SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
[X] Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED BY
[ ] Definitive Additional Materials RULE 14A-6(E)(2))
[ ] Soliciting Material Pursuant to
Section 240.14a-13
IOWA PUBLIC AGENCY 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):
X No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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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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IOWA PUBLIC AGENCY INVESTMENT TRUST
SPECIAL MEETING OF PARTICIPANTS
TO BE HELD
AUGUST 24, 2004
10:00 AM
1735 NE 70th Avenue
Ankeny, Iowa 50021
Dear Participant:
At a special Board of Trustees meeting on July 12, 2004, the Board
considered and approved operational changes to the way we elect Trustees and
called a meeting of Participants to implement them. This action was in response
to the regulatory impact of IPAIT's registration as an investment company under
the Investment Company Act of 1940 ("1940 Act") and comments made by the
Securities and Exchange Commission ("SEC") following an exam last January.
IPAIT has been registered as an investment company with the SEC since 1993
and was and is subject to compliance with 1940 Act and the rules adopted by the
SEC. While the Board and legal counsel believe that the historical procedures
for the election of Trustees were adequate and complied with the law, to resolve
these issues the Board determined to implement the new procedures.
The primary operational change is that the Trustees will now be directly
elected by the Participants on a one vote per Unit basis, instead of being
elected at the annual meetings of the Associations. The Board will still be
comprised of nine Trustees representative of the municipalities, counties and
utilities that participate in IPAIT. The terms of the Trustees will still be
three years and the terms will still be staggered so that three Trustees are
reappointed and or elected each year.
In addition, at the meeting the Board considered and approved a proposal to
change the fundamental investment policies of IPAIT to permit investment by both
the Direct Government Obligation Portfolio and the Diversified Portfolio in
securities with maturities up to 397 days as permitted by Rule 2a-7 under the
1940 Act. This change conforms the investment policies of IPAIT to the Iowa
code. Previously we were more restrictive than what the Iowa code allowed and
what is allowed under federal law.
In order to implement the new Trustee election procedures we determined to
hold a special meeting of Participants before our next regularly scheduled Board
meeting on August 25. Under the 1940 Act, IPAIT must provide the Participants
the right in certain situations to approve the selection of auditors, the
investment advisory agreement with the investment adviser and any Rule 12b-1
plans applicable to it. A Rule 12b-1 plan is a plan that permits a fund to pay
fees and other costs from its assets in furtherance of its distribution. Since
we were having the meeting, we decided to provide Participants the opportunity
to vote on these approvals as well. Consequently, in addition to electing the
Trustees and seeking the approval of the change in the fundamental investment
policies to permit investment in securities with maturities of up 397 days, we
have included proposals to approve the Advisor Agreement between IPAIT and
Investors Management Group, Ltd. ("IMG"), IPAIT's Rule 12b-1 Plan and the
selection of our auditors, KPMG LLP.
In consideration of these matters and on behalf of our Board of Trustees, I
ask that you vote at the SPECIAL MEETING OF PARTICIPANTS OF IOWA PUBLIC AGENCY
INVESTMENT TRUST ("IPAIT") TO BE HELD IN THE AUDITORIUM AT THE OFFICES OF THE
IOWA ASSOCIATION OF MUNICIPAL UTILITIES AT 1735 NE 70TH AVENUE, ANKENY, IOWA
50021 ON AUGUST 24, 2004, AT 10:00 AM LOCAL TIME. A NOTICE OF THE MEETING AND A
PROXY STATEMENT, WHICH DESCRIBES THE PROPOSALS, INFORMATION ABOUT THE TRUSTEES
AND HOW TO VOTE IS ENCLOSED.
YOUR VOTE IS IMPORTANT. WHILE YOU MAY ATTEND THE MEETING IN PERSON AND
VOTE, YOU MAY VOTE BY PROXY AS DESCRIBED IN THE PROXY STATEMENT. IF YOU CHOOSE
TO VOTE BY PROXY, an authorized official of each Participant is asked to sign,
date and return the accompanying proxy card in the enclosed postage-paid return
envelope. You may also FAX IT TO US TOLL-FREE AT 866-260-0246. Faxing or
returning your proxy card to us will not prevent you from otherwise voting in
person, but will assure that your vote will be counted if you are not in
attendance and will ensure that a quorum will be present at the meeting which
will avoid the additional expense of further proxy solicitation if a quorum is
not present.
IT IS VERY IMPORTANT THAT YOUR PROXY BE RECEIVED PROMPTLY. We need to
receive your card or FAX no later than August 23, 2004.
THE IPAIT BOARD OF TRUSTEES RECOMMENDS THAT THE PARTICIPANTS APPROVE ALL OF
THE PROPOSALS.
Sincerely,
Dated: August 11, 2004 /s/ Don Kerker
---------------------------------
Chairman of the Board of Trustees
NOTICE OF SPECIAL MEETING OF PARTICIPANTS
TO BE HELD
AUGUST 24, 2004
NOTICE IS HEREBY GIVEN that a Special Meeting of Participants (the
"Meeting") of Iowa Public Agency Investment Trust, an Iowa common law trust
organized under Chapter 28E of the Iowa Code ("IPAIT"), will be held on August
24, 2004 in the auditorium at the Iowa Association of Municipal Utilities, 1735
NE 70th Avenue, Ankeny, Iowa 50021 at 10:00 am local time for the following
purposes:
1. To ratify and approve the election the Board of Trustees.
2. To ratify the selection of KPMG LLP as IPAIT's auditors.
3. To approve IPAIT's Advisor Agreement with Investors Management Group,
Ltd.
4. To approve IPAIT's Rule 12b-1 Plan.
5. To approve a change in the fundamental investment policy of the Direct
Government Obligation Portfolio and Diversified Portfolio which
permits the Portfolios to invest in securities that have maturities up
to 397 days.
6. To transact such other business as may properly come before the
Meeting and at any postponements or adjournments thereof.
The Board of Trustees of IPAIT fixed the close of business on July 30, 2004
as the record date (the "Record Date") for determining the Participants who are
entitled to notice of, and to vote at, the Meeting or any adjournments thereof.
Each Participant as of the Record Date which has a positive account in either
the Diversified or Direct Government Obligation Portfolios (the "Portfolios")
are entitled to cast one vote per Unit for each matter to be voted on. Please
read the full text of the accompanying Proxy Statement for a complete
understanding of the proposals.
YOUR VOTE IS IMPORTANT. THE AUTHORIZED OFFICIAL OF EACH PARTICIPANT MAY
EXECUTE THE PROXY. Please sign, date and return the accompanying proxy card in
the enclosed postage-paid return envelope, or you may fax the signed proxy card
to us toll-free at 866-260-0246. Faxing or returning your proxy card will not
prevent you from voting in person, but will assure that your vote will be
counted if you are unable to attend the meeting, and will ensure that a quorum
will be present at the meeting, which will avoid the additional expense of
further proxy solicitation if a quorum is not present. IT IS VERY IMPORTANT THAT
YOUR PROXY BE RECEIVED PROMPTLY. We must receive your vote by no later than
August 23, 2004.
THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF IPAIT.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSED ITEMS.
By Order of the Board of Trustees
/s/ Robert Haug
SECRETARY
Des Moines, Iowa
Dated: August 11, 2004
IOWA PUBLIC AGENCY INVESTMENT TRUST
1415 28TH STREET
CENTURY II BUILDING
SUITE 200
WEST DES MOINES, IOWA 50266-1461
(515) 244-5426
800-872-4024
PROXY STATEMENT
SPECIAL MEETING OF PARTICIPANTS
-----------------
GENERAL INFORMATION
We are providing you with this Proxy Statement in connection with the
solicitation of proxies by and on behalf of Iowa Public Agency Investment Trust,
an Iowa common law trust organized under Chapter 28E of the Iowa Code ("IPAIT"),
for use at the Special Meeting of Participants to be held at 1735 NE 70th
Avenue, Ankeny, Iowa 50021 on August 24, 2004, at 10:00 am local time, and at
any and all postponements or adjournments thereof (the "Meeting"). This proxy
statement, the accompanying form of proxy, and the Notice of Special Meeting
will be first mailed or given to Participants on or about August 11, 2004.
Because many of the authorized representatives of IPAIT's Participants may
be unable to attend the Meeting in person, the Board of Trustees is soliciting
proxies to give each Participant an opportunity to vote on all matters presented
at the Meeting. Authorized representatives of the Participants are urged to:
(1) read this Proxy Statement carefully;
(2) specify their choice in each matter by marking the appropriate box on
the enclosed Proxy,
(3) sign, date and return the Proxy by mail in the postage-paid, return
envelope provided, or
(4) fax the Proxy toll-free to fax number 866-260-0246.
If the accompanying proxy is executed properly by an authorized official of
a Participant and returned, the Participants so voting will be deemed to have
voted their Units at the Meeting in accordance with the instructions given. The
Board of Trustees of IPAIT recommends a vote FOR all proposals. If no
instructions are given, the Participant's Units will be voted FOR the approval
of all proposals and any other business as may properly come before the Meeting.
IPAIT'S ANNUAL AND SEMI-ANNUAL REPORTS HAVE PREVIOUSLY BEEN DELIVERED TO
PARTICIPANTS OF IPAIT. SUCH REPORTS ARE AVAILABLE AT NO COST BY CALLING
TOLL-FREE AT 800-872-4024, VIEWING ONLINE AT WWW.IPAIT.ORG, OR WRITING TO IPAIT
AT 1415 28TH STREET, CENTURY II BUILDING, SUITE 200, WEST DES MOINES, IOWA
50266-1461.
YOUR VOTE IS IMPORTANT. Please take a moment now to sign, date and return
the accompanying proxy card in the enclosed postage-paid return envelope.
Returning your proxy card will not prevent you from voting in person, but will
assure that your vote will be counted if you are unable to attend the meeting,
and will avoid the additional expense of further proxy solicitation and will
ensure that a quorum is represented at the meeting.
QUESTION AND ANSWER SUMMARY: ABOUT THE VOTE
WHAT IS BEING VOTED ON AT THE MEETING?
As more fully described in this proxy statement, the Board of Trustees of
IPAIT is asking participants to consider and vote on the following proposals:
1. Election of Trustees
2. Ratification of the selection of KPMG LLP as IPAIT's auditors
3. Approval of the Advisor Agreement with Investors Management Group,
Ltd. ("IMG")
4. Approval of IPAIT's Rule 12b-1 Plan
5. Change in the Fundamental Investment Policy of the Portfolios to
permit investment in securities with maturities up 397 days
We may also transact any other business as may properly come before the Meeting
or any adjournment thereof.
WHO CAN VOTE AT THE MEETING?
The Board of Trustees has set July 30, 2004 as the record date for the
Meeting. Only Participants at the close of business on the record date which
have positive account balances in either the Diversified Portfolio and or the
Direct Government Obligation Portfolio (the "Portfolios") will be entitled to
receive notice of and to vote at the Meeting. Each Participant will be entitled
to one vote per unit of beneficial ownership ("Unit") held in both Portfolios on
each matter properly submitted for vote at the Meeting. Participants of both
Portfolios vote together on the Election of Trustees and the ratification of the
selection of KPMG LLP.
WHAT CONSTITUTES A QUORUM FOR THE MEETING?
Quorum for the Meeting is based on the number Units outstanding held by
Participants that are represented in person or by proxy. To have a quorum we
need a majority of the Units of the combined Diversified Portfolio and the
Direct Government Obligation Portfolio to be present, in person or by proxy.
Proxies received will be considered present at the Meeting for purposes of
establishing a quorum for the transaction of business at the meeting. The vote
with respect to each proposal will be tabulated separately.
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting, but sufficient votes to approve a proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies with respect to a proposal. In
determining whether to adjourn the Meeting, the following factors may be
considered: the nature of a proposal, the percentage of votes cast, the
percentage of negative votes cast, the nature of any further solicitation and
the information to be provided to Unit holders with respect to the reasons for
the solicitation. Any adjournment will require the affirmative vote of a
majority of participants represented in person or by proxy at the Meeting. In
that case, the persons named as proxies will vote all proxies required to be
voted for a proposal, FOR such an adjournment; provided, however, any proxies
required to be voted against a proposal will be voted AGAINST such adjournment.
HOW TO VOTE?
If an authorized representative of each Participant completes and properly
signs the accompanying proxy card and return it to us, it will be voted as they
direct, unless they later revoke the proxy. Unless instructions to the contrary
are marked, or if no instructions are specified, Participants represented by a
proxy will be voted FOR the proposals set forth on the proxy, and in the
discretion of the persons named as proxies on such other matters as may properly
come before the Meeting. If you do not complete a proxy card and return it to us
or vote at the meeting, you will be treated as if you voted AGAINST a proposal.
If you check the box labeled ABSTAIN on the proxy card and return it to us, you
will be treated as if you voted AGAINST a proposal.
If you attend the Meeting, you may deliver your completed proxy card or
vote in person. You mail either mail the proxy card to us in the envelope
provided or you may fax the signed proxy card toll-free to us at 866-260-0246.
CAN THE VOTE BE CHANGED AFTER RETURN OF THE PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with our Secretary, at the
address indicated above, either a written notice of revocation, a duly executed
proxy bearing a later date, or if you vote in person at the Meeting. The powers
of the proxy holders will be suspended if you attend the Meeting in person and
so request. However, attendance at the Meeting will not by itself revoke a
previously granted proxy.
Any written notice of revocation sent to us must include the Participant's
name and must be received prior to the Meeting to be effective.
WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS?
Election of Trustees requires as to each Trustee, the affirmative vote of a
plurality of the combined Units of the Direct Government Obligation Portfolio
and the Diversified Portfolio voting at the meeting. This means that the
director nominee with the most affirmative votes for a particular slot is
elected for that slot. Abstentions will not count as votes cast and will have no
effect on the outcome of this proposal.
The ratification of the selection of KPMG LLP as IPAIT's auditors requires
the affirmative vote of a majority of the combined outstanding Units of the
Portfolios voting at the meeting.
The approval of the Advisor Agreement requires the approval of a majority
of the outstanding Units of each of the Portfolios voting separately at the
meeting.
The approval of the Rule 12b-1 Plan requires the approval of a majority of
the outstanding Units of each of the Portfolios voting separately at the
meeting.
The approval of the change in the fundamental investment policy allowing
securities with maturities up to 397 days requires the approval of a majority of
the outstanding Units of each of the Portfolios voting separately at the
meeting.
Abstentions are counted in tabulations of the votes cast on proposals
presented to participants. Therefore, for all matters presented at the Meeting,
abstentions will have the same effect as a vote against the proposals.
PROPOSAL 1. ELECTION OF DIRECTORS
At the July 12, 2004 Board of Trustees meeting, the Board determined to
make changes in the procedures it follows for the election of Trustees to remove
any ambiguity with compliance with the Investment Company Act of 1940 (the "1940
Act"). Previously, Participants elected Trustees annually at annual meetings of
their respective associations - the Iowa League of Cities (ILC), the Iowa
Association of Municipal Utilities (IAMU), and the Iowa State Association of
Counties (ISAC) (collectively the "Associations"). Going forward, if their
election is required by the 1940 Act, the Trustees will be elected at special or
annual meetings of IPAIT, pursuant to the call of the Board of Trustees. In this
election and in any future elections, each Participant will be entitled to vote
that number of Units it owns of record in both of the Portfolios as of the
record date.
The Board is currently comprised of nine persons who are representative of
the three types of Iowa public agencies (and their associations - ILC, IAMU, and
ISAC) that have historically participated in IPAIT - Iowa counties, cities
(municipalities), and municipal utilities, with each group having three
representatives. The qualifications for the Trustees require that the person be
an "official" and employee with an Iowa public agency. In the future, the Board
will continue this structure in filling vacancies. To the extent that a vacancy
occurs, the Board will seek and nominate persons to fill the vacancy with a
person associated with the group meeting the qualifications for the vacancy.
Each Trustee serves a three-year term and three Trustees are reappointed or
elected each year (one each from group).
The persons named below are nominees for election as Trustees to hold
office until the next meeting of Participants at which Trustees are elected or
until a successor has been elected and qualified. Each person listed is
presently a Trustee of IPAIT. The year that the term for each Trustee will end
is specified in the table. All nominees are non-interested and independent. Each
of the persons listed below has consented to being named in this Proxy Statement
and has indicated a willingness to serve as a Trustee if elected. Unless
otherwise instructed, the proxy holder will vote the proxies received for the
election of the persons listed below. It is not expected that any of the
nominees will decline or become unavailable for election, but in case this
should happen, the proxy holders reserve the right to select and substitute
another person as a Trustee nominee.
NAME, CONTACT, ADDRESS POSITION TERM OF PRINCIPAL NUMBER OF OTHER
AND AGE HELD WITH OFFICE AND OCCUPATIONS DURING PORTFOLIOS DIRECTORSHIPS
IPAIT LENGTH OF PAST FIVE YEARS OVERSEEN BY HELD OUTSIDE OF
TIME SERVED DIRECTOR IPAIT
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Robert Hagey Trustee Term ending Sioux County 2 None
2005 Treasurer
210 Central Ave. SW
Orange City, IA 51041 Served
since 1993
Age 53
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Thomas Hanafan Trustee, Term ending Council Bluffs 2 None
Vice Chair 2006 Mayor
209 Pearl Street
Council Bluffs, IA 51503 Served
since 1992
Age 56
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Donald Kerker Trustee, Term ending Director of 2 None
Chair 2005 Finance, Muscatine
Served Power and Water
3205 Cedar Street since 1999
Muscatine, IA 52761
Age 53
- ----------------------- --------- ----------- ------------------ ---------- ---------------
- ---------------------- --------- ----------- ------------------ ---------- ---------------
Dianne Kiefer Trustee, Term Wapello County 2 None
Second ending 2007 Treasurer
Vice Chair
101 W. Fourth Street,
Ottumwa, IA 52501 Served College
since 2000 Instructor, Buena
Vista University
Age 54
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Floyd Magnusson Trustee Term ending Webster County 2 None
2006 Supervisor
703 Central Avenue
Fort Dodge, Iowa 50501 Served
since 2000
Age 78
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Craig Hall Trustee Term ending Manager, Brooklyn 2 None
2007 Municipal Utilities
138 Jackson St.
Brooklyn, Iowa Served
since 2004
Age 52
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Leon Rodas Trustee Term ending General Manager, 2 None
2006 Spencer Municipal
Utility
712 North Grand Avenue
P.O. Box 222 Served
Spencer, IA 51301-0222 since 2003
Age 51
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Jody Smith Trustee Term ending Director of 2 None
2007 Administrative
Services, West Des
P.O. Box 65320 Moines City Clerk
West Des Moines, IA Served
50266 since 1994
Age 51
- ----------------------- --------- ----------- ------------------ ---------- ---------------
Susan Vavroch Trustee Term ending Cedar Rapids City 2 None
2005 Treasurer
50 Second Ave. Bridge
Cedar Rapids, IA 52401 Served
since 2003
Age 46
- ----------------------- --------- ----------- ------------------ ---------- ---------------
The Board of Trustees does not include any person who is deemed to be an
"interested person" as defined in Section 2(a)(19) of the Investment Company Act
of 1940 ("1940 Act").
During the fiscal year ended June 30, 2004, the Company's Board of Trustees
held four meetings. All incumbent Trustees of the Company attended at least 75
percent of the aggregate of (i) the total number of meetings of the Board of
Trustees (held during the period for which he or she was a director) and (ii)
the total number of meetings held by all committees of the Board on which he
served.
The Board of Trustees has an Executive Committee comprised of the Chairman,
the Vice Chairman, the Second Vice Chairman, the Treasurer and the Secretary. In
the fiscal year ending June 30, 2004, the Executive committee met three times.
The Executive Committee functions as the Audit Committee. However, the full
Board of Trustees considers and approves the engagement of the independent
auditors.
There is no Nominating Committee as the full Board of Trustees reviews and
recommends candidates for election to fill vacancies on the Board of Trustees.
The Board of Trustees will consider written recommendations from the Sponsoring
Associations and directly from Participants for possible nominees. Participants
should submit their recommendations to the Secretary.
As of the Record Date, none of the Trustees owned of record or beneficially
any Units of either of IPAIT's Portfolios as none are legally permitted to
invest in IPAIT. Only public agencies in the State of Iowa are permitted to
participate in IPAIT.
The Trustees receive no compensation for serving on the Board of Trustees,
except reimbursement for mileage and lodging in attending meetings. The Company
has no pension or retirement plans for its Directors.
A Participant may nominate an individual for election to the Board of
Directors at the Special Meeting of Participants if the Participant: (1) is a
Participant of record at the time of giving notice of its intent to nominate a
candidate; (2) is a Participant of record at the time of the Special Meeting;
(3) is entitled to vote at the Special Meeting; and (4) has given written notice
of the nomination to the Secretary of the IPAIT no earlier than August 10 and no
later than August 23, 2004. The notice must contain all information relating to
the nominee required for proxy solicitations by Regulation 14A under the
Securities Exchange Act of 1934, as amended (including the individual's written
consent to being named in the proxy statement as a nominee and to serving as a
trustee if elected). The notice must also contain the Participant's name and
address as they appear on IPAIT books, the number of Units owned of record by
such Participant and the "slot" for which the person in nominated for election.
PROPOSAL 2. RATIFICATION OF SELECTION OF AUDITORS
Although not required to do so, the Board of Trustees seeks your
ratification of the appointment of KPMG LLP as IPAIT independent auditors for
the fiscal year ending June 30, 2004. At a meeting held on August 27, 2003, the
Board of Trustees selected KPMG LLP as independent auditors of IPAIT. At the
meeting of the Board of Trustees to be held August 25, 2004, KPMG LLP is
expected to be reappointed as the independent auditors for the 2004/2005 fiscal
year. The Board of Trustees intends to solicit request for proposals from other
qualified accounting firms to act as IPAIT independent auditors beginning with
the 2005/2006 fiscal year.
The Board of Trustees believes that the Participants should have the
opportunity to vote to ratify the selection of KPMG LLP. If the appointment is
not ratified, the Board will meet to select new independent auditors. Such
selection of new auditors will be submitted to Participants for their
ratification at either the Special Meeting or at a future meeting of
Participants. IPAIT has been advised by its independent accountants that they
have no direct or material indirect financial interest in IPAIT. Representatives
of KPMG LLP are not expected to be present at the Meeting but will be available
by telephone to respond to any questions.
Fees Paid to KPMG LLP by IPAIT (for the Fiscal Years ending June 30, 2004 and
June 30, 2003).
2004 2003
Audit Fees................................................$12,300 $13,600
Tax Fees..................................................$ 950 $ 900
------- -------
Total Fees................................................$13,250 $14,500
The Tax Fees included those specific charges billed by KPMG LLP and paid by
IPAIT relating to the preparation and filing of all tax returns for IPAIT during
the fiscal years indicated. KPMG LLP does not provide non-audit services to IMG.
THE BOARD OF TRUSTEE RECOMMENDS THAT PARTICPANTS VOTE FOR RATIFICATION OF THE
SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS OF IPAIT.
PROPOSAL 3
APPROVE ADVISOR AGREEMENT WITH IMG
IMG, 1415 28th Street, West Des Moines, Iowa 50266 has served as IPAIT's
investment adviser since IPAIT was organized. IMG is a wholly owned subsidiary
of AMCORE Investment Group, N.A., ("AIG"), which is a wholly owned subsidiary of
AMCORE Financial, Inc. ("AMCORE"), a publicly traded bank holding and financial
services company. AIG's and AMCORE's address is 501 Seventh Street,Rockford, IL
61110-0037. The original investment advisory agreement was approved by the Board
of Trustees on October 22, 1987. In 1994, due to changes in Iowa law relating to
the investment of funds held by public agencies in Iowa, IPAIT registered with
the Securities and Exchange Commission as an investment company. In 1997 the
Investment Advisor Agreement between IPAIT and IMG was approved by the
Participants in connection with the acquisition of IMG by AMCORE Investment
Group, N.A. On August 27, 2003, the current form of Adviser Agreement, which is
attached hereto as Appendix A was approved by the Board of Trustees. In January
2004, the SEC conducted an exam of IPAIT and questioned whether the procedures
followed by IPAIT for the election of Trustees since its inception, complied
with the requirements of 40 Act. Under the 1940 Act, if the Board of Trustees
was improperly elected, then all subsequent actions required to be taken by the
Board of Trustees under the 1940 Act would be deemed invalid, rendering the past
annual approvals of the Advisor Agreement invalid. While the Board of Trustees
and IPAIT's legal counsel disagree with the SEC's position, the Board of
Trustees determined to change its procedures for the election of Trustees, as
described in Proposal 1, and hold a special meeting of Participants to elect
Trustees and consider such other business as may be appropriate. In considering
other business, IPAIT's legal counsel and the SEC suggested that the
Participants also be given the opportunity to ratify the approval of the Adviser
Agreement. To satisfy these concerns the Board of Trustees agreed to submit the
Adviser Agreement to Participants for approval.
As noted above, the Board of Trustees last considered and approved the
Adviser Agreement at their annual meeting held on August 27, 2003. At this same
meeting the Board of Trustees also considered and approved all of IPAIT's
agreements with its service providers and conducted an assessment and evaluation
of the services provided by IMG and Wells Fargo, N.A., IPAIT's custodian. In
performing this assessment and evaluation the Board of Trustees asked IMG to
provide a wide array of information about (i) the quality and nature of IMG's
services, including the qualification and experience of IMG investment
management and administrative staff, IPAIT's investment performance compared to
other similar funds, data regarding the investment advisory fees, other
administrative fees and overall fees paid by IPAIT compared to other comparable
investment alternatives and other comparable public fund pools in other states
and a detailed satisfaction and needs survey of the Participants conducted by an
unrelated third party. The data from the client survey was compiled from
responses from over one third of the Participants. The Board also considered a
proposed new fee structure that reduced the investment advisory fees and
administrative services fees paid to IMG.
With respect to the quality and nature of IMG's services, the information
indicated that five members of the IMG service team had worked on IPAIT for more
than ten years and that seventeen employees spent a significant portion of their
day working on IPAIT services. Furthermore, it was noted that IMG employees are
cross-trained to provide service redundancy. A complete overview of the
education and experience of IMG's principal employees and compliance personnel
was provided.
With respect to the performance of the DGO and Diversified Portfolios, the
information provided demonstrated that both Portfolios performed better than the
benchmark indices against which they were compared for the period from May of
2002 through July of 2003. This included comparisons of performance against the
IBC US Government and Agency Fund Index for the Diversified Fund and the IBC US
Treasury and Repo Fund Index for the DGO Fund. IBC is a national nonprofit
organization that compiles and publishes yield and operating data on mutual
funds.
With respect to the advisory and other fees paid by IPAIT to IMG and its
other service providers, information was provided that compared IPAIT fees
against similar registered money market funds and non-registered public funds
programs operated in other states that had similar characteristics. Based on
information provided by IBC the average total fees for funds comparable to the
Diversified Portfolio were 72 basis points (.72 %) and 74 basis points (.74%)
for funds comparable to the DGO Portfolio. Total fees for the Diversified
Portfolio in 2003 at the highest breakpoint fees were projected to be 58 basis
points (.58%) and in 2004 under the new fee structure were forty-nine basis
points (.49%) for the same breakpoint.
As to the specific advisory fees paid to IMG, information provided by
Lipper Analytical Services, Inc. indicated that the average advisory fees paid
by registered money market funds comparable to the Diversified Portfolio were 16
basis points (.16%) and for the DGO Fund were 14 basis points. For 2003 the
Diversified Portfolio and the DGO Portfolio paid IMG 15 basis points (.15%) for
assets under $150 million declining to 8 basis points (.08%) for assets over
$300 million and in 2004 the new fee was 12 basis points (.12%) for assets under
$150 million declining to 7 basis points (.07%) for assets over $250 million.
Information was also provided comparing total fees and advisory fees of similar
programs operated in the states of Illinois and Minnesota. These programs are
not registered with the SEC and have slightly different characteristics. No
information about performance with respect to these programs was available. The
information about these programs indicated that the fees paid by IPAIT to IMG
for advisory and administration were higher, but roughly comparable to the fees
paid by these programs.
As to the satisfaction and needs survey of the Participants conducted by an
unrelated third party, the survey followed a similar survey performed in 1993
and reported on the responses of approximately one third of the Participants. In
summary the survey indicated that ninety three percent (93%) of the Participants
placed their overall satisfaction with IPAIT in the top two levels of evaluation
and seventy three percent (73%) were in the highest level of evaluation - "very
satisfied" with IPAIT.
After consideration of this information, the Board of Trustees concluded
that the compensation payable under the Advisor Agreement was fair and
reasonable with respect to each of the Direct Government Obligation Portfolio
and the Diversified Portfolio and their unit holders in light of the services to
be provided and that the Advisor Agreement between IPAIT be approved.
The Advisor Agreement is attached to this Proxy Statement as Appendix A.
The following summary of the essential terms of the agreement is qualified in
its entirety by reference to the agreement.
Term: The Advisor Agreement is effective for the period January 1, 2004
through December 31, 2006, subject to annual approval of the Board of Trustees
as required by the 40 Act and the right of the Board of Trustees to terminate
the agreement at anytime on 60 days prior notice. The Advisor agreement
terminates automatically in the even of its assignment.
Duties: IMG shall continuously supervise IPAIT's investment program and
determine what investments shall be purchased or sold and place all orders for
the purchase and sale of investments. IMG shall also attend all meetings of the
Participants and Trustees and assist with or conduct workshops and other
informational meetings organized or sponsored by IPAIT. IMG will furnish
information to the Board of Trustees as they may require and evaluate
performance of the IPAIT's various service providers. IMG will directly consult
with Participants and provide advice to them regarding their cash management
programs. IMG also is responsible for monitoring compliance with the amortized
cost method of valuing IPAIT's assets (Rule 2a-7) and also complying with laws
and regulations applicable to IPAIT. IMG also provides program support and
support services including the services of a representative that works directly
with participants and who provides annual and quarterly reports to the Trustees
regarding these activities as well as recommendations for other services.
Compensation: IPAIT pays to IMG a monthly fee computed at an annual rate of .12%
of the average daily assets of the combined Direct Government Obligation
Portfolio and the Diversified Portfolio up to $150,000,000. If either the Direct
Government Obligation Portfolio or the Diversified Portfolio's average daily
assets are greater than $150,000,000 but less than $250,000,000 then as to that
Portfolio, the fee the amount over $150,000,000 is .095%. For average assets
over $250,000,000, the fee is .0.07%.
Expenses: IMG pays various expenses from its fees in connection with its
services to IPAIT. These include printing and postage costs of the Information
Statement, proxy material and reports sent to Participants. In addition IMG pays
for administrative costs of IPAIT associated with its performance under the
agreement. IPAIT pays for all other costs and expenses including interest and
taxes, brokerage commissions, compensation, if any, of Trustees, legal audit and
accounting expenses, custodian charges, insurance, meeting expenses, other
operations expenses directly incurred by IPAIT and authorized by the Board of
Trustees and other non reoccurring expenses, including obligations to indemnify
the Trustees.
Indemnity and Limitations of Liability: IPAIT does not indemnify or hold
harmless IMG for any acts or liabilities. IMG indemnifies and holds harmless
IPAIT against damages, claims, liability, and costs, including attorney's fees,
proximately caused by IMG's negligent error or omission in the performance of
professional services within the responsibility of IMG or as to any breach of
duty or obligation assumed by or required of IMG under the agreement.
Insurance: IMG is required to purchase and maintain a variety of insurance
coverages with specified limits covering its operations, including insurance
coverage for workers compensation, general commercial liability, automobile
liability and banker's professional coverage.
For the fiscal years ending June 30, 2004 and 2003, IPAIT paid IMG $346,989.75
and $480,357.40, respectively, in fees under the Advisor Agreement. For the
fiscal year ending June 30, 2003, IPAIT paid to IMG a monthly advisory fee
computed at an annual rate of .15% of the average daily assets of the combined
Direct Government Obligation Portfolio and the Diversified Portfolio up to
$150,000,000. If either the Direct Government Obligation Portfolio or the
Diversified Portfolio's average daily assets was greater than $150,000,000 but
less than $300,000,000 then as to that Portfolio, the fee the amount over
$150,000,000 was .125%. For average assets over $300,000,000, the fee was .08%.
Had the new advisory fee been in effect for the year ended June 30, 2003, IPAIT
would have paid IMG $374,366.00 in fees for that year.
In addition to the advisory fees paid to IMG under the Advisor Agreement, IMG is
also paid fees under an Administrator Agreement for various services in
connection with operating IPAIT on a daily basis. This Agreement was also
approved by the Board of Trustees on August 27, 2003, but is not required to be
approved by the Participants under the 40 Act. As a result the Board of Trustees
is not submitting it to the Participants for approval.
IMG Directors and Officers
James I. Mackay is a Director and is the President and principal executive
officer of IMG. Mr. Mackay's principal occupation is serving as President of
IMG. Amy Mitchell is a Director and is Vice President of IMG. Ms. Mitchell's
principal occupation is Vice President and Director of Administration for IMG.
Jeffrey Lorenzen is a Director and Secretary/Treasurer of IMG. Mr. Lorenzen's
principal occupation is Chief Investment Officer for IMG. Patricia M. Bonavia is
a Director and is Assistant Secretary of IMG. Ms. Bonavia's principal occupation
is President of AMCORE Investment Services Inc. Mr. Mackay's, Ms. Mitchell's and
Mr. Lorenzen's business is1415 28th Street, West Des Moines, Iowa 50266. Ms.
Bonavia's business address is , 501 Seventh Street,Rockford, IL 61110-0037.
THE BOARD OF TRUSTEES RECOMMENDS THE PARTICIPANTS VOTE FOR APPROVAL OF THE
ADVISOR AGREEMENT. IF THE PARTICIPANTS DO NOT APPROVE THE ADVISOR AGREEMENT, THE
BOARD OF TRUSTEES WILL CONSIDER APPROPRIATE ACTION WITH RESPECT TO SUCH
NON-APPROVAL.
PROPOSAL 4
APPROVAL OF RULE 12B -1 PLAN
The Board of Trustees also is recommending that Participants approve
IPAIT's Rule 12b-1 Plan in the form attached as Appendix B. The Rule 12b-1 Plan
was first adopted by the Board of Trustees on March 16, 1993 in anticipation of
IPAIT's registration as an investment company under the 1940 Act.
When IPAIT was formed in October of 1987, IPAIT entered into agreements
with each of the Associations pursuant to which IPAIT paid each of the
Associations a fee based on the total net assets of IPAIT derived from the
investments made by the Participants in the Portfolios that were members of the
Associations. These fees were paid to facilitate the distribution of IPAIT
through the Associations. The Associations permitted IPAIT to use their
respective logos in the offering materials and they provided administrative
support for IPAIT. When the Board of Trustees determined to register IPAIT as an
investment company with the SEC under the 1940 Act in 1993, the Board of
Trustees determined that these fees were fees payable in furtherance of IPAIT's
distribution and therefore should be subject to the terms of a plan adopted
under Rule 12b-1.
From the fist adoption of the Rule 12b-1 Plan, the Rule 12b-1 Plan was
annually approved by the Board of Trustees. The Plan was last approved by the
Board of Trustees at their meeting held on August 27, 2003. At their meeting on
July 12, 2004, the Board of Trustees, in calling a meeting of Participants to
elect the Trustees as discussed in Proposal 1, considered including the approval
of the Rule 12b-1 Plan to the agenda of the participant meeting. They determined
to do so because it was prudent and to resolve any ambiguity in prior approvals.
At its August 27, 2003 board meeting, the Board of Trustees of the Trust,
voted to approve the continuance of the Rule 12b-1 Plan. In connection with its
review of the Rule 12b-1 Plan, the Board requested and reviewed materials
furnished by the Administrator, which included information about the fees paid.
The Board considered other factors as well, including the merits of possible
alternative plans; the possible benefits of the Rule 12b-1 Plan to any other
person relative to those expected to inure to the IPAIT; the effect of the Rule
12b-1 Plan on existing Unit holders; and whether the Rule 12b-1 Plan has
produced the anticipated benefits. Based on its consideration of these factors,
among others, the Board concluded in the exercise of its reasonable business
judgment and in light of its fiduciary duties under state law and Sections 36(a)
and (b) of the Investment Company Act of 1940 that (i) there is reasonable
likelihood that said 12b-1 Plan will benefit each of the Iowa Public Agency
Investment Trust and the Participants; (ii) it is in the best interest of the
Iowa Public Agency Investment Trust and its unitholders to contract for
Distribution Services; (iii) the services provided under the contract are
reasonably necessary; (iv) the services provided are in nature and quality at
least equal to similar services by independent third parties; and (v) the fees
for the services under the Distribution Agreement are fair and reasonable in
light of the usual and customary charges for service of the same nature and
quality. The Board of Trustees then approved the Rule 12b-1 Plan and the related
agreements with the Associations.
DESCRIPTION OF THE RULE 12B-1 PLAN
The following paragraphs briefly describe the terms of the Rule 12b-1 Plan.
For a complete understanding of the Rule 12b-1 Plan, please refer to the form of
Rule 12b-1 Plan provided as Appendix B.
The Rule 12b-1 Plan Trust allows IPAIT to pay each of the Associations a
monthly service fee at an annual rate not to exceed 0.10% of the IPAIT's average
net assets attributable to the those Particpants that were members of the
respective association. For the fiscal year ended June 30, 2003, IPAIT paid the
Iowa League of Cities $174,830 and $67,063, the Iowa State Association of
Counties $59,079 and $0 and the Iowa Association of Municipal Utilities $34,863
and $4,792 in fees under the 12b-1 Plan for the Diversified and Direct
Government Obligation Portfolios respectively. These collectively represented
..10% of the average net assets of the Diversified and Direct Government
Obligation Portfolios respectively. The fees paid are compensatory and are paid
under the Plan for the expenses and services provided to IPAIT by the
Associations in connection with meetings of the Board of Trustees, evaluation of
the performance of IPAIT's service providers, reviews of compliance with
investment policies, providing reports, maintaining trust records.
The Rule 12b-1 Plan can continue in effect for successive one-year periods,
provided that each such continuance is specifically approved (i) by the vote of
a majority of the entire Board of Trustees and (ii) by the vote of a majority of
the Independent Trustees, in each case cast in person at a meeting called for
that purpose. The Board of Trustee has been comprised of all independent
trustees since its inception. The Rule 12b-1 Plan may be terminated at any time
with respect to a Portfolio on 60 days' written notice by vote of a majority of
the Trustees, or by vote of the Participants holding a majority of the
outstanding Units of a Portfolio.
The Board of Trustees reviews quarterly written reports of payments made
under the Rule 12b-1 Plan. If Participants do not approve the Rule 12b-1 Plan,
the Rule 12b-1 Plan will be deemed to have terminated on the day of the meeting
and the IPAIT will no longer will be making payments to the Associations under
the Rule 12b-1 Plan.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE PARTICPANTS VOTE TO
APPROVE THE RULE 12B-1 PLAN.
PROPOSAL 5
CHANGE IN THE FUNDAMENTAL INVESTMENT POLICY OF THE PORTFOLIOS
At the July 12, 2004 meeting of the Board of Trustees, the Board reviewed
and considered the fundamental investment policies of the Portfolios in
connection with a review of IPAIT's policies and procedures implementing the
amortized cost method of valuation pursuant to Rule 2a-7 under the Investment
Company Act of 1940. Since inception of IPAIT in 1987, IPAIT conformed its
operations to the requirements of Rule 2a-7 in all respects, except with respect
to the issue of the maturity of securities eligible for purchase. Rule 2a-7
permits securities to have maturities of up to 397 days. At inception, IPAIT, as
a fundamental investment policy restricted its investments to securities with
maturities of no longer than 365 days. This was because while there were no
specific restrictions on maturities under the Iowa code the Board wanted to
conform its operations to the amortized cost method of valuation and chose to
take a more restrictive approach and limit it to maturities of 365 days. In
1992, the Iowa code was amended and permitted public agencies to not only invest
in money market funds operating under 2a-7, but also permitted public agencies
to invest through a joint investment trust, organized under Iowa Code Chapter
28E that was registered under the Investment Company Act of 1940 and operating
in conformity with Rule 2a-7. Iowa code section 12B.10(5). says in part:
"Political subdivisions of this state, including entities organized pursuant to
chapter 28E whose primary function is other than to jointly invest public funds,
shall purchase and invest only in the following:
f. An open-end management investment company registered with the federal
Securities and Exchange Commission under the federal Investment Company Act of
1940, 15 U.S.C. ss. 80(a), and operated in accordance with 17 C.F.R. ss.
270.2a-7.
g. A joint investment trust organized pursuant to chapter 28E prior to and
existing in good standing on the effective date of this Act or a joint
investment trust organized pursuant to chapter 28E after April 28, 1992,
provided that the joint investment trust shall either be rated within the two
highest classifications by at least one of the standard rating services approved
by the superintendent of banking by rule adopted pursuant to chapter 17A and
operated in accordance with 17 C.F.R. ss. 270.2a-7, or be registered with the
federal securities and exchange commission under the federal Investment Company
Act of 1940, 15 U.S.C. ss. 80(a), and operated in accordance with 17 C.F.R. ss.
270.2a-7. The manager or investment advisor of the joint investment trust shall
be registered with the federal securities and exchange commission under the
Investment Advisor Act of 1940, 15 U.S.C. ss. 80(b)."
The Board considered that extending the permitted maturity for IPAIT investments
in either portfolio to 397 days was fully permissible under Iowa law. Further,
the Board considered the extension of the permitted maturity to 397 days might
provide for slightly increased yield for the Portfolios. As a result, Board
approved conforming changes to the fundamental investment policies of the
Portfolios to extend the permitted maturity of otherwise permitted and eligible
investments to 397 days in conformity to Rule 2a-7. Because the changes were
changes to a fundamental policy, the change must be approved by the Participants
and the Board directed that the issue be included in this proxy statement.
THE BOARD OF TRUSTEE RECOMMENDS THAT PARTICPANTS VOTE FOR THE CHANGE IN THE
FUNDAMENTAL INVESTMENT POLICIES OF THE PORTFOLIOS TO PERMIT INVESTMENTS IN
PERMITTED AND ELIGIBLE SECURITIES WITH MATURITIES OF UP TO 397 DAYS AS PROVIDED
IN RULE 2A-7.
ADDITIONAL INFORMATION
RECORD DATE AND NUMBER OF OUTSTANDING UNITS
The Board of Trustees of IPAIT has fixed the close of business on July 30, 2004
as the Record Date for the determination of Participants entitled to notice of
and to vote at the Meeting and any adjournment thereof. Only Participants of
record with positive account balances in the Portfolios at the close of business
on the Record Date are entitled to notice of and to vote at the Meeting and any
adjournment thereof. On this record date, there were 237,569,501 and 33,316,310
Units of the outstanding of the Diversified Portfolio or the Direct Government
Obligation Portfolio respectively.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of the Record Date, all Trustees and Officers of IPAIT, as a group,
owned no Units of the Diversified Portfolio and the Direct Government Obligation
Portfolio of IPAIT and are not as a matter of law permitted to own any such
Units.
The following table sets forth information regarding beneficial ownership
of the Units in the Diversified Portfolio and the Direct Government Obligation
Portfolio by all Participants known to IPAIT to be the beneficial owner of five
percent or more of the outstanding Units. Unless otherwise noted in the
footnotes following the table, the information is provided as of July 30, 2004
and the persons as to whom information is given have sole voting and investment
power over the Units beneficially owned.
DIVERSIFIED PORTFOLIO
NAME # UNITS %
City of Cedar Rapids 29,525,965 12
City of Coralville 27,482,309 12
City of Bettendorf 19,735,354 8
City of West Des Moines 14,749,159 6
DIRECT GOVERNMENT OBLIGATION PROTFOLIO
NAME # UNITS %
City of Cedar Rapids 29,448,676 88
West Des Moines Waterworks 3,852,457 11
SOLICITATION OF PROXIES
This solicitation is being made by mail on behalf of the Board of Trustees
of IPAIT, but may also be made without additional remuneration by officers or
employees of the Adviser by telephone, telegraph, facsimile transmission,
electronic mail or personal interview. The expense of the printing and mailing
of this Proxy Statement and the enclosed form of Proxy and Notice of Special
Meeting, and any additional material relating to the Meeting, which may be
furnished to Participants by the Board subsequent to the furnishing of this
Proxy Statement, has been or will be borne by the Administrator. To obtain the
necessary representation of Participants at the Meeting, supplementary
solicitations may be made by mail, electronic mail, telephone or interview by
officers of IPAIT or employees of the Adviser. It is anticipated that the cost
of any other supplementary solicitations, if any, will not be material.
PARTICIPANT PROPOSALS FOR NEXT ANNUAL MEETING
Annual meetings of Participants are not required to be held unless they are
necessary under the 1940 Act. Therefore, IPAIT may not hold Participant meetings
on an annual basis. A Participant proposal intended to be presented at any
meeting hereafter called must be received at IPAIT's offices a reasonable time
before IPAIT begins to print and mail its proxy materials for that meeting, in
order to be considered for inclusion in IPAIT's proxy statement and form of
proxy relating to such meeting. If a Participant fails to submit the proposal by
such date, IPAIT will not be required to provide any information about the
nature of the proposal in its proxy statement, and the proposal will not be
considered at that next annual meeting of Participants.
Proposals should be sent to Robert Haug, IPAIT, Secretary, at 1735 NE 70th
Avenue, Ankeny, Iowa 50021. The submission by a Participant of a proposal for
inclusion in a proxy statement does not guarantee that it will be included.
Participant proposals are subject to certain regulations under the federal
securities laws.
OTHER MATTERS
The Board is not aware of any matters to come before the Meeting, other
than the proposals specified in the Notice of Special Meeting. However, if any
other matter requiring a vote of the Participants should arise at the Meeting,
it is the intention of the persons named in the accompanying Proxy to vote such
Proxy in accordance with their best judgment.
APPENDIX A
ADVISOR AGREEMENT
between
IOWA PUBLIC AGENCY INVESTMENT TRUST
and
INVESTORS MANAGEMENT GROUP, LTD.
January 1, 2004 - December 31, 2006
ADVISOR AGREEMENT
This Agreement is made by and between the Iowa Public Agency Investment
Trust, an Iowa common law trust formed pursuant to Iowa Code chapter 28E and
sections 331.555 and 384.21 (the "Trust"), and Investors Management Group, Ltd.,
an Iowa corporation (the "Advisor") as follows: WHEREAS, the Trust was
established in Iowa by a Joint Powers Agreement and Declaration of Trust dated
as of October 1, 1987; and WHEREAS, the beneficial interest of the Participants
under the Joint Powers Agreement and Declaration of Trust in the property of
each series of the Trust is divided into Units (the "Units"); and WHEREAS, the
Trust offers a Fixed Term Automated Investment Program; and WHEREAS, pursuant to
a Custodian Agreement, dated January 1, 2004, (the "Custodian Agreement"), Wells
Fargo Bank Iowa, National Association, is custodian (the "Custodian") to the
Trust; and WHEREAS, pursuant to an Administrator Agreement, dated January 1,
2004, Investors Management Group, Ltd. (the "Administrator") has agreed to
provide certain administrative services; and WHEREAS, the Trust desires to avail
itself of the experience, resources, advice, and assistance of the Advisor and
to have the Advisor undertake the duties and responsibilities hereinafter set
forth, on behalf of the Trustees of the Trust, as provided herein; and
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WHEREAS, the Advisor is willing to undertake to render such services, on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants hereinafter set forth, and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I. DELIVERY OF DOCUMENTS
Section 1.1. Documents Delivered. The Trust has delivered to the Advisor
properly certified or authenticated copies of each of the following documents
presently in effect and will deliver to them all future amendments and
supplements, if any:
A. Amended Joint Powers Agreement and Declaration of Trust dated as of
October 1, 1987 as amended August 1, 1988 and May 1, 1993 (the
"Declaration");
B. Restated Bylaws of the Trust (the "Bylaws");
C. Certified resolutions of the Trustees of the Trust authorizing the
appointment of Investors Management Group, Ltd., as Advisor of the
Trust and approving the form of this Agreement;
D. Information Statement of the Trust (the "Information Statement"); and
E. A Certificate of the Secretary of the Trust setting forth the names
and specimen signatures of the individuals authorized to act on behalf
of the Trust in connection with matters arising hereunder as
authorized officers.
F. A copy of the Custodian Agreement dated January 1, 2004.
G. A copy of the Administrator Agreement dated January 1, 2004.
H. A copy of the Advisor Agreement, dated January 1, 2004.
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ARTICLE II. APPOINTMENT, DUTIES AND COMPENSATION
Section 2.1. Appointment of Advisor. The Trust hereby appoints, pursuant to
Section 3.1 of the Declaration, Investors Management Group, Ltd., as Advisor of
the Trust on the terms and for the period set forth in this Agreement, and
Investors Management Group, Ltd., hereby accepts such appointment and agrees to
perform the services and duties set forth in Section 2.2 hereof for the
compensation provided in Section 2.3 hereof.
Section 2.2 Service and Duties The following provisions of this Agreement
relate to the functions of the Advisor in its capacity as Advisor:
A.The Advisor shall:
1. Supervise continuously the investment program of the Trust, the
administration of the investment program, and the composition of
its portfolios;
2. Provide investment research, evaluation, and supervision of the
Trust's investments;
3. Determine what investment instruments shall be purchased or sold
by the Trust;
4. Arrange for the purchase and the sale of investment instruments
held in each portfolio of the Trust and the Fixed Term Automated
Investment Program;
5. In connection with the purchase of certificates of deposit by the
Trust, establish and maintain a list of state banks, national
banks, savings and loan associations, and savings banks located
within Iowa that qualify as depositories of public agencies under
Iowa law and meet criteria established or approved by the
Trustees of the Trust;
6. Place all orders for the purchase, sale, or exchange of the
Trust's assets;
7. Attend all meetings of the Trustees and Participants;
8. Attend, assist with, or conduct workshops, informational meetings
or seminars organized or sponsored by the Trust;
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9. Furnish the Trustees with statistical information, reports, and
evaluation of Trust assets, and such other information as the
Trustees may require for the management of the Trust; and
10. Evaluate the performance of the Trust, the Administrator and the
Custodian and furnish such other information as the Trustees may
require for the management of the Trust. Such evaluations and
information will be furnished in response to inquiries from
Trustees and in responding thereto the Advisor will seek such
information, as is appropriate, from the Custodian and from other
parties. The Advisor will not undertake extensive independent
investigations in order to respond to such inquiries and will
therefore not be liable for losses or claims incurred by the
Trust arising as a result of problems investigated by the
Advisor.
11. In conjunction with the Administrator, provide, upon the request
of a Participant of the Trust, individualized advice and
consultation to such Participant regarding such Participant's
cash management program.
12. Monitor daily and weekly valuations of each series and if the
amortized cost value deviates materially from the market value
(more than .5%) will consider what action, if any, should be
initiated to reasonably eliminate or reduce material dilution or
other unfair results to Participants.
13. There shall be established by the Trust an internal control
structure to assure compliance with the Declaration of Trust, the
Agreements, Trust policies and procedures, and applicable laws
and rules. In conjunction with the Trust appointed legal counsel
and public accounting firm, provide support and assistance with
audits and reviews as required by the Trust.
B. Compliance. The Advisor shall act in conformity with the Declaration,
the Bylaws and the Information Statement and with the instructions and
directions of the Trustees and shall conform to and comply with all
applicable federal and state laws, rules and regulations, including,
but not limited to, the Investment Company Act of 1940 and all rules
and regulations promulgated thereunder.
C. Placement of Orders. The Advisor shall place all orders for the
purchase, sale, loan or exchange of investment instruments for the
Trust's account with brokers or dealers selected by the Advisor. The
Advisor shall determine whether investment instruments are Permitted
Investments. The Advisor is authorized as the agent of the Trust to
give oral instructions to the Trust's Administrator and Custodian,
confirmed by written instructions to the Custodian, as to
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deliveries of securities and payments for the account of the Trust. In
connection with the selection of brokers and dealers and the placing
of orders, the Advisor is directed to seek the most favorable
execution and price.
D. Best Judgment. The Advisor shall give the Trust the benefit of its
best judgment, experience and effort in rendering services hereunder,
but the Advisor shall not be liable for any loss sustained by reason
of the adoption of any investment policy or the purchase, sale or
retention of any investment instrument, whether the purchase, sale or
retention is based upon its own investigation and research or upon
investigation and research made by any other individual, firm or
corporation, if the purchase, sale or retention is made and such other
individual, firm or corporation was selected with due care and in good
faith. Nothing herein contained shall, however, be construed to
protect the Advisor against any liability to the Trust or its
Participants by reason of misfeasance, bad faith or negligence in the
performance of its duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement, nor shall anything
herein contained constitute a waiver or limitation on any rights which
the Trust may have under any federal securities laws.
E. Maintain Name of Trust. The Advisor will maintain the name "Iowa
Public Agency Investment Trust" and assigns all right, title and
interest in this name to the Trust and agrees to relinquish any and
all right to use of this name by assignment or otherwise upon the
termination of this Agreement or extension thereof.
F. Program Support and Development. The following provisions of this
Agreement relate to the functions of the Advisor in its capacity as
provider of program support and development services. The Advisor
shall:
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1. Provide the services of a dedicated program representative to
illustrate the advantages of the investment services provided by
the Trust to Participants and potential participants and
administer the Unit Holder Services Plan;
2. Annually prepare and present to the Trustees a summary of
anticipated activities and the projected results of support and
development of the program and Unit Holder Service;
3. Annually prepare recommendations of enhancements to the Trustees
to be funded by existing and anticipated reserves within the
Trust Administration Fund; and
4. Quarterly prepare and present to the Trustees summaries of
results of program support and development activities.
Section 2.3. Compensation. For the services to be rendered and the
obligations assumed by the Advisor pursuant to section 2.2 of this Agreement,
the Trust will pay to the Advisor as full compensation a fee as provided in
attachment Exhibit A.
ARTICLE III. EXPENSES
Section 3.1. Expenses Paid by Advisor. The Advisor shall pay the following
expenses, in addition to the expenses to be paid pursuant to Section 2.2:
A. Costs of printing the Information Statement and such other documents
as may be used by the Trust in connection with its seeking and
obtaining of additional Participants;
B. Administrative costs of the Trust associated with the performance of
the Agreement; and
C. Expenses of preparing, printing and mailing Information Statements,
reports, notices and proxy material to Participants of the Trust.
Section 3.2. Expenses Paid by the Trust. All expenses of the Trust not
allocated to the Advisor pursuant to Section 3.1 hereof shall be paid by the
Trust, including, but not limited to the following:
(A) Interest and taxes, if any;
(B) Brokerage commissions;
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(C) Compensation (if any) and expenses of its Trustees;
(D) Legal, audit and accounting expenses;
(E) Fees and expenses of the Custodian;
(F) Costs of appropriate insurance written by reputable insurers for the
Trust and its interests;
(G) Expenses incidental to holding meetings of the Trustees or its
Participants;
(H) Nonrecurring expenses as may arise, including litigation affecting the
Trust and the legal obligations which the Trust may have to indemnify
its officers and Trustees with respect thereto;
and
(I) Trust operations expenses incurred directly by the Trust and
authorized by the Trustees.
ARTICLE IV. LIMITATIONS OF LIABILITY
Section 4.1. Trust's Liability Limitation. The Trust has been created
pursuant to the Declaration, a copy of which has been delivered to the Advisor.
Reference is hereby made to Article V of such Declaration which contains certain
provisions limiting the liability of the Trustees, Participants, officers,
employees and agents of the Trust. The obligations of the Trust created
hereunder are not personally binding upon, nor shall resort be had to the
property of, any of the Trustees, Participants, officers, employees or agents of
the Trust, and only that portion of the Trust Property necessary to satisfy the
obligations of the Trust arising hereunder shall be bound or affected by the
operation of this Agreement. When dealing with third parties on behalf of the
Trust, the Advisor shall include such recitals in written documents as may be
reasonably requested by the Trust pursuant to the provisions of the Declaration
regarding the limitation of liabilities of the Trustees, Participants, officers,
employees and agents of the Trust to the third parties.
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Section 4.2. Indemnification. The Advisor will indemnify, hold harmless,
and protect the Trust against any damages, claims, liability, and costs,
including attorneys' fees, proximately caused by the Advisor's negligent error
or omission in the performance of any professional services within the
responsibility of the Advisor or to any breach of duty or obligation assumed by
or required by the Advisor under the terms of this Agreement.
ARTICLE V. INSURANCE REQUIREMENTS
Section 5.1 The Advisor shall purchase and maintain such insurance as will
protect the Advisor from claims set forth below which may arise out of or result
from the Advisor's operations under this Agreement, whether such operations be
by the Advisor or by any sub-contractor or by anyone directly or indirectly
employed by and of them, or by anyone for whose acts any of them may be liable:
A. Claims under Workers' Compensation, disability benefit, and other
similar employee benefit acts.
B. Claims for damages because of bodily injury, occupational sickness or
disease, or death of the Advisor's employee.
C. Claims for damages because of bodily injury, sickness or disease, or
death of any person other than Advisor's employee.
Section 5.2 The insurance to be maintained by Advisor shall be written as
follows:
A. Workers' Compensation and Employers Liability Insurance as prescribed
by Iowa law minimum limits shown below covering Employers Liability:
Bodily Injury by accident$500,000 each accident
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Bodily Injury by disease$500,000 each accident Bodily Injury by
disease$500,000 policy limit
B. Commercial General Liability Insurance Combined Single Limits shown
below covering Bodily Injury, Property Damage and Personal Injury:
General Aggregate Limit$2,000,000 Products-Completed Operations
Aggregate Limit$2,000,000 Personal and Advertising Injury
Limit$1,000,000 Each Occurrence Limit$1,000,000 Fire Damage Limit (for
any one fire)$ 50,000 Medical Damage Limit (any one person)$ 5,000
C. Automobile Liability insurance, covering all owned, non-owned, hired
and leased vehicles with a minimum combined single limit for Bodily
Injury and Property Damage of $1,000,000 per accident. Insurance must
include Contractual Liability.
D. Bankers Professional Liability Insurance covering activities of this
Agreement. Limit:Minimum of $5,000,000 each claim $5,000,000 aggregate
Retention per loss: Please state. This insurance must include the
following features.
1. Coverage for all premises and operations. The policy shall be
endorsed to provide the Aggregate Per Project Endorsement.
2. Personal and Advertising Injury.
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3. Operations by independent service provider.
4. Contractual Liability coverage.
5. Coverage for property damage underground or damage by explosion
or collapse (XCU).
6. Umbrella/Excess Insurance - At Advisor's option, the limits
specified in this Agreement may be satisfied with a combination
of primary and Umbrella/Excess Insurance.
7. Additional Insured - The Advisor will include the Trust as
additional insured on all policies except Worker's Compensation
as respects all work performed under this Agreement.
8. Insurance Certificates - Each policy noted above shall be issued
by an insurance company authorized to write such insurance in the
State of Iowa and shall be reasonably acceptable to the Trust.
These insurance policies shall not be cancelled without at least
10 days prior written notice to the Trust. A properly executed
Certificate of Insurance showing evidence of these insurance
requirements shall be delivered to the Trust prior to the
commencement of work.
E. Subrogation. To the extent that such insurance is in force and
collectible and to the extent permitted by law, the Trust and Advisor
each hereby releases and waives all right of recovery against the
other or anyone claiming through or under each of them by way of
subrogation or otherwise. The foregoing release and waiver shall apply
to damage to Advisor's equipment, tools, and other personal property
as well as automobiles. A WAIVER OF SUBROGATION is also required as
respects the Advisor's Workers Compensation insurance.
ARTICLE VI. DURATION AND TERMINATION
Section 6.1. Term of Agreement. This Agreement, unless sooner terminated as
provided in Section 6.2 or 6.3 hereof, shall continue until midnight December
31, 2006.
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Section 6.2. Early Termination. Notwithstanding the provisions of the
preceding Section 6.1, this Agreement may be terminated at any time by either
party, without the payment of any penalty by either party upon sixty (60) days
written notice to the other party.
Section 6.3. Termination on Assignment. This Agreement automatically and
immediately terminates without notice or penalty in the event of assignment by
any party hereto without giving prior written consent to such assignment.
ARTICLE VII. CONSULTATION AND RELIANCE
Section 7.1. Consultation with Counsel. The Advisor may consult with
reputable and experienced legal counsel (who may be counsel to the Trust)
concerning any question that may arise with reference to its duties under this
Agreement, and the opinion of such counsel is full and complete protection in
respect of any action taken or omitted by the Advisor in good faith and in
accordance with the opinion.
Section 7.2. Reliance on Certificates. The Advisor is not liable and is
fully protected in relying upon any notice, instrument, direction or other
communication that the Advisor reasonably believes (based on the most recent
certificate of the Secretary of the Trust that has been received by the Advisor)
to have been given by an individual authorized to act on behalf of the Trust
consistent with the Agreement, the Custodian Agreement, the Administrator
Agreement, the Declaration of Trust, and the policies and procedures of the
Trust of which it has notice.
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Other Activities of the Advisor. Nothing in this Agreement
shall prevent the Advisor or its officers, directors or employees from acting as
investment advisor or manager or administrator for any other person, firm,
corporation or entity and shall not in any way limit or
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restrict the Advisor or any of its directors, officers, partners or employees,
or any of its affiliates' directors, officers, partners or employees from
buying, selling or trading any investment instruments for its or their own
accounts, or for the accounts of others for whom it or they may be acting. The
Advisor represents that it will undertake no activities which, in its judgment,
will materially adversely affect the performance of its obligations to the Trust
under this Agreement. Directors, officers, partners, employees and agents of the
Advisor or of affiliated persons of the Advisor may serve as officers, employees
or agents of the Trust solely within the limitations of the Declaration.
Section 8.2. Compliance with Laws, Rules and Regulations. Anything in this
Agreement to the contrary notwithstanding, the Advisor shall refrain from any
action which, in its reasonable judgment, or in the judgment of the Trustees of
which the Advisor has written notice, would violate any law, rule or regulation
of any governmental body or agency having jurisdiction over the Trust or its
Participants or which would not be permitted by the Declaration.
Section 8.3. Opinions and Reports. The Advisor shall provide such opinions
and reports of legal counsel and certified public accountants as may be
requested regarding the Advisor Agreement and relationship with the Trust and
the adequacy and sufficiency of accounting, record keeping, and reporting
obligations of the Advisor pursuant to this Agreement. The Advisor shall provide
the Trust with the most recent report of independent auditors concerning its
function pursuant to this Agreement. The report shall be provided prior to each
annual closing of the Trust; provided, however, that the Advisor shall notify
the Trust immediately upon receipt of any such report which contains any
qualifications or indication of existence of weakness.
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The Advisor shall provide the trust within thirty (30) days of receipt of all
communications from its auditor or any regulatory authority of a material
weakness in internal control structure, or regulatory orders or sanctions
against the Advisor.
Section 8.4. Recommendations. Without limiting the generality of the
foregoing paragraph, the Advisor shall not recommend, or arrange for, the
purchase by the Trust of any investment instrument which is not a Permitted
Investment or the purchase or other acquisition of which would constitute a
violation of the investment restrictions applicable to the Trust set forth in
the Declaration or the policies and procedures of the Trust of which it has
notice.
Section 8.5. Dealing with Third Parties. When dealing with third parties on
behalf of the Trust in connection with the execution of investment transactions
and other matters, the Advisor shall include such recitals in written documents
as may be reasonably requested by the Trust pursuant to the provisions of the
Declaration regarding the limitation of liability of the Trustees, Participants,
officers, employees and agents of the Trust to third parties.
Section 8.6. Amendments. This Agreement shall not be modified or amended
without the consent of each party, which consent must be evidenced by an
instrument in writing executed by each party, or by their respective successors
or permitted assigns.
Section 8.7. Captions. The captions in this Agreement are included for
convenience of reference only and shall in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
Section 8.8. Severability. If any provision of this Agreement shall be held
invalid under any applicable statute or regulation or by a decision of a court
of competent jurisdiction, this
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invalidity shall not affect any other provision of this Agreement that can be
given effect without the invalid provision, and, to this end, the provisions are
severable. Section 8.9. Binding Effect. Subject to the provisions of Section
5.3, this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 8.10. Notices. Notices or consents of any kind required or
permitted under this Agreement shall be in writing and shall be deemed duly
delivered if delivered in person or if mailed by certified mail, return receipt
requested, or telegraph, postage prepaid, to the appropriate party as follows:
If to the Trust:
Iowa Public Agency Investment Trust
c/o Edgar H. Bittle
Ahlers & Cooney, P.C.
100 Court Avenue, Suite 600
Des Moines, Iowa 50309
If to the Advisor or Administrator:
Investors Management Group, Ltd.
1415 28th Street, Suite 200
West Des Moines, Iowa 50266
Attention: Mark A. McClurg
If to the Custodian:
Wells Fargo Bank Iowa, N.A.
Investment Management and Trust Department
666 Walnut Street
P.O. Box 837
Des Moines, Iowa 50304
Attention: Vice President, Custody Services
or at such other address or to the attention of such other individual specified
by written notice.
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Section 8.11. Entire Agreement. This Agreement, and the documents delivered
pursuant to Section 1.1 constitute the entire agreement between the parties.
Section 8.12. Applicable Law. This Agreement shall be deemed to have been
executed in the State of Iowa, and the laws of the State of Iowa govern the
construction of this Agreement and the rights and remedies of the respective
parties hereto.
Section 8.13. Enforcement and Waiver. Each party has the right at all times
to enforce the provisions of this Agreement in strict accordance with the terms,
notwithstanding any conduct or custom on the part of such party in refraining
from so doing at any time or times. The failure to enforce its rights under
those provisions, strictly in accordance with the same, is not construed as
having created a custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or waived the same.
All rights and remedies of the respective parties are cumulative and concurrent
and the exercise of one right or remedy shall not be deemed a waiver or release
of any other right or remedy.
Section 8.14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
Section 8.15. Effectiveness. This Agreement shall take effect January 1,
2004.
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IN WITNESS WHEREOF, the parties hereby have caused this instrument to be
executed by their officers designated below as of the _______ day of ______,
2003. IOWA PUBLIC AGENCY INVESTMENT TRUST
By
--------------------------------------
Chair
Attest:
------------------------------------
Secretary
INVESTORS MANAGEMENT GROUP, LTD.
By
-------------------------------------
Attest:
--------------------------------------
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EXHIBIT A
The Advisor shall receive an advisor fee payable monthly and computed at an
annual rate equal to .12% of the Trust's average daily assets up to $150
million. If the Trust's average daily assets of the Diversified Portfolio or the
DGO Portfolio are greater than $150 million but less than $250 million, the fee
shall be .095% of the Trust's average daily assets for that amount in excess of
$150 million for that Portfolio. If the Trust's average daily assets of the
Diversified Portfolio or the DGO Portfolio are greater than $250 million, the
fee shall be .07% of the Trust's average daily assets for that amount in excess
of $250 million for that Portfolio.
The annual fee for operating the Fixed Term Automated Investment Program
will be 24.49% of the fee collected on securities purchased through the Fixed
Term Automated Investment Program in accordance with the schedule of fees
approved by the Trustees, the Administrator, the Advisor, and the Custodian.
Such fee will be paid by Participants from earnings on the amount invested
pursuant to the Fixed Term Automated Investment Program.
Subject to the foregoing, the fees shall be computed daily and paid
monthly. The fee may be modified upon the mutual agreement of the parties to
this Agreement in writing.
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APPENDIX B
IOWA PUBLIC AGENCY INVESTMENT TRUST
PLAN OF DISTRIBUTION
WHEREAS, Rule 12b-1 under the "Investment Company Act of 1940 ("Rule
12b-1") provides that, except as provided in Rule 12b-1, it shall be unlawful
for any registered open-end management investment company (other than such
company complying with the provisions of Section 10(d) under the Investment
Company Act of 1940 (the "1940 Act")) to act as distribution of securities of
which such company is the issuer, except through an underwriter;
WHEREAS, Rule 12b-1 provides that a registered open-end management
investment company will be deemed to be acting as a distributor of securities of
which it is the issuer, other than through an underwriter, if it engages
directly or indirectly in financing any activity which is primarily intended to
result in the sale of shares issued by such company, including, but not
necessarily limited to, advertising, compensation of underwriters, dealers and
sales personnel, the printing and mailing of prospectuses to other than current
shareholders, and the printing and mailing of sales literature;
WHEREAS, the Iowa Public Agency Investment Trust, an Iowa common law trust
(the "Trust"), has entered into licensing agreements with the Iowa State
Association of Counties, the Iowa Association of Municipal Utilities and the
League of Iowa Municipalities (the "Sponsoring Associations") pursuant to which
each Sponsoring Association provides administrative services to the Trust (the
"Agreements");
WHEREAS, Rule 12b-1 provides that a registered, open-end management company
may act as a distributor of securities of which it is the issuer, provided that
any payments made by such company in connection with such distribution are made
pursuant to a written plan describing all material aspects of the proposed
financing of distribution and that all agreements with any person relating to
implementation of the plan are in writing, and provided further that certain
additional conditions are met;
NOW, THEREFORE, the following constitutes the Plan of Distribution ("the
Plan"), pursuant to which distribution of the Trust Units of beneficial interest
(the "Units") shall be made:
(a) The Trust is solely responsible for all actions required to be taken in
connection with the offer and distribution of the Units.
-1-
Section 2. Payment of Costs of Distribution.
(a) As long as the Agreements or any amendment thereto complying with
Sections 5 and 7 of this Plan, remain in effect, the Trust shall pay monthly to
the Sponsoring Associations an amount calculated of the annual rate of .10% of
average daily net assets of the Trust Portfolios Average daily net assets is
computed in accordance with the Information Statement.
Payments made by the Trust are for expenses and services, including
clerical and administrative services in connection with meetings of the Board of
Trustees, evaluation of performance of service providers, review of compliance
with investment policies, providing the Board of Trustees various reports
thereon,.and maintaining Trust records.
(b) This Plan is subject to limitations imposed by the Sales charge Rule,
unless the Trust, the Sponsoring Associations or any other person obtains
exemptive relief from the provisions Trust of the Sales Charge Rule of Article
III, Section 26 of the NASD Rules of Fair Practice Re: Regulations by the NASD
of Mutual Fund Asset-Based Sales Charges as described in NASD Notice to Members
90-56.
Section 3. Portfolio Approvals.
(a) The Trust represents that this Plan, together with the Agreements, has
been approved by a vote of the Trustees, and of the Trustees of the Trust who
are not interested persons of the Trust, as defined in Section 2(a)(19) of the
1940 Act and the rules, regulations and releases relating thereto, and have no
direct or indirect financial interest in the operation of the Plan, or in the
Agreements, or any other agreement related to the Plan ("Interested Persons"),
cast in person at a meeting called for the purpose of voting on the Plan and the
Agreements.
(b) In approving the Plan and the Agreements, the Trustees have undertaken
the following:
(1) The Trustees have concluded, in the exercise of reasonable
business judgment and in light of their fiduciary duties under
state law and sections 36(a) and 36(b) of the 1940 Act, that the
Plan will benefit the Trust and its Participants.
(2) The Trustees have requested and evaluated such information as was
reasonably necessary to an informed determination of whether the
Plan should be implemented and, in connection therewith,
officials of the Sponsoring Associations, as a party
-2-
to agreements related to the Plan, have finished such information
reasonably necessary for the foregoing purposes.
(3) The Trustees have considered and given appropriate weight to all
pertinent factors, including, without limitation, the following:
(A) the need for independent counsel or experts to assist the
Trustees in reaching a determination;
(B) the nature of the problems or circumstances which
purportedly make implementation of the Plan necessary or
appropriate;
(C) the causes of such problems or circumstances;
(D) the way in which the Plan would address these problems or
circumstances and how it would be expected to resolve or
alleviate them, including the nature and approximate amount
of the expenditures to the overall cost structure of the
Trust, the nature of the anticipated benefits and the time
it would take for those benefits to be achieved;
(E) the merits of possible alternative plans;
(F) the interrelationship between the Plan and the activities of
any other person who finances or has financed distribution
of the Units, including whether any payments by the Trust to
such other person are made in such a manner as to constitute
the indirect financing of distribution by the Trust; and
(G) the possible benefits of the Plan to any other person
relative to those expected to inure to the Trust.
Section 4. Reports to and Review by the Trustees.
(a) Any person authorized to direct the disposition of moneys paid or
payable by the Trust pursuant to the Plan shall provide the Trustees, and the
Trustees shall review, at least quarterly, a written report of the specific
purposes for which such expenditures were made.
-3-
(b) The Agreements and any other agreement related to the Plan shall, by
their respective terms, provide that appropriate officers of the Sponsoring
Associations, or any party to such other agreement, shall provide the Trustees
with such information as may be reasonably necessary to the Trustees for the
purposes required by Sections 3(a), 3(b) and 7(d) of this Plan.
Section 5. Concerning Agreements Related to the Plan.
In addition to the requirements contained in Sections 4(b) and 8 of the
Plan, the Agreements and any other agreement related to the Plan shall be in
writing and shall provide in substance that such agreement shall be terminated:
(a) at any time, without the payment of any penalty, by vote of a majority
of the members of the Trustees who are not Interested Persons or by vote of a
majority of the Participants ofthe Trust on not more than sixty (60) days
written notice to the other party thereto; provided that if a majority of the
Participants of any Portfolio votes to terminate this Plan, such termination
shall be effective with respect to such Portfolio, whether or not the
Participants of any other Portfolio have voted to terminate this Plan; and
(b) automatically, in the event of itsassignment.
Section 6 Amendments an Modifications.
The Plan, the Agreements and any other agreement related to the Plan shall
not be amended, modified or superseded except by an agreement in writing, and,
in addition:
(a) may not be amended to increase materially the amount to be spent for
costs of distribution of any Portfolio of the Trust, as provided in Section 2 of
this Plan, without the approval of a majority of the outstanding Units of such
Portfolio subject to such increase; and
(b) may not be amended in any material manner unless such amendment has
been approved in the manner provided in, and consistent with the procedures
specified by, Sections 3(a), 3(b) and 7(d) of this Plan.
(c) If a majority of the Participants of any Portfolio votes to amend this
Plan, such amendment shall be effective with respect to such Portfolio, whether
or not the Participants of any other Portfolio vote to adopt such amendment.
-4-
Section 7 Continuation and Termination.
(a) Plan shall terminate automatically in the event the participant
approval required pursuant to Section 9 is not received.
(b) The Plan, the Agreements and any other agreement related to the Plan
shall continue in effect for a period of more than one (1) year from its
adoption only as long as the continuance is specifically approved in the manner
described in subsection (d) of this Section.
(c) The Plan may be terminated at any time by a majority of the members of
the Board of Trustees who are not Interested Persons or by vote of a majority of
the Participants.
(d) In determining whether the Plan shall be continued or terminated as
provided in this Section, the Trustees shall make such determination in the
manner provided in, and consistent, with the procedures specified by, Sections
3(a) and 3(b) of this Plan; provided that, in addition to the factors specified
in Section 3(b)(3), the Trustees shall also consider and give appropriate weight
to the following factors:
(1) the effect of the Plan on existing Participants; and
(2) whether the Plan has, in fact, produced the anticipated
benefits for the Trust and Participants.
Section 8 Preservation of Information.
(a) The Trust shall, for a period of not less than six (6)years, preserve
the following information and documentation: the Plan;
(1) the Agreements;
(2) any other agreement related to the Plan;
(3) any report made pursuant to Section 4 of the Plan; and
(4) all minutes which relate to the approval, amendment or
continuation of the Plan, the Agreements or any other
agreement related to the Plan.
(b) With respect to the information and documentation required to be
-5-
preserved pursuant to subsection (a) of this Section, such information and
documentation shall be preserved in an easily accessible place for a period of
not less than two (2) years.
Section 9 Participant Approval and Effective Date,.
The effective date of this Plan is the date upon which this Plan is
approved by the Board of Trustees.
Wherever referred to in this Plan, the vote or Approval of a majority of
the Participants of the Trust or any Portfolio means the vote of (a) sixty-seven
percent (67%) of such outstanding Trust Units present at a meeting if the
holders of more than fifty percent (50%) of such outstanding Trust Units are
present in person or by proxy or (b) more than fifty percent (50%) of such
outstanding units, whichever is lesser.
Approved by the Board of Trustees on March 16, 1993.
-6-
PROXY/VOTING INSTRUCTION CARD
SPECIAL MEETING AUGUST 24, 2004
THIS PROXY IS SOLICITED ON BEHALF OF IPAIT'S BOARD OF TRUSTEES
Revoking any such prior appointments, the undersigned, a participant of Iowa
Public Agency Investment Trust ("IPAIT"), hereby appoints, Thomas Bredeweg,
Robert Haug and William Peterson and each of them, proxies, with full power of
substitution, for and on behalf of the undersigned to vote, as designated below,
as a participant in IPAIT as of the date of record, and as fully as the
undersigned would be entitled to vote if personally present, at the Special
Meeting of Participants to be held at 1735 NE 70th Avenue, Ankeny, Iowa 50021 on
August 24, 2004 at 10:00 am local time, and at any postponements or adjournments
thereof.
THE VOTE OF THE PARTICIPANT REPRESENTED BY THIS PROXY/VOTING INSTRUCTION, WHEN
PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BELOW, OR IF NO
DIRECTION IS MADE, WILL BE VOTED IN FAVOR OF All PROPOSALS AND EACH OF THE OTHER
ITEMS SET FORTH ON THE PROXY.
FOR THE REASONS SET FORTH IN THIS PROXY STATEMENT, THE BOARD OF TRUSTEES
RECOMMENDS THAT PARTICIPANTS VOTE "FOR" ALL PROPOSALS.
Please mark boxes in ink. Sign, date and return this Proxy promptly, using the
enclosed envelope.
Proposal No. 1: The Election of Board of Trustees. To withhold authority to
vote for any Trustee, strike out that name.
Terms Expiring 2005
Don Kerker Susan Vavroch Robert Hagey
Terms Expiring 2006
Leon Rodas Floyd Magnusson Tom Hanafan
Terms Expiring 2007
Craig L. Hall Jody Smith Dianne Kiefer
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 2: Ratification of the Selection of KPMG LLP as IPAIT'S
auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 3: Approve Advisor Agreement
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 4: Approve Rule 12b-1 Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 5: Change in Investment Policy Permitting 397 Day Maturities
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Proposal No. 6: In the discretion of such proxy holders, upon such other
business as may properly come before the Meeting or any and all
postponements or adjournments thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Participants, dated August 24, 2004 and the Proxy Statement furnished
therewith.
Dated ________,___ Authorized Signature:__________________________________
Title of Authorized Signatory:___________________________
IPAIT PARTICIPANT:__________________________________
TO SAVE IPAIT ADDITIONAL VOTE SOLICITATION EXPENSES, PLEASE SIGN, DATE AND
RETURN THIS PROXY PROMPTLY, USING THE ENCLOSED ENVELOPE OR FAX IT TOLLFREE TO
866-260-0246.