shares will be entitled to receive
as a class a distribution out of the assets, net of the liabilities
belonging to the Fund. No shareholder is liable to further calls or to
assessment by the Trust without its express consent.
Under Massachusetts law, in certain circumstances, shareholders of a
Massachusetts business trust could be deemed to have the same type of
personal liability for the obligations of the Trust as a partner of a
partnership. However, numerous investment companies registered under the
Investment Company Act of 1940 (the "1940 Act") have been formed as
Massachusetts business trusts, and the Trust is not aware of an instance
where such result has occurred. In addition, the Trust Agreement of
Millennium Income Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given
in each agreement, obligation or instrument entered into or executed by the
Trust or the Trustees. The Trust Agreement also provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Moreover, the Trust
Agreement provides that the Trust will, upon request, assume the defense of
any claim made against any shareholder for any act or obligation of the Trust
and satisfy any judgment thereon. As a result, and particularly because the
Trust's assets are readily marketable and ordinarily substantially exceed
liabilities, the risk of shareholder liability is slight and limited to
circumstances in which both inadequate insurance existed and the Trust was
unable to meet its obligations. In view of the above, the risk of
shareholder liability is remote.
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INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Fund is to seek high current income,consistent
with protection of capital. The Fund pursues its objective by investing
exclusively in obligations issued or guaranteed as to principal and interest
by the United States Government, its agencies or instrumentalities ("U.S.
Government Obligations"), and repurchase agreements collateralized by such
U.S. Government Obligations. All securities purchased mature within 12 months
or less, and the Fund maintains a weighted average portfolio maturity of 90
days or less. Except where otherwise indicated, all investment policies,
practices and limitations of the Fund are non-fundamental which means they may
be changed by the Board of Trustees (the "Trustees") without shareholder
approval. There can be no assurance that the investment objective of the Fund
will be achieved.
US GOVERNMENTS AND AGENCIES
U.S. Government Obligations include securities that are issued or guaranteed
by the United States Treasury, by various agencies of the United States
Government, and by various instrumentalities that have been established or
sponsored by the United States Government. U.S. Treasury obligations are
backed by the full faith and credit of the United States Government. Other
U.S. Government Obligations may not be backed by the full faith and credit of
the United States. In the case of securities not backed by the full faith
and credit of the United States, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment and may
not be able to assert a claim against the United States in the event the
agency or instrumentality does not meet its commitments.
United States Treasury obligations ("U.S. Treasuries") include Treasury
bills, Treasury notes, and Treasury bonds. U.S. Treasuries also include the
separate principal and interest components of U.S. Treasuries that are traded
under the Separate Trading of Registered Interest and Principal of Securities
("STRIPS") program. Government agencies that issue or guarantee securities
backed by the full faith and credit of the United States include the
Government National Mortgage Association, the Student Loan Marketing
Association and the Small Business Administration. Government agencies and
instrumentalities that issue or guarantee securities not backed by the full
faith and credit of the United States include the Federal Farm Credit Banks,
the Federal Home Loan Banks, the Federal National Mortgage Association, the
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Federal Home Loan Mortgage Corporation, the Federal Land Bank, the Bank for
Cooperatives, the Federal Intermediate Credit Bank, the Federal Financing
Bank, the Resolution Funding Corporation, the Financing Corporation of
America and the Tennessee Valley Authority.
The Fund may invest in securities issued or guaranteed by any of the entities
listed above or by any other agency or instrumentality established or
sponsored by the United States Government, provided that the securities are
otherwise permissible investments of the Fund. Certain U.S. Government
Obligations that have a variable rate of interest readjusted no less
frequently than annually will be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate.
The Fund's yield will fluctuate due to changes in interest rates, economic
conditions, quality ratings and other factors. The prepayment experience of
the mortgages underlying mortgage-related securities, such as obligations
issued by the Government National Mortgage Association, may affect the value
of, and return on, an investment in such securities.
STRIPS. STRIPS are U.S. Treasury bills, notes and bonds that have been
issued without interest coupon or stripped of their unmatured interest
coupons, interest coupons that have been stripped from such U.S. Treasury
securities, and receipts or certificates representing interests in such
stripped U.S. Treasury securities and coupons. A STRIPS security pays no
interest in cash to its holder during its life although interest is accrued
for federal income tax purposes. Its value to an investor consists of the
difference between its face value at the time of maturity and the price for
which it was acquired, which is generally an amount significantly less than
its face value. Investing in STRIPS may help to preserve capital during
periods of declining interest rates. For example, if interest rates decline,
Government National Mortgage Association Certificates purchased at greater
than par are more likely to be prepaid, which would cause a loss of principal.
In anticipation of this, the Fund might purchase STRIPS, the value of which
would be expected to increase when interest rates decline.
STRIPS do not entitle the holder to periodic payments of interest prior to
maturity. Accordingly, such securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of
comparable maturities that make periodic distributions of interest. On the
other hand, because there are no periodic interest payments to be reinvested
prior to maturity, STRIPS eliminate the reinvestment risk and lock in a rate
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of return to maturity. Current federal tax law requires that a holder of a
STRIPS security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund received no interest
payment in cash on the security during the year.
Repurchase Agreements. Repurchase agreements are transactions by which the
Fund purchases a security and simultaneously commits to resell that security
to the seller at an agreed upon time and price, thereby determining the yield
during the term of the agreement. In the event of a bankruptcy or other
default by the seller of a repurchase agreement, the Fund could experience
both delays in liquidating the underlying security and losses. To minimize
these possibilities, the Fund intends to enter into repurchase agreements
only with its Custodian, banks having assets in excess of $10 billion and
primary U.S. Government securities dealers. The Fund may only enter into
repurchase agreements fully collateralized by U.S. Government Obligations.
The Fund may enter into repurchase agreements with the Custodian, with banks
having assets in excess of $10 billion and with broker-dealers who are
recognized as primary dealers in U.S. Government obligations by the Federal
Reserve Bank of New York. Although the securities subject to the repurchase
agreement might bear maturities exceeding one year, settlement for the
repurchase would never be more than one year after the Fund's acquisition of
the securities and normally would be within a shorter period of time. The
resale price will be in excess of the purchase price, reflecting an agreed
upon market rate effective for the period of time the Fund's money will be
invested in the securities and will not be related to the coupon rate of the
purchased security. At the time the Fund enters into a repurchase agreement,
the value of the underlying security, including accrued interest, will equal
or exceed 102% of the value of the repurchase agreement, and in the case of
a repurchase agreement exceeding one day, the seller will agree that the
value of the underlying security, including accrued interest, will at all
times equal or exceed 102% of the value of the repurchase agreement. The
collateral securing the seller's obligation will be held by the Custodian or
in the Fund's account in the Federal Reserve Book Entry System. The Fund
will not enter into a repurchase agreement not terminable within seven
business days if, as a result thereof, more than 10% of the value of the net
assets of the Fund would be invested in such securities and other illiquid
securities.
For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan
from a Fund to the seller subject to the repurchase agreement and is
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therefore subject to the Fund's investment restriction applicable to loans.
It is not clear whether a court would consider the securities purchased by
the Fund subject to a repurchase agreement as being owned by the Fund or as
being collateral for a loan by the Fund to the seller. In the event of the
commencement of bankruptcy or insolvency proceedings with respect to the
seller of the securities before repurchase of the security under a
repurchase agreement, the Fund may encounter delay and incur costs before
being able to sell the security. Delays may involve loss of interest or
decline in price of the security. If the court characterized the transaction
as a loan and the Fund has not perfected a security interest in the security,
the Fund may be required to return the security to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor,
the Fund would be at the risk of losing some or all of the principal and
income involved in the transaction. As with any unsecured debt obligation
purchased for the Fund, the Fund's investment adviser seeks to minimize the
risk of loss through repurchase agreements by analyzing the creditworthiness
of the obligor, in this case the seller. Apart from the risk of bankruptcy
or insolvency proceedings, there is also the risk that the seller may fail to
repurchase the security, in which case the Fund may incur a loss if the
proceeds to the Fund of the sale to a third party are less than the
repurchase price. However, if the market value of the securities subject to
the repurchase agreement becomes less than the repurchase price (including
interest), the Fund will direct the seller of the security to deliver
additional securities so that the market value of all securities subject to
the repurchase agreement will equal or exceed 102% of the repurchase price.
It is possible that the Fund will be unsuccessful in seeking to enforce the
seller's contractual obligation to deliver additional securities.
OTHER INVESTMENT TECHNIQUES
The Fund may also engage in the following investment techniques, each of
which may involve certain risks:
Delayed Settlement Transactions. The Fund will make commitments to purchase
securities on a When-Issued ("WI") or To-Be-Announced ("TBA") basis.
Obligations issued on a when-issued basis are settled by delivery and payment
after the date of the transaction, usually within 15 to 45 days. In a to-be-
announced transaction, the Fund commits to purchasing or selling securities
for which all specific information is not yet known at the time of the trade,
particularly the face amount in transactions involving mortgage-related
securities. The Fund will only make commitments to purchase obligations on a
when-issued or to-be-announced basis with the intention of actually acquiring
the obligations, but the Fund may sell these securities before the settlement
date if it is deemed advisable as a matter of investment strategy or in order
to meet its obligations, although it would not normally expect to do so. The
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Fund intends to invest less than 5% of its net assets in securities purchased
on this basis, and the Fund will not enter into a delayed settlement
transaction which settles in more than 120 days.
In connection with these investments, the Fund will direct the Custodian to
place liquid securities in a segregated account in an amount sufficient to
make payment for the securities to be purchased. When a segregated account is
maintained because the Fund purchases securities on a WI or TBA basis, the
assets deposited in the segregated account will be valued daily at market for
the purpose of determining the adequacy of the securities in the account. If
the market value of such securities declines, additional cash or securities
will be placed in the account on a daily basis so that the market value of the
account will equal the amount of the Fund's commitments to purchase securities
on a WI or TBA basis. To the extent funds are in a segregated account, they
will not be available for new investment or to meet redemptions. Securities
in the Fund's portfolio are subject to changes in market value based upon
changes in the level of interest rates (which will generally result in all of
those securities changing in value in the same way, i.e., all those securities
experiencing appreciation when interest rates decline and depreciation when
interest rates rise). Therefore, if in order to achieve higher returns, the
Fund remains substantially fully invested at the same time that it has
purchased securities on a WI or TBA basis, there will be a possibility that
the market value of the Fund's assets will have greater fluctuation. The
purchase of securities on a WI or TBA basis may involve a risk of loss if the
broker-dealer selling the securities fails to deliver after the value of the
securities has risen.
When the time comes for the Fund to make payment for securities purchased on
a WI or TBA basis, the Fund will do so by using then available cash flow, by
sale of the securities held in the segregated account, by sale of other
securities or, although it would not normally expect to do so, by directing
the sale of the securities purchased on a WI or TBA basis themselves (which
may have a market value greater or less than the Fund's payment obligation).
Lending Portfolio Securities. The Fund may make short-term loans of its
portfolio securities to banks, brokers and dealers. Lending portfolio
securities exposes the Fund to the risk that the borrower may fail to return
the loaned securities, may not be able to provide additional collateral or
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that the Fund may experience delays in recovery of the loaned securities or
loss of rights in the collateral if the borrower fails financially. To
minimize these risks, the borrower must agree to maintain collateral marked
to market daily, in the form of cash or U.S. Government Obligations with the
Fund's Custodian in an amount at least equal to the market value of the
loaned securities. The Fund will limit the amount of its loans of portfolio
securities to no more than 25% of its net assets. This lending policy is
fundamental and may not be changed without the affirmative vote of a
majority of the Fund's outstanding securities, as defined in the 1940 Act.
Borrowing and Pledging. The Fund may borrow money from banks (provided there
is 300% asset coverage) or other persons (in an amount not exceeding 5% of
its total assets) for temporary purposes. The Fund may pledge assets in
connection with borrowings, but the Fund will not pledge more than one-third
of its assets. The Fund will not make any additional purchases of portfolio
securities if outstanding borrowings exceed 5% of the value of its total
assets. The Fund's policies on borrowing and pledging are fundamental
policies that may not be changed without the affirmative vote of a majority
of its outstanding securities.
The Fund receives amounts equal to the interest on loaned securities and also
receives one or more of (a) negotiated loan fees, (b) interest on securities
used as collateral or (c) interest on short-term debt securities purchased
with such collateral; either type of interest may be shared with the borrower.
The Fund may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a
placing broker provided that the Trustees determine that the fee paid to the
placing broker is reasonable and based solely upon services rendered, that the
Trustees separately consider the propriety of any fee shared by the placing
broker with the borrower and that the fees are not used to compensate the
Fund's investment adviser or any affiliated person of the Trust or an
affiliated person of the Fund's investment adviser. The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code and permit
the Fund to reacquire the loaned securities on five days' written notice or in
time to vote on any important matter.
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INVESTMENT LIMITATIONS
The Trust has adopted certain fundamental investment limitations designed to
reduce the risk of an investment in the Fund. These limitations may not be
changed without the affirmative vote of a majority of the outstanding
securities of the Fund. The term "majority of the outstanding securities" of
the Trust (or of the Fund) means the lesser of (1) 67% or more of the
outstanding shares of the Trust (or the Fund) present at a meeting, if the
holders of more than 50% of the outstanding shares of the Trust (or the Fund)
are present or represented at such meeting or (2) more than 50% of the
outstanding shares of the Trust (or the Fund).
The limitations applicable to the Fund are:
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other entity
for temporary purposes only, provided than when made, such temporary
borrowings are in an amount not exceeding 5% of the Fund's total assets. The
Fund also will not make any borrowing which would cause its outstanding
borrowings to exceed one-third of the value of its total assets.
2. Pledging. The Fund will not mortgage, pledge, or hypothecate or in any
manner transfer, as security for indebtedness, any security owned or held by
the Fund except as may be necessary in connection with borrowings described
in limitation (1) above. The Fund will not mortgage, pledge, or hypothecate
more than one-third of its assets in connection with borrowings.
3. Underwriting. The Fund will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of its portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. Illiquid Investments. The Fund will not invest more than 10% of its net
assets in securities for which there are legal or contractual restrictions on
resale and other illiquid securities.
5. Real Estate. The Fund will not purchase, hold or deal in real estate.
6. Commodities. The Fund will not purchase, hold or deal in commodities or
commodities future contracts or invest in oil, gas or other mineral
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exploration or development programs. This limitation is not applicable to
the extent that the U.S. Government obligations in which the Fund may
otherwise invest would be considered to be such commodities, contracts or
investments.
7. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, or (b) by engaging in repurchase agreements.
For purposes of this limitation, the term "loans" shall not include the
purchase of a portion of an issue of U.S. Government obligations.
8. Margin Purchases. The Fund will not purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short-term
credit obtained by the Fund for the clearance of purchase and sales or
redemptions of securities.
9. Short Sales and Options. The Fund will not sell any securities short or
sell put and call options. This limitation is not applicable to the extent
that sales by the Fund of securities in which the Fund may otherwise invest
would be considered to be sales of options.
10. Other Investment Companies. The Fund will not invest in the securities
of any investment company except as permitted by the Investment Company Act
of 1940.
11. Concentration. The Fund will not invest more than 25% of its total
assets in the securities of issuers in a particular industry; this limitation
is not applicable to investments in obligations issued or guaranteed by the
United States Government, its agencies and instrumentalities or repurchase
agreements with respect thereto.
12. Mineral Leases. The Fund will not purchase oil, gas or other mineral
leases or exploration or development programs.
13. Senior Securities. The Fund will not issue senior securities as defined
in the Investment Company Act of 1940.
Notwithstanding any other investment policy the Fund may invest all, but not
less than all, of its investable assets in the securities of beneficial
interests of a single pooled investment entity having substantially the same
objective, policies and limitations as the Fund.
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With respect to the percentages adopted by the Trust as maximum limitations
on the Fund's investment policies and restrictions, an excess above the fixed
percentage (except for the percentage limitations relative to the borrowing
of money) will not be a violation of the policy or restriction unless the
excess results immediately and directly from the acquisition of any security
or the action taken.
The Trust does not presently intend to pledge, mortgage or hypothecate the
assets of the Fund. The Trust does not presently intend to acquire
securities issued by any other investment companies. The Trust does not
presently intend to invest all its assets in securities issued by any other
single pooled investment entity. The statements of intention in this
paragraph reflect nonfundamental policies that may be changed by the Board of
Trustees without shareholder approval.
TRUSTEES AND OFFICERS
The officers and trustees of the Fund, their principal occupations and
affiliations, if any, with the Adviser and Underwriter and their ages, are
listed below.
James A. Casselberry, Jr., Trustee, Chairman of the Board and President*, 140
S. Dearborn, Chicago, Illinois; Chairman and Chief Executive Officer of
Trias Capital Management, Inc. (the investment adviser of the Trust)
beginning in 1996. From 1995 through 1996, Chief Operating Officer of
Wedgewood Capital Management, an investment adviser. From 1991 to 1995
Investment Manager at the MacArthur Investment Group and Director of Fixed
Income Investments for the John D. and Catherine T. MacArthur Foundation, a
501(c)(3) foundation. From 1987 to 1991, portfolio manager of First National
Bank of Chicago, managing the First Prairie money market funds. (40).
Janis S. England, Trustee, Secretary and Treasurer*, 10814 Bull Valley Road,
Woodstock, Illinois; Chairman of Millennium Financial LLC (administrator of
the Trust) LLC and Millennium Capital LLC (the principal underwriter of the
Trust). From 1986 through 1993 she was associated with Kemper Financial
Services, Inc. (a registered broker-dealer and investment adviser) most
recently as Senior Vice President with responsibility for, among other
things, wholesale money market funds. (53).
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Albert R. Grace, Jr., Trustee*, 175 W. Jackson, Chicago, IL; President and
COO of Loop Capital Markets LLC, a registered broker-dealer, since 1997. From
1994 until 1997 Vice President Northern Trust Company, a national bank. From
1987 through 1993, he was associated with Kemper Financial Services, Inc. (a
registered broker-dealer and investment adviser) most recently as President of
the Selected Funds. (48)
Marjorie H. O'Laughlin, Trustee+, 3838 N. Rural Street, Indianapolis, IN;
Treasurer, Health & Hospital Corporation of Marion County, a municipal
corporation created by the Indiana General Assembly. From 1987 through
February 1995 Treasurer of the State of Indiana. (70).
Sally M. Tassani, Trustee+, 6003 Guion , Indianapolis, IN; Director and
Executive Vice President of Paul Harris Stores, Inc., a specialty retailer of
moderately price women's apparel and accessories since July 1998. From
January 1998 to June 1998 Managing Director of Tassani Partners LLC,
marketing communication consultants. From October 1995 through 1997, Senior
Vice-President of Leo Burnett Company, an advertising agency. From August
through September 1995 Executive Vice-President of Bender Browning Dolby &
Sanderson an advertising agency. Formerly Chief Executive Officer of Tassani
& Paglia Inc., an advertising agency. (50).
Barbara E. Wallace , Trustee+ 875 N. Michigan Avenue, Chicago, IL; Executive
Vice President of SMG Marketing Group, Inc., a firm providing information and
consulting to the health care industry. (50).
* These are "interested persons" of the Trust within the meaning of Section
2(a)(19) of the of 1940 Act. Mr. Casselberry is an affiliated person of
Trias Capital Management, the Trust's investment adviser. Ms England is an
affiliated person of Millennium Capital LLC, the Trust's principal
underwriter, and Millennium Financial LLC, the Trust's administrator. Mr.
Grace is an affiliated person of Loop Capital Markets LLC,. a registered
broker-dealer.
+ Member of the Audit Committee
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they are
not protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.
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The Fund pays Trustees who are not interested persons of the investment
adviser a fee of $1,000 for each Board meeting attended plus $250 for each
committee meeting attended. The table below shows the amounts estimated to
be paid to Trustees during the Trust's 1999 fiscal year.
Aggregate Pension or Retirement Total
Compensation Benefits Accrued as Compensation
Name of Trustee from Trust Part of Trust Expenses from Trust
- ---------------------- ---------- -------------------- ----------
Marjorie H. O'Laughlin $4,000 $0 $4,000
Albert R. Grace, Jr. $2,000 $0 $2,000
Sally M. Tassani $4,000 $0 $4,000
Barbara E. Wallace $4,000 $0 $4,000
On November 1, 1999, the trustees and officers as a group owned less than 1%
of the outstanding shares of the Fund. Those record owners which owned
beneficially 5% or more of the outstanding shares of the Fund are: City of
Detroit - Water Bond 97 Fund for 83, 2 Woodward Ave, Detroit, MI 48226,
16.66%; Chicago Housing Authority/Section 8, 626 W. Jackson, Chicago,
IL, 60661, 39.64%; Treasurer State of Illinois, 300 W. Jefferson,
Springfield, IL 62702 7.75%; New America Insurance Company, 7640 Southgate
Blvd, N. Lauderdale FL 33068 22.80%.
INVESTMENT MANAGEMENT AND ADMINISTRATION
The Trust's investment manager is Trias Capital Management, Inc. ("Trias").
Under the terms of an investment advisory agreement (the "Advisory
Agreement") with the Fund, Trias provides the investment advice to the Fund
subject to the supervison of the board of trustees. Trias has complete
discretion to purchase and sell portfolio securities for the Fund within the
Fund's investment objective, restrictions and policies. In addition to
serving as the investment adviser to the Fund, Trias provides investment
advice and manages investment portfolios for endowments, foundations,
corporate cash, pension, profit sharing and individual accounts. Trias is
controlled by Mr. James A. Casselberry, Jr.
Mr. James A. Casselberry, Jr. is the Chief Executive Officer of Trias, and
the Fund's portfolio manager. Mr. Casselberry has more than 10 years of
experience as a fixed income strategist. Prior to founding Trias Capital
Management, Mr. Casselberry was the Chief Operating Officer at Wedgewood
Capital Management in Washington, D.C. His primary responsibility was to
oversee the firm's marketing, client services and operations divisions.
Before joining Wedgewood Capital Management, Mr. Casselberry was a Partner in
the MacArthur Investment Group and was the Director of Fixed Income
Investments for the John D. and Catherine T. MacArthur Foundation. Preceding
his four years at the MacArthur Foundation, Mr. Casselberry served as
Portfolio Manager and Credit Analyst for First National Bank of Chicago. Mr.
Casselberry managed two tax-exempt money market funds, First Prairie Tax-
Exempt Money Market Fund ($400 Million) and the Personal Investments Tax-
Exempt Fund ($500 Million). Mr. Casselberry graduated from the University of
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Illinois at Chicago with a Bachelor of Science degree in Economics. Mr.
Casselberry is an associate member of the Financial Analysts Federation, a
member of the Chicago Quantitative Alliance, a member of the Urban Bankers'
Forum, and the Treasurer of the National Association of Security
Professionals.
For performing its responsibilities, the Fund pays Trias an annual fee,
payable monthly, of .20% of the Fund's average daily net assets. Trias has
agreed to temporarily reimburse the Fund's total operating expenses to the
extent that they exceed .25% of the average daily net assets of the Fund on
an annual basis. For this purpose "operating expenses" do not include taxes,
interest, extraordianary expenses, brokerage commissions or transaction
costs. Upon notice to the Fund, Trias may terminate this expense absorption
at any time.
By its terms, the Trust's Advisory Agreement will remain in force until June
30, 2000 and from year to year thereafter, subject to annual approval by (a)
the Board of Trustees or (b) a vote of the majority of the Fund's outstanding
voting securities; provided that in either event continuance is also approved
by a majority of the Trustees who are not interested persons of the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval. The Advisory Agreement may be terminated at any time, on sixty
days' written notice, without the payment of any penalty, by the Board of
Trustees, by a vote of the majority of the Fund's outstanding voting
securities, or by Trias. The Advisory Agreement automatically terminates in
the event of its assignment, as defined by the 1940 Act and the rules
thereunder. For the fiscal years ended September 30 1999, 1998, and 1997 the
Fund incurred $64,495, $25,202 and $301, respectively, for the investment
management services.
The Fund retains Millennium Financial LLC, (MFL) to manage the Fund's business
affairs. MFL is located at 10814 Bull Valley Road, Woodstock, IL, and is an
Illinois limited liablity company. Under the terms of an administration
agreement (the "Administration Agreement") with the Fund, it is MFL's
responsibility to provide executive and administrative services to the Trust.
MFL supervises the preparation of the Trust's tax returns, reports to
shareholders of the Trust; reports to and filings with the Securities and
Exchange Commission and state securities commissions and materials for the
meetings of the Board of Trustees. The controlling member of MFL is Janis S.
14
<PAGE>
<PAGE>
England. For performing its responsibilities, the Fund pays MFL an annual
fee, payable monthly, of .05% of the Fund's daily net assets.
By its terms, the Trust's Administration Agreement will remain in force until
June 30, 2000 and from year to year thereafter, subject to annual approval by
(a) the Board of Trustees or (b) a vote of the majority of the Fund's
outstanding voting securities; provided that in either event continuance is
also approved by a majority of the Trustees who are not interested persons of
the Trust, by a vote cast in person at a meeting called for the purpose of
voting such approval. The Administration Agreement may be terminated at any
time, on sixty days' written notice, without the payment of any penalty, by
the Board of Trustees, by a vote of the majority of the Fund's outstanding
voting securities, or by MFL. The Administration Agreement automatically
terminates in the event of its assignment, as defined by the 1940 Act and the
rules thereunder.
Trias and MFL shall not be liable for any losses that may be sustained in the
purchase, holding or sale of any security or for anything done or omitted by
it except acts or omissions involving willful misfeasance of the duties
imposed upon it by its contract with the Trust.
The Fund is responsible for the payment of all expenses incurred in
connection with the organization, registration of shares and operations of
the Fund, including such extraordinary or non-recurring expenses as may
arise, such as litigation to which the Trust may be a party.
The Fund may have an obligation to indemnify the Trust's Officers and
Trustees with respect to such litigation except in instances of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their office. As the Fund's distributor, MFL
bears promotional expenses in connection with the distribution of the Fund's
shares. The Fund will not be responsible for the compensation and expenses
of any officer, Trustee or employee of the Trust who is either (i) an
officer, member or employee of MFL or (ii) an officer, partner or employee of
Trias.
MFL has licensed the use of the name "Millennium," "Millennium Income" or any
derivation thereof in connection with any registered investment company or
other business enterprise with which the Trust is or may become associated.
15
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<PAGE>
In the event MFL ceases to be the Administrator of the Fund, the Fund will be
required to cease using the name.
SECURITIES TRANSACTIONS
Decisions to buy and sell securities for the Fund and the placing of the
Fund's securities transactions and negotiation of commission rates where
applicable are made by Trias and are subject to review by the Trustees. In
the purchase and sale of portfolio securities, Trias seeks best execution for
the Fund, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the brokerage
and research services provided by the broker or dealer. Trias generally
seeks favorable prices and commission rates that are reasonable in relation
to the benefits received.
Generally, the Fund attempts to deal directly with the dealers who make a
market in the securities involved unless better prices and execution are
available elsewhere. Such dealers usually act as principals for their own
account. On occasion, portfolio securities may be purchased directly from
the United States Treasury. Because the portfolio securities of the Fund are
generally traded on a net basis and transactions in such securities do not
normally involve brokerage commissions, the cost of portfolio securities
transactions of the Fund will consist primarily of dealer and underwriting
spreads.
Trias is specifically authorized to select brokers who also provide brokerage
and research to the Fund and/or other accounts over which Trias exercises
investment discretion and to pay such brokers a commission in excess of the
commission another broker would charge if Trias determines in good faith that
the commission is reasonable in relation to the value of the brokerage and
research services provided. The determination may be viewed in terms of a
particular transaction or Trias's overall responsibilities with respect to
the Fund and to accounts over which it exercises investment discretion.
Research services include securities and economic analyses, reports on
issuers' financial conditions and future business prospects, newsletters and
opinions relating to interest trends, general advice on the relative merits
of possible investment securities for the Fund and statistical services and
16
<PAGE>
<PAGE>
information with respect to the availability of securities or purchasers or
sellers of securities. Although this information is useful to the Fund and
Trias, it is not possible to place a dollar value on it. Research services
furnished by brokers through whom the Fund effects securities transactions
may be used by Trias in servicing all of its accounts and not all such
services may be used by Trias in connection with the Fund.
NET ASSET VALUE
The NAV of the shares of the Fund is determined as of 11:30 p.m. Central
time, on each Business Day. Business Day means any day on which the New York
Stock Exchange is open except on days on which Cincinnati or New York banks
are closed for holidays. For a description of the method used to determine
the NAV see "Net Asset Value" in the Prospectus.
Pursuant to Rule 2a-7 promulgated under the 1940 Act, the Fund values its
portfolio securities on an amortized cost basis. The use of the amortized
cost method of valuation involves valuing an instrument at is cost and,
thereafter, assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. Under the amortized cost method of valuation,
neither the amount of daily income nor the NAV of the Fund is affected by any
unrealized appreciation or depreciation of the portfolio. The Board of
Trustees has determined in good faith that utilization of amortized cost is
appropriate and represents the fair value of the portfolio securities of the
Fund. Pursuant to Rule 2a-7, the Fund maintains a dollar weighed average
portfolio maturity of 90 days or less, purchases only securities having
remaining maturities of one year or less and invests only in United States
dollar- denominated securities determined by the Board of Trustees to be of
high quality and to present minimal credit risks. If a security ceases to be
an eligible security, or if the Board of Trustees believes such security no
longer presents minimal credit risks, the Trustees will cause the Fund to
dispose of the security as soon as practicable. The maturity of U.S.
Government obligations which have a variable rate of interest readjusted no
less frequently then annually will be deemed to be the period of time
remaining until the next readjustment of the interest rate.
The Board of Trustees has established procedures designed to stabilize, to
the extent reasonably possible, the price per share of the Fund as computed
for the purpose of sales and redemptions at $1 per share. The procedures
include review of the Fund's portfolio holdings by the Board of Trustees to
determine whether the Fund's NAV, calculated by using available market
quotations, deviates more than one-half of one percent from $1 per share and,
17
<PAGE>
<PAGE>
if so, whether such deviation may result in material dilution or is otherwise
unfair to existing shareholders. In the event the Board of Trustees
determines that such a deviation exists, it will take corrective action as it
regards necessary and appropriate, including the sale of portfolio securities
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturities, the withholding of dividends, the redemption of shares
in kind, or the establishment of a NAV per share by using available market
quotations. The Board of Trustees has also established procedures designed
to ensure that the Fund complies with the quality requirements of Rule 2a-7.
While the amortized cost method provides certainty in valuation, it may
result in periods during which the value of an instrument, as determined by
amortized cost, is higher or lower than the price the Fund would receive if
it sold the instrument. During periods of declining interest rates, the
daily yield on shares of the Fund may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of
its portfolio securities. Thus, if the use of amortized cost by the Fund
resulted in a lower aggregate portfolio value on a particular day, a
prospective investor in the Fund would be able to obtain a somewhat higher
yield than would result from investment in a fund utilizing solely market
values, and existing investors would receive less investment income. The
converse would apply in a period of rising interest rates.
TAXES
The Prospectus describes generally the tax treatment of distributions by the
Fund. This section of the Statement of Additional Information includes
additional information concerning federal taxes.
A Fund's net realized capital gains from securities transactions will be
distributed only after reducing such gains by the amount of any available
capital loss carry forwards. Capital losses may be carried forward to offset
any capital gains for eight years, after which any undeducted capital loss
remaining is lost as a deduction.
A federal excise tax at the rate of 4% will be imposed on the excess, if any,
of the Fund's "required distribution" over actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its net capital gains
recognized during the one year period ending on October 31 of the calendar
year plus undistributed amounts from prior years. The Fund intends to make
distributions sufficient to avoid imposition of the excise tax. The Trust is
18
<PAGE>
<PAGE>
required to withhold and remit to the U.S. Treasury a portion (31%) of
dividend income on any account unless the shareholder provides a taxpayer
identification number and certifies that such number is correct and that the
shareholder is not subject to backup withholding.
REDEMPTION IN KIND
Although the Trust intends to redeem Fund shares in cash, it reserves the
right under circumstances when the Board of Trustees deems it in the best
interests of the Fund's shareholders, to pay the redemption price in whole or
in part in securities of the Fund taken at current value. If any such
redemption in kind is to be made, the Fund intends to make an election
pursuant to Rule 18f-1 under the 1940 Act. This election will require the
Fund to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Fund during any 90 day period for any one
shareholder. Should payment be made in securities, the redeeming shareholder
will generally incur brokerage costs in converting such securities to cash.
Portfolio securities which are issued in an "in-kind" redemption will, to the
extent available, be readily marketable.
HISTORICAL PERFORMANCE INFORMATION
Yield quotations on investments in the Fund are provided on both a current
and an effective (compounded) basis. The current yield for the 7 day period
ended 9/30/99 was 5.06%. Current yield is calculated by determining the net
change in the value of a hypothetical account for a seven calendar day period
(base period) with a beginning balance of one share, dividing by the value of
the account at the beginning of the base period to obtain the base period
return, multiplying the result by (365/7) and carrying the resulting yield
figure to the nearest hundredth of one percent. The effective yield for the
7 day period ended 9/30/99 was 5.19%. Effective yield reflects daily
compounding and is calculated as follows: Effective yield = (base period
return + 1)(365/7)-1. For purposes of these calculations, no effect is given
to realized or unrealized gains or losses (the Fund does not normally
recognize unrealized gains and losses under the amortized cost valuation
method).
To help investors better evaluate how an investment in the Fund might satisfy
their investment objective, advertisements regarding the Fund may discuss
various measures of Fund performance, including current performance ratings
and/or rankings appearing in financial magazines, newspapers and publications
19
<PAGE>
<PAGE>
that track mutual fund performance. Advertisements may also compare
performance (using the calculation methods set forth in the Prospectus) to
performance as reported by other investments, indices and averages. The
performance of the Fund may be compared to that of other money market mutual
funds tracked by mutual fund rating services, various indices of investment
performance or direct investments in United States government obligations or
bank certificates of deposit, or other investments for which reliable
performance data is available. The Fund performance may also be compared
with other well known market rates, including the Federal Funds rate, or
investments for which its institutional clients request comparative data. The
Fund may use the following publications or indices to discuss or compare Fund
performance:
Donoghue's Money Fund Report provides a comparative analysis of
performance for various categories of money market funds. The Fund may
compare performance with any other individual money market fund or any
of the taxable fund categories.
Federal Reserve Publication H.15 and G.13 Selected Interest Rates
provides weekly and monthly averages of various direct investments
including U.S. Treasury Bills and the Federal Funds rate.
Lipper Fixed Income Fund Performance Analysis measures total return and
average current yield for the mutual fund industry and ranks individual
mutual fund performance over specified time periods assuming
reinvestment of all distributions, exclusive of sales loads. The Fund
may provide comparative performance information appearing in the Short
Term U.S. Government Funds or the Institutional Government Money Market
Funds category.
In assessing such comparisons of performance with indices, averages, other
funds, direct investments or market rates, an investor should keep in mind
that the composition of the investments in the reported funds, indices and
averages is not identical to the Fund's portfolio, that the averages are
generally unmanaged and that the items included in the calculations of such
averages may not be identical to the formula used by the Fund to calculate
its performance. Additionally, some direct investments may be insured by, or
direct obligations of, the U.S. Government, while the Fund is not. In
addition, there can be no assurance that the Fund will continue its
comparative performance record.
TRANSFER AND SHAREHOLDER SERVICE AGENT
As described in the Prospectus, Countrywide Fund Services, Inc.
("Countrywide") is the Trust's transfer and dividend disbursing, shareholder
servicing and plan agent. Countrywide maintains the records of each
shareholder account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
20
<PAGE>
<PAGE>
dividend and distribution disbursing agent and performs other shareholder
service functions.
DISTRIBUTOR
Millennium Capital LLC located at 10814 Bull Valley Road, Woodstock,
Illinois.(the "Distributor") is the principal underwriter of the Trust and is
the exclusive agent for distribution of shares of the Fund. Millennium
Capital LLC is an Illinois limited liability company organized on March 9,
1994. The Distributor is controlled by Janis S. England. Shares of the Fund
are offered on a continuous basis. The Fund is available on a no-load basis
(i.e., there are no sales commissions or 12b-1 fees).
CUSTODIAN
Fifth Third Bank has been retained to act as Custodian for the Fund's
investments. Fifth Third Bank acts as the Fund's depository, safekeeps its
portfolio securities, collects all income and other payments with respect
thereto, disburses funds as instructed and maintains records in connection
with its duties.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has been selected as independent public
accountants for the Trust for the fiscal year ending September 30, 1999.
Arthur Andersen LLP, 425 Walnut Street, Cincinnati, Ohio, performs an annual
audit of the Trust's financial statements.
LEGAL COUNSEL
Legal counsel is provided by Bell, Boyd & Lloyd.
21
<PAGE>
<PAGE>
PART C: OTHER INFORMATION
- ----------------------------
Item 23. Exhibits
- ----------------------
(a) Agreement and Declaration of Trust(1)
(b) By-Laws(2)
(c) Not applicable
(d) Form of Advisory Agreement(3)
(e) Form of Underwriting Agreement(3)
(f) Not applicable
(g) Form of Custodian Agreement(2)
(h)(1) Form of Transfer Agency Agreement(1)
(h)(2) Form of Administration Agreement(3)
(h)(3) Form of Accounting Services Agreement(3)
(i)(1) Legal opinion and consent of counsel
(i)(2) Legal opinion and consent of counsel
(j) Consent of Independent Public Accountants
(k) Not applicable
(l) Form of Subscription Agreement(2)
(m) Not applicable
(n) Not applicable
(1) Incorporated by reference from the initial Registration
Statement filed on Form N-1A on or about October 12, 1994.
(2) Incorporated by reference from Pre-Effective Amendment No. 1
filed on Form N-1A on or about February 21, 1995.
(3) Incorporated by reference from Post-Effective Amendment No. 3
filed on Form N-1A on or about January 29, 1998.
Item 24. Persons Controlled by or Under Common Control With Registrant.
- -----------------------------------------------------------------------
The Registrant retains Millennium Financial LLC ("MFL") to act as the
Registrant's Administrator. MFL is an Illinois limited liability company
organized on January 1, 1994. MFL is controlled by Janis S. England.
Millennium Capital LLC ("MCL") is the principal underwriter for the
Registrant. MCL is an Illinois limited liability company organized on
March 9, 1994. MCL is controlled by Janis S. England.
Trias Capital Management, Inc is the investment adviser for the Registrant.
Trias is a Delaware C corporation. Trias is controlled by James A.
Casselberry, Jr.
Item 25. Indemnification:
- --------------------------
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933
may be permitted to trustees, officers and controlling persons of the
C-1
<PAGE>
<PAGE>
Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant is aware that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Act and, therefore, is 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 trustees, directors,
officers or controlling persons of the Registrant in connection with the
successful defense of any act, suit or proceeding) is asserted by such
trustees, directors, officers or controlling persons in connection with the
shares 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 Act and will be governed
by the final adjudication of such issues.
Item 26. Business and Other Connections of Investment Adviser:
- --------------------------------------------------------------
Trias Capital Management, Inc. is a registered investment adviser providing
investment advice to the Registrant.
Position with Other Business, Profession,
Name Adviser Vocation or Employment
---- ------------- ---------------------------
James A. Casselberry, Jr. Chairman and CEO None
Michael L. Lucas President None
Nora J. Bustamante COO None
James A. Wilkinson Executive VP None
Item 27. Principal Underwriters:
- -------------------------------
(a) None.
(b) MCL acts as principal underwriter of the Registrant. Information
about the officers and members of MCL is as follows:
Name and Positions and Offices Positions and Offices
Principal Business Address With Underwriter With Registrant
- -------------------------- --------------------- ---------------------
Janis S. England Chairman and Trustee and Treasurer
10814 Bull Valley Road Managing Member
Woodstock, IL 60098
John A. Lancaster Vice President and None
10814 Bull Valley Road Member
Woodstock, IL 60098
(c) Not applicable.
C-2
<PAGE>
<PAGE>
Item 28. Location of Accounts and Records:
- ------------------------------------------
All such accounts, books and other documents are maintained (i) at the
offices of Registrant's investment adviser, Trias Capital Management, Inc,
140 S. Dearborn, Chicago, IL 60603.;(ii) at the offices of Registrant's
distributor, Millennium Capital LLC or at the offices of the Registrant's
Administrator. Millennium Financial LLC, 10814 Bull Valley Road, Woodstock,
Illinois 60098; (iii) at the offices of Registrant's custodian, The Fifth
Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263; or (iv) at
the offices of the Registrant's accountant and transfer agent, Countrywide
Fund Services, Inc., 321 Walnut Street, 21st Floor, Cincinnati, Ohio 45202.
Item 29. Management Services.
- ----------------------------
Not applicable.
Item 30. Undertakings:
- ---------------------
(a) Not applicable.
(b) Not applicable.
(c) Registrant hereby undertakes, if requested to do so by holders of at
least 10% of the registrant's outstanding shares, to call a meeting
of shareholders for the purpose of voting upon the question of
removal of a trustee or trustees and to assist in communications with
other shareholders as required by Section 16(c) of the Act.
C-3
<PAGE>
<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
registration statement to be signed on its behalf by the undersigned,
thereto duly authorized in the City of Chicago, and State of Illinois on
the 30th day of November 1999.
MILLENNIUM INCOME TRUST
By:/s/ JAMES A. CASSELBERRY, JR.
--------------------------------------
James A. Casselberry, Jr.,President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
/s/ JAMES A. CASSELBERRY, JR. Chairman of the Board, Trustee and
- --------------------------------- President (Chief Executive Officer)
James A. Casselberry, Jr.
/s/ JANIS S. ENGLAND Trustee, Treasurer and Secretary
- --------------------------------- (Chief Financial Officer and Chief
Janis S. England Accounting Officer)
/s/ ALBERT R. GRACE, JR. Trustee
- ---------------------------------
Albert R. Grace, Jr.
/s/ MARJORIE H. O'LAUGHLIN Trustee
- ---------------------------------
Marjorie H. O'Laughlin
/s/ SALLY M. TASSANI Trustee
- ---------------------------------
Sally M. Tassani
/s/ BARBARA E. WALLACE Trustee
- ---------------------------------
Barbara E. Wallace
<PAGE>
<PAGE>
Exhibit (i)(1)
BELL BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, IL 60602-4207
312 372-1121 Fax 312 372 2098
OFFICES IN CHICAGO
AND WASHINGTON, D.C.
December 6,1999
Millennium Income Trust
140 S. Dearborn Suite 1620
Chicago, Il 60603
Ladies and Gentlemen:
We have acted as counsel for Millennium Income Trust, a Massachusetts
business trust (the "Trust"), in connection with the offer and sale from time
to time of an indefinite number of shares of beneficial interest (the"Shares")
of the Treasurers' Government Money Market Fund (the "Fund"), a series of the
Trust registered under the Securities Act of 1933, as amended (the "Act"), by
a Registration Statement on Form N-1A (No. 33-85196) (the "Registration
Statement").
In this connection, we have examined the Trust's records of Trustee
action, its By-Laws and its Agreement and Declaration of Trust, as amended to
date. We have examined such other documents as we deem necessary for the
purposes of this opinion.
We assume that, upon sale of the Shares the Trust will receive the net
asset value thereof. We also assume that, in connection with any offer and
sale of Shares the Trust will take proper steps to effect compliance with
applicable federal and state laws regulating offering and sales of securities.
We are of the opinion that the Trust is authorized to issue an unlimited
number of Shares, and that, assuming the Shares are issued and sold in
accordance with the terms and conditions set forth in the Trust's prospectus
relating to the Shares and forming part of the Trust's Registration Statement,
as from time to time amended or supplemented, and the authorized consideration
therefor is received by the Trust, the Shares will be validly issued, fully
paid and nonassessable by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust or
any series of the Trust (a "Series"). However, the Agreement and Declaration
of Trust disclaims shareholder liability for acts or obligations of the Trust
or any Series and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or
<PAGE>
<PAGE>
Trustees. The Agreement and Declaration of Trust provides for indemnification
out of property of a Series for all loss and expense of any shareholder of a
Series held personally liable for the obligation of the Trust or a Series.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a Series itself
would be unable to meet its obligations.
In giving this opinion, we have relied upon the opinion of Ropes & Gray
to us dated December 6, 1999 a copy of which is attached hereto and have made
no independent inquiry with respect to any matter covered by such opinion.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent , we o not admit that we are
in the category of persons whose consent is required under Section 7 of the
Act.
Sincerely,
BELL, BOYD & LLOYD
/s/ Bell, Boyd & Lloyd
<PAGE>
<PAGE>
Exhibit (i)(2)
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
617-961-7000
December 6, 1999
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street
Suite 3300
Chicago, Illinois 60602-4207
Ladies and Gentlemen:
We are furnishing this opinion in connection with the proposed offer and
sale from time to time of an indefinite number of shares of beneficial
interest (the "Shares") of Treasurers' Government Money Market Fund, a series
(the "Series") of Millennium Income Trust (the "Trust"), pursuant to the
Trust's Registration Statement on Form N-1A under the Securities Act of 1933,
as amended (File Nos. 811-8816, 33-85196).
We are familiar with the action taken by the Trustees of the Trust to
authorize the issuance of the Shares. We have examined the Trust's records of
Trustee action, its By-Laws and its Agreement and Declaration of Trust on file
at the Office of the Secretary of State of The Commonwealth of Massachusetts.
We have examined such other documents as we deem necessary for the purposes of
this opinion.
We assume that, upon sale of the Shares, the Trust will receive the net
asset value thereof. We also assume that, in connection with any offer and
sale of the Shares, the Trust will take proper steps to effect compliance with
applicable federal and state laws regulating offerings and sales of
securities.
Based upon and subject to the foregoing, we are of the opinion that the
Trust is authorized to issue an unlimited number of Shares, and that, assuming
the Shares are issued and sold in accordance with the terms and conditions set
forth in the Trust's prospectus forming part of the Trust's Registration
Statement, as from time to time amended or supplemented, and the
<PAGE>
<PAGE>
authorized consideration therefor is received by the Trust, they will be
validly issued, fully paid and nonassesable by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust or
the Series. However, the Agreement and Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and the Series and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the Trustees. The
Agreement and Declaration of Trust provides for indemnification out of the
property of the Series for all loss and expense of any shareholder of the
Series held personally liable for the obligations of the Trust or the Series.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Series itself
would be unable to meet its obligations.
We consent to the Filing of this opinion as an exhibit to the aforesaid
Registration Statement.
Very Truly yours
/s/ Ropes & Gray
<PAGE>
<PAGE>
EXHIBIT (j)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in
this Post-Effective Amendment No. 5 of our report dated November 29, 1999
and to all references to our Firm included in or made a part of this
Post-Effective Amendment.
/s/ ARTHUR ANDERSEN LLP
------------------------------
Arthur Andersen LLP
Cincinnati, Ohio
November 30, 1999
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<INVESTMENTS-AT-COST> 65,380,653
<INVESTMENTS-AT-VALUE> 65,380,653
<RECEIVABLES> 266,474
<ASSETS-OTHER> 8,984
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 65,656,111
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 115,337
<TOTAL-LIABILITIES> 115,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 65,560,153
<SHARES-COMMON-STOCK> 65,560,153
<SHARES-COMMON-PRIOR> 33,707,806
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 65,540,774
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,668,563
<OTHER-INCOME> 0
<EXPENSES-NET> 80,616
<NET-INVESTMENT-INCOME> 1,587,947
<REALIZED-GAINS-CURRENT> (19,379)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,568,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,587,947
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 171,492,461
<NUMBER-OF-SHARES-REDEEMED> (140,481,515)
<SHARES-REINVESTED> 841,401
<NET-CHANGE-IN-ASSETS> 31,832,968
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 64,495
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 223,977
<AVERAGE-NET-ASSETS> 33,406,547
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .049
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.049)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .25
</TABLE>
