SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Thornburg Investment Trust
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
___________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________
5) Total fee paid:
___________________________________________________________________
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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DEFINITIVE COPY
THORNBURG INVESTMENT TRUST
Thornburg Limited Term U.S. Government Fund
Thornburg Limited Term Income Fund
Thornburg Intermediate Municipal Fund
Thornburg New Mexico Intermediate Municipal Fund
Thornburg Florida Intermediate Municipal Fund
Thornburg Value Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Thornburg Investment Trust:
A Special Meeting of Shareholders of each Fund identified above, each of
which is a series of Thornburg Investment Trust (the "Company"), will be held
at 119 East Marcy Street, Suite 202, Santa Fe, New Mexico on April 16, 1996
at 2:00 p.m. prevailing Mountain Time, to act on the matters described below.
(1) To consider a restructuring of the manner in which certain
expenses are charged to the Company's Funds, by restating the
Investment Advisory Agreement applicable to each of the Funds
and adopting an Administrative Services Agreement, to
reallocate the current services performed and the current fees
paid to the investment adviser so that a portion of these
services will be performed and fees associated with them will
be paid pursuant to the new Administrative Services Agreement.
This restructuring would not cause Fund expenses to increase
at current asset levels.
(2) To elect Trustees.
(3) To consider ratification of the appointment by the Trustees of
McGladrey & Pullen, LLP, as independent auditors of the
Company for the current fiscal year.
(4) To transact such other business as may properly come before
the Meeting and any adjournments thereof.
Only shareholders of record on February 16, 1996 will be entitled to notice
of, and to vote at the meeting or any adjournments thereof.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWNED
ON THE RECORD DATE
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
By Order of the Trustees
DAWN B. SHAPLAND
Secretary
Santa Fe, New Mexico
February 27, 1996
DEFINITIVE COPY
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OF
THORNBURG INVESTMENT TRUST
Thornburg Limited Term U.S. Government Fund
Thornburg Limited Term Income Fund
Thornburg Intermediate Municipal Fund
Thornburg New Mexico Intermediate Municipal Fund
Thornburg Florida Intermediate Municipal Fund
Thornburg Value Fund
119 East Marcy Street, Suite 202
Santa Fe, New Mexico 87501
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Trustees of Thornburg Investment Trust (the "Company") for use
at the Company's Special Meeting of Shareholders (the "Meeting") to be held
at 119 East Marcy Street, Suite 202, Santa Fe, New Mexico, on April 16, 1996
at 2:00 p.m. prevailing Mountain Time, and at any postponement or adjournment
thereof.
The Proxy Statement and the accompanying Notice of Special Meeting of
Shareholders and form of proxy are being mailed on or about February 28, 1996
to shareholders of record on the record date.
GENERAL MATTERS
Any person giving a proxy may revoke it at any time prior to its use.
Signed proxies received by the Company in time for voting and not so revoked
will be voted in accordance with the directions specified in the proxy. If
no instructions are given, the proxy will be voted in favor of all proposals,
and at the discretion of the proxy holders, on any other matters which may
properly come before the Meeting or any postponement or adjournment thereof.
The Trustees do not know of any actions to be considered at the Meeting other
than those referred to in the Notice of Special Meeting.
A majority of the outstanding shares of each of the Company's Funds,
represented in person or by proxy, will be required to constitute a quorum at
the Meeting. Abstentions and broker non-votes (i.e., proxies from brokers or
nominees indicating that they have not received instructions from the
beneficial owners on an item for which the brokers or nominees do not have
discretionary power to vote) will be treated as present for determining the
existence of a quorum. If a proposal must be approved by a percentage of
votes cast on the proposal, abstentions and broker non-votes will not be
counted and will have no effect on the result of the vote. If the proposal
must be approved by a percentage of voting securities present at the Meeting,
abstentions will be counted as votes against the proposal and broker non-
votes will not be counted and will have no effect on the result of the vote.
The required vote for each proposal and the manner of counting votes is
described below under the caption "Required Votes."
If a quorum is present at the Meeting, but sufficient votes to approve
any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will be approved if the votes
cast in favor of adjournment exceed the votes cast opposing the adjournment.
It is anticipated that the persons named as proxies will vote in favor of any
such adjournment.
Costs of soliciting proxies will be borne by the Company. In addition
to solicitation of proxies by use of the mails, some of the officers of the
Company and persons affiliated with Thornburg Management Company, Inc., the
investment adviser to the Company, and Thornburg Securities Corporation, the
distributor of shares of the Company, may, without remuneration, solicit
proxies personally or by telephone, telegram or facsimile transmission. The
Company also may retain D. F. King & Co., Inc., a professional proxy
solicitor, or another professional proxy solicitor to assist in soliciting
proxies. The solicitor's fee is estimated at $5,000 to $10,000, plus
expenses, depending upon the extent of the solicitor's activities.
On February 16, 1996, the record date for the determination of
shareholders entitled to vote at the Meeting, there were an aggregate of
44,542,781.24 shares entitled to vote, constituting all of the outstanding
voting securities of the Company, and the issued and outstanding shares for
each Fund and their respective classes on the record date were as follows:
Fund Class A Class C
- ------------------------------------------------ ------- -------
Thornburg Limited Term U.S. Government Fund 11,344,925.84 201,046.49
Thornburg Limited Term U.S. Government Fund 1,975,975.84 148,831.11
Thornburg Intermediate Municipal Fund 17,941,713.11 399,655.45
Thornburg New Mexico Intermediate Municipal Fund 10,176,146.35 -
Thornburg Florida Intermediate Municipal Fund 1,510,057.22 56,952.74
Thornburg Value Fund 727,305.03 60,172.06
Each full share of the Company outstanding on the record date is entitled to
one full vote and each fractional share outstanding on that date is entitled
to a proportionate share of one vote.
Required Votes
Proposal 1. Votes will be counted separately for each of the Funds.
- ---------- Proposal 1 must be approved by affirmative vote of a majority of
the outstanding voting securities of each Fund, which is defined
as the lesser of (i) a majority of the outstanding shares of
each Fund, or (ii) 67% or more of the shares of the Fund
represented in person or by proxy at the Meeting if more than
50% of the outstanding shares of the Fund are represented.
Proposal 2. The six nominees receiving the highest number votes cast at
- ---------- the meeting shall be elected.
Proposal 3. Votes will be counted separately for each of the Funds.
- ---------- Proposal 3 must be approved by a majority of all votes cast at
the Meeting on Proposal 3.
If any proposal is not approved as described, the Trustees will consider what
appropriate action may be taken.
THE COMPANY WILL FURNISH A COPY OF THE FUNDS' MOST RECENT ANNUAL REPORTS
AND SEMIANNUAL REPORTS WITHOUT CHARGE TO ANY SHAREHOLDER REQUESTING THE
REPORTS BY TELEPHONING THE COMPANY AT (800) 847-0200 OR WRITING TO THE
COMPANY AT 119 EAST MARCY STREET, SUITE 202, SANTA FE, NEW MEXICO 87501.
PROPOSAL 1
RESTRUCTURING SERVICES AND EXPENSES
Introduction
The Company's Trustees determined at a meeting held on December 18, 1995
to revise the manner in which certain investment management and
administrative services are provided to each class of shares offered by each
of the Company's Funds. Briefly described, the Trustees determined to
separate the investment management services provided by Thornburg Management
Company, Inc. ("TMC") from the basic administrative services TMC provides.
The investment management services will continue to be provided to each Fund
by TMC for a reduced fee in the same manner those services are provided
today. The administrative services will be provided to each class of shares
under a new, separate Administrative Services Agreement for a separate fee.
The administrative services fee will be offset by the reduction in the
investment management fee, at current levels. The reason for these changes
is to better associate the provision of existing and future services to
shareholders with the expenditures made to obtain these services. These
changes also will permit greater flexibility in creating new classes of
shares with different expense structures. The Trustees believe that this
will broaden the Company's appeal in the marketplace, increase the Company's
size, and enhance its operating efficiencies so that shareholders may enjoy
lower fees and costs over time because of improved economies of scale. The
services furnished to the Funds after the restructuring will remain the same
or be improved.
Existing shareholders are not expected to pay higher fees or costs at
current asset levels because of the proposed revisions. The table below
shows what the proposed advisory and administrative services fees would have
been for the fiscal year ended September 30, 1995 as if the restructuring had
been in place for the year, and compares the total of the proposed fees to
the actual fees accrued by TMC under the Investment Advisory Agreement for
the year ended September 30, 1995. Decreases in advisory fees would have
been offset by the addition of the administrative services fees.
Summary: Proposed Fees Fiscal Year Ended 9/30/95
-------------------------------------------------
Total of Management
Proposed Fee
Advisory Accrued
Proposed and Current
Proposed Adminis- Adminis- Agreement
Advisory tration tration FY ended
Fund Fee Fee Fees 9/30/95
- ---------------------- ------------ ------------ ---------- ---------
Thornburg Limited Term $ 569,479 $ 189,884 $ 759,363 $ 759,363
U.S. Government Fund
Thornburg Limited Term 107,663 26,948 134,611 134,611
Income Fund
Thornburg Intermediate 1,082,481 270,708 1,353,189 1,353,189
Municipal Fund
Thornburg New Mexico 692,279 173,126 865,405 865,405
Intermediate Municipal Fund
Thornburg Florida Intermediate 58,716 14,703 73,419 73,419
Municipal Fund
Thornburg Value Fund (commenced operations on October 2, 1995)
The figures in the table display accrued fees, before any waiver of fees.
Figures are not shown for Thornburg Value Fund, which commenced operations on
October 2, 1995.
The specific aspects of this proposal are described below in detail.
Description of Proposal
TMC currently provides both investment management and administrative
services under the Investment Advisory Agreement. The proposal contemplates
restating the Investment Advisory Agreement to limit its scope to investment
management services and related activities only, and to adopt for each class
of shares offered by the Funds an Administrative Services Agreement governing
administrative services. The restated Investment Advisory Agreement and the
form of Administrative Services Agreement accompany this Proxy Statement as
Exhibits A and B, respectively.
The Investment Advisory Agreement applicable to each Fund and the date
of its last consideration by shareholders is shown below:
Last Considered
Fund Date of Agreement By Shareholders
- ------------------------------ ----------------- ---------------
Thornburg Limited Term November 6, 1987 March 25, 1988
U.S. Government Fund
Thornburg Intermediate June 20, 1991 January 24, 1992
Municipal Fund
Thornburg New Mexico Inter- June 20, 1991 January 24, 1992
mediate Municipal Fund
Thornburg Limited Term September 30, 1992 September 30, 1992
Income Fund
Thornburg Florida Intermediate January 31, 1994 January 31, 1994
Municipal Fund
Thornburg Value Fund September 30, 1995 September 30, 1995
The Investment Advisory Agreement applicable to each Fund has been
continued on an annual basis by an annual affirmative vote of the Trustees of
the Company, including a majority of the Trustees who are not interested
persons of TMC or its affiliates, or officers or employees of the Company,
cast in person at a meeting called for the purpose of voting on that
approval. The Investment Advisory Agreement applicable to each Fund was most
recently continued for an additional 12 months to November 6, 1996 by the
Trustees, at a meeting on September 21, 1995, and will be considered again
for continuation in late summer or autumn of 1996.
Investment management services provided by TMC under the Trustees'
supervision comprise the largest part of TMC's duties under the current
Investment Advisory Agreement, and include the review and selection of
portfolio securities, buying and selling of portfolio securities, periodic
evaluations of the credit quality of portfolio securities and issuers, market
research and evaluation of general economic conditions, and related
activities. Investment management services and related activities are
separable from administrative functions currently provided under the
Investment Advisory Agreement. These administrative functions include
bookkeeping and accounting for class income and expenses and the allocation
of those items, review and administration of functions provided by outside
service providers such as the custodian and transfer agents and the conduct
of shareholder communications through written reports, telephone advice and
other means.
The Trustees have determined, subject to shareholder approval, to
restate the Investment Advisory Agreement applicable to each Fund so that it
applies only to the investment management services common to all classes of
the Company's Funds. Upon approval of this proposal, the rate of the
investment advisory fee charged each Fund will be reduced accordingly, as
shown in the following table:
Thornburg Limited Term
U.S. Government Fund
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $1 billion .50% .375%
$1 billion to $2 billion .45% .325%
Over $2 billion .40% .275%
Thornburg Limited Term Income Fund;
Thornburg Intermediate Municipal Fund;
Thornburg New Mexico Intermediate Municipal Fund;
Thornburg Florida Intermediate Municipal Fund
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $500 million .625% .50%
$500 million to $1 billion .575% .45%
$1 billion to $1.5 billion .525% .40%
$1.5 billion to 2 billion .475% .35%
Over $2 billion .400% .275%
Thornburg Value Fund
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $500 million 1.00% .875%
$500 million to $1 billion .95% .825%
$1 billion to $1.5 billion .90% .775%
$1.5 billion to 2 billion .85% .725%
Over $2 billion .80% .675%
These rates are calculated on average daily net assets and are paid
monthly. At current asset levels, the new rate is 75% of the rate now
charged to the limited Term U.S. Government Fund, 87.5% of the rate now
charged to the Value Fund, and 80% of the rates now charged the other Funds.
The decrease would be offset by the addition of the administrative services
fee, at current asset levels.
The Trustees also have adopted, subject to shareholder approval, an
Administrative Services Agreement for Class A and Class C shares of each of
the Funds under which TMC will provide to each class the administrative
functions which will no longer be provided for TMC under the restated
Investment Advisory Agreement. These administrative functions include
bookkeeping and accounting for Fund income and expenses and the allocation of
those items, review and administration of functions provided by outside
service providers such as the custodian and transfer agents and the conduct
of shareholder communications through written reports and telephone advice.
The fee paid to TMC for these functions is calculated at an annual percentage
of .125 of 1% of each class's average daily net assets, paid monthly,
together with any applicable sales or similar tax.
The restated Investment Advisory Agreement applicable to each Fund will
continue to provide that the Company will pay all of its expenses, subject to
TMC's reimbursement obligation described below. These expenses include, but
are not limited to, taxes, brokerage fees and commissions, commitment fees,
distribution expenses, certain insurance premiums, interest charges, fees and
expenses of the custodian, transfer agent and dividend disbursing agent,
telecommunications expenses, auditing and legal expenses, costs of forming
the Company and maintaining its corporate existence, compensation of officers
and employees of the Company, fees and travel expenses of outside Trustees,
costs of other personnel performing service for the Company who are not
officers of TMC or its affiliates, costs of federal and state registration
fees and expenses, expenses of printing and distributing the Company's
prospectus and share certificates and printing applications for shareholder
accounts, and the fees payable under the Advisory Agreements, Administrative
Services Agreements and applicable Rule 12b-1 plans and agreements. The
restated Agreements further provide that the Funds will pay any applicable
sales or similar taxes on TMC's fee. No such tax is currently imposed.
The restated Investment Advisory Agreement applicable to each Fund
provides that it may be terminated at any time without penalty by vote of the
Trustees or by vote of a majority of the outstanding voting securities of the
Fund on 60 days' notice by the Company to TMC, or by TMC on 60 days' notice
to the Company, and will automatically terminate in the event of its
assignment. The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence on the part of TMC, or of reckless
disregard of its obligations thereunder, the Company shall not hold TMC
liable for any action or failure to act in accordance with its duties
thereunder.
The Administrative Services Agreement provides that it may be terminated
at any time without penalty by vote of the Trustees or by vote of a majority
of the outstanding voting securities of the share class to which the
Agreement relates, on 60 days' notice to the Company. The Administrative
Services Agreement provides that in the absence of willful misfeasance, bad
faith or gross negligence on the part of TMC, or of reckless disregard of its
obligations under the Agreement, the Company will not hold TMC liable for any
action or failure to act in accordance with its duties thereunder.
REASONS FOR RESTRUCTURING
The reason for this reorganization of functions is to better allocate
costs for specific services. This improved allocation will permit each Fund
to create one or more new classes of shares which will pay the same cost of
investment management under the restated Investment Advisory Agreement, but
may pay a different administrative fee under an Administrative Services
Agreement specific to each new class, depending upon the administrative
functions required for the new class.
The Trustees believe that the ability of each Fund to offer new classes
of shares more closely tailored to specific purchasers may increase the total
assets of the Funds. Increases in total assets can have the following
benefits for shareholders:
(a) increases in total assets will reduce the investment management fee
charged to each share as assets of a Fund increase beyond each step in the
investment advisory fee schedule displayed above;
(b) other expenses also tend to decline with increases in a mutual
fund's total assets;
(c) a mutual fund may obtain the benefit of increased bargaining power
that increased size brings in dealing for reduced brokerage commissions or
dealer spreads on purchase and sale of securities;
(d) developments within the mutual fund industry including networking
systems, innovative methods of share distribution and new modes for
delivering shareholder services may favor larger mutual funds, and may be
denied completely to smaller mutual funds; and
(e) larger mutual funds or mutual funds which are members of fund
"families" may have advantages in managing and disposing of assets in
declining markets.
The Trustees of the Company recommend a vote FOR Proposal 1.
ADDITIONAL INFORMATION ABOUT TMC
Thornburg Management Company, Inc., a Delaware corporation, is an
investment adviser registered under the Investment Company Act of 1940. All
of the voting capital stock of TMC is owned by Mr. H. Garrett Thornburg, Jr.,
who is president and sole director of TMC and is President and a Trustee of
the Company. The principal office of TMC and Mr. Thornburg is 119 East Marcy
Street, Suite 202, Santa Fe, New Mexico 87501.
The officers of the Company who are officers or directors of TMC are as
follows:
Name Position With Company Position With TMC
H. Garrett Thornburg, Jr. Chairman of Trustees, Director, President
Trustee, President
Brian J. McMahon Vice President Managing Director
Steven J. Bohlin Treasurer Managing Director
Ken Ziesenheim Vice President Managing Director
Dawn B. Shapland Secretary Secretary, Managing
Director
John Ariola Assistant Vice President Employee
Susan Rossi Assistant Vice President Employee
Jonathan Ullrich Assistant Vice President Employee
Christine Thompson Assistant Vice President Employee
The address of each individual is 119 East Marcy Street, Suite 202, Santa Fe,
New Mexico 87501.
TMC is also investment adviser to the following mutual funds having
investment objectives similar in certain respects to those of a number of the
Company's Funds.
Asset Size
Fund Advisory Fee Rate (as of December 31, 1995)
- ---------------------- ----------------- -------------------------
Thornburg Limited Term .70% $912,000,000
Municipal Fund
National Portfolio
Thornburg Limited Term .75% $ 98,600,000
Municipal Fund
California Portfolio
Each of the foregoing mutual funds are separate series or portfolios of
Thornburg Limited Term Municipal Fund, Inc., a registered series investment
company. Each of these funds has an agreement with TMC which provides for a
declining advisory fee rate with increases in asset size; the fee rates shown
above are based upon the respective asset sizes shown above for each fund.
For the fiscal year of the funds ending June 30, 1995, TMC reduced its
investment advisory fee for Thornburg Limited Term Municipal Fund California
Portfolio. TMC is also investment subadviser to Daily Tax-Free Income Fund,
Inc. a mutual fund having assets of approximately $620 million as of December
31, 1995, and receives an annual fee of .10% of that fund's assets for its
services.
TMC agrees to waive portions of its investment advisory fee or assume
certain Company expenses so that total Company expenses (including advisory
fees and distribution expenses paid pursuant to the proposed plan and
agreement of distribution, but exclusive of interest, taxes, brokerage and
extraordinary expenses) do not in any year exceed the limits prescribed by
any state in which the Company's shares are qualified for sale. The Company
believes that currently the most restrictive expense ratio limitation imposed
by any state is 2.5% of the first $30,000,000 of a Fund's average daily net
assets, 2% of the next $70 million in assets and 1.5% of any additional net
assets in excess of $100 million. For the purpose of this obligation to
reimburse expenses, the Company's annual expenses are estimated and accrued
daily, and any appropriate estimated payments are made to it by TMC. The
Company may from time to time hire its own employees or contract to have
services performed by third parties, and the management of the Company
intends to do so whenever it appears advantageous to the Company. The
Company's expenses for employees and such services are among the expenses
subject to the expense limitation.
TMC performs for the Company certain telephone answering services
previously performed by the Company's transfer agent, National Financial Data
Services, Inc. ("NFDS"). These telephone services include answering
telephone calls placed to the Company or its transfer agent by shareholders,
securities dealers and others through the Company's toll fee number, and
responding to those telephone calls by answering questions, effecting certain
shareholder transactions described in the Company's current prospectus, and
performing such other, similar functions as the Company may reasonably
prescribe from time to time. The Company currently pays one dollar for each
telephone call, which was the charge previously imposed by the Company's
transfer agent for this service. The Company paid reimbursements to TMC
under this arrangement of $21,451.50 for all of the Company's Funds during
the fiscal year ended September 30, 1995.
COMPANY RULE 12B-1 PLANS
Class A shares of each Fund are subject to a Class A Service Plan under
which TMC makes payments to securities dealers and other financial
institutions and organizations to obtain various shareholder related
services. The Class A Service Plans permit each Fund to reimburse TMC for
these payments and other similar expenditures it may make at an annual rate
up to .25% of the Fund's net assets attributable to Class A shares. For the
year ended September 30, 1995 the Funds paid to TMC the following amounts
under the Class A Service Plans:
Thornburg Limited Term U.S. Government Fund $345,423
Thornburg Limited Term Income Fund $ 52,571
Thornburg Intermediate Municipal Fund $500,756
Thornburg New Mexico Intermediate Municipal Fund $332,809
Thornburg Florida Intermediate Municipal Fund $ 20,103
Thornburg Value Fund * -
* (Commenced operations October 2, 1995).
Class C shares of each Fund have adopted a Class C Service Plan which is
substantially similar to the Class A Service Plan for each Fund, under which
TMC makes payments to securities dealers and other financial institutions and
organizations to obtain various shareholder related services. The Class C
Service Plans permit each of these Funds to reimburse TMC for these payments
at an annual rate up to .25% of the Fund's net assets attributable to Class
C shares. Each Fund also has adopted a Class C Distribution Plan applicable
to Class C shares under which the Fund will pay to Thornburg Securities
Corporation ("TSC") on a monthly basis an annual distribution fee of up to
.75% of the average daily net assets attributable to Class C shares of the
Fund. This distribution fee is in addition to the service fee described
above and is charged to and reduces the income allocated to Class C shares.
TSC uses these amounts principally to compensate dealers (including banks)
who sell Class C shares. For the year ended September 30, 1995, the Funds
paid the following amounts to TMC and TSC under the Class C Service and
Distribution Plans: Thornburg Limited Term U.S. Government Fund $11,219;
Thornburg Limited Term Income Fund $3,276; Thornburg Intermediate Municipal
Fund $17,809; Thornburg New Mexico Intermediate Municipal Fund $793;
Thornburg Florida Intermediate Municipal Fund $670; Thornburg Value Fund - 0
- - (commenced operations October 2, 1995).
Rates of payment and the services provided under the Class A and Class
C Service Plans, and the Class C Distribution Plans, will not be affected by
approval of Proposal 1.
DISTRIBUTION AGREEMENT
Thornburg Securities Corporation ("TSC") acts as principal underwriter
of the Funds' shares and has its offices at 119 East Marcy, Suite 202, Santa
Fe, New Mexico 87501. All of the issued and outstanding shares of TSC's
voting stock are owned by H. Garrett Thornburg, Jr., the controlling
shareholder of TMC. The Distribution Agreement provides that TSC will use
its best efforts to distribute the Funds' shares, and that TSC will pay
certain costs incurred in the distribution of shares including the printing
and distribution of prospectuses and other marketing materials, commissions
and advertising costs. For the year ended September 30, 1995, the following
table displays the gross commissions received by TSC and amounts TSC paid to
dealers and others selling the Company's shares as compensation for selling
shares:
Amounts Paid
Fund Gross Commissions to Dealers
- -------------------------- ----------------- ------------
Thornburg Limited Term $176,000 $149,000
U.S. Government Fund
Thornburg Limited Term 134,000 117,000
Income Fund
Thornburg Intermediate 707,000 645,000
Municipal Fund
Thornburg New Mexico 287,000 259,000
Intermediate Municipal Fund
Thornburg Florida Intermediate 63,000 55,000
Municipal Fund
Thornburg Value Fund * - 0 - - 0 -
* (commenced operations October 2, 1995)
PROPOSAL 2
ELECTION OF TRUSTEES
The following table displays information concerning each of the nominees
for Trustee of the Company. Each nominee has agreed to hold office until a
successor is elected and qualified or until the Trustee's death, resignation
or removal from office. Because the Company does not hold annual meetings,
Trustees will hold office for an indeterminate period. Messrs. Ault, Ater,
Smith and Thornburg, named below as four of the six nominees, are currently
Trustees and have served in that capacity since originally elected or
appointed to serve. Messrs. Ault, Smith and Thornburg have served since the
Company's inception in June, 1987, and Mr. Ater was appointed to serve in
1995. Mr. Weyhrauch and Mr. McMahon were nominated by the Trustees on
February 2, 1996, each to fill a vacancy created by an increase in the number
of Trustees. Messrs. Ater, McMahon and Weyhrauch are standing for election
by shareholders for the first time at the Meeting.
A shareholder using the enclosed Proxy may vote for or against any or
all of the nominees. IF THE PROXY CARD IS PROPERLY EXECUTED BUT UNMARKED, IT
WILL BE VOTED FOR ALL OF THE NOMINEES. The six nominees receiving the
highest number of votes cast at the meeting shall be elected, provided that
a quorum is present. Each of the nominees has consented to be named as a
nominee in the Proxy Statement. The Trustees have no reason to believe that
any of the nominees will become unavailable for election as a Trustee, but if
that should occur before the Meeting, proxies will be voted for persons
recommended by the Trustees, in the discretion of the individuals holding the
proxies.
Funds (Shares As a
Beneficially Percentage
Position Owned) of Named Fund
Name (Age) Principal Occupations 2/16/96 2/16/96
- ----------------------------------- ----------------------------------- ------------ ----------
H. Garrett Thornburg, Jr. (50) Trustee, Chairman and President of Value Fund
<FN1> Company since its inception in 1987. 377,943 <FN2> 47.99%
119 East Marcy Street, Suite 202 Director, Chairman (since January
Santa Fe, NM 87501 of 1987) and Treasurer of Thornburg
Limited Term Municipal Fund, Inc. New Mexico
(a mutual fund investing in certain Muni Fund
municipal securities) since its 413,983 <FN3> 4.07%
inception in 1984; Chairman and
Director of Thornburg Mortgage Limited Term
Advisory Corporation since its Income Fund
formation in 1989; Chairman and 81,841 <FN4> 3.85%
Director of Thornburg Mortgage
Asset Corporation (real estate
investment trust) since its
formation in 1993; Executive Vice
President of Daily Tax Free Income
Fund, Inc. (mutual fund) since its
formation in 1982 and a Director
from 1982 to June 1993.
David A. Ater (49) Trustee since 1995.
Post Office Box 1052 Principal in Ater & Ater Associates
Santa Fe, NM 87504 Santa Fe, NM (developer, planner
and broker of residential and
commercial real estate) since 1990;
owner, developer and broker for
various real estate projects;
Director of Thornburg Mortgage Asset
Corporation (real estate investment
trust) since 1994.
J. Burchenal Ault (69) Trustee of Company since its
119 East Marcy Street, Suite 202 inception in 1987. Independent
Santa Fe, NM 87501 Fund Raising Counsel, May 1986
to Present; Trustee, Woodrow Wilson
International Center for Scholars;
Provost, St. John's College, Santa
Fe, NM, from 1986 through May 1991;
Director of Thornburg Limited Term
Municipal Fund, Inc. since its
formation in 1984; Director of Farrar,
Strauss & Giroux (publishers) since
1968.
Brian J. McMahon (40) <FN1> Vice President and Assistant Intermediate
119 East Marcy Street, Suite 202 Secretary of Company since Muni Fund
Santa Fe, NM 87501 its inception in 1987. 12,660 <FN8>
President (since January 1987), New Mexico
Thornburg Limited Term Municipal Muni Fund
Fund, Inc.; Managing Director of 39,840 <FN5> <FN8>
TMC since December 1984. Limited Term
Income Fund
81,841 <FN6> 3.85%
Value Fund
140,536 <FN7> 17.85%
Forrest S. Smith (64) Trustee of Company since
2006 Botulph Road its inception in 1987.
Santa Fe, NM 87501 Attorney in private practice, Santa
Fe, NM; shareholder, Catron, Catron
& Sawtell (law firm), Santa Fe, NM,
1988 to present.
James W. Weyhrauch (36) Executive Vice President and
Director, Nambe' Mills, Inc.
(manufacturer), Santa Fe,
New Mexico, 1986 to present.
<FN>
<FN1> "Interested persons" of the Company as defined in the Investment
Company Act of 1940 because of their positions with TMC.
<FN2> Total includes 110,566 shares owned by the Thornburg Management
Company, Inc. Profit Sharing Plan (as to which Mr. Thornburg is a
trustee and holds shared voting and investment powers) and 84,095
shares owned by Thornburg Management Company, Inc.
<FN3> Total includes 220,513 shares owned by Thornburg Management Company,
Inc. and 67,389 shares owned by Thornburg Securities Corporation.
<FN4> Total includes 81,841 shares owned by Thornburg Management Company,
Inc. Profit Sharing Plan, as to which Mr. Thornburg is a trustee and
holds shared voting and investment powers.
<FN5> Total includes 17,360 shares owned by Thornburg Descendants Trust, as
to which Mr. McMahon is a trustee and holds shared voting and
investment powers.
<FN6> Total includes 81,841 shares owned by Thornburg Management Company,
Inc. Profit Sharing Plan, as to which Mr. McMahon is a trustee and
holds shared voting and investment powers.
<FN7> Total includes 27,928 shares owned by Thornburg Descendants Trust, as
to which Mr. McMahon is a trustee and holds shared voting and
investment powers, and 110,566 shares owned by the Thornburg
Management Company, Inc. Profit Sharing Plan, as to which Mr. McMahon
is a trustee and holds shared voting and investment powers.
<FN8> Less than one percent.
</FN>
The Trustees held four meetings during the fiscal year ended
September 30, 1995. It is expected that the Trustees will continue to meet
at least four times a year at regularly scheduled meetings. Each incumbent
Trustee attended all of the scheduled meetings of Trustees in the last full
fiscal year except Mr. Ater, whose appointment did not become effective until
1995. Messrs. Ater, Ault and Smith serve on the Company's audit committee,
which meets at least two times a year to consider accounting, audit, and
other issues. The audit committee also serves as a nominating committee for
the nomination of Trustees. Mr. Thornburg and Mr. McMahon, as Trustees
affiliated with TMC, will serve without any compensation from the Company.
The Company currently pays each Trustee who is not an employee of TMC or an
affiliated company a quarterly fee of $1,000 plus a fee of $500 for each
meeting of the Trustees attended by the Trustee, pays an annual stipend of
$1,000 to each Trustee who serves on the audit committee or any other
committee the Trustees may establish, and reimburses Trustees for travel and
out-of-pocket expenses incurred in connection with attending meetings. For
the fiscal year ended September 30, 1995, the Company paid the following
amounts as compensation to Trustees:
Total Compensation
Aggregate from Company and
Trustee Compensation Related Mutual Funds
------- ------------ --------------------
D. A. Ater $4,000 $ 4,000
J. B. Ault 5,000 10,500
F. S. Smith 5,000 5,000
The Company does not pay retirement or pension benefits.
The executive officers of the Trust other than those who also serve as
Trustees or are nominees to serve as Trustees, are:
Funds (Shares As a
Beneficially percentage
Position with Company; Owned) of named Fund
Name (Age) Principal Occupations 2/16/96 2/16/96
- ----------------------------------- ----------------------------------- ------------ ----------
Steven J. Bohlin (36) Vice President, Treasurer since New Mexico
119 East Marcy Street, Suite 202 Company's inception in 1987. Muni Fund
Santa Fe, NM 87501 Vice President of Thornburg Limited 1,909 <FN5>
Term Municipal Fund, Inc. (mutual
fund) since November 1988 and
Assistant Vice President from 1985
to November 1988; Managing Director
of TMC since December 1990 and Vice
President since December 1988.
Dawn B. Shapland (48) Secretary and New Mexico
119 East Marcy Street, Suite 202 Assistant Treasurer since Muni Fund
Santa Fe, NM 87501 Company's inception in 1987. 21,970 <FN1> <FN5>
Secretary, Thornburg Limited Term Limited Term
Municipal Fund, Inc. (mutual fund) Income Fund
since its formation in 1984; Vice 81,841 <FN2> 3.85%
President, Daily Tax Free Income Value Fund
Fund, Inc. (mutual fund) since 1989; 158,174 <FN3> 20.09%
Managing Director of TMC since 1985.
William Fries (56) Vice President since 1995. Value Fund
119 East Marcy Street, Suite 202 Managing Director of TMC since May 26,585 3.38%
Santa Fe, NM 87501 1995; Vice President of USAA
Investment Management Company from
1982 to 1995.
Ken Ziesenheim (41) Vice President since 1995. New Mexico
119 East Marcy Street, Suite 202 Managing Director of TMC since Muni Fund
Santa Fe, NM 87501 1995; President of Thornburg 67,389 <FN4> <FN5>
Securities Corporation (principal Intermediate
underwriter of the Funds) since Muni Fund
1995; Senior Vice President of 10,347 <FN5>
Financial Services, Raymond James & Value Fund
Associates, Inc. 1991 to 1995. 2,447 <FN5>
<FN>
<FN1> Total includes 17,360 shares owned by Thornburg Descendants Trust, as
to which Ms. Shapland is a trustee and holds shared voting and
investment powers.
<FN2> Total includes 81,841 shares owned by the Thornburg Management
Company, Inc. Profit Sharing Plan, as to which Ms. Shapland is a
trustee and holds shared voting and investment powers.
<FN3> Total includes 27,928 shares owned by Thornburg Descendants Trust, as
to which Ms. Shapland is a trustee and holds shared voting and
investment powers, and 110,566 shares owned by the Thornburg
Management Company, Inc. Profit Sharing Plan, as to which Ms. Shapland
is a trustee and holds shared voting and investment powers.
<FN4> Total includes 67,389 shares owned by Thornburg Securities
Corporation.
<FN5> Less than one percent.
</FN>
The Trustees Recommend a Vote FOR all Nominees.
PROPOSAL 3
RATIFICATION OF INDEPENDENT AUDITORS
Description of Proposal
The firm of McGladrey & Pullen, LLP, has been selected as independent
auditors for the fiscal year ending September 30, 1996 by the Trustees of the
Company. The ratification of the selection of independent auditors is to be
voted on at the Meeting. It is not expected that a representative of the
independent auditors will be present at the Meeting.
For the fiscal year of the Company ended September 30, 1995, McGladrey
& Pullen, LLP performed both audit and non-audit services for the Company.
Audit services consisted of examinations of the Company's financial
statements and review and consultation in connection with the filings with
the Securities and Exchange Commission. Non-audit services consisted of
preparation of the Company's federal and state income tax returns.
The Board of Directors of the Company recommends a vote FOR Proposal 3.
ALLOCATION OF PORTFOLIO BROKERAGE
Purchases and sales of portfolio securities by all of the Funds except
for Thornburg Value Fund usually are principal transactions, in which
portfolio securities are purchased directly from the issuer or from an
underwriter or market maker. The Company does not pay brokerage commissions
on such transactions. Any transaction for which a Fund pays a brokerage
commission will be effected at the best price available. Purchases from
underwriters of portfolio securities include a commission or concession paid
by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and asked price.
Allocation of transactions, including their frequency, to various
dealers is determined by TMC in its best judgment and in a manner deemed to
be in the best interest of shareholders of the Funds rather than by any
formula. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price.
The Funds may execute portfolio transactions with broker dealers who
provide research and execution services to the Funds. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement).
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause a
Fund to pay such higher commissions, TMC must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage and
research services provided by such executing broker-dealers, viewed in terms
of a particular transaction or TMC's overall responsibilities to the Fund.
In reaching this determination, TMC will not attempt to place a specific
dollar value on the brokerage and research services provided, or to determine
what portion of the compensation would be related to those services.
TMC is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance in
the distribution of shares of the Funds or shares of other Thornburg funds to
the extent permitted by law. TMC may use research services provided by and
place agency transactions with Thornburg Securities Corporation (TSC) if the
commissions are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. TMC may
allocate brokerage transactions to broker-dealers who have entered into
arrangements with TMC under which the broker-dealer allocates a portion of
the commissions paid by a Fund toward payment of the Fund's expenses, such as
transfer agent fees or custodian fees. The transaction quality must,
however, be comparable to those of other qualified broker-dealers.
TMC also acts as investment adviser to Thornburg Limited Term Municipal
Fund, Inc. and investment sub-adviser to Daily Tax Free Income Fund, Inc.,
both registered investment companies. Investment decisions for the Funds
will be made independently from those for any other accounts or investment
companies which may be or become managed by TMC or its affiliates. If,
however, the Funds and other investment companies or accounts managed by TMC
are contemporaneously engaged in the purchase or sale of the same security,
the transaction may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by the Funds or the size of the position obtainable for the Funds.
In addition, when purchases or sales of the same security of the Funds and
for other investment companies managed by TMC occur contemporaneously, the
purchase or sale may be aggregated in order to obtain any price advantages
available to large denomination purchasers or sellers.
No portfolio transactions were executed with TMC, or with TSC or any
affiliate of TMC or TSC acting either as principal or as broker, during the
fiscal year ended September 30, 1995.
SECURITIES OWNERSHIP OF CERTAIN PERSONS
As of February 16, 1996 no person is known by the Company to own
beneficially more than five percent of the shares of any Fund except as
described under Proposal 2 and as indicated below.
Number Percentage
Fund Name and Address of Shares of Fund
- ---------------- ----------------------------------- --------- ---------
Intermediate New Merrill Lynch Pierce Fenner & Smith 608,015 5.98%
Mexico Fund Mutual Fund Operations
Post Office Box 45286
Jacksonville, Florida 32232
Intermediate E. Good 93,955 6.04%
Florida Fund Naples, Florida
OTHER MATTERS
The Trustees know of no other matters to come before the Meeting. If
any other matters properly come before the Meeting, it is the intention of
the persons acting pursuant to the enclosed proxy card to vote the shares
represented by those proxies in accordance with their best judgment with
respect to those matters.
SHAREHOLDER PROPOSALS
Any shareholder proposals to be presented at the 1997 Annual Meeting of
Shareholders, if such a meeting is held, must be received by the Company at
its address stated above on or before October 31, 1996.
By Order of the Trustees
DAWN B. SHAPLAND
Secretary
Santa Fe, New Mexico
February 28, 1996
EXHIBIT A
RESTATED
INVESTMENT ADVISORY AGREEMENT
THORNBURG INVESTMENT TRUST
119 East Marcy Street, Suite 202
Santa Fe, New Mexico 87501
Thornburg Management Company, Inc.
119 East Marcy Street, Suite 202
Santa Fe, New Mexico 87501
Ladies and Gentlemen:
We hereby confirm our agreement with you as follows:
We are engaged in the business of investing and reinvesting our assets
in securities of the type, and in accordance with the limitations, specified
in our Declaration of Trust, By-Laws and Registration Statement filed with
the Securities and Exchange Commission under the Investment Company Act of
1940 (the "Act") and the Securities Act of 1933, including the Prospectuses
forming a part thereof (the "Registration Statement"), and in such manner and
to such extent as may from time to time be authorized by our Trustees. We
have furnished copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
We hereby employ you to manage the investment and reinvestment of the
assets of our respective series and to perform related functions, and without
limiting the generality of the foregoing, to provide the investment
management services specified below.
You will make decisions with respect to all purchases and sales of
portfolio securities by the Company's respective series. To carry out such
decisions, you are hereby authorized, as our agent and attorney in fact, for
our account and at our risk and in our name, to place orders for the
investment and reinvestment of our assets. In all purchases, sales and other
transactions in our portfolio securities you are authorized to exercise full
discretion and act for us in the same manner and with the same force and
effect as our Company itself or its respective series might or could do with
respect to such purchases, sales, or other transactions, as well as with
respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
You will report to our Trustees at each meeting thereof all changes in
our series' portfolios since your prior report, and will also keep us
apprised of important developments affecting our portfolios and, on your own
initiative, will furnish to us from time to time such information as you may
believe appropriate for this purpose, whether concerning the individual
entities whose securities are included in our portfolios, the individual
banks and other third parties from which securities have been purchased for
inclusion in our portfolios, the activities in which the entities or the
banks and other third parties engage, federal income tax policies applicable
to our investments, or the conditions prevailing in the securities markets or
the economy generally. You will also furnish us with such statistical and
analytical information with respect to our portfolio securities as you may
believe appropriate or as we reasonably may request. In making such
purchases and sales of our portfolio securities, you will bear in mind the
policies set from time to time by our Trustees as well as the limitations
imposed by our Declaration of Trust and by the provisions of the Internal
Revenue Code relating to regulated investment companies and the limitations
contained in our Registration Statement.
It is understood that you will from time to time employ or associate
with yourself, entirely at your expense, such persons as you believe to be
particularly fitted to assist you in the execution of your duties hereunder.
While this Agreement is in effect, you or persons affiliated with you, other
than us ("your affiliates"), will provide persons satisfactory to our
Trustees to be elected or appointed officers or employees of our Company.
These shall be a president, a secretary, a treasurer, and such additional
officers and employees as may reasonably be necessary for the conduct of our
business.
We agree, subject to the limitations described below, to be responsible
for, and hereby assume the obligation for payment of, all our expenses other
than those expressly stated to be payable by you hereunder. Expenses payable
by us shall include, but not be limited to: (a) brokerage and commission
expenses, (b) federal, state or local taxes, including issue and transfer
taxes incurred by or levied on us, (c) commitment fees, (d) interest charges
on borrowings, (e) charges and expenses of our custodian, (f) charges and
expenses of persons performing issuance, redemption, registrar, transfer and
dividend disbursing functions for us, (g) telecommunication expenses,
(h) recurring and non-recurring legal and accounting expenses (including
disbursements), (i) insurance premiums, (j) costs of organizing and
maintaining our existence as a corporation, (k) compensation and travel
expenses, including Trustees' fees, of any of our Trustees, officers or
employees who are not your officers or officers of your affiliates (provided
that such officers who serve as our Trustees will be reimbursed by us for
travel and out-of-pocket expenses incurred in attending meetings), and costs
of other personnel providing services to us, (l) costs of shareholders'
services and portfolio valuation services, (m) costs of shareholders'
reports, proxy solicitations, distribution of prospectuses to existing
shareholders, and corporate meetings, (n) costs of personnel (other than your
officers or officers of your affiliates) competent to perform administrative,
clerical and shareholder relations functions, including travel expenses if
necessarily related to shareholder relations functions, (o) costs of any
reports to government agencies, (p) fees and expenses of registering our
shares under the appropriate federal securities laws and of qualifying our
shares under applicable state securities laws, including expenses attendant
upon the initial registration and qualification of our shares and attendant
upon renewals of, or amendments to, those registrations and qualifications,
(q) expenses of printing our prospectuses, (r) the cost of printing or
engraving of certificates representing our shares, (s) postage,
(t) membership dues in any industry associations, (u) payment of the
investment advisory fee provided for herein, and (v) all other charges and
costs of our operation unless otherwise explicitly provided herein. Our
obligation for the foregoing expenses is limited by your agreement to be
responsible for any amount by which our operating expenses (excluding taxes,
brokerage, interest and, to the extent permitted by applicable law,
extraordinary expenses) accrued for any period during which this Agreement is
in effect exceed an amount equal to, in the case of expenses accrued with
respect to any of our fiscal years during which this Agreement is in effect,
the limits prescribed by any state in which the Company's shares are
qualified for sale.
We will expect of you, and you will give us the benefit of, your best
judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause provided that
nothing herein shall be deemed to protect, or purport to protect, you against
any liability to us or to our security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
In consideration of the foregoing we will pay you a fee at the annual
percentage rate of the daily average of the net assets of each series to
which this Agreement is applicable, as set forth below:
Thornburg Limited Term
U.S. Government Fund
- ----------------------
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $1 billion .50% .375%
$1 billion to $2 billion .45% .325%
Over $2 billion .40% .275%
Thornburg Limited Term Income Fund;
Thornburg Intermediate Municipal Fund;
Thornburg New Mexico Intermediate Municipal Fund;
Thornburg Florida Intermediate Municipal Fund
- -------------------------------------------------
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $500 million .625% .50%
$500 million to $1 billion .575% .45%
$1 billion to $1.5 billion .525% .40%
$1.5 billion to 2 billion .475% .35%
Over $2 billion .400% .275%
Thornburg Value Fund
- --------------------
Net Assets of Fund Old Rate New Rate
------------------ -------- --------
0 to $500 million 1.00% .875%
$500 million to $1 billion .95% .825%
$1 billion to $1.5 billion .90% .775%
$1.5 billion to 2 billion .85% .725%
Over $2 billion .80% .675%
Your fee will be accrued by us daily and will be payable in arrears on
the last day of each calendar month for services performed hereunder during
that month, together with any applicable gross receipts tax, sales tax,
compensating tax, value added tax or similar exaction imposed by any federal,
state or local government, but the taxes on the fee will be limited to 10% of
the fee. Any reimbursement of our expenses, to which we may become entitled
pursuant to the third paragraph preceding, will be paid to us at the end of
the month for which those expenses are accrued, at the same time as we pay
you your fee for that month.
This Restated Agreement will become effective and supersede the existing
Investment Advisory Agreement as to each series on the date of its execution
after approval by the majority vote of holders of the outstanding voting
securities (as defined in the Act) of the series of this Company, shall
continue in effect for one year from the date of execution hereof and
thereafter for successive twelve-month periods, provided that such
continuation is specifically approved at least annually by our Trustees or by
a majority vote of the holders of our outstanding voting securities (as
defined in the Act) and, in either case, by a majority of those of our
Trustees who are neither a party to this Agreement nor, other than by their
service as Trustees of our Company, interested persons, as defined in the
Act, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous agreements
between us covering the subject matter hereof. This Agreement may be
terminated at any time as to any series, without the payment of any penalty,
by vote of a majority of the outstanding voting securities of that series, as
defined in the Act, or by a vote of a majority of our Trustees, on sixty
days' written notice to you, or by you on sixty days' written notice to us.
This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale,
hypothecation or pledge by you. The terms "transfer," "assignment" and
"sale" as used in this paragraph shall have the meanings ascribed thereto by
governing law and in applicable rules or regulations of the Securities and
Exchange Commission.
Except to the extent necessary to perform your obligations hereunder,
nothing herein shall be deemed to limit or restrict your right, or the right
of any of your officers, directors or employees who may also be a Trustee,
officer or employee of ours, or of a person affiliated with us, as defined in
the Act, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar
or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
This Agreement applies to the series of the Company specified herein.
This Agreement may by agreement be made applicable to one or more other
series. This Agreement will in all events apply separately to each series to
which it relates and will be severable in all respects. Consequently, this
Agreement may be modified, continued or terminated as to any series without
affecting any other series. A determination by any court or agency having
jurisdiction that any provision of this Agreement is invalid or unenforceable
will not affect the validity of the other provisions of this Agreement.
If the foregoing is in accordance with your understanding, you will
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THORNBURG INVESTMENT TRUST
By:________________________________
BRIAN J. McMAHON, Vice President
ACCEPTED:_________________________, 1996
THORNBURG MANAGEMENT COMPANY, INC.
By:____________________________________
H. GARRETT THORNBURG, JR., President
EXHIBIT B
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made as of the _____ day of ______________, 1996 by
and between THORNBURG INVESTMENT TRUST, a Massachusetts business trust (the
"Company"), in respect of Thornburg Limited Term U.S. Government Fund,
Thornburg Limited Term Income Fund, Thornburg Intermediate Municipal Fund,
Thornburg New Mexico Intermediate Municipal Fund, Thornburg Florida
Intermediate Municipal Fund and Thornburg Value Fund, series of the Company
(collectively, the "Funds"), and THORNBURG MANAGEMENT COMPANY, INC., a
Delaware corporation ("Thornburg").
Recitals
The Company engages in business as an open-end management investment
company and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act").
The Company seeks to obtain described administrative services from
Thornburg for the class or classes of the Funds' shares hereinafter
specified.
Thornburg seeks to be retained to perform services in accordance with
this Agreement.
This Agreement has been approved by a vote of the Trustees of the
Company, including a majority of the Trustees who are not interested persons
of the Company, as defined in the 1940 Act, and who have no direct or
indirect financial interest in the operation of this Agreement (sometimes the
"Disinterested Trustees"), cast in person at a meeting called for the purpose
of voting on this Agreement.
Agreement
NOW THEREFORE, the Company hereby enters into this Agreement with
Thornburg, and the parties provide and agree as follows:
Subject to the continuing supervision of the Trustees, the Company
hereby retains and appoints Thornburg as its agent to perform certain
administrative services and engage in activities beyond those specifically
required by the investment advisory agreement between the Company and
Thornburg, and to provide related services. The activities and services to
be provided by Thornburg hereunder shall include shareholder communication
and informational functions, share accounting, asset, income and expense
bookkeeping and accounting, performance of clerical, regulatory and office
functions associated with share and shareholder accounting and
administration, and such other related or similar administrative functions as
the Company and Thornburg may from time to time agree. Thornburg or its
affiliates will also provide persons who shall not be officers or officers of
Thornburg's affiliates, to render such clerical, accounting,
shareholder-related and other office services to the Company as the Company
may from time to time request of Thornburg. These personnel may be employees
of Thornburg or its affiliates. Thornburg also will furnish to the Company
without charge such administrative and management supervision and assistance
and such office facilities as Thornburg believes appropriate or as the
Company may reasonably request.
The Company will pay for the services described in the preceding
Paragraph, on a monthly basis, and shall pay Thornburg monthly, a fee
computed at an annual rate of up to .125 of 1% of the average daily net
assets attributable to each class of shares to which this Agreement applies
from time to time, together with any applicable gross receipts tax, sales
tax, value-added tax, compensating tax or similar exaction imposed by any
federal, state or local government, but the aggregate of those taxes will not
exceed 10% of the basic fee. In addition, the Company will pay Thornburg for
the cost of personnel provided in accordance with the preceding Paragraph to
provide the described clerical, accounting, shareholder-related and other
office services requested by the Company. Thornburg and the Company agree
and acknowledge that the Company will pay expenses payable by the Company in
accordance with the investment advisory agreement between the Company and
Thornburg.
The Company and Thornburg shall provide to the Company's Trustees, at
such intervals as the Trustees may request, a written report of all amounts
expended by the Company pursuant to this Agreement. Thornburg shall provide
to the Trustees upon request such information as may reasonably be required
for the Trustees to review the continuing appropriateness of this Agreement.
This Agreement will become effective as to a Fund or a class upon
execution after its approval by vote of at least a majority of the
outstanding shares of the Fund or a class of a Fund, and shall continue in
effect for a period of one year from the date of that approval unless
terminated as provided below. Thereafter, the Agreement will continue in
effect from year to year, provided that continuance is approved at least
annually by a vote of the Trustees, including a majority of the Disinterested
Trustees, cast in person at a meeting called for the purpose of voting on the
continuance. This Agreement may be terminated as to a class of shares of a
Fund at any time, without penalty, by the vote of a majority of the
Disinterested Trustees or by the vote of a majority of the outstanding shares
of the class. The Company may discontinue Thornburg's services under this
Agreement and name another service provider, or Thornburg may assign this
Agreement or delegate part or all of its obligations hereunder (to a related
or unrelated party) upon a vote of a majority of the Disinterested Trustees
or a vote of the holders of a majority of a class's outstanding shares,
without any penalty, upon 60 days written notice to Thornburg. Thornburg may
terminate its services under this Agreement upon 60 days written notice to
the Company.
All material amendments to this Agreement must be approved by the vote
of the Trustees, including a majority of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting on the amendment.
This Agreement applies to those classes of shares of the Funds of
the Company specified in the preamble to this Agreement. The parties
acknowledge and agree that this Agreement may from time to time be made
applicable to one or more Funds and one or more classes of shares of those
Funds, but that the Agreement applies separately to each class of shares and
each Fund and is severable in all respects. Consequently, the Agreement may
be modified, continued or terminated as to one class of shares of a Fund or
a Fund without affecting any other class of shares of that Fund or any other
Fund.
The Company will preserve in an easily accessible place copies of this
Agreement and all reports made pursuant to this Agreement, together with
minutes of all Trustees' meetings at which the adoption, amendment or
continuance of this Agreement were considered (describing the factors
considered and the basis for decision), for a period of not less than 6 years
from the date of this Agreement.
8. This Agreement will be construed in accordance with the laws of the
State of New Mexico and applicable provisions of the 1940 Act. To the extent
the applicable law of the State of New Mexico or any provisions herein
conflict with the applicable provisions of the 1940 Act, the latter will
control. If any provision of this Agreement is determined by a court or
governmental agency having jurisdiction to be invalid or unenforceable, the
balance of this Agreement shall remain in full force and effect. If any
provision of this Agreement is determined by any court or agency having
jurisdiction to be invalid or unenforceable, the balance of this Agreement
will remain in full force and effect.
The Company will not hold Thornburg liable for any act or failure to act
hereunder in the absence of TMC's willful misfeasance, bad faith or gross
negligence, or its reckless disregard of its obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Santa Fe, New Mexico.
THORNBURG INVESTMENT TRUST
(Thornburg Limited Term U.S. Government Fund;
Thornburg Limited Term Income Fund;
Thornburg Intermediate Municipal Fund;
Thornburg New Mexico Intermediate Municipal
Fund;
Thornburg Florida Intermediate Municipal Fund;
Thornburg Value Fund)
By:_____________________________________
THORNBURG MANAGEMENT COMPANY, INC.
By:_____________________________________
DEFINITIVE COPY
THORNBURG INVESTMENT TRUST
PROXY
for
SPECIAL MEETING OF SHAREHOLDERS
Thornburg Limited Term U.S. Government Fund
Thornburg Limited Term Municipal Fund California Portfolio
April 16, 1995
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WE NEED YOUR VOTE BEFORE APRIL 16, 1996
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Your vote is important and, as a shareholder, you are asked to be at the
Special Meeting either in person or by proxy. If you are unable to attend
the Meeting in person, we urge you to complete, sign, date, and return this
proxy card using the enclosed postage prepaid envelope. Your prompt return
of the proxy will help assure a quorum at the Meeting and avoid additional
expenses to your Fund associated with further solicitation. Sending in your
proxy will not prevent you from personally voting your shares at the Meeting
and you may revoke your proxy by advising the Secretary of the Funds in
writing (by subsequent proxy or otherwise) of such revocation at any time
before it is voted.
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THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES
- ----------------------------------------------------------------------------
The undersigned hereby constitutes and appoints Brian J. McMahon, Dawn
B. Shapland and Steven J. Bohlin as proxies, each with power to appoint his
or her substitute, and hereby authorizes them to represent and to vote, as
designated below, all shares of stock of the Company which the undersigned
is entitled to vote at the Special Meeting of Shareholders to be held at
119 East Marcy Street, Suite 202, Santa Fe, New Mexico 87501, on April 16,
1996, at 9:30 a.m., local time, and any adjournments thereof, with respect
to the matters set forth below and described in the Notice of Special
Meeting and Proxy Statement dated February ___, 1996, receipt of which is
hereby acknowledged.
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This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED IN FAVOR OF ALL PROPOSALS AND IN THE DISCRETION OF THE
PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Please indicate by filling in the appropriate box below, as shown, using
blue or black ink or dark pencil. Do not use red ink. <darkened box>
- ----------------------------------------------------------------------------
1. To restate the Investment Advisory Agreement and adopt an Administrative
Services Agreement.
FOR <box> AGAINST <box> ABSTAIN <box>
2. Election of Trustees.
FOR all nominees listed <box> WITHHOLD AUTHORITY <box>
to vote for all nominees
listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW
H. Garrett Thornburg, Jr. Brian J. McMahon
J. Burchenal Ault Forrest S. Smith
David A. Ater James W. Weyhrauch
3. To ratify the appointment of McGladrey & Pullen, LLP as independent
auditors.
FOR <box> AGAINST <box> ABSTAIN <box>
<3.5 inch x 2.5 inch box for Date___________________________
shareholder information>
NOTE: Please sign exactly as your
name appears on this Proxy. If joint
owners, either owner may sign this
Proxy. When signing as attorney,
executor, administrator, trustee,
guardian or corporate officer, please
give your full title.
_______________________________
Signature
_______________________________
Title (if applicable)