-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, COMHd370Yq5M6eBiLNdIGgriWvKjZ8dF1zN21tDrLRhnyxGunSReEHBBA+fy/FOe +qSE5Qr2bmK+xUZ/cExCMA== 0000891554-01-503275.txt : 20010702 0000891554-01-503275.hdr.sgml : 20010702 ACCESSION NUMBER: 0000891554-01-503275 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20010629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST CASH MANAGEMENT TRUST CENTRAL INDEX KEY: 0000317947 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 046447044 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 002-68348 FILM NUMBER: 1671011 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-02819 FILM NUMBER: 1671012 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 8002831155 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NVEST CASH MANAGEMENT TRUST DATE OF NAME CHANGE: 20000202 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND CASH MANAGEMENT TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEL CASH MANAGEMENT TRUST DATE OF NAME CHANGE: 19860901 485APOS 1 d26079_485apos.txt REGISTRATION STATEMENT Registration Nos. 2-68348 811-2819 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. __ [ ] Post-Effective Amendment No. 38 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. 38 [X] (Check appropriate box or boxes.) CDC Nvest Cash Management Trust - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) 399 Boylston Street Boston, Massachusetts 02116 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, including Area Code (617) 449-2801 -------------- John E. Pelletier, Esq. CDC IXIS Asset Management Distributors, L.P. 399 Boylston Street Boston, Massachusetts 02116 - -------------------------------------------------------------------------------- (Name and Address of Agent for Service) Copy to: John M. Loder, Esq. Ropes & Gray One International Place Boston, Massachusetts 02110 - -------------------------------------------------------------------------------- It is proposed that this filing will become effective (check appropriate box): [ ] Immediately upon filing pursuant to paragraph (b) [ ] On (date) pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [X] On September 1, 2001 pursuant to paragraph (a)(1) [ ] 75 days after filing pursuant to paragraph (a)(2) [ ] on (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. [GRAPHIC OMITTED] CDC Nvest Funds --------- CDC IXIS Asset Management Distributors CDC Nvest Money Market Funds CDC Nvest Cash Management Trust -- Money Market Series Reich & Tang Asset Management, LLC CDC Nvest Tax Exempt Money Market Trust Reich & Tang Asset Management, LLC [photo] Prospectus September 1, 2001 What's Inside Goals, Strategies & Risks Page X Fund Fees & Expenses Page X Management Team Page X Fund Services Page X Fund Performance Page X The Securities and Exchange Commission has not approved any Fund's shares or determined whether this Prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime. For general information on the Funds or any of their services and for assistance in opening an account, contact your financial representative or call CDC Nvest Funds. CDC Nvest Funds 399 Boylston Street, Boston, Massachusetts 02116 800-225-5478 www.cdcnvestfunds.com Table of Contents - -------------------------------------------------------------------------------- Goals, Strategies & Risks - -------------------------------------------------------------------------------- CDC Nvest Cash Management Trust -- Money Market Series....................... CDC Nvest Tax Exempt Money Market Trust...................................... - -------------------------------------------------------------------------------- Fund Fees & Expenses - -------------------------------------------------------------------------------- Fund Fees & Expenses......................................................... - -------------------------------------------------------------------------------- More About Risk - -------------------------------------------------------------------------------- More About Risk.............................................................. - -------------------------------------------------------------------------------- Management Team - -------------------------------------------------------------------------------- Meet Each Fund's Investment Adviser and Subadviser........................... - -------------------------------------------------------------------------------- Fund Services - -------------------------------------------------------------------------------- Investing in the Funds....................................................... It's Easy to Open an Account................................................. Buying Shares................................................................ Selling Shares............................................................... Selling Shares in Writing.................................................... Exchanging Shares............................................................ Restrictions on Buying, Selling and Exchanging Shares........................ How Fund Shares Are Priced................................................... Dividends and Distributions.................................................. Tax Consequences............................................................. Additional Investor Services................................................. - -------------------------------------------------------------------------------- Fund Performance - -------------------------------------------------------------------------------- CDC Nvest Cash Management Trust -- Money Market Series....................... CDC Nvest Tax Exempt Money Market Trust..................................... - -------------------------------------------------------------------------------- Glossary of Terms - -------------------------------------------------------------------------------- Glossary of Terms............................................................ If you have questions about any of the terms used in this Prospectus, please refer to the "Glossary of Terms." To learn more about the possible risks of investing in the Funds, please refer to the section entitled "More about Risk." This section details the risks of practices in which the Funds may engage. Please read this section carefully before you invest. Fund shares are not bank deposits and are not guaranteed, endorsed or insured by the Federal Deposit Insurance Corporation or any other government agency, and are subject to investment risks, including possible loss of principal invested. Please see the back cover of this Prospectus for important privacy policy information. 2 Goals, Strategies & Risks - ------------------------- CDC Nvest Cash Management Trust -- Money Market Series --------------------------------------------- Fund Focus --------------------------------------------- Stability Income Growth --------------------------------------------- High X --------------------------------------------- Mod. --------------------------------------------- Low X X --------------------------------------------- Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset Management Advisers") Subadviser: Reich & Tang Asset Management, LLC ("RTAMLLC") Ticker Symbol: Class A Class B Class C NEMXX NMBXX NVCXX - -------------------------------------------------------------------------------- Investment Goal - -------------------------------------------------------------------------------- The Fund seeks maximum current income consistent with preservation of capital and liquidity. - -------------------------------------------------------------------------------- Principal Investment Strategies - -------------------------------------------------------------------------------- The Fund will invest up to 100% of its assets in high-quality, short-term, U.S. dollar-denominated money market investments issued by U.S. and foreign issuers. To preserve its investors' capital, the Fund seeks to maintain a stable $1.00 share price. Some of the Fund's portfolio positions include: o Certificates of deposit o Bankers' acceptances or bank notes o Securities issued or guaranteed by the U.S. government o Commercial paper o Repurchase agreements o Other corporate debt obligations o Cash RTAMLLC will manage the Fund's portfolio in compliance with industry-standard requirements for money market funds. These requirements include: o Credit quality -- The Fund's investments are generally rated in the two highest rating categories as rated by a major credit agency. o Maturity -- Each of the Fund's investments has a maturity of 397 days or less and the dollar-weighted average portfolio maturity is 90 days or less. o Diversification -- The Fund is diversified, which limits its exposure to any given issuer. The Fund's portfolio manager may adjust the Fund's holdings or its average maturity based on actual or anticipated changes in interest rates or credit quality. The Fund is appropriate for investors who seek a conservative investment for their portfolio or who are comfortable with the risks described below and need cash immediately. A "snapshot" of the Fund's investments may be found in the current annual or semiannual report. 3 - -------------------------------------------------------------------------------- Principal Investment Risks of Money Market Securities - -------------------------------------------------------------------------------- Credit and Interest Rate Risk. Subject to credit risk and interest rate risk. Credit risk relates to the ability of an issuer to make payments of principal and interest when due and includes the risk of default. Although generally considered unlikely, the risk of default could cause the Fund's share price or yield to fall. Interest rate risk relates to changes in a security's value as a result of changes in interest rates. Generally, the value of money market securities rises when prevailing interest rates fall and falls when interest rates rise. Foreign Investment Risk. Risks of foreign investments include a lack of issuer information, the risk of political uncertainties as well as different regulatory requirements. Not Insured. An investment in the Fund is not a deposit of a bank or insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the net asset value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. To learn more about the possible risks of investing in the Funds, please refer to the section entitled "More About Risk." This section details the risks of practices in which the Funds may engage. Please read this section carefully before you invest. 4 - -------------------------------------------------------------------------------- Evaluating the Fund's Past Performance - -------------------------------------------------------------------------------- The bar chart and table shown below give an indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and showing the Fund's average annual total returns for the one-year, five-year and ten-year periods (or since inception, if shorter). The Fund's past performance does not necessarily indicate how the Fund will perform in the future. The Fund's current subadviser assumed that function in June 2001. This chart and table reflect results achieved by the previous subadviser under different investment policies for periods prior to June 2001. The Fund's performance may have been different under its current advisory arrangements and investment policies. The bar chart shows the Fund's total returns for Class A shares for each of the last ten calendar years.+
- ----------------------------------------------------------------------------------------------------------------------------- Total Return 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 7.15% 4.58% 2.84% 2.68% 4.76% 4.96% 4.77% 4.99% 4.54% 5.76% - -----------------------------------------------------------------------------------------------------------------------------
Highest Quarterly Return: ____________, up ______% Lowest Quarterly Return: _______________, up ______% + The Fund's Class A shares total return year-to-date as of June 30, 2001 was _____%. The table below shows the Fund's average annual total returns for the one-year, five-year and ten-year periods (or since the class's inception if shorter).
Average Annual Total Returns (for the periods ended June 30, 2001) Past 1 Year Past 5 Years Past 10 Years CDC Nvest Cash Management Trust -- Money Market Series: Class A (Inception 7/10/78) ____% ____% ____% CDC Nvest Cash Management Trust -- Money Market Series: Class B (Inception 9/13/93) ____% ____% ____%* CDC Nvest Cash Management Trust -- Money Market Series: Class C (Inception 3/1/98) ____% -- ____%*
* Since class inception For actual past expenses of Classes A, B and C shares, see the section entitled "Fund Fees & Expenses." For current yield information about the Fund, shareholders or their financial representatives may call CDC Nvest Funds Personal Access Line(R) 24 hours a day at 800-225-5478, press 1. 5 Goals, Strategies & Risks - ------------------------- CDC Nvest Tax Exempt Money Market Trust --------------------------------------------- Fund Focus --------------------------------------------- Stability Income Growth --------------------------------------------- High X --------------------------------------------- Mod. --------------------------------------------- Low X X --------------------------------------------- Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset Management Advisers") Subadviser: Reich & Tang Asset Management, LLC ("RTAMLLC") Ticker Symbol: Class A Class B NEEXX TEBXX - -------------------------------------------------------------------------------- Investment Goal - -------------------------------------------------------------------------------- The Fund seeks current income exempt from federal income taxes consistent with the preservation of capital and liquidity. - -------------------------------------------------------------------------------- Principal Investment Strategies - -------------------------------------------------------------------------------- Under normal market conditions, the Fund will invest in high-quality, short-term, U.S. dollar-denominated money market investments that pay interest that is exempt from federal income tax ("Municipal Securities"). Municipal Securities are generally issued by state and local governments and their agencies. It is a fundamental policy of the Fund that, unless it has adopted a temporary defensive position in response to adverse conditions, it will invest at least 80% of its net assets in Municipal Securities. To preserve its investors' capital, the Fund seeks to maintain a stable $1.00 share price. Some of the Fund's portfolio positions include: o Notes or bonds o Commercial paper o Variable or floating interest rate obligations o Taxable, high-quality money market securities including certificates of deposit, bankers' acceptances or bank notes, and other corporate debt obligations o Repurchase agreements o Cash RTAMLLC will manage the Fund's portfolio in compliance with industry-standard requirements for money market funds. These requirements include: o Credit quality -- The Fund's investments are generally rated in the two highest rating categories as rated by a major credit agency. o Maturity -- Each of the Fund's investments has a maturity of 397 days or less and the dollar-weighted average portfolio maturity is 90 days or less. o Diversification -- The Fund is diversified, which limits its exposure to any given issuer. The Fund's portfolio manager may adjust the Fund's holdings or its average maturity based on actual or anticipated changes in interest rates or credit quality. The Fund is appropriate for investors who seek a conservative investment 6 exempt from federal taxes for their portfolio or who are comfortable with the risks described below and need cash immediately. A "snapshot" of the Fund's investments may be found in the current annual or semiannual report. (See back cover.) - -------------------------------------------------------------------------------- Principal Investment Risks of Money Market Securities - -------------------------------------------------------------------------------- Credit and Interest Rate Risk. Subject to credit risk and interest rate risk. Credit risk relates to the ability of an issuer to make payments of principal and interest when due and includes the risk of default. Although generally considered unlikely, the risk of default could cause the Fund's share price or yield to fall. Interest rate risk relates to changes in a security's value as a result of changes in interest rates. Generally, the value of money market securities rises when prevailing interest rates fall and falls when interest rates rise. Stability and Liquidity. The Fund's price stability and liquidity may not be equal to that of a taxable money market fund, because the market for Municipal Securities is not as broad as the market for taxable money market securities and the average portfolio maturity is generally greater for the Fund than for a taxable money market fund. Not Insured. An investment in the Fund is not a deposit of a bank or insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. To learn more about the possible risks of investing in the Funds, please refer to the section entitled "More About Risk." This section details the risks of practices in which the Funds may engage. Please read this section carefully before you invest. 7 - -------------------------------------------------------------------------------- Evaluating the Fund's Past Performance - -------------------------------------------------------------------------------- The bar chart and table shown below give an indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and showing the Fund's average annual total returns for the one-year, five-year and ten-year periods (or since inception, if shorter). The Fund's past performance does not necessarily indicate how the Fund will perform in the future. The Fund's current subadviser assumed that function in June 2001. This chart and table reflect results achieved by the previous subadviser under different investment policies for periods prior to June 2001. The Fund's performance may have been different under its current advisory arrangements and investment policies. The bar chart shows the Fund's total returns for Class A shares for each of the last ten calendar years.+
- ----------------------------------------------------------------------------------------------------------------------------- Total Return 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 4.93% 3.42% 2.20% 2.10% 3.15% 3.33% 3.20% 3.29% 2.80% 3.57% - -----------------------------------------------------------------------------------------------------------------------------
Highest Quarterly Return: _________, up ______% Lowest Quarterly Return: __________, up _____% + The Fund's Class A shares total return year-to-date as of June 30, 2001 was _____%. The table below shows the Fund's average annual total returns for the one-year, five-year and ten-year periods (or since the class's inception if shorter).
Average Annual Total Returns (for the periods ended June 30, 2001) Past 1 Year Past 5 Years Past 10 Years CDC Nvest Tax Exempt Money Market Trust -- Class A (Inception 4/21/83) _____% _____% _____% CDC Nvest Tax Exempt Money Market Trust -- Class B (Inception 9/13/93) _____% _____% _____%*
* Since class inception For actual past expenses of Classes A and B shares, see the section entitled "Fund Fees & Expenses." For current yield information about the Fund, shareholders or their financial representatives may call CDC Nvest Funds Personal Access Line(R) 24 hours a day at 800-225-5478, press 1. 8 Fund Fees & Expenses - -------------------- The following tables describe the fees and expenses that you may pay if you buy and hold shares of each Fund. - -------------------------------------------------------------------------------- Shareholder Fees - -------------------------------------------------------------------------------- (fees paid directly from your investment)
Cash Management Trust -- Tax Exempt Money Market Series Money Market Trust Class A Class B Class C Class A Class B Maximum sales charge (load) imposed on purchases None None None None None Maximum deferred sales charge (load) None* None* None* None* None* Redemption fees None** None** None** None** None**
* Shares of each class are sold without any sales charge. However, shares may be subject to a Contingent Deferred Sales Charge ("CDSC") if the shares were purchased by exchange from another CDC Nvest Fund. See the section entitled "Exchanging Shares." ** Generally, a transaction fee will be charged for expedited payment of redemption proceeds such as by wire or overnight delivery. - -------------------------------------------------------------------------------- Annual Fund Operating Expenses - -------------------------------------------------------------------------------- (expenses that are deducted from Fund assets, as a percentage of average daily net assets)
Cash Management Trust -- Tax Exempt Money Market Series Money Market Trust Class A Class B Class C Class A Class B Management fees 0.40% 0.40% 0.40% 0.40% 0.40% Distribution and/or service (12b-1) fees ____% ____% ____% ____% ____% Other expenses ____% ____% ____% ____% ____% Total annual fund operating expenses ____% ____% ____% ____% ____%
- -------------------------------------------------------------------------------- Example - -------------------------------------------------------------------------------- This example, which is based upon the expenses shown above, is intended to help you compare the cost of investing in the Funds with the cost of investing in other mutual funds. The example assumes that: o You invest $10,000 in a Fund for the time periods indicated and then redeem all of your shares at the end of those periods; o Your investment has a 5% return each year; and o A Fund's operating expenses remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
Cash Management Trust -- Tax Exempt Money Market Series Money Market Trust Class A Class B Class C Class A Class B (1) (1) (1) 1 year $_____ $_____ $_____ $_____ $_____ 3 years $_____ $_____ $_____ $_____ $_____ 5 years $_____ $_____ $_____ $_____ $_____ 10 years $_____ $_____ $_____ $_____ $_____
(1) Assumes CDSC does not apply to the redemption. See the section entitled "Exchanging Shares." 9 More About Risk - --------------- The Funds have principal investment strategies that come with inherent risks. The following is a list of risks to which each Fund may be subject by investing in various types of securities or engaging in various practices. Credit Risk (Both Funds) The risk that the issuer of a security, or the counterparty to a contract, will default or otherwise become unable to honor a financial obligation. Foreign Risk (Cash Management Trust - Money Market Series) A foreign security may be affected by limited liquidity and higher volatility than securities held by a U.S. bank. Political, economic and information risks as well as different regulatory requirements are also associated with securities held by a foreign bank. Information Risk (Both Funds) The risk that key information about a security is inaccurate or unavailable. Interest Rate Risk (Both Funds) The risk of market losses attributable to changes in interest rates. In general, the prices of fixed-income securities rise when interest rates fall, and prices fall when interest rates rise. Liquidity Risk (Both Funds) The risk that certain securities may be difficult or impossible to sell at the time and at the price that the seller would like. This may result in a loss or may otherwise be costly to a Fund. These types of risks may also apply to restricted securities, Section 4(2) Commercial Paper, or Rule 144A Securities. Management Risk (Both Funds) The risk that a strategy used by a Fund's portfolio management may fail to produce the intended result. Market Risk (Both Funds) The risk that the market value of a security may move up and down, sometimes rapidly and unpredictably, based upon a change in an issuer's financial condition as well as overall market and economic conditions. Opportunity Risk (Both Funds) The risk of missing out on an investment opportunity because the assets necessary to take advantage of it are invested in less profitable investments. Political Risk (Both Funds) The risk of losses directly attributable to government or political actions. Valuation Risk (Both Funds) The risk that a Fund has valued certain securities at a higher price than it can sell them for. 10 Management Team - --------------- Meet Each Fund's Investment Adviser and Subadviser The CDC Nvest Funds family includes 27 mutual funds with a total of over $__ billion in assets under management as of June 30, 2001. CDC Nvest Funds are distributed through CDC IXIS Asset Management Distributors, L.P. (the "Distributor"). This Prospectus covers CDC Nvest Cash Management Trust -- Money Market Series and CDC Nvest Tax Exempt Money Market Trust (the "Money Market Funds" and each a "Fund"). CDC Nvest Equity Funds, CDC Nvest Income Funds, CDC Nvest Star Funds, Kobrick Funds, CDC Nvest Tax Free Funds and the Money Market Funds constitute the "CDC Nvest Funds". - -------------------------------------------------------------------------------- CDC IXIS Asset Management Advisers, L.P. - -------------------------------------------------------------------------------- CDC IXIS Asset Management Advisers, L.P. (formerly Nvest Management, L.P.), located at 399 Boylston Street, Boston, Massachusetts 02116, serves as the adviser to each of the Funds. CDC IXIS Asset Management Advisers is a subsidiary of CDC IXIS Asset Management North America, L.P. ("CDC IXIS Asset Management North America", formerly Nvest Companies, L.P.), which is a subsidiary of CDC IXIS Asset Management. CDC IXIS Asset Management is the investment management arm of France's Caisse des Depots et Consignations ("CDC"), a major diversified financial institution. As of June 30, 2001, CDC IXIS Asset Management North America's __ principal subsidiary or affiliated asset management firms collectively had $___ billion in assets under management. CDC IXIS Asset Management Advisers oversees, evaluates and monitors the subadvisory services provided to each Fund. It also provides general business management and administration to each Fund. CDC IXIS Asset Management Advisers does not determine what investments will be purchased by the Funds RTAMLLC makes investment decisions for each Fund. The combined advisory and subadvisory fees paid by the Funds for the year ended June 30, 2001, as a percentage of each Fund's average daily net assets, were _____% for the Cash Management Trust -- Money Market Series ____% for the Tax Exempt Money Market Trust. - -------------------------------------------------------------------------------- Subadviser - -------------------------------------------------------------------------------- Reich & Tang Asset Management, LLC, located at 600 Fifth Avenue, New York, New York 10020, serves as the subadviser for each Fund. RTAMLLC is a limited liability company with 99.5% of its membership interest owned by CDC IXIS Asset Management North America, L.P. and the remaining 0.5% membership interest owned by CDC IXIS Asset Management Holdings, Inc. RTAMLLC's origins date back to 1970, and is, as of April 30, 2001, investment manager, adviser or subadviser with respect to assets aggregating in excess of $15.6 billion. - -------------------------------------------------------------------------------- Subadvisory Agreements - -------------------------------------------------------------------------------- Each Fund has received an exemptive order from the Securities and Exchange Commission (the "SEC") which permits CDC IXIS Asset Management Advisers to amend or continue existing subadvisory agreements when approved by the Board of Trustees, without shareholder approval. The exemption also permits CDC IXIS Asset Management Advisers to enter into new subadvisory agreements with subadvisers that are not affiliated with CDC IXIS Asset Management Advisers, if approved by the Board of Trustees. Shareholders will be notified of any subadviser changes. - -------------------------------------------------------------------------------- Portfolio Trades - -------------------------------------------------------------------------------- In placing portfolio trades, each Fund's adviser or subadviser may use brokerage firms that market the Fund's shares or are affiliated with CDC IXIS Asset Management North America, CDC IXIS Asset Management Advisers, or RTAMLLC. In placing trades, RTAMLLC will seek to obtain the best combination of price and execution, which involves a number of judgmental factors. Such portfolio trades are subject to applicable regulatory restrictions and related procedures adopted by the Board of Trustees. 11 Fund Services - ------------- Investing in the Funds - -------------------------------------------------------------------------------- Choosing a Share Class - -------------------------------------------------------------------------------- CDC Nvest Cash Management Trust -- Money Market Series offers Class A, Class B and Class C shares to the public and CDC Nvest Tax Exempt Money Market Trust offers only Class A and Class B shares. The classes of each Fund enable shareholders in the same classes of another CDC Nvest Fund to invest in the Money Market Funds through an exchange of shares. - -------------------------------------------------------------------------------- Certificates - -------------------------------------------------------------------------------- Certificates will not be automatically issued for any class of shares. Upon written request, you may receive certificates for Class A shares only. It's Easy to Open an Account - -------------------------------------------------------------------------------- To Open an Account with CDC Nvest Funds: - -------------------------------------------------------------------------------- 1. Read this Prospectus carefully. 2. Determine how much you wish to invest. The following chart shows the investment minimums for various types of accounts:
Minimum to Open Minimum to Open an Account Using Minimum for Type of Account an Account Investment Builder Existing Accounts Any account other than those listed below $2,500 $100 $100 Accounts registered under the Uniform Gifts to Minors Act ("UGMA") or the Uniform Transfers to Minors Act ("UTMA") $2,500 $100 $100 Individual Retirement Accounts ("IRAs") $500 $100 $100 Retirement plans with tax benefits such as corporate pension, profit sharing and Keogh plans $250 $100 $100 Payroll Deduction Investment Programs for SARSEP*, SEP, SIMPLE IRA, 403(b)(7) and certain other retirement plans $25 N/A $25
* Effective January 1, 1997, the Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA became available replacing SARSEP plans. SARSEP plans established prior to January 1, 1997 may remain active and continue to add new employees. 3. Complete the appropriate parts of the account application, carefully following the instructions. If you have any questions, please call your financial representative or CDC Nvest Funds at 800-225-5478. For more information on CDC Nvest Funds' investment programs, refer to the section entitled "Additional Investor Services" in this Prospectus. 4. Use the following sections as your guide for purchasing shares. 12 - -------------------------------------------------------------------------------- Self-Servicing Your Account - -------------------------------------------------------------------------------- Buying or selling shares is easy with the services described below: - -------------------------------------------------------------------------------- CDC Nvest Funds Personal Access Line(R) - -------------------------------------------------------------------------------- 800-225-5478, press 1 - -------------------------------------------------------------------------------- CDC Nvest Funds Web Site - -------------------------------------------------------------------------------- www.cdcnvestfunds.com You have access to your account 24 hours a day by calling the Personal Access Line(R) from a touch-tone telephone or by visiting us online. Using these customer service options, you may: o purchase, exchange or redeem shares in your existing accounts (certain restrictions may apply); o review your account balance, recent transactions, Fund prices and recent performance; o order duplicate account statements; and o obtain tax information. Please see the following pages for other ways to buy, exchange or sell your shares. 13 Fund Services - ------------- Buying Shares
Opening an Account Adding to an Account - ----------------------------------------------------------------------------------------------------------------------------------- Through Your Investment Dealer - ----------------------------------------------------------------------------------------------------------------------------------- o Call your investment dealer for information. o Call your investment dealer for information. - ----------------------------------------------------------------------------------------------------------------------------------- By Mail - ----------------------------------------------------------------------------------------------------------------------------------- o Make out a check in U.S. dollars for the o Make out a check in U.S. dollars for the investment amount, payable to "CDC Nvest investment amount, payable to "CDC Nvest Funds." Third party checks and "starter" Funds." Third party checks and "starter" checks will not be accepted. checks will not be accepted. [envelope icon] o Mail the check with your completed o Fill out the detachable investment slip from application to CDC Nvest Funds, P.O. Box an account statement. If no slip is 8551, Boston, MA 02266-8551. available, include with the check a letter specifying the Fund name, your class of shares, your account number and the registered account name(s). To make investing even easier, you can order more investment slips by calling 800-225-5478. - ----------------------------------------------------------------------------------------------------------------------------------- By Exchange - ----------------------------------------------------------------------------------------------------------------------------------- o The exchange must be for a minimum of $1,000 o The exchange must be for a minimum of $1,000 or for all of your shares. or for all of your shares. [exchange icon] o Obtain a current prospectus for the Fund into o Call your investment dealer or CDC Nvest which you are exchanging by calling your Funds at 800-225-5478 or visit investment dealer or CDC Nvest Funds at www.cdcnvestfunds.com to request an exchange. 800-225-5478. o Call your investment dealer or CDC Nvest o See the section entitled "Exchanging Shares" Funds to request an exchange. for more details. o See the section entitled "Exchanging Shares" for more details. - ----------------------------------------------------------------------------------------------------------------------------------- By Wire - ----------------------------------------------------------------------------------------------------------------------------------- o Call CDC Nvest Funds at 800-225-5478 to o Visit www.cdcnvestfunds.com to add shares to obtain an account number and wire transfer your account by wire. instructions. Your bank may charge you for such a transfer. [wire icon] o Instruct your bank to transfer funds to State Street Bank & Trust Company, ABA# 011000028, DDA# 99011538. o Specify the Fund name, your class of shares, your account number and the registered account name(s). Your bank may charge you for such a transfer.
14 - ----------------------------------------------------------------------------------------------------------------------------------- Automatic Investing Through Investment Builder - ----------------------------------------------------------------------------------------------------------------------------------- o Indicate on your application that you would o Please call CDC Nvest Funds at 800-225-5478 like to begin an automatic investment plan for a Service Options Form. A signature through Investment Builder and the amount of guarantee may be required to add this your monthly investment ($100 minimum). privilege. o Send a check marked "Void" or a deposit slip o See the section entitled "Additional Investor from your bank account along with your Services". application. - ----------------------------------------------------------------------------------------------------------------------------------- Through Automated Clearing House (ACH) - ----------------------------------------------------------------------------------------------------------------------------------- o Ask your bank or credit union whether it is a o Call CDC Nvest Funds at 800-225-5478 or visit member of the ACH system. www.cdcnvestfunds.com to add shares to your account through ACH. o Complete the "Bank Information" section on o If you have not signed up for the ACH system, your account application. please call CDC Nvest Funds for a Service Options Form. A signature guarantee may be required to add this privilege. o Mail your completed application to CDC Nvest Funds, P.O. Box 8551, Boston, MA 02266-8551.
15 Fund Services - ------------- Selling Shares To Sell Some or All of Your Shares Certain restrictions may apply. See section entitled "Restrictions on Buying, Selling and Exchanging Shares." - -------------------------------------------------------------------------------- Through Your Investment Dealer - -------------------------------------------------------------------------------- o Call your investment dealer for information. - -------------------------------------------------------------------------------- By Mail - -------------------------------------------------------------------------------- o Write a letter to request a redemption specifying the name of your Fund, your class of shares, your account number, the exact registered account name(s), the number of shares or the dollar amount to be redeemed and the method by which you wish to receive your proceeds. Additional materials may be required. See the section entitled "Selling Shares in Writing." [envelope icon] o The request must be signed by all of the owners of the shares and must include the capacity in which they are signing, if appropriate. o Mail your request by regular mail to CDC Nvest Funds, P.O. Box 8551, Boston, MA 02266-8551 or by registered, express or certified mail to CDC Nvest Funds, 66 Brooks Drive, Braintree, MA 02184. o Your proceeds (less any applicable CDSC) will be delivered by the method chosen in your letter. If you choose to have your proceeds delivered by mail, they will generally be mailed to you on the business day after the request is received in good order. You may also choose to redeem by wire or through ACH (see below). - -------------------------------------------------------------------------------- By Exchange - -------------------------------------------------------------------------------- o Obtain a current prospectus for the Fund into which you are exchanging by calling your investment dealer or CDC Nvest Funds at 800-225-5478. [exchange icon] o Call CDC Nvest Funds or visit www.cdcnvestfunds.com to request an exchange. o See the section entitled "Exchanging Shares" for more details. - -------------------------------------------------------------------------------- By Wire - -------------------------------------------------------------------------------- o Fill out the "Bank Information" section on your account application. [wire icon] o Call CDC Nvest Funds at 800-225-5478, visit www.cdcnvestfunds.com or indicate in your redemption request letter (see above) that you wish to have your proceeds wired to your bank. o Proceeds (less any applicable CDSC) will generally be wired on the next business day. A wire fee (currently $5.00) will be deducted from the proceeds. - -------------------------------------------------------------------------------- Through Automated Clearing House - -------------------------------------------------------------------------------- o Ask your bank or credit union whether it is a member of the ACH system. o Complete the "Bank Information" section on your account application. [ACH icon] o If you have not signed up for the ACH system on your application, please call CDC Nvest Funds at 800-225-5478 for a Service Options Form. o Call CDC Nvest Funds or visit www.cdcnvestfunds.com to request a redemption through this system. o Proceeds (less any applicable CDSC) will generally arrive at your bank within three business days. - -------------------------------------------------------------------------------- By Systematic Withdrawal Plan - -------------------------------------------------------------------------------- o Please refer to the section entitled "Additional Investor Services" or call CDC Nvest Funds at 800-225-5478 or your financial representative for information. [systematic icon] o Because withdrawal payments may have tax consequences, you should consult your tax adviser before establishing such a plan. 16 - -------------------------------------------------------------------------------- By Telephone - -------------------------------------------------------------------------------- o You may receive your proceeds by mail, by wire or through ACH (see above). [telephone icon] o Call CDC Nvest Funds at 800-225-5478 to choose the method you wish to use to redeem your shares. - -------------------------------------------------------------------------------- By Check (for Class A only) - -------------------------------------------------------------------------------- o Select the checkwriting option on your account application and complete the attached signature card. [check icon] o To add this privilege to an existing account, call CDC Nvest Funds at 800-225-5478 for a Service Options Form. o Each check must be written for $250 or more. o You may not close your account by withdrawal check. Please call your financial representative or CDC Nvest Funds to close an account. 17 Fund Services - ------------- Selling Shares in Writing If you wish to redeem your shares in writing, all owners of the shares must sign the redemption request in the exact names in which the shares are registered and indicate any special capacity in which they are signing. In certain situations, you will be required to make your request to sell shares in writing. In these instances, a letter of instruction signed by the authorized owner is necessary. In certain situations, we also may require a signature guarantee or additional documentation. A signature guarantee protects you against fraudulent orders and is necessary if: o your address of record has been changed within the past 30 days; o you are selling more than $100,000 worth of shares and you are requesting the proceeds by check; or o a proceeds check for any amount is either mailed to an address other than the address of record or not payable to the registered owner(s). A notary public cannot provide a signature guarantee. A signature guarantee can be obtained from one of the following sources: o a financial representative or securities dealer; o a federal savings bank, cooperative, or other type of bank; o a savings and loan or other thrift institution; o a credit union; or o a securities exchange or clearing agency. The table below shows some situations in which additional documentation may be necessary. Please call your financial representative or CDC Nvest Funds regarding requirements for other account types. Seller (Account Type) Requirements for Written Requests Individual, joint, sole o The request must include the proprietorship, UGMA/UTMA signatures of all persons (minor accounts) authorized to sign, including title, if applicable. o Signature guarantee, if applicable (see above). Corporate or association accounts o The request must include the signatures of all persons authorized to sign, including title. Owners or trustees of trust accounts o The request must include the signatures of all trustees authorized to sign, including title. o If the names of the trustees are not registered on the account, please provide a copy of the trust document certified within the past 60 days. o Signature guarantee, if applicable (see above). Joint tenancy whose co-tenants are o The request must include the deceased signatures of all surviving tenants of the account. o Copy of the death certificate. o Signature guarantee if proceeds check is issued to other than the surviving tenants. Power of Attorney (POA) o The request must include the signatures of the attorney-in-fact, indicating such title. o A signature guarantee. o Certified copy of the POA document stating it is still in full force and effect, specifying the exact Fund and account number, and certified within 30 days of receipt of instructions.* Qualified retirement benefit plans o The request must include the (except CDC Nvest Funds prototype signatures of all those authorized documents) to sign, including title. o Signature guarantee, if applicable (see above). 18 Executors of estates, administrators, o The request must include the guardians, conservators signatures of all those authorized to sign, including capacity. o A signature guarantee. o Certified copy of court document where signer derives authority, e.g.: Letters of Administration, Conservatorship, Letters Testamentary.* Individual Retirement Accounts o Additional documentation and distribution forms are required. * Certification may be made on court documents by the court, usually certified by the clerk of the court. Power of Attorney certification may be made by a commercial bank, broker/member of a domestic stock exchange or a practicing attorney. 19 Fund Services - ------------- Exchanging Shares In general, you may exchange shares of your Fund for shares of the other Money Market Fund or another CDC Nvest Fund subject to certain restrictions shown below. An exchange must be for a minimum of $1,000 (or the total net asset value of your account, whichever is less), or $100 if made under the Automatic Exchange Plan (see the section entitled "Additional Investor Services"). All exchanges are subject to the eligibility requirements of the Fund into which you are exchanging. The exchange privilege may be exercised only in those states where shares of the Funds may be legally sold. Please refer to the Statement of Additional Information (the "SAI") for more detailed information on exchanging Fund shares. - -------------------------------------------------------------------------------- Exchange Options - -------------------------------------------------------------------------------- Class A shares of a Money Market Fund not previously subject to a front-end sales charge or CDSC may exchange into: o Class A shares of a Money Market Fund without paying a front-end sales charge or CDSC. o Class A shares of a CDC Nvest Fund other than a Money Market Fund, after paying the applicable front-end sales charge and subjecting the new shares to any applicable CDSC. Class A shares of a Money Market Fund previously subject to a front-end sales charge or CDSC may exchange into: o Class A shares of the other Money Market Fund without a front-end sales charge or CDSC. o Class A shares of a CDC Nvest Fund other than a Money Market Fund without paying a front-end sales charge or CDSC (unless you exchanged into a Money Market Fund from shares of the CDC Nvest Short Term Corporate Income Fund ("Corporate Income Fund", formerly Nvest Adjustable Rate U.S. Government Fund) purchased before December 1, 1998, in which case you would be required to pay the difference between the front-end sales charge previously paid on your Corporate Income Fund shares and the front-end sales charge currently imposed on other CDC Nvest Funds shares). Class B shares of a Money Market Fund may exchange into: o Class B shares of the other Money Market Fund without paying a front-end sales charge or CDSC. o Class B shares of a CDC Nvest Fund other than a Money Market Fund subject to its CDSC schedule. Class C shares in accounts of Cash Management Trust -- Money Market Series established on or after December 1, 2000 and that have not previously been subject to a front-end sales charge may exchange into: o Class C shares of any CDC Nvest Fund other than a Money Market Fund subject to its sales charge and CDSC schedule. Class C shares in accounts of Cash Management Trust -- Money Market Series established before December 1, 2000 or that have previously been subject to a front-end sales charge may exchange into: o Class C shares of a CDC Nvest Fund other than a Money Market Fund without paying a front-end sales charge. If you exchange shares of a CDC Nvest Fund other than a Money Market Fund into shares of the Money Market Funds, the holding period for purposes of determining the CDSC for Classes A, B or C shares and conversion from Class B into Class A shares stops until you exchange back into shares of another CDC Nvest Fund other than a Money Market Fund. If you choose to redeem those Money Market Fund shares, a CDSC may apply. 20 Fund Services - ------------- Restrictions on Buying, Selling and Exchanging Shares - -------------------------------------------------------------------------------- Purchase and Exchange Restrictions - -------------------------------------------------------------------------------- Although the Funds do not anticipate doing so, they reserve the right to suspend or change the terms of purchasing or exchanging shares. The Funds and the Distributor reserve the right to refuse or limit any purchase or exchange order by a particular purchaser (or group of related purchasers) if the transaction is deemed harmful to the best interests of the Fund's other shareholders or would disrupt the management of the Fund. The Funds and the Distributor reserve the right to restrict purchases and exchanges for the accounts of "market timers" by limiting the transaction to a maximum dollar amount. An account will be deemed to be one of a market timer if: (i) more than two exchange purchases of a given Fund are made for the account in a calendar quarter or (ii) the account makes one or more exchange purchases of a given Fund in a calendar quarter in an aggregate amount in excess of 1% of the Fund's total net assets. - -------------------------------------------------------------------------------- Selling Restrictions - -------------------------------------------------------------------------------- The table below describes restrictions placed on selling shares of any Fund described in this Prospectus: - -------------------------------------------------------------------------------- Restriction Situation - -------------------------------------------------------------------------------- The Fund may suspend the right of o When the New York Stock Exchange redemption or postpone payment for (the "Exchange") is closed (other more than 7 days: than a weekend/holiday) o During an emergency o Any other period permitted by the SEC The Fund reserves the right to o With a notice of a dispute between suspend account services or refuse registered owners transaction requests: o With suspicion/evidence of a fraudulent act The Fund may pay the redemption price o When it is detrimental for the Fund in whole or in part by a distribution to make cash payments as determined in kind of readily marketable in the sole discretion of the securities in lieu of cash or may take Adviser or subadviser up to 7 days to pay a redemption request in order to raise capital: - -------------------------------------------------------------------------------- The Fund may withhold redemption o When redemptions are made within 10 proceeds until the check or funds calendar days of purchase by check have cleared: or ACH of the shares being redeemed - -------------------------------------------------------------------------------- Telephone redemptions are not accepted for tax-qualified retirement accounts. If you hold certificates representing your shares, they must be sent with your request for it to be honored. The Fund recommends that certificates be sent by registered mail. - -------------------------------------------------------------------------------- Small Account Redemption - -------------------------------------------------------------------------------- When the Fund account falls below a set minimum (currently $1,000 as set by the Board of Trustees), the Fund may close your account and send you the proceeds. You will have 60 days after being notified of the Fund's intention to close your account to increase its amount to the set minimum. This does not apply to certain qualified retirement plans or accounts that have fallen below the minimum solely because of fluctuations in the Fund's net asset value per share. 21 Fund Services - ------------- How Fund Shares Are Priced "Net asset value" is the price of one share of a Fund without a sales charge, and is calculated each business day using this formula: - -------------------------------------------------------------------------------- Net Asset Value = Total market value of securities + Cash and other assets - Liabilities Number of outstanding shares - -------------------------------------------------------------------------------- Fund securities are generally valued at amortized cost on each day that the Exchange is open for trading. Amortized cost approximates market value of the security at the time of purchase. By using amortized cost valuation, the Funds seek to maintain a constant net asset value of $1.00 per share despite minor shifts in the market value of their portfolio securities. The net asset value of Fund shares is determined according to this schedule: o A share's net asset value is determined at the close of regular trading on the Exchange on the days the Exchange is open for trading. This is normally 4:00 p.m. Eastern time. Fund shares will not be priced on the days on which the Exchange is closed for trading. o The price you pay for purchasing, redeeming or exchanging a share will be based upon the net asset value next calculated after your order is received "in good order" by State Street Bank and Trust Company, the Fund's custodian (plus or minus applicable sales charges as described earlier in this Prospectus). o Requests received by the Distributor after the Exchange closes will be processed based upon the net asset value determined at the close of regular trading on the next day that the Exchange is open, with the exception that those orders received by your investment dealer before the close of the Exchange and received by the Distributor before 5:00 p.m. Eastern time* on the same day will be based on the net asset value determined on that day. * Under limited circumstances, the Distributor may enter into a contractual agreement pursuant to which it may accept orders after 5:00 p.m., but not later than 8:00 p.m. Generally, during times of substantial economic or market change it may be difficult to place your order by phone. During these times, you may deliver your order in person to the Distributor or send your order by mail as described in "Buying Shares" and "Selling Shares." 22 Fund Services - ------------- Dividends and Distributions The Funds generally distribute most or all of their net investment income (tax exempt and taxable income other than long-term capital gains) in the form of dividends. Each Fund declares dividends for each class daily and pays them monthly. Each Fund expects to distribute all net realized long- and short-term capital gains annually, after applying any available capital loss carryovers. The Board of Trustees may adopt a different schedule as long as payments are made at least annually. Distributions will automatically be reinvested in shares of the same class of the distributing Fund at net asset value, unless you select one of the following alternatives: o Participate in the Dividend Diversification Program, which allows you to have all dividends and distributions automatically invested at net asset value (plus an applicable sales charge or CDSC) in shares of the same class of a Money Market Fund or CDC Nvest Fund registered in your name. Class A shareholders may also have dividends and distributions automatically invested in Class C shares of a CDC Nvest Fund. Certain investment minimums and restrictions may apply. For more information about this program, see the section entitled "Additional Investor Services." o Receive distributions from dividends and interest in cash while reinvesting distributions from capital gains in additional shares of the same class of a Money Market Fund or in the same class of another CDC Nvest Fund. o Receive all distributions in cash. For more information or to change your distribution option, contact CDC Nvest Funds in writing or call 800-225-5478. If you earn more than $10 annually in taxable income from a non-retirement plan CDC Nvest Fund, you will receive a Form 1099 to help you report the prior calendar year's distributions on your federal income tax return. Be sure to keep this Form 1099 as a permanent record. A fee may be charged for any duplicate information requested. Tax Consequences Each Fund intends to meet all requirements under Subchapter M of Internal Revenue Code necessary to qualify for treatment as a "regulated investment company" and thus does not expect to pay any federal income tax on income and capital gains distributed to shareholders. Fund distributions paid to you are taxable whether you receive them in cash or reinvested them in additional shares (except for exempt-interest dividends earned by Tax Exempt Money Market Trust - see below). Distributions derived from net short-term capital gains or investment income are generally taxable at ordinary income rates. Distributions of gains from investments that a Fund owned for more than one year that are designated by a Fund as capital gain dividends will generally be taxable to a shareholder receiving such distributions as long-term capital gain, regardless of how long the shareholder has held Fund shares. Distributions are taxable to you even if they are paid from income or gains earned by the Fund before your investment (and thus were included in the price you paid). Any gain resulting from the sale of Fund shares (or an exchange of Fund shares for shares of another CDC Nvest Fund) will generally be subject to federal income tax. If you purchase shares of a Fund shortly before it declares a capital gain distribution or a dividend, a portion of the purchase price may be returned to you as a taxable distribution. Dividends derived from interest on U.S. government securities for the CDC Nvest Cash Management Trust - Money Market Series may be exempt from state and local income taxes. The Fund intends to advise shareholders of the proportion of its dividends that are derived from such interest. You should consult your tax adviser about any federal, state or local taxes that may apply to the distributions you receive. Special tax considerations for Tax Exempt Money Market Trust Dividends paid to you as a shareholder of the Tax Exempt Money Market Trust that are derived from interest on Municipal Securities are "exempt-interest dividends" and generally may be excluded from gross income on your federal tax return. However, if you receive Social Security or railroad retirement benefits, you may be taxed on a portion of those benefits as a result of receiving tax-exempt income. Also, if the Fund invests in "private activity" municipal securities, a portion of the Fund's dividends may constitute a tax preference item subject to the alternative minimum tax. 23 The Fund may at times purchase tax-exempt securities at a discount from the price at which they were originally issued. For federal income tax purposes, some or all of this market discount will be included in the Fund's ordinary income and will be taxable to you as such when it is distributed to you. The federal exemption for "exempt-interest dividends" does not necessarily result in exemption from state and local taxes. Distributions of these dividends may be exempt from local and state taxation to the extent they are derived from the state and locality in which you reside. You should check the consequences under your local and state tax laws before investing in the Fund. The Fund will report annually on a state-by-state basis the source of income the Fund receives on tax-exempt bonds that was paid out as dividends during the preceding year. 24 Fund Services - ------------- Additional Investor Services Retirement Plans CDC Nvest Funds offer a range of retirement plans, including IRAs, SEPs, SARSEPs*, SIMPLE IRAs, 403(b) plans and other pension and profit sharing plans. Refer to the section entitled "It's Easy to Open an Account" for investment minimums. For more information about our Retirement Plans, call us at 800-225-5478. Investment Builder Program This is CDC Nvest Funds' automatic investment plan. You may authorize automatic monthly transfers of $100 or more from your bank checking or savings account to purchase shares of one or more CDC Nvest Funds. To join the Investment Builder Program, please refer to the section entitled "Buying Shares." Dividend Diversification Program This program allows you to have all dividends and any other distributions automatically invested in shares of the same class of another CDC Nvest Fund or a Money Market Fund, subject to the eligibility requirements of that other fund and to state securities law requirements. Shares will be purchased at the selected Fund's net asset value (plus the applicable sales charge or CDSC) on the dividend record date. Before establishing a Dividend Diversification Program into a CDC Nvest Fund or a Money Market Fund, please read its prospectus carefully. Automatic Exchange Plan CDC Nvest Funds have an automatic exchange plan under which shares of a class of a Fund are automatically exchanged each month for shares of the same class of another CDC Nvest Fund or a Money Market Fund. There is no fee for exchanges made under this plan, but there may be a sales charge in certain circumstances. Please refer to the SAI for more information on the Automatic Exchange Plan. Systematic Withdrawal Plan This plan allows you to redeem shares and receive payments from your Fund on a regular schedule. Redemption of shares that are part of the Systematic Withdrawal Plan are not subject to a CDSC. However, the amount or percentage you specify in the plan may not exceed, on an annualized basis, 10% of the value of your Fund account based upon the value of your Fund account on the day you establish your plan. To establish a Systematic Withdrawal Plan, please refer to the section entitled "Selling Shares." CDC Nvest Funds Personal Access Line(R) This automated customer service system allows you to have access to your account 24 hours a day by calling 800-225-5478, press 1. With a touch-tone telephone, you can obtain information about your current account balance, recent transactions, Fund prices and recent performance. You may also use Personal Access Line(R) to purchase, exchange or redeem shares in any of your existing accounts. Certain restrictions may apply. CDC Nvest Funds Web Site Visit us at www.cdcnvestfunds.com to review your account balance and recent transactions, to view daily prices and performance information or to order duplicate account statements and tax information. You may also go online to purchase, exchange or redeem shares in your existing accounts. Certain restrictions may apply. 25 Electronic Mail Delivery This delivery option allows you to receive important fund documents via the Internet instead of in paper form through regular U.S. mail. Eligible documents include confirmation statements, quarterly statements, prospectuses, annual and semiannual reports and proxies. Electronic Delivery will cut down on the amount of paper mail you receive; speed up the availability of your documents; and lower expenses to your fund. To establish this option on your account(s), complete the appropriate section of your new account application or visit us at www.cdcnvestfunds.com. * Effective January 1, 1997, the Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA became available, replacing SARSEP plans. SARSEP plans established prior to January 1, 1997 may remain active and continue to add new employees. 26 Fund Performance The financial highlights tables are intended to help you understand each Fund's financial performance for the last five years (or, if shorter, the period of the Fund's operations). Certain information reflects financial results for a single Fund share. The total returns in the table represent the return that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been audited by PricewaterhouseCoopers LLP, independent accountants, whose report, along with each Fund's financial statements, are incorporated by reference in the Statement of Additional Information, which is available without charge upon request. CDC Nvest Cash Management Trust -- Money Market Series [TO BE UPDATED]
Classes A, B, C Year Ended June 30, 1997 1998(a) 1999 2000 2001 Net Asset Value, Beginning of the Year $1.0000 $1.0000 $1.0000 $1.0000 ________ Income From Investment Operations Net Investment Income (loss) 0.0467 0.0488 0.0445 0.0498 ________ Net Realized and Unrealized Gain (loss) on Investments 0.0000 0.0000 0.0000 0.0000 ________ Total From Investment Operations 0.0467 0.0488 0.0445 0.0498 ________ Less Distributions Dividends From Net Investment Income (0.0465)(b) (0.0488) (0.0445)(b) (0.0498)(b) ________ Dividends From Net Realized Capital Gains (0.0002) 0.0000 0.0000 0.0000 ________ Total Distributions (0.0467) (0.0488) (0.0445) (0.0498) ________ Net Asset Value, End of the Year $1.0000 $1.0000 $1.0000 $1.0000 ________ Total Return (%) 4.8 5.0 4.6 5.1 ________ Ratios/Supplemental Data Ratio of Operating Expenses to Average Net Assets (%) 0.88 0.84 0.84 0.84 ________ Ratio of Net Investment Income to Average Net Assets (%) 4.66 4.88 4.46 4.95 ________ Net Assets, End of Year (000,000) $699 $607 $665 $604 ________
(a) Class C shares commenced operations March 1, 1998. (b) Including net realized gain (loss) on investments. 27 Fund Performance CDC Nvest Tax Exempt Money Market Trust [TO BE UDPATED]
Classes A and B Year Ended June 30, 1997 1998 1999 2000 2001 Net Asset Value, Beginning of the Year $1.0000 $1.0000 $1.0000 $1.0000 ________ Income From Investment Operations Net Investment Income (loss) 0.0314 0.0323 0.0276 0.0309 ________ Net Realized and Unrealized Gain (loss) on Investments 0.0001 0.0000 0.0000 0.0000 ________ Total From Investment Operations 0.0315 0.0323 0.0276 0.0309 ________ Less Distributions Dividends From Net Investment Income (0.0315)(a) (0.0323) (0.0276) (0.0309)(a) ________ Total Distributions (0.0315) (0.0323) (0.0276) (0.0309) ________ Net Asset Value, End of the Year $1.0000 $1.0000 $1.0000 $1.0000 ________ Total Return (%) 3.2 3.3 2.8 3.1 ________ Ratios/Supplemental Data Ratio of Operating Expenses to Average Net Assets % 0.85 0.85 0.80 0.79 ________ Ratio of Operating Expenses to Average Net Assets 0.56 0.60 0.65 0.65 ________ After Expense Reductions(%)(b) Ratio of Net Investment Income to Average Net Assets 3.17 3.23 2.76 3.10 ________ (%) Net Assets, End of Year (000,000) $68 $74 $85 $72
(a) Including net realized gain (loss) on investments. (b) After giving effect to the expense limitation and fee waiver. 28 Glossary of Terms Bankers' acceptance -- A bill of exchange drawn on and accepted by a bank. The bank as the drawee of the bill becomes responsible for payment of the bill at maturity. Bid price -- The price a prospective buyer is ready to pay. This term is used by traders who maintain firm bid and offer prices in a given security by standing ready to buy or sell security units at publicly quoted prices. Capital gain distributions -- Payments to a Fund's shareholders of profits earned from selling securities in a Fund's portfolio. Capital gain distributions are usually paid once a year. Credit rating -- Independent evaluation of a bond's creditworthiness. This measurement is usually calculated through an index compiled by companies such as Standard & Poor's Rating Service, Inc. ("S&P"), Moody's Investors Service, Inc. ("Moody's"), or Fitch Investors Services, Inc ("Fitch"). Bonds with a credit rating of BBB or higher by S&P or Fitch, or Baa or higher by Moody's are generally considered investment grade. Discounted price -- The difference between a bond's current market price and its face or redemption value. Diversification -- The strategy of investing in a wide range of securities representing different market sectors to reduce the risk if an individual company or one sector suffers losses. Dividend yield -- The current or estimated annual dividend divided by the market price per share of a security. Duration -- An estimate of how much a bond's price fluctuates with changes in comparable interest rates. Income distributions -- Payments to a Fund's shareholders resulting from the net interest or dividend income earned by a Fund's portfolio. Inflation -- A general increase in prices coinciding with a fall in the real value of money, as measured by the Consumer Price Index. Interest rate -- Rate of interest charged for the use of money, usually expressed at an annual rate. Maturity -- The final date on which the payment of a debt instrument (e.g. bonds, notes, repurchase agreements) becomes due and payable. Short-term bonds generally have maturities of up to 5 years; intermediate-term bonds between 5 and 15 years; and long-term bonds over 15 years. Net asset value (NAV) -- The market value of one share of a Fund on any given day without taking into account any front-end sales charge or CDSC. It is determined by dividing a Fund's total net assets by the number of shares outstanding. Repurchase agreement -- An agreement to buy a security at one price and a simultaneous agreement to sell it back at an agreed upon price. Total return -- The change in value of an investment in a Fund over a specific time period expressed as a percentage. Total returns assume all earnings are reinvested in additional shares of a Fund. Variable or floating-rate debt securities -- Securities which pay a rate of interest that is adjusted on a periodic basis and determined by reference to a prescribed formula. Volatility -- The general variability of a portfolio's value resulting from price fluctuations of its investments. In most cases, the more diversified a portfolio is, the less volatile it will be. Yield -- The rate at which a Fund earns income, expressed as a percentage. Mutual fund yield calculations are standardized, based upon a formula developed by the SEC. Yield-to-maturity -- The concept used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond, is held to its maturity date. It takes into account purchase price, redemption value, time to maturity, coupon yield (the interest rate on a debt security the issuer promises to pay to the holder until maturity, expressed as an annual percentage of face value) and the time between interest payments. 29 If you would like more information about the Funds, the following documents are available free upon request: Annual and Semiannual Reports -- Provide additional information about each Fund's investments. To reduce costs, we mail one copy per household. For more copies call CDC IXIS Asset Management Distributors, L.P. at the number below. Statement of Additional Information (SAI) -- Provides more detailed information about the Funds and their investment limitations and policies, has been filed with the SEC and is incorporated into this Prospectus by reference. To order a free copy of a Fund's annual or semiannual report or its SAI, contact your financial representative, or the Funds at: CDC IXIS Asset Management Distributors, L.P., 399 Boylston Street, Boston, MA 02116 Telephone: 800-225-5478 Internet: www.cdcnvestfunds.com Your financial representative or CDC Nvest Funds will also be happy to answer your questions or to provide any additional information that you may require. You can review and copy a Fund's reports and SAI at the Public Reference Room of the SEC in Washington, D.C. Text-only copies are available free from the Commission's Web site at: www.sec.gov. Copies of these publications are also available for a fee and information on the operation of the Public Reference Room may be obtained by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing or calling the Public Reference Room of the SEC, Washington, D.C. 20549-0102 Telephone: 1-202-942-8090 CDC IXIS Asset Management Distributors, L.P., and other firms selling shares of CDC Nvest Funds are members of the National Association of Securities Dealers, Inc. (NASD). As a service to investors, the NASD has asked that we inform you of the availability of a brochure on its Public Disclosure Program. The program provides access to information about securities firms and their representatives. Investors may obtain a copy by contacting the NASD at 800-289-9999 or by visiting their Web site at www.NASDR.com. (Investment Company Act File No. 811-2819) (Investment Company Act File No. 811-3658) 30 [GRAPHIC] CDC NVEST FUNDS(SM) CDC IXIS Asset Management Distributors - -------------------------------------------------------------------------------- CDC NVEST MONEY MARKET FUNDS CDC NVEST CASH MANAGEMENT TRUST -- MONEY MARKET SERIES CDC NVEST TAX EXEMPT MONEY MARKET TRUST STATEMENT OF ADDITIONAL INFORMATION SEPTEMBER 1, 2001 This Statement of Additional Information (the "Statement") is not a prospectus. This Statement relates to the prospectus of CDC Nvest Cash Management Trust for Classes A, B and C shares and CDC Nvest Tax Exempt Money Market Trust (the "Trusts" and each a "Trust") for Classes A and B shares dated September 1, 2001, ( the "Prospectus"), and should be read in conjunction therewith. A copy of the Prospectus may be obtained from CDC IXIS Asset Management Distributors, L.P. (the "Distributor", formerly Nvest Funds Distributor, L.P.), Prospectus Fulfillment Desk, 399 Boylston Street, Boston, Massachusetts 02116, by calling CDC Nvest Funds at 800-225-5478 or by placing an order online at www.cdcnvestfunds.com. The Trusts' financial statements and accompanying notes are incorporated by reference into this Statement. Each Trust's annual and semiannual report contains additional performance information and is available upon request and without charge by calling 800-225-5478. TABLE OF CONTENTS PAGE Investment Objectives and Policies Investment Restrictions Management of the Funds Investment Advisory, Subadvisory, Distribution and Other Services Portfolio Transactions Performance Description of the Funds and Ownership of Shares How to Buy Shares Shareholder Services Open Accounts Automatic Investment Plans Retirement Plans Offering Tax Benefits Systematic Withdrawal Plans Dividend Diversification Program Exchange Privilege Automatic Exchange Plan Self-Servicing Your Account Redemptions Net Income, Dividends and Valuation Tax-Free Investing Taxes Financial Statements Appendix A - Description of Certain CDC Nvest Cash Management Trust - Money Market Series Investments A-1 Appendix B - Description of Certain CDC Nvest Tax Exempt Money Market Trust Investments B-1 Appendix C - Ratings of Corporate and Municipal Bonds, Commercial Paper and Short-Term Tax-Exempt Obligations C-1 Appendix D - Media that May Contain Fund Information D-1 Appendix E - Advertising and Promotional Literature E-1 1 - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES AND POLICIES - -------------------------------------------------------------------------------- GENERAL The investment objectives and policies of CDC Nvest Cash Management Trust - Money Market Series and CDC Nvest Tax Exempt Money Market Trust (together, the "Money Market Funds," or the "Funds," and each a "Fund") are summarized in the Prospectus under "Goals, Strategies & Risks." The investment policies and types of permitted investments of each Fund set forth below and in the Prospectus may be changed without shareholder approval except that the investment objective of each Fund, and any investment policy expressly identified as fundamental, may not be changed without the approval of a majority of the outstanding voting securities of that Fund. The terms "shareholder approval" and "majority of the outstanding voting securities" as used in the Prospectus and this Statement each refer to approval by (A) 67% or more of the voting shares of the applicable Fund present at a meeting, if the holders of more than 50% of the outstanding voting shares of such Fund are present or represented by proxy; or (B) more than 50% of the outstanding voting shares of such Fund, whichever is less. CASH MANAGEMENT TRUST - MONEY MARKET SERIES The Fund will invest only in securities which the Fund's subadviser, Reich & Tang Asset Management, LLC ("RTAMLLC"), acting under guidelines established by the CDC Nvest Cash Management Trust's Board of Trustees, has determined are of high quality and present minimal credit risk. For a description of certain of the money market instruments in which the Fund may invest, and the related descriptions of the ratings of Standard and Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc. ("Moody's"), see Appendices A and C to this Statement. Money market instruments maturing in less than one year may yield less than obligations of comparable quality having longer maturities. The Fund's investments may include certificates of deposit, bankers' acceptances and other U.S. dollar-denominated obligations of banks whose net assets exceed $100 million. These obligations may be issued by U.S. banks, foreign banks (including their U.S. branches) or foreign branches and subsidiaries of U.S. banks. Obligations of foreign banks may be subject to foreign economic, political and legal risks. Such risks include foreign economic and political developments, foreign governmental restrictions that may adversely affect payment of principal and interest on the obligations, foreign withholding and other taxes on interest income, difficulties in obtaining and enforcing a judgment against a foreign obligor, exchange control regulations (including currency blockage), and the expropriation or nationalization of assets or deposits. Foreign branches of U.S. banks and foreign banks are not necessarily subject to the same or similar regulatory requirements that apply to domestic banks. For instance, such branches and banks may not be subject to the types of requirements imposed on domestic banks with respect to mandatory reserves, loan limitations, examinations, accounting, auditing, record keeping and the public availability of information. Obligations of such branches or banks will be purchased only when RTAMLLC believes the risks are minimal. The Fund may also invest in U.S. government securities that include all securities issued or guaranteed by the U.S. government or its agencies, authorities or instrumentalities ("U.S. government securities"). Some U.S. government securities are backed by the full faith and credit of the United States, some are supported by the discretionary authority of the U.S. government to purchase the issuer's obligations (e.g., obligations of the Federal National Mortgage Association), some by the right of the issuer to borrow from the U.S. government (e.g., obligations of Federal Home Loan Banks), while still others are supported only by the credit of the issuer itself (e.g., obligations of the Student Loan Marketing Association). All of the Fund's investments at the time of purchase (other than U.S. government securities and repurchase agreements relating thereto) generally will be rated in the two highest rating categories as rated by a major credit agency or, if unrated, will be of comparable quality as determined by the Fund's subadviser under guidelines approved by the CDC Nvest Cash Management Trust's Board of Trustees. 2 Considerations of liquidity, safety and preservation of capital may preclude the Fund from investing in money market instruments paying the highest available yield at a particular time. The Fund, consistent with its investment objective, attempts to maximize yields by engaging in portfolio trading and by buying and selling portfolio investments in anticipation of, or in response to, changing economic and money market conditions and trends. The Fund also seeks to take advantage of what are believed to be temporary disparities in the yields of the different segments or among particular instruments within the same segment of the market. These policies, as well as the relatively short maturity of obligations to be purchased by the Fund, may result in frequent changes in the portfolio composition of the Fund. There are usually no brokerage commissions as such paid by the Fund in connection with the purchase of securities of the type in which it invests. See "Portfolio Transactions" and "Investment Restrictions." TAX EXEMPT MONEY MARKET TRUST As described in the Prospectus, the Fund seeks to achieve its objective through investment in a diversified portfolio consisting primarily of high quality, short-term fixed, variable and floating rate debt securities the interest on which is, in the opinion of bond counsel for the issuers of the securities at the time of their issuance, exempt from federal income taxation ("Municipal Securities"). Municipal Securities are generally obligations issued by or on behalf of states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, or by or on behalf of multi-state agencies or authorities. The Fund will only invest in Municipal Securities which are (i) short-term notes rated MIG-2 or better by Moody's or SP-2 or better by S&P; (ii) municipal bonds rated Aa or better by Moody's or AA or better by S&P with a remaining maturity of 397 days or less whose issuer has comparable short-term obligations that are rated in the top rating category by Moody's or S&P; and (iii) other types of Municipal Securities, including commercial paper, rated P-2 by Moody's or A-2 by S&P or unrated Municipal Securities determined to be of comparable quality by the Fund's subadviser under guidelines approved by the CDC Nvest Tax Exempt Money Market Trust's Board of Trustees, subject to any limitations imposed by Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"). For a more complete description of various types of Municipal Securities and the meanings of the ratings assigned to them by Moody's and S&P, see Appendices B and C to this Statement. The Fund expects that at least 95% of all dividends paid by the Fund in any given year will be exempt from federal income tax. See "Taxes." As indicated in the Prospectus, the Fund may elect on a temporary basis to hold cash or to invest in obligations other than Municipal Securities when such action is deemed advisable by RTAMLLC. For example, the Fund might hold cash or make such temporary investments: (i) due to market conditions; (ii) in the event of the scarcity of suitable Municipal Securities; (iii) pending investment of proceeds from subscriptions for Fund shares or from the sale of portfolio securities; or (iv) in anticipation of redemptions. The Fund will limit its investments in obligations other than Municipal Securities to "money market securities" such as (i) U.S. government securities, (ii) high quality short-term domestic certificates of deposit, commercial paper and domestic bankers' acceptances and other high quality money market instruments, or (iii) repurchase agreements with brokers, dealers and banks relating to Municipal or U.S. government securities. The interest earned on money market securities is not exempt from federal income tax and will generally be taxable to shareholders as ordinary income. The ability of the Fund to invest in such taxable money market securities is limited by a requirement of the Internal Revenue Code (the "Code") that at least 50% of the Fund's total assets be invested in Municipal Securities at the end of each quarter of the Fund's fiscal year (see "Taxes") and by a fundamental policy of the Fund which requires that during periods of normal market conditions the Fund will not purchase any security if, as a result, less than 80% of the Fund's net assets would then be invested in Municipal Securities. As described in the Prospectus, the Fund may invest in variable or floating rate Municipal Securities. These obligations pay a rate of interest adjusted on a periodic basis and determined by reference to a prescribed formula. Such obligations will be subject to prepayment without penalty, at the option of either the Fund or the issuer, and may be backed by letters of credit or similar arrangements where necessary to ensure that the obligations are of appropriate investment quality. RTAMLLC intends to evaluate the credit of the issuers of these obligations and the providers of credit support no less frequently than quarterly. The price stability and liquidity of the Fund may not be equal to that of a money market fund which invests exclusively in short-term taxable money market securities, because the taxable money market is a broader and more liquid market with a greater number of investors, issuers and market makers than the short-term Municipal Securities market and because the average portfolio maturity of a money market fund will generally be shorter than the average portfolio maturity of a tax exempt money fund such as the Fund. Adverse economic, business or political developments might affect all or a substantial portion of the Fund's Municipal Securities in the same manner. The issuer of a Municipal Security may make 3 payments from money raised through a variety of sources, such as (i) the issuer's general taxing power; (ii) a specific type of tax such as a property tax; or (iii) a particular facility or project such as a highway. The ability of an issuer to make these payments could be affected by litigation, legislation or other political events or the bankruptcy of the issuer. WHEN-ISSUED SECURITIES The Tax Exempt Money Market Trust may purchase Municipal Securities on a when-issued basis, which means that delivery and payment for the securities normally occur between 15 to 45 days after the date of the commitment to purchase. The payment obligation and the interest rate that will be received on the securities are each fixed at the time the buyer enters into the commitment. Pending delivery of securities purchased on a when-issued basis, the amount of the purchase price will be held in liquid assets such as cash or high quality debt obligations. Such obligations and cash will be maintained in a separate account with the Fund's custodian in an amount equal on a daily basis to the amount of the Fund's when-issued commitments. By committing itself to purchase Municipal Securities on a when-issued basis, the Fund subjects itself to market and credit risks on such commitments as well as such risks otherwise applicable to its portfolio securities. Therefore, to the extent the Fund remains substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be a greater possibility that the market value of the Fund's assets will vary from $1.00 per share. (See "Net Income, Dividends and Valuation.") The Fund will make commitments to purchase such securities only with the intention of actually acquiring the securities. However, the Fund may sell these securities before the settlement date if it is deemed advisable as a matter of investment strategy. Such sales may result in capital gains that are not exempt from federal income taxes. When the time comes to pay for when-issued securities, the Fund will meet its obligations from then available cash flow or the sale of securities, or, although it would not normally expect to do so, from the sale of the when-issued securities (which may have a value greater or less than the Fund's payment obligation). PURCHASE OF SECURITIES WITH RIGHTS TO PUT SECURITIES TO SELLER The Tax Exempt Money Market Trust has authority to purchase securities, including Municipal Securities, at a price which would result in a yield-to-maturity ratio lower than that generally offered by the seller at the time of purchase if the Fund simultaneously acquires the right to sell the securities back to the seller at an agreed-upon price at any time during a stated period or on a certain date. Such a right is generally called a "put." The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity and to permit the Fund to meet redemptions while remaining as fully invested as possible in Municipal Securities. The Fund will acquire puts only from recognized securities dealers. For the purposes of asset valuation, the Fund will not ascribe any value to puts. The Fund will rarely pay specific consideration for them (although typically the yield on a security that is subject to a put will be lower than for an otherwise comparable security that is not subject to a put). In no event will the specific consideration paid for puts held in the Fund's portfolio at any time exceed 1/2 of 1% of the Fund's net assets. Puts purchased by the Fund will generally not be marketable and the Fund's ability to exercise puts will depend on the creditworthiness of the other party to the transaction. BOTH FUNDS ASSET-BACKED SECURITIES Each Fund may invest in asset-backed securities. The securitization techniques used to develop mortgage securities are also being applied to a broad range of other assets. Through the use of trusts and special purpose vehicles, assets such as automobile and credit card receivables are being securitized in pass-through structures similar to mortgage pass-through structures or in a pay-through structure similar to a Collateralized Mortgage Obligation structure. Generally, the issuers of asset-backed bonds, notes or pass-through certificates are special purpose entities and do not have any significant assets other than the receivables securing such obligations. In general, the collateral supporting asset-backed securities is of shorter maturity than mortgage loans. Instruments backed by pools of receivables are similar to mortgage-backed securities in that they are subject to unscheduled prepayments of principal prior to maturity. When the obligations are pre-paid, the Fund will ordinarily reinvest the prepaid amounts in securities the yields of which reflect interest rates prevailing at the time. Therefore, the Fund's ability to maintain a portfolio that includes high-yielding asset-backed securities will be adversely affected to the extent that prepayments of principal must be reinvested in securities that have lower yields than the prepaid obligations. Moreover, prepayments of securities purchased at a premium could result in a realized loss. 4 REPURCHASE AGREEMENTS As noted in the Prospectus, each Fund may enter into repurchase agreements, which are agreements pursuant to which the Fund purchases a security and obtains a simultaneous commitment from the seller (a member bank of the Federal Reserve or, to the extent permitted by the 1940 Act, a recognized securities dealer) to repurchase the security at an agreed-upon price and date (usually seven days or less from the date of original purchase). The resale price is in excess of the purchase price and reflects an agreed upon market rate unrelated to the coupon rate on the purchased security. Such transactions afford each Fund the opportunity to earn a return on temporarily available cash at relatively low market risk. While the underlying security may be a U.S. government security (in the case of either Fund), a Municipal Security (in the case of the Tax Exempt Money Market Trust) or another type of high quality money market instrument, the obligation of the seller is not guaranteed by the U.S. government, the issuer of the Municipal Security, or the issuer of any other high quality money market instrument underlying the agreement, and there is a risk that the seller may fail to repurchase the underlying security. In such event, the Fund would attempt to exercise rights with respect to the underlying security, including possible disposition in the market. However, in case of such a default, a Fund may be subject to various delays and risks of loss, including (a) possible declines in the value of the underlying security during the period while the Fund seeks to enforce its rights thereto, (b) possible reduced levels of income and lack of access to income during this period, and (c) inability to enforce rights and the expenses involved in attempted enforcement. Each Fund will enter into repurchase agreements only where the market value of the underlying security equals or exceeds the repurchase price, and each Fund will require the seller to provide additional collateral if this market value falls below the repurchase price at any time during the term of the repurchase agreement. As described in the Prospectus, all of each Fund's investments will be in U.S. dollars and will be determined to present minimal credit risks by the subadviser under guidelines established by each Trust's Board of Trustees. Also, all of each Fund's investments will, at the time of investment, have remaining maturities of 397 days or less. The dollar-weighted average maturity of each Fund's portfolio securities will not exceed 90 days at the time of each investment. If the disposition of a portfolio security results in a dollar-weighted average portfolio maturity in excess of 90 days for any Fund, such Fund will invest its available cash in such a manner as to reduce its dollar-weighted average portfolio maturity to 90 days or less as soon as reasonably practicable. For the purposes of the foregoing maturity restrictions, variable rate instruments which are scheduled to mature in more than 397 days are treated as having a maturity equal to the longer of (i) the period remaining until the next readjustment of the interest rate and (ii) if the Fund is entitled to demand prepayment of the instrument, the notice period remaining before the Fund is entitled to such prepayment; other variable rate instruments are treated as having a maturity equal to the shorter of such periods. Floating rate instruments which are scheduled to mature in more than 397 days are treated as having a maturity equal to the notice period remaining before the Fund is entitled to demand prepayment of the instrument; other floating rate instruments, and all such instruments which are U.S. government securities, are treated as having a maturity of one day. The value of the securities in each Fund can be expected to vary inversely with changes in prevailing interest rates. Thus, if interest rates increase after a security is purchased, that security, if sold, might be sold at a loss. Conversely, if interest rates decline after purchase, the security, if sold, might be sold at a profit. In either instance, if the security were held to maturity, no gain or loss would normally be realized as a result of these fluctuations. Substantial redemptions of the shares of any Fund might require the sale of portfolio investments of that Fund at a time when a sale might not be desirable. After purchase by a Fund, a security may cease to be rated or its rating may be reduced below the minimum required for purchase by such Fund but neither event will require a sale of such security by such Fund. However, such event will be considered in determining whether the Fund should continue to hold the security. To the extent that the ratings given by Moody's or S&P (or another nationally recognized statistical rating organization ("NRSRO") approved by the Securities and Exchange Commission (the "SEC")) may change as a result of changes in such organizations or their rating systems, each Fund will, in accordance with standards approved by the relevant Board of Trustees, attempt to use comparable ratings as standards for investments in accordance with the investment policies contained in the Prospectus. 5 - -------------------------------------------------------------------------------- INVESTMENT RESTRICTIONS - -------------------------------------------------------------------------------- The following is a list of each Fund's investment restrictions. The restrictions set forth in the numbered paragraphs below (except paragraphs (9) and (10) for Cash Management Trust and paragraphs (9) and (10) for Tax Exempt Money Market Trust) are fundamental policies and, accordingly, will not be changed without the consent of the holders of a majority of the outstanding voting securities of the applicable Fund. CASH MANAGEMENT TRUST - MONEY MARKET SERIES The Fund will not: (1) Purchase any security, if, as a result, more than 5% of its total assets (based on current value) would then be invested in a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities as defined in the 1940 Act; (2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at market value) would be invested in any one industry. For purposes of this restriction, telephone, gas and electric public utilities are each regarded as separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; (3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; (4) Borrow money, except for temporary or emergency purposes; provided however, that the Fund may loan securities, engaged in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; (5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, that this restriction does not apply to repurchase agreements or loans of portfolio securities; (6) Purchase or sell commodities, except that the Fund may purchase and sell future contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; (7) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities which represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; (8) Act as underwriter except to the extent that in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; (9) Write or purchase puts, calls or combinations thereof; or (10) Purchase any security restricted as to disposition under the federal securities laws if, as a result, more than 10% of the Fund's net assets would be invested in such securities or in other securities that are illiquid, including repurchase agreements maturing in more than seven days and certain loan participations. 6 Except as otherwise stated, the foregoing percentages and the percentage limitations set forth in the Prospectus will apply at the time of the purchase of a security and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of a purchase of such security. TAX EXEMPT MONEY MARKET TRUST The Fund will not: (1) Purchase any security if, as a result, more than 5% of its total assets (based on current value) would then be invested in a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided, however, this limitation does not apply to government securities as defined in the 1940 Act; (2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at market value) would be invested in any one industry. For purposes of this restriction, telephone, gas and electric public utilities are each regarded as separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; (3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of securities transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; (4) Borrow money except for temporary or emergency purposes; provided, however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets at cost; (5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided, however, that this restriction does not apply to repurchase agreements or loans of portfolio securities.; (6) Act as an underwriter, except to the extent that in the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; (7) Purchase or sell commodities, except that the Fund may purchase and sell future contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; (8) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities which represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; (9) Write or purchase puts, calls, warrants, straddles, spreads or combinations thereof, except that the Fund may purchase puts and may purchase Municipal Securities on a "when-issued" basis each as described in its Registration Statement. (10) Purchase any security restricted as to disposition under the federal securities laws if, as a result, more than 10% of the Fund's net assets would be invested in such securities or in other securities that are illiquid, including repurchase agreements maturing in more than seven days and certain loan participations. 7 Except as otherwise stated, the foregoing percentages and the percentage limitations set forth in the Prospectus will apply at the time of the purchase of a security and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of a purchase of such security. For the purpose of the foregoing investment restrictions, the identification of the "issuer" of Municipal Securities which are not general obligation bonds (see Appendix B) is made by RTAMLLC on the basis of the characteristics of the obligation, the most significant of which is the source of funds for the payment of principal and interest on such securities. If the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government of such subdivision, and the obligation is based solely on the assets and revenues of such subdivision, such subdivision would be regarded as the sole issuer. Similarly, in the case of industrial development bonds (see Appendix B), if the bond is backed only by the assets and revenues of the non-governmental user, the non-governmental user would be regarded as the sole issuer. - -------------------------------------------------------------------------------- MANAGEMENT OF THE FUNDS - -------------------------------------------------------------------------------- The Funds are governed by a Board of Trustees, which is responsible for generally overseeing the conduct of Fund business and for protecting the interests of shareholders. The trustees meet periodically throughout the year to oversee the Funds' activities, review contractual arrangements with companies that provide services to the Funds and review the Funds' performance. TRUSTEES The trustees of the Trusts, their position with the Trusts (underlined), and their ages (in parentheses), addresses and principal occupations during at least the past five years are listed below. Those marked with an asterisk (*) may be deemed to be an "interested person" of the Trusts as defined in the 1940 Act. GRAHAM T. ALLISON, JR. -- TRUSTEE (61); 79 John F. Kennedy Street, Cambridge, Massachusetts 02138; Member of the Contract Review and Governance Committee for the Trusts; Douglas Dillon Professor and Director for the Belfer Center of Science and International Affairs, John F. Kennedy School of Government, Harvard University; Special Advisor to the United States Secretary of Defense; formerly, Assistant Secretary of Defense; formerly, Dean, John F. Kennedy School of Government. DANIEL M. CAIN -- TRUSTEE (56); 452 Fifth Avenue, New York, New York 10018; Chairman of the Audit Committee for the Trusts; President and CEO, Cain Brothers & Company, Incorporated (investment banking); Trustee, Universal Health Realty Income Trust (NYSE), eBenX, Inc. (NASDAQ); and Board Member, Norman Rockwell Museum; Sharon Hospital, National Committee for Quality Healthcare, and Columbia University School of Business. KENNETH J. COWAN -- TRUSTEE (69); One Beach Drive, S.E. #2103, St. Petersburg, Florida 33701; Chairman of the Contract Review and Governance Committee for the Trusts; Retired; formerly, Senior Vice President-Finance and Chief Financial Officer, Blue Cross of Massachusetts, Inc. and Blue Shield of Massachusetts, Inc.; formerly, Director, Neworld Bank for Savings and Neworld Bancorp. 8 RICHARD DARMAN -- TRUSTEE (58); 1001 Pennsylvania Avenue, N.W., Washington, D.C. 20004; Member of the Contract Review and Governance Committee for the Trusts; Partner, The Carlyle Group (investments); Public Service Professor, John F. Kennedy School of Government, Harvard University; Trustee, Council for Excellence in Government (not for profit); Director, Frontier Ventures (personal investment); Director, Telcom Ventures (telecommunications); Director, Prime Communications (cable communications); Director, Neptune Communications (undersea cable systems); formerly, Director of the U.S. Office of Management and Budget and a member of President Bush's Cabinet; formerly, Managing Director, Shearson Lehman Brothers (investments). *JOHN T. HAILER -- PRESIDENT AND TRUSTEE (40); President and Chief Executive Officer, the Distributor; Director and Executive Vice President, CDC IXIS Asset Management Distribution Corporation (formerly Nvest Distribution Corporation); President and Chief Executive Officer, CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers", formerly Nvest Funds Management, L.P.); formerly, Senior Vice President, Fidelity Investments Institutional Services Company; formerly, Senior Vice President and Director of Retail Business Development, Putnam Investments; Director, Home for Little Wanderers. SANDRA O. MOOSE -- TRUSTEE (59); Exchange Place, Boston, Massachusetts 02109; Member of the Audit Committee for the Trusts; Senior Vice President and Director, The Boston Consulting Group, Inc. (management consulting); Director, Verizon Communications (communication services); Director, Rohm and Haas Company (specialty chemicals); Trustee, Boston Public Library Foundation; Board of Overseers, Museum of Fine Arts and Beth Israel/New England Deaconess Hospital; Director, Alfred P. Sloan Foundation, Harvard Graduate School Society Council; Member, Visiting Committee, Harvard School of Public Health. JOHN A. SHANE -- TRUSTEE (68); 200 Unicorn Drive, Woburn, Massachusetts 01801; Member of the Audit Committee for the Trusts; President, Palmer Service Corporation (venture capital organization); Director, Arch Communications Group, Inc. (paging service); Director, Eastern Bank Corporation; Director, Gensym Corporation (developer of expert system software); Director, Overland Data, Inc. (manufacturer of computer tape drives). * PETER S. VOSS -- CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND TRUSTEE (54); Director, President and Chief Executive Officer, CDC IXIS Asset Management North America, L.P. ("CDC IXIS North America", formerly Nvest Companies, L.P.); Director, CDC IXIS Asset Management Services, Inc. ("CIS", formerly Nvest Services Company, Inc.); Director, CDC IXIS Asset Management Distribution Corporation; Director of various affiliates of CDC IXIS Advisers; formerly, Board Member, Investment Company Institute and United Way of Massachusetts Bay; Committee Member, New York Stock Exchange listed Company Advisory Committee. PENDLETON P. WHITE -- TRUSTEE (70); 6 Breckenridge Lane, Savannah, Georgia 31411; Member of the Contract Review and Governance Committee for the Trusts; Retired; formerly, President and Chairman of the Executive Committee, Studwell Associates (executive search consultants); formerly, Trustee, The Faulkner Corporation (community hospital corporation). The Contract Review and Governance Committee of the Funds is comprised solely of disinterested trustees and considers matters relating to advisory, subadvisory and distribution arrangements, potential conflicts of interest between the adviser or subadviser and the Funds, and governance matters relating to the Funds. 9 The Audit Committee of the Funds is comprised solely of disinterested trustees and considers matters relating to the scope and results of the Funds' audits and serves as a forum in which the independent accountants can raise any issues or problems identified in the audit with the Board of Trustees. This Committee also reviews and monitors compliance with stated investment objectives and policies, regulations of the SEC and Internal Revenue Service (the "IRS") as well as operational issues relating to the transfer agent. OFFICERS Officers of the Trusts, in addition to Messrs. Hailer and Voss, and their positions with the Trusts (underlined), their ages (in parentheses) and principal occupations during at least the past five years are listed below. THOMAS P. CUNNINGHAM -- TREASURER (55); Senior Vice President, CIS; Senior Vice President, CDC IXIS Advisers; formerly, Vice President, Allmerica Financial Life Insurance and Annuity Company; formerly, Treasurer, Allmerica Investment Trust; formerly, Vice President, First Data Investor Services Group. JOHN E. PELLETIER -- SECRETARY AND CLERK (37); Director and Senior Vice President, CDC IXIS Asset Management Distribution Corporation; Senior Vice President, General Counsel, Secretary and Clerk, the Distributor; Senior Vice President, General Counsel, Secretary and Clerk, CDC IXIS Advisers; Executive Vice President, General Counsel, Secretary and Clerk, CIS; formerly, Senior Vice President and General Counsel, Funds Distributor, Inc. (mutual funds service company); formerly, Vice President and General Counsel, Boston Institutional Group (mutual funds service company); formerly, Senior Vice President and General Counsel, Financial Research Corporation. Each person listed above holds the same position(s) with both Trusts. Previous positions during the past five years with the Distributor, or CDC IXIS Advisers are omitted, if not materially different from a trustee's or officer's current position with such entity. As indicated below under "Trustee Fees", each of the trustees is also a director or trustee of several other investment companies for which the Distributor acts as principal underwriter. Except as indicated above, the address of each trustee and officer of the Trusts is 399 Boylston Street, Boston, Massachusetts 02116. TRUSTEE FEES Neither Trust pays compensation to its officers, or to its trustees who are "interested persons" of the Trusts as defined in the 1940 Act. Each trustee who is not an interested person of the Trusts receives, in the aggregate for serving on the Board of Trustees of the Trusts, CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III and CDC Nvest Companies Trust I (all six trusts collectively, the "CDC Nvest Funds Trusts"), comprising as of March 31, 2001 a total of 23 mutual fund portfolios, a retainer fee at the annual rate of $40,000 and meeting attendance fees of $3,500 for each meeting of the Board of Trustees he or she attends. Each committee member receives an additional retainer fee at the annual rate of $6,000. Furthermore, each committee chairman receives an additional retainer fee (beyond the $6,000 fee) at the annual rate of $4,000. These fees are allocated among the mutual fund portfolios in the CDC Nvest Funds Trusts based on a formula that takes into account, among other factors, the relative net assets of each Fund. 10 During the fiscal year ended June 30, 2001, the trustees of the Trusts received the amounts set forth in the following table for serving as a trustee of the Trusts; and during the year ended December 31, 2000, such persons received the amounts set forth below for serving as trustee of the Trusts and for also serving as trustees of the other CDC Nvest Funds Trusts.
Aggregate Aggregate Pension or Compensation Compensation from Retirement from CDC Nvest CDC Nvest Tax Benefits Accrued Total Compensation Cash Management Exempt Money as Part of Fund Estimated from the CDC Nvest Trust in the Market Trust in Expenses in the Annual Funds Trusts in the Year Ended the Year Ended Year Ended Benefits Upon Year Ended Name of Trustee June 30, 2001* June 30, 2001* June 30, 2001* Retirement December 31, 2000 --------------- -------------- -------------- -------------- ---------- ----------------- Graham T. Allison, Jr. $0 $0 $60,000 Daniel M. Cain $0 $0 $64,000 Kenneth J. Cowan $0 $0 $64,000 Richard Darman $0 $0 $60,000 Sandra O. Moose $0 $0 $60,000 John A. Shane $0 $0 $60,000 Pendleton P. White $0 $0 $60,000
*Amounts include payments deferred by trustees for the fiscal year ended June 30, 2001. The total amount of deferred compensation accrued for all of the CDC Nvest Funds Trusts as of June 30, 2001 for the trustees follows: Allison: $____; Cain: $______; Cowan: $_______; Darman: $________. The Funds provide no pension or retirement benefits to trustees, but have adopted a deferred payment arrangement under which each trustee may elect not to receive fees from each Fund on a current basis but to receive in a subsequent period an amount equal to the value that such fees would have been if they had been invested in a Fund or Funds selected by the trustee on the normal payment date for such fees. Each Fund posts a deferred trustee fee liability in an amount equal to its pro rata share of the deferred fees. As a result of this arrangement, each Fund, upon making the deferred payments, will be in substantially the same financial position as if the deferred fees had been paid on the normal payment dates. - -------------------------------------------------------------------------------- INVESTMENT ADVISORY, SUBADVISORY, DISTRIBUTION AND OTHER SERVICES - -------------------------------------------------------------------------------- INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS Pursuant to separate advisory agreements, the agreement for Cash Management Trust - Money Market Series dated _________ and the agreement for Tax Exempt Money Market Trust dated October 30, 2000 (the "Advisory Agreements"), CDC IXIS Advisers has agreed, subject to the supervision of the Board of Trustees of the relevant Trust, to manage the investment and reinvestment of the assets of each Fund and to provide a range of administrative services, including executive and other personnel, to each Fund. In addition to overseeing the management of the Funds, CDC IXIS Advisers provides executive and other personnel for the management of the Trusts. For the services described in the advisory agreements, each Fund has agreed to pay CDC IXIS Advisers a management fee set forth in the following table, reduced by the amount of any subadvisory fee payable by the Fund to RTAMLLC (as described below): 11
Management fee payable by Fund to CDC IXIS Advisers (includes any subadviser fees paid) Fund (as a percentage of average daily net assets of the Fund) ---- --------------------------------------------------------- Cash Management Trust - Money Market Series 0.400% of the first $500 million 0.375% of the next $500 million 0.325% of the next $500 million 0.275% of the next $500 million 0.225% of amounts in excess of $2 billion Tax Exempt Money Market Trust 0.400% of the first $100 million 0.300% of amounts in excess of $100 million
The Advisory Agreements each provide that CDC IXIS Advisers may delegate its responsibilities thereunder to other parties. Pursuant to separate subadvisory agreements, each dated October 1, 2001 (the "Subadvisory Agreements"), CDC IXIS Advisers has delegated responsibilities for managing the investment and reinvestment of each Fund to RTAMLLC as subadviser. For providing such subadvisory services to the Funds, each Fund pays RTAMLLC the following fee:
Subadvisory fee payable by the Fund Fund (as a percentage of average daily net assets of the Fund) ---- --------------------------------------------------------- Cash Management Trust - Money Market Series 0.170% of the first $250 million 0.140% of the next $250 million 0.130% of the next $500 million 0.100% of amounts in excess of $1 billion Tax Exempt Money Market Trust 0.170% of the first $250 million 0.140% of the next $250 million 0.130% of the next $500 million 0.100% of amounts in excess of $1 billion
Prior to June 1, 2001, Back Bay Advisors, L.P. ("Back Bay Advisors") served as subadviser to each Fund. For the fiscal years ended June 30, 1999, 2000 and 2001, the Cash Management Trust - Money Market Series paid management fees of $1,713,918, $1,827,365 and $________ to CDC IXIS Advisers. During the fiscal years ended June 30, 1999, 2000 and the period from January 1, 2001 to April 30, 2001, Back Bay Advisors received subadvisory fees of $1,527,291, $1,620,119 and $________. For the period from June 1, 2001 to June 30, 2001 RTAMLLC received $______________. From January 2, 1996 to August 31, 2000 CDC IXIS Advisers and Back Bay Advisors each agreed to proportionately reduce their fee and/or pay the charges, expenses and fees of Tax Exempt Money Market Trust (not including fees payable to the trustees who are not "interested persons" of the Trust as defined in the 1940 Act) to the extent necessary to limit the Fund's expenses to an annual rate of 0.65% of average net assets. For the fiscal years ended June 30, 1999, 2000 and 2001, gross management fees (which include gross subadvisory fees) payable to CDC IXIS Advisers of $310,993, $318,953 and $______were reduced by $118,782, $109,957 and $______, respectively, resulting in net management fees of $192,211, $208,996 and $________ respectively, and gross subadvisory fees payable to Back Bay Advisors of $155,496, $159,476 and $________were reduced by $59,391, $54,978 and $_________, respectively, resulting in net subadvisory fees, of $96,105, $104,498 and $_________, respectively, as a result of this expense limitation. In addition to the management fees paid to CDC IXIS Advisers and the subadvisory fees paid to RTAMLLC, each Fund pays the Distributor for providing certain accounting and administrative services. The amount of the payments is based on the allocated costs that the Distributor incurs in providing these services. 12 IN GENERAL. CDC IXIS Advisers, formed in 1995, is a limited partnership whose sole general partner, CDC IXIS Asset Management Distribution Corporation, is a wholly-owned subsidiary of CDC IXIS Asset Management Holdings, LLC ("CDC IXIS Asset Management Holdings", formerly Nvest Holdings, L.P.), which in turn is a wholly-owned subsidiary of CDC IXIS North America. CDC IXIS Asset Management Distribution Corporation is also the sole general partner of the Distributor, and the sole shareholder of CIS, the transfer and dividend disbursing agent of the Funds. CDC IXIS North America owns the entire limited partnership interest in each of CDC IXIS Advisers and the Distributor. CIS has subcontracted certain of its obligations as the transfer and dividend disbursing agent of the Funds to third parties. CDC IXIS North America is part of the investment management arm of France's Caisse des Depots et Consignations ("CDC"), a major diversified financial institution which, in turn, is wholly-owned by the French government. CDC IXIS North America is wholly-owned by CDC IXIS Asset Management, a French entity that is part of Caisse des Depots et Consignations. The seventeen principal subsidiary or affiliated asset management firms of CDC IXIS North America, collectively, have more than $_____ billion of assets under management or administration as of June 30, 2001. Reich & Tang Asset Management, LLC is a registered investment adviser whose origins date back to 1970. CDC IXIS North America is the managing member and owner of a 99.5% membership interest in RTAMLLC, a limited liability company. CDC IXIS Asset Management Holdings is the owner of the remaining 0.5% membership interest in RTAMLLC. Each Fund pays all expenses not borne by CDC IXIS Advisers or RTAMLLC including, but not limited to, the charges and expenses of the Fund's custodian and transfer agent, independent auditors and legal counsel for the Funds and the Trusts' independent trustees, all brokerage commissions and transfer taxes in connection with portfolio transactions, all taxes and filing fees, the fees and expenses for registration or qualification of its shares under federal and state securities laws, all expenses of shareholders' and trustees' meetings and of preparing, printing and mailing reports to shareholders and the compensation of trustees who are not directors, officers or employees of each of the Fund's adviser, subadviser(s) or their affiliates, other than affiliated registered investment companies. Each Fund also pays CDC IXIS Advisers for certain legal and accounting services provided to the Fund by CDC IXIS Advisers. Each Fund's Advisory Agreement and Subadvisory Agreement provides that it will continue in effect for two years from its date of execution and thereafter from year to year if its continuance is approved at least annually (i) by the Board of Trustees of the relevant Trust or by vote of a majority of the outstanding voting securities of the relevant Fund and (ii) by vote of a majority of the trustees who are not "interested persons" of the relevant Trust, as that term is defined in the 1940 Act, cast in person at a meeting called for the purpose of voting on such approval. Each Fund has received an exemptive order from the SEC, which permits CDC IXIS Advisers to amend or continue existing subadvisory agreements without shareholder approval when approved by the Fund's Board of Trustees. The exemption also permits CDC IXIS Advisers to enter into new subadvisory agreements with subadvisers that are not affiliated with CDC IXIS Advisers, if approved by the Fund's Board of Trustees. Shareholders will be notified of any subadviser changes. Each Advisory Agreement and Subadvisory Agreement may be terminated without penalty by vote of the Board of Trustees of the relevant Trust or by vote of a majority of the outstanding voting securities of the relevant Fund, upon 60 days' written notice, or by the Fund's adviser upon 90 days' written notice, and each terminates automatically in the event of its assignment. Each Subadvisory Agreement also may be terminated by the Fund's subadviser upon 90 days' notice and automatically terminates upon termination of the related Advisory Agreement. Each Fund's Advisory Agreement and Subadvisory Agreement provides that CDC IXIS Advisers or RTAMLLC shall not be subject to any liability in connection with the performance of its services thereunder in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties. 13 Certain officers and employees of RTAMLLC have responsibility for portfolio management of other advisory accounts and clients of RTAMLLC (including other registered investment companies and accounts of affiliates of RTAMLLC) that may invest in securities in which the Funds also invest. If RTAMLLC determines that an investment purchase or sale opportunity is appropriate and desirable for more than one advisory account, purchase and sale orders may be executed separately or may be combined and, to the extent practicable, allocated by RTAMLLC to the participating accounts. Where advisory accounts have competing interests in a limited investment opportunity, RTAMLLC will allocate an investment purchase opportunity based on the relative time the competing accounts have had funds available for investment, and the relative amounts of available funds, and will allocate an investment sale opportunity based on relative cash requirements and the time the competing accounts have had investments available for sale. It is RTAMLLC's policy to allocate, to the extent practicable, investment opportunities to each client over a period of time on a fair and equitable basis relative to its other clients. It is believed that the ability of the Funds to participate in larger volume transactions in this manner will in some cases produce better executions for the Funds. However, in some cases, this procedure could have a detrimental effect on the price and amount of a security available to a Fund or the price at which a security may be sold. The trustees are of the view that the benefits of retaining RTAMLLC as subadviser to each of the Funds outweigh the disadvantages, if any, that may result from participating in such transactions. DISTRIBUTION AGREEMENT Under separate agreements with each Fund, the Distributor acts as the distributor of each class of the Funds' shares, which are sold at net asset value without any sales charge. The Distributor receives no compensation from the Funds or purchasers of Fund shares for acting as distributor. Under these agreements, the Distributor conducts a continuous offering and is not obligated to sell a specific number of shares. Under the agreements, the Distributor pays promotion and distribution expenses relating to the sale of Fund shares, including the cost of preparing, printing and distributing prospectuses used in offering shares of the Funds for sale. Each Fund pays the cost of registering and qualifying its shares under state and federal securities laws. The Distributor pays investment dealers a service fee in order to compensate them for services they provide and expenses they incur in connection with the establishment or maintenance of shareholder accounts in the Funds. The service fee is paid quarterly at an annual rate equal to the following percentages of average Fund net assets, including reinvested dividends, in accounts serviced by the investment dealer during the year. THE DISTRIBUTOR PAYS THE SERVICE FEE; THE FEE IS NOT A DIRECT OR INDIRECT EXPENSE OF THE FUNDS OR THEIR SHAREHOLDERS AND DOES NOT AFFECT THE FUNDS' YIELDS. The table below sets forth the service fee: Average Daily Net Asset Balance Fee ------------------------------- --- $0 - 5 million none $ over 5 million to 10 million .05% $ over 10 million .10% The Distributor controls the words "CDC Nvest" in the names of the Trusts and the Funds and if it should cease to be the distributor, CDC Nvest Cash Management Trust, CDC Nvest Tax Exempt Money Market Trust or the affected Fund may be required to change their names and delete these words or letters. The Distributor also acts as general distributor for the CDC Kobrick Investment Trust, CDC Nvest Funds Trust I, CDC Nvest Trust II, CDC Nvest Funds Trust III and CDC Nvest Companies Trust I and their constituent funds. The address of the Distributor is 399 Boylston Street, Boston, Massachusetts 02116. The Distributor may publish information about the Funds in the media described in Appendix D and may include information in advertising and sales literature as described in Appendix E. 14 INDEPENDENT ACCOUNTANTS The Trusts' independent accountants are PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110. The independent accountants conduct an annual audit of each Fund's financial statements, assist in the preparation of federal and state income tax returns and consult with the Trusts as to matters of accounting and federal and state income taxation. The information concerning financial highlights in the Prospectus, and financial statements contained in the Funds' annual reports for the year ended June 30, 2001 and incorporated by reference into this Statement, have been so included in reliance on the reports of each Trust's independent accountants, given on the authority of said firm as experts in auditing and accounting. CUSTODIAL ARRANGEMENTS State Street Bank and Trust Company ("State Street Bank"), 225 Franklin Street, Boston, Massachusetts 02110, is the Trusts' custodian. As such, State Street Bank holds in safekeeping certificated securities and cash belonging to each Fund and, in such capacity, is the registered owner of securities in book-entry form belonging to each Fund. Upon instruction, State Street Bank receives and delivers cash and securities of each Fund in connection with Fund transactions and collects all dividends and other distributions made with respect to each Fund's portfolio securities. State Street Bank also maintains certain accounts and records of the Trusts and calculates the total net asset value, total net income and net asset value per share of each Fund on a daily basis. OTHER ARRANGEMENTS Pursuant to a contract between the Trusts and CIS, CIS acts as shareholder servicing and transfer agent for the Funds and is responsible for services in connection with the establishment, maintenance and recording of shareholder accounts, including all related tax and other reporting requirements and the implementation of investment and redemption arrangements offered in connection with the sale of the Funds' shares. The Funds pay an asset-based fee to CIS for these services. This fee is assessed at the greater of (i) the sum of 0.239% of aggregate average daily net assets for the Funds up to $650 million plus 0.200% of such assets between $650 million and $5.65 billionplus 0.195% of such assets in excess of $5.65 billion, or (ii) a minimum fee of $1.55 million. The aggregate amount of fees paid by the Funds to CIS for these services during the three most recent fiscal years of the Funds were as follows:
Fund Fiscal Year Ended June 30, - ----------------------------------------------- ----------------------------------------------------- 1999 2000 2001 ---- ---- ---- Cash Management Trust - Money Market Series $1,672,122 $1,507,132 $_____ Tax Exempt Money Market Trust $69,140 $72,061 $_____
CIS has subcontracted with State Street Bank for it to provide, through its subsidiary, Boston Financial Data Services, Inc. ("BFDS"), transaction processing, mail and other services. For these services, CIS pays BFDS a monthly per account fee. In addition, during the fiscal year ended June 30, 2001, CIS performed certain accounting and administrative services for the Funds, pursuant to an Administrative Services Agreement (the "Administrative Agreement"). Under the Administrative Agreement, CIS provides the following services to the Funds: (i) personnel that perform bookkeeping, accounting, internal auditing and financial reporting functions and clerical functions relating to the Funds, (ii) services required in connection with the preparation of registration statements and prospectuses, registration of shares in various states, shareholder reports and notices, proxy solicitation material furnished to shareholders of the Funds or regulatory authorities and reports and questionnaires for SEC compliance, and (iii) various registrations and filings required by various regulatory authorities. Subject to certain minimums, the Money Market Funds, CDC Nvest Equity Funds, CDC Nvest Income Funds, CDC Nvest Star Funds, CDC Tax Free Funds and Kobrick Funds (altogether, the "CDC Nvest Funds") pay CIS a fee equal to the annual rate of 0.0350% of the first $5 billion of the Funds' average daily net assets, 0.0325% of the next $5 billion of the Funds' average daily net assets and 0.0300% of the Funds' average daily net assets in excess of $10 billion for these services. 15 For these services, CIS received fees from the Funds for the following fiscal years ending June 30, 1999, 2000 and 2001:
Fund Fiscal Year Ended June 30, - ----------------------------------------------- ----------------------------------------------------- 1999 2000 2001 ---- ---- ---- Cash Management Trust - Money Market Series $191,303 $264,886 $____ Tax Exempt Money Market Trust $32,738 $28,480 $____
- -------------------------------------------------------------------------------- PORTFOLIO TRANSACTIONS - -------------------------------------------------------------------------------- IN GENERAL Each Fund's purchases and sales of portfolio securities are usually principal transactions. Portfolio securities are generally purchased directly from the issuer, from banks and financial institutions or from an underwriter or market maker for the securities. There are usually no brokerage commissions paid for such purchases and each Fund at present does not anticipate paying brokerage commissions. Should any Fund pay a brokerage commission on a particular transaction, such Fund would seek to effect the transaction at the most favorable available combination of best execution and lowest commission. Purchases from underwriters of portfolio securities include a commission or concession paid by the issuer to the underwriter, and purchases from dealers serving as market makers include the spread between the bid and asked price. During the fiscal years ended June 30, 1999, 2000 and 2001, the Funds did not incur any brokerage fees in connection with portfolio transactions. No portfolio transactions are executed with Reich & Tang, or its affiliates acting as principal. In addition, each Fund will not buy bankers' acceptances, certificates of deposit or commercial paper from Reich & Tang or its affiliates. The frequency of transactions and their allocation to various dealers is determined by Reich & Tang in its best judgment and in a manner deemed in the best interest of shareholders of each Fund. The primary consideration is prompt execution of orders in an effective manner at the most favorable price. Investment decisions for each Fund will be made independently from those for any other accounts or investment companies that may be or become managed by Reich & Tang or its affiliates. If, however, any Fund and other investment companies or accounts managed by Reich & Tang are contemporaneously engaged in the purchase or sale of the same security, the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by a Fund or the size of the position obtainable for a Fund. In addition, when purchases or sales of the same security for each Fund and for other investment companies managed by Reich & Tang occur contemporaneously, the purchase or sale orders may be aggregated in order to obtain any price advantages available to large denomination purchasers or sellers. The Board of Trustees of each Trust has requested that RTAMLLC seek to reduce underwriting commissions or similar fees on Fund portfolio transactions through certain methods currently available. It is not expected that these methods will result in material reductions. The Boards have not requested that RTAMLLC or its affiliates attempt to join underwriting syndicates to reduce underwriting commissions or fees. 16 TAX EXEMPT MONEY MARKET TRUST It is expected that the Tax Exempt Money Market Trust's portfolio securities will normally be purchased directly from an underwriter or in the over-the-counter market from the principal dealers in such securities, unless it appears that a better price or execution may be obtained elsewhere. Purchases from underwriters will include a commission or concession paid by the issuer to the underwriter, and purchases from dealers will include the spread between the bid and asked price. - -------------------------------------------------------------------------------- PERFORMANCE - -------------------------------------------------------------------------------- From time to time, the Funds may use performance data in advertisements and promotional material. These results may include comparisons to the average daily yields of money market funds reporting to IBC/Donoghue's Money Fund Report ("Donoghue's"), including comparisons of such average yields for funds considered by Donoghue's to be in the same category as each of the Funds. See "Net Income, Dividends and Valuation" below for an explanation of how the Funds calculate yield and "effective" (or "compound") yield. The Funds' advertising and sales literature may refer to historical, current and prospective political, social, economic and financial trends and developments that affect domestic and international investment as it relates to any of the CDC Nvest Funds. The Funds' advertising and sales literature may include historical and current performance and total returns of investment alternatives to the CDC Nvest Funds. Articles, releases, advertising and literature may discuss the range of services offered by the Trusts, the Distributor, and the transfer agent of the Funds, with respect to investing in shares of the Funds and customer service. Such materials may discuss the multiple classes of shares available through the Trusts and their features and benefits, including the details of the pricing structure. The Distributor may make reference in its advertising and sales literature to awards, citations and honor bestowed on it by industry organizations and other observers and raters, including, but not limited to Dalbar's Quality Tested Service Seal and Key Honors Award. Such reference may explain the criteria for the award, indicate the nature and significance of the honor and provide statistical and other information about the award and the Distributor's selection, including, but not limited to, the scores and categories in which the Distributor excelled, the names of funds and fund companies that have previously won the award and comparative information and data about those against whom the Distributor competed for the award, honor or citation. The Distributor may publish, allude to or incorporate in its advertising and sales literature testimonials from shareholders, clients, brokers who sell or own shares, broker-dealers, industry organizations and officials and other members of the public, including, but not limited to, fund performance, features and attributes, or service and assistance provided by departments within the organization, employees or associates of the Distributor. The Funds may enter into arrangements with banks exempted from broker-dealer registration under the Securities Exchange Act of 1934. Advertising and sales literature developed to publicize such arrangements will explain the relationship of such bank to the CDC Nvest Funds and the Distributor as well as the services provided by the bank relative to the Funds. The material may identify the bank by name and discuss the history of the bank including, but not limited to, the type of bank, its asset size, the nature of its business and services and its status and standing in the industry. 17 In addition, sales literature may be published concerning topics of general investor interest for the benefit of registered representatives and the Funds' prospective shareholders. These materials may include, but are not limited to, discussions of college planning, retirement planning and reasons for investing and historical examples of the investment performance of various classes of securities, securities markets and indices. - -------------------------------------------------------------------------------- DESCRIPTION OF THE FUNDS AND OWNERSHIP OF SHARES - -------------------------------------------------------------------------------- CDC Nvest Cash Management Trust was organized as a Massachusetts business trust under the laws of Massachusetts by an Agreement and Declaration of Trust (a "Declaration of Trust") dated June 5, 1980. The Trust commenced operations on October 3, 1980 by acquiring all the assets and liabilities of NEL Cash Management Account, Inc., which commenced operations on July 10, 1978. The Trust was established with the same investment objective, policies, restrictions and investment adviser as NEL Cash Management Account, Inc. then had. The name of the Trust has changed several times since its organization - from the date of its organization to September 1986, the name of the Trust was "NEL Cash Management Trust"; from September 1986 to April 1992, its name was "New England Cash Management Trust"; from April 1992 to April 1994, its name was "TNE Cash Management Trust"; from April 1994 to February 2000, its name was "New England Cash Management Trust"; from February 2000 until April 2001 the name of the Trust was "Nvest Cash Management Trust"; and since May 2001 the name of the Trust has been "CDC Nvest Cash Management Trust". The Money Market Series is the only series of CDC Nvest Cash Management Trust currently in existence. The Fund has three classes of shares (Classes A, B and C) available for purchase. The Trust is a diversified, open-end management investment company. CDC Nvest Tax Exempt Money Market Trust was organized as a Massachusetts business trust under the laws of Massachusetts by a Declaration of Trust dated January 18, 1983, and commenced operations on April 21, 1983. The name of the Trust has changed several times since its organization - from the date of its organization to September 1986, the name of the Trust was "NEL Tax Exempt Money Market Trust"; from September 1986 to April 1992, its name was "New England Tax Exempt Money Market Trust"; from April 1992 to April 1994, its name was "TNE Tax Exempt Money Market Trust"; from April 1994 to February 2000, its name was "New England Tax Exempt Money Market Trust"; from February 2000 until April 2001 the name of the Trust was "Nvest Cash Management Trust"; and since May 2001 the name of the Trust has been "CDC Nvest Tax Exempt Money Market Trust". Only one series of CDC Nvest Tax Exempt Money Market Trust is currently in existence; it has two classes of shares (Classes A and B) available for purchase. The Trust is a diversified, open-end management investment company. Classes A, B and C shares of the CDC Nvest Cash Management Trust - Money Market Series and Classes A and B shares of the CDC Nvest Tax Exempt Money Market Trust are identical except that the classes have different exchange privileges, as set forth in detail in the Prospectus. All expenses of each Fund (including advisory and subadvisory fees but excluding transfer agency fees and expenses of printing and mailing Prospectuses to shareholders are borne by Classes A, B and C shares of the CDC Nvest Cash Management Trust - Money Market Series and Classes A and B shares of the CDC Nvest Cash Management Trust on a pro rata basis. The Class A, Class B, and Class C structure could be terminated should certain IRS rulings be rescinded. 18 Each Declaration of Trust currently permits each Trust's trustees to issue an unlimited number of full and fractional shares of each Fund. Each Fund is represented by a particular series of shares. Each Declaration of Trust further permits each Trust's trustees to divide the shares of each series into any number of separate classes, each having such rights and preferences relative to other classes of the same series as the trustees may determine. When you invest in a Fund, you acquire freely transferable shares of beneficial interest that entitle you to receive annual or quarterly dividends as determined by the respective Trust's Board of Trustees and to cast a vote for each share you own at stockholder meetings. The shares of each Fund have no pre-emptive rights. Upon termination of any Fund, whether pursuant to liquidation of the Fund or otherwise, shareholders of each series of shares are entitled to share pro rata in the net assets belonging to that series then available for distribution to such shareholders. Each Declaration of Trust also permits the trustees to charge shareholders directly for custodial, transfer agency and servicing expenses. If a Trust were to issue shares of more than one series, the assets received by each series of the Trust from the issue or sale of shares of each series thereof and all income, earnings, profits, losses and proceeds therefrom, subject only to the rights of creditors, are allocated to, and constitute the underlying assets of, that series. The underlying assets of each series are segregated and are charged with the expenses in respect of that series and with a share of the general expenses of the Trust. Any general expenses of the Trust not readily identifiable as belonging specifically to a particular series are allocated by or under the direction of the trustees in such manner as the trustees determine to be fair and equitable. While the expenses of the Trust are allocated to the separate books of account of each series of the Trust, certain expenses may be legally chargeable against the assets of both series. Each Declaration of Trust also permits each Trust's Board of Trustees, without shareholder approval, to subdivide any series or class of shares into various sub-series or sub-classes participating in the same portfolio with such dividend preferences and other rights as the trustees may designate. While each Trust's Board of Trustees has no current intention to exercise this power, it is intended to allow them to provide for an equitable allocation of the impact of any future regulatory requirements that might affect various classes of shareholders differently. Each Trust's Board of Trustees may also, without shareholder approval, establish one or more additional series or classes or merge two or more series or classes. At such time as the trustees of the Trusts create another series, the Trusts would become a "series" company as that term is used in Section 18(f) of the 1940 Act. Each Declaration of Trust provides for the perpetual existence of the Trusts. Either Trust or any Fund, however, may be terminated at any time by vote of at least two-thirds of the outstanding shares of the Fund affected. Similarly, any class within a Fund may be terminated by vote of at least two-thirds of the outstanding shares of such class. While each Declaration of Trust further provides that the Board of Trustees may also terminate the relevant Trust upon written notice to its shareholders, the 1940 Act requires that the Trust receive the authorization of a majority of its outstanding shares in order to change the nature of its business so as to cease to be an investment company. 19 VOTING RIGHTS Shareholders are entitled to one vote for each full share held (with fractional votes for fractional shares held) and may vote (to the extent described below) in the election of trustees and the termination of the Funds and on other matters submitted to the vote of shareholders. The Declaration of Trust for each Trust provides that, on any matter submitted to a vote of all Trust shareholders, all of a Trust's shares entitled to vote shall be voted together irrespective of series or class unless the rights of a particular series or class would be adversely affected by the vote, in which case a separate vote of that series or class shall also be required to decide the question. Also, a separate vote shall be held whenever required by the 1940 Act or any rule thereunder. Rule 18f-2 under the 1940 Act provides in effect that a series or class shall be deemed to be affected by a matter unless it is clear that the interests of each series or class in the matter are substantially identical or that the matter does not affect any interest of such series or class. On matters affecting an individual series or class, only shareholders of that series or class are entitled to vote. Consistent with the current position of the SEC, shareholders of all series and classes vote together, irrespective of series or class, on the election of trustees and the selection of the Trust's independent accountants, but shareholders of each series vote separately on other matters requiring shareholder approval, such as certain changes in investment policies of that series or the approval of the investment advisory and subadvisory agreement relating to that series, and shareholders of each class within a series vote separately as to the Rule 12b-1 plan (if any) relating to that class. There will normally be no meetings of shareholders for the purpose of electing trustees except that in accordance with the 1940 Act (i) each Trust will hold a meeting of its shareholders for the election of Trustees at such time as less than a majority of the trustees holding office have been elected by shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees, less than two-thirds of the trustees holding office have been elected by the shareholders, that vacancy may only be filled by a vote of the shareholders. In addition, trustees of the Tax Exempt Money Market Trust may be removed from office by a written consent signed by the holders of two-thirds of the outstanding shares and filed with the Fund's custodian or by a vote of the holders of two-thirds of the outstanding shares at a meeting duly called for the purpose, which meeting shall be held upon the written request of the holders of not less than 10% of the outstanding shares. Upon written request by the holders of shares having a net asset value of $25,000 or constituting 1% of the outstanding shares stating that such shareholders wish to communicate with the other shareholders for the purpose of obtaining the signatures necessary to demand a meeting to consider removal of a trustee, the Tax Exempt Money Market Trust has undertaken to provide a list of shareholders or to disseminate appropriate materials (at the expense of the requesting shareholders). Except as set forth above, the trustees shall continue to hold office and may appoint successor trustees. Shareholder voting rights are not cumulative. No amendment may be made to a Declaration of Trust without the affirmative vote of a majority of the outstanding shares of the relevant Trust except (i) to change the name of the Trust or a series thereof or to cure technical problems in the Declaration of Trust, (ii) to establish and designate new series or classes of Trust shares, and (iii) to establish, designate or modify new and existing series or classes of Trust shares or modify other provisions relating to Trust shares in response to applicable laws or regulations, or, in the case of the Tax Exempt Money Market Trust, in order to convert the Fund into a "series" company. If one or more new series of either Trust is established and designated by the trustees, the shareholders having beneficial interests in the Funds described in this Statement shall not be entitled to vote on matters exclusively affecting such new series, such matters including, without limitation, the adoption of or any change in the investment objectives, policies or restrictions of the new series and the approval of the investment advisory contracts of the new series. Similarly, the shareholders of the new series shall not be entitled to vote on any such matters as they affect the Funds. 20 SHAREHOLDER AND TRUSTEE LIABILITY Under Massachusetts law, a Trust's shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust. However, the Declarations of Trust disclaim shareholder liability for acts or obligations of a Fund and require that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by a Trust or its trustees. The Declarations of Trust provide for indemnification out of the assets of a Fund for all loss and expense of any shareholder held personally liable for the obligations of that Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is considered remote since it is limited to circumstances in which the disclaimer is inoperative and the Fund itself would be unable to meet its obligations. Each Declaration of Trust further provides that the trustees will not be liable for errors of judgment or mistakes of fact or law. However, nothing in the Declarations of Trust protects a trustee against any liability to which the trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. The By-Laws of each Trust provide for indemnification by the Trust of the trustees and the officers of the relevant Trust except with respect to any matter as to which any such person did not act in good faith in the reasonable belief that his or her action was in or not opposed to the best interests of the Trust. Such person may not be indemnified against any liability to the Trust or its shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. Each Trust offers only its own Funds' shares for sale, but it is possible that a Trust might become liable for any misstatements in a Prospectus that relate to another Trust. The trustees of each Trust have considered this potential liability and approved the use of the combined Prospectus for Funds of both Trusts. CODE OF ETHICS The Funds, their advisers and the Distributor have adopted Codes of Ethics pursuant to Rule 17j-1 under the 1940 Act. The Codes of Ethics permits employees to invest in securities for their own accounts, including securities that may be purchased or held by the Funds. The Codes of Ethics are on public file with, and are available from, the SEC. OWNERSHIP OF SHARES As of __________, 2001, to the Trusts' knowledge, the following persons owned of record or beneficially 5% or more of the outstanding shares of the indicated classes set forth below. At July 31, 2001, the officers and trustees of the Trusts as a group owned less than 1% of the outstanding shares of each Fund. [TO BE UPDATED]
Fund Shareholder and Address Ownership Percentage - ---- ----------------------- -------------------- CASH MANAGEMENT TRUST - MONEY MARKET SERIES Class C shares TAX EXEMPT MONEY MARKET TRUST CLASS A SHARES CLASS B SHARES
21 - -------------------------------------------------------------------------------- HOW TO BUY SHARES - -------------------------------------------------------------------------------- The procedures for purchasing shares of the Funds are summarized in the Prospectus. Under certain conditions, exceptions may be made to the policies listed here and in the Prospectus, subject to senior management approval. All purchases made by check should be drawn on U.S. banks and payable in U.S. dollars and made payable to CDC Nvest Funds, or, in the case of a retirement account, the custodian or trustee. Shares of each Fund are offered for sale continuously at their respective net asset values, which the Funds seek to maintain at a constant $1.00 per share. See "Net Income, Dividends and Valuation" in this Statement. There is no sales charge to purchase the Funds' shares. The minimum initial investment is $2,500, with a $100 minimum for subsequent investments. There are reduced initial investment minimums for certain investments described below under "Shareholder Services." Shares may also be purchased either in writing, by phone, by electronic funds transfer using Automated Clearing House ("ACH"), or by exchange as described in the Prospectus through firms that are members of the National Association of Securities Dealers, Inc. and that have selling agreements with the Distributor. You may also use CDC Nvest Funds Personal Access Line(R) (800-225-5478, press 1) or CDC Nvest Funds Web site (www.cdcnvestfunds.com) to purchase Fund shares. For more information, see the section entitled "Shareholder Services" in this Statement. A shareholder may purchase additional shares electronically through the ACH system so long as the shareholder's bank or credit union is a member of the ACH system and the shareholder has a completed, approved ACH application on file. Banks may charge a fee for transmitting funds by wire. With respect to shares purchased by federal funds, shareholders should bear in mind that wire transfers may take two or more hours to complete. If you wish transactions in your account to be effected by another person under a power of attorney from you, special rules as summarized in the Prospectus may apply. - -------------------------------------------------------------------------------- SHAREHOLDER SERVICES - -------------------------------------------------------------------------------- OPEN ACCOUNTS Except for investors who own shares through certain broker "street names" or retirement plan arrangements, each shareholder's investment is automatically credited to a separate open account maintained for the shareholder by State Street Bank, and the shareholder will receive a daily statement disclosing the current balance of shares owned in the shareholder's account and the details of all transactions in that account for the day; however, if there were no transactions other than dividend declarations during a month, the shareholder will only receive a quarterly statement. After the close of each calendar year, State Street Bank will send the shareholder a statement for each of his or her accounts providing federal tax information on dividends and distributions paid during the year including information as to that percentage, if any, of Tax Exempt Money Market Trust dividends that are not exempt from federal income taxation. Shareholders should retain this as a permanent record. CIS reserves the right to charge a fee for providing duplicate information. The open account system provides for full and fractional shares expressed to three decimal places and, by making the issuance and delivery of stock certificates unnecessary, eliminates problems of handling and safekeeping, and the cost and inconvenience of replacing lost, stolen, mutilated or destroyed certificates. Certificates will not be issued for Class B, or Class C shares. 22 The costs of maintaining the open account system are paid by the Funds and no direct charges are made to shareholders. Although the Funds have no present intention of making such direct charges to shareholders, they each reserve the right to do so. Shareholders will receive prior notice before any such charges are made. AUTOMATIC INVESTMENT PLANS (CLASSES A, B AND C SHARES) Subject to each Fund's investor eligibility requirements, investors may automatically invest in additional shares of a Fund on a monthly basis by authorizing the Distributor to draw checks on an investor's bank account. The checks are drawn under the Investment Builder Program, a program designed to facilitate such periodic payments, and are forwarded to CIS for investment in the Fund. A plan may be opened with an initial investment of $100 or more and thereafter regular monthly checks of $100 or more will be drawn on the investor's account. The reduced minimum initial investment pursuant to an automatic investment plan is referred to in the Prospectus. An Investment Builder application must be completed to open an automatic investment plan. An application may be found in the Prospectus or may be obtained by calling the Distributor at 800-225-5478 or your investment dealer. This program is voluntary and may be terminated at any time by CIS upon notice to existing plan participants. The Investment Builder Program plan may be discontinued at any time by the investor by written notice to CIS, which must be received at least five business days prior to any payment date. The plan may be discontinued by State Street Bank at any time without prior notice if any check is not paid upon presentation; or by written notice to you at least thirty days prior to any payment date. State Street Bank is under no obligation to notify shareholders as to the nonpayment of any check. RETIREMENT PLANS OFFERING TAX BENEFITS - CASH MANAGEMENT TRUST - MONEY MARKET SERIES (CLASSES A, B AND C SHARES) The federal tax laws provide for a variety of retirement plans offering tax benefits. These plans may be funded with shares of the Cash Management Trust - Money Market Series or with certain other investments. The plans include H.R. 10 (Keogh) plans for self-employed individuals and partnerships, individual retirement accounts (IRAs), corporate pension and profit sharing plans, including 401(k) plans, and retirement plans for public school systems and certain tax exempt organizations (403(b) plans). The reduced minimum initial investment available to retirement plans offering tax benefits is referred to in the Prospectus. For these plans, initial investments in the Fund must be at least $250 for each participant in corporate pension and profit sharing plans and Keogh plans, at least $500 for IRAs and at least $100 for any subsequent investments. There is a special initial and subsequent investment minimum of $25 for payroll deduction investment programs for SARSEP, SEP, SIMPLE Plans, 403(b) and certain other retirement plans. Income dividends and capital gain distributions must be reinvested (unless the investor is over age 59 1/2 or disabled). These types of accounts may be subject to fees. Plan documents and further information can be obtained from the Distributor. An investor should consult a competent tax or other adviser as to the suitability of either Fund's shares as a vehicle for funding a plan, in whole or in part, under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and as to the eligibility requirements for a specific plan and its state as well as federal tax aspects. SYSTEMATIC WITHDRAWAL PLANS (CLASSES A, B AND C SHARES) An investor owning a Fund's shares having a value of $5,000 or more may establish a Systematic Withdrawal Plan providing for periodic payments of a fixed or variable amount. An investor may terminate the plan at any time. A form for use in establishing such a plan is available from the servicing agent or your investment dealer. Withdrawals may be paid to a person other than the shareholder if a signature guarantee is provided. Please consult your investment dealer or the Distributor. 23 A shareholder under a Systematic Withdrawal Plan may elect to receive payments monthly, quarterly, semiannually or annually for a fixed amount of not less than $50 or a variable amount based on (1) the market value of a stated number of shares, (2) a specified percentage of the account's market value or (3) a specified number of years for liquidating the account (e.g., a 20-year program of 240 monthly payments would be liquidated at a monthly rate of 1/240, 1/239, 1/238, etc.). The initial payment, under a variable payment option, may be $50 or more. On Systematic Withdrawal Plans for accounts subject to a contingent deferred sales charge ("CDSC"), the amount or percentage you specify may not, on an annualized basis, exceed 10% of the value, as of the time you make the election, of your account with the Fund with respect to which you are electing the plan. All shares under the Plan must be held in an open (uncertificated) account. Income dividends and capital gain distributions will be reinvested. Since systematic withdrawal payments represent proceeds from the liquidation of shares, withdrawals may reduce and possibly exhaust the value of the account, particularly in the event of a period of low earnings. Accordingly, a shareholder should consider whether a Systematic Withdrawal Plan and the specified amounts to be withdrawn are appropriate in the circumstances. The Funds and the Distributor make no recommendations or representations in this regard. It may be appropriate for the shareholder to consult a tax adviser before establishing such a Plan. See "Redemptions" and "Tax Status," below, for certain information as to federal income taxes. CDC Nvest Funds may modify or terminate this program at any time. Because of statutory restrictions this plan is not available to pension or profit-sharing plans, IRAs or 403(b) plans that have State Street Bank as trustee. DIVIDEND DIVERSIFICATION PROGRAM You may also establish a Dividend Diversification Program, which allows you to have all dividends and any other distributions automatically invested in shares of the same class of a CDC Nvest Fund, subject to the investor eligibility requirements of that other Fund and to state securities law requirements. Shares will be purchased at the selected Fund's net asset value (plus any applicable sales charge or CDSC) on the dividend record date. A dividend diversification account must be in the same registration (shareholder name) as the distributing Fund account and, if a new account in the purchased Fund is being established, the purchased Fund's minimum investment requirements must be met. Before establishing a Dividend Diversification Program into any other CDC Nvest Fund, you must obtain and carefully read a copy of that Fund's Prospectus. EXCHANGE PRIVILEGE Class A shares of a Fund may be exchanged for Class A shares of the other Money Market Fund and Class B shares of a Fund may be exchanged for Class B shares of the other Money Market Fund without paying a front-end sales charge or CDSC, subject to the eligibility requirements of the Fund into which you are exchanging. Shareholders may also exchange their shares in the Money Market Funds for shares of the same class of any other CDC Nvest Fund listed below, subject to those funds' eligibility requirements and front-end sales charges or CDSC. These options are summarized in the Prospectus. Shareholders of any of the CDC Nvest Funds other than the Money Market Funds may exchange all or any portion of their shares (including the proceeds of shares of the other funds redeemed within 120 days before the exchange) for shares of the same class of the Money Market Funds. However, Class A, Class B or Class C shares of a Money Market Fund acquired by exchange either from the other Money Market Fund or any other CDC Nvest Fund will be subject to a CDSC if, and to the extent as, the shares exchanged were subject to a CDSC. If you exchange shares of a CDC Nvest Fund into shares of a Money Market Fund, the holding period for purposes of determining the CDSC for Classes A, B or C shares and conversion from Class B into Class A shares stops until you exchange back into shares of a CDC Nvest Fund. If you then choose to redeem those shares of the Fund, a CDSC may apply. Such exchanges may be made by telephoning or writing CDC Nvest Funds or certain investment dealers. An exchange of the Class B shares of the CDC Nvest Funds into Class B shares of a Money Market Fund stops the aging period for purposes of determining the CDSC and conversion to Class A, and the aging resumes only when an exchange is made back into a CDC Nvest Fund. 24 Class C shares in accounts of Cash Management Trust - Money Market Series established on or after December 1, 2000 may exchange into Class C shares of any CDC Nvest Fund subject to its sales charge and CDSC schedule. Class C shares in accounts of Cash Management Trust - Money Market Series established prior to December 1, 2000 or that have been previously subject to a front-end sales charge may exchange into Class C shares of a CDC Nvest Fund without paying a front-end sales charge Shares of any Fund acquired through an exchange from the CDC Nvest Funds listed below may be re-exchanged for shares of the same class of those CDC Nvest Funds. Any such exchange will be based on the respective current net asset values of the shares involved and no sales charge will be unless you exchanged into a Money Market Fund from Class A shares of CDC Nvest Short Term Corporate Income Fund ("Short Term Corporate Fund", formerly Nvest Adjustable Rate U.S. Government Fund) purchased before December 1, 1998, which would subject you to pay the difference between the sales charge previously paid on the Short Term Corporate Fund shares and the sales charge currently imposed on other CDC Nvest Fund shares). Under certain circumstances, the Distributor may waive the requirement that shareholders pay the difference between any sales charge already paid on their shares and the higher sales charge of the Fund into which they are exchanging at the time of the exchange. Shareholders making such exchanges must provide CDC Nvest Funds with sufficient information to permit verification of their prior ownership of shares. An exchange may be effected, provided that neither the registered name nor address of the accounts are different and provided that a certificate representing the shares being exchanged has not been issued to the shareholder, by (1) a telephone request to the Funds or CIS at 800-225-5478 or (2) a written exchange request to the Funds or CIS, P.O. Box 8551, Boston, MA 02266-8551. You must acknowledge receipt of a current Prospectus for a Fund before an exchange for that Fund can be effected. The minimum amount for an exchange is $1,000. Except as otherwise permitted by SEC rule, shareholders will receive at least 60 days advance notice of any material change to the exchange privilege. AUTOMATIC EXCHANGE PLAN (CLASSES A, B AND C SHARES) As described in the Prospectus following the caption "Additional Investor Services", a shareholder may establish an Automatic Exchange Plan under which shares of a Fund are automatically redeemed each month and immediately reinvested in shares of the same class of one or more of the CDC Nvest Funds listed below, subject to the investor eligibility requirement of that other fund and the exchange rules regarding Class A, Class B and Class C above. Registrations on all accounts must be identical. The two dates each month on which exchanges may be made are the 15th or 28th (or the first business day thereafter if the 15th or the 28th are not business days) and are made until the account is exhausted or until CIS is notified in writing to terminate the plan. Exchanges may be made in amounts of $100 or more. A sales charge will be imposed on such exchanges unless the shares being exchanged were previously acquired through an exchange from one of the CDC Nvest Funds listed below. Complete the account application or the Service Options Form available from CIS or your financial representative to establish an Automatic Exchange Plan. Every exchange constitutes a sale of fund shares for federal income tax purposes, on which an investor may realize a long- or short-term capital gain or loss. 25 The investment objectives of the CDC Nvest Funds (including the Kobrick Funds) as set forth in the Prospectus are as follows: EQUITY FUNDS: CDC NVEST AEW REAL ESTATE FUND seeks above-average income and long-term growth of capital. CDC NVEST MID CAP GROWTH FUND seeks long-term growth from investments in common stocks or their equivalent. CDC NVEST SELECT FUND seeks long-term capital appreciation. CDC NVEST GROWTH FUND seeks long-term growth of capital through investments in equity securities of companies whose earnings are expected to grow at a faster rate than the United States economy. CDC NVEST CAPITAL GROWTH FUND seeks long-term growth of capital. CDC NVEST BALANCED FUND seeks a reasonable long-term investment return from a combination of long-term capital appreciation and moderate current income. CDC NVEST GROWTH AND INCOME FUND seeks opportunities for long-term capital growth and income. CDC NVEST INTERNATIONAL EQUITY FUND seeks total return from long-term capital growth and dividend income. CDC NVEST LARGE CAP VALUE FUND seeks total return from capital growth and dividend income. CDC NVEST BULLSEYE FUND seeks long-term growth of capital. STAR FUNDS: CDC NVEST STAR ADVISERS FUND seeks long-term growth of capital. CDC NVEST STAR WORLDWIDE FUND seeks long-term growth of capital. CDC NVEST STAR SMALL CAP FUND seeks capital appreciation. CDC NVEST STAR VALUE FUND seeks a reasonable long-term investment return from a combination of market appreciation and dividend income from equity securities. KOBRICK FUNDS KOBRICK CAPITAL FUND seeks maximum capital appreciation by investing primarily in equity securities of companies with small, medium and large capitalizations. KOBRICK EMERGING GROWTH FUND seeks to provide growth of capital by investing primarily in equity securities of emerging growth companies, with an emphasis on companies with small capitalizations. KOBRICK GROWTH FUND seeks long-term growth of capital by investing primarily in equity securities of companies with large capitalizations that may have better than average long-term growth potential. INCOME FUNDS: CDC NVEST GOVERNMENT SECURITIES FUND seeks a high level of current income consistent with safety of principal by investing in U.S. government securities. CDC NVEST LIMITED TERM U.S. GOVERNMENT FUND seeks a high current return consistent with preservation of capital. CDC NVEST SHORT TERM CORPORATE INCOME FUND seeks a high level of current income consistent with preservation of capital. CDC NVEST STRATEGIC INCOME FUND seeks high current income with a secondary objective of capital growth. 26 CDC NVEST BOND INCOME FUND seeks a high level of current income consistent with what the Fund considers reasonable risk. CDC NVEST HIGH INCOME FUND seeks high current income plus the opportunity for capital appreciation to produce a high total return. TAX FREE INCOME FUNDS: CDC NVEST MUNICIPAL INCOME FUND seeks as high a level of current income exempt from federal income taxes as is consistent with reasonable risk and protection of shareholders' capital. CDC NVEST MASSACHUSETTS TAX FREE INCOME FUND seeks as high a level of current income exempt from federal and Massachusetts personal income taxes. As of June 30, 2001, the net assets of the CDC Nvest Funds (including the Kobrick Funds) and the Money Market Funds totaled over $____ billion. SELF-SERVICING YOUR ACCOUNT WITH CDC NVEST FUNDS PERSONAL ACCESS LINE(R)AND WEB SITE CDC Nvest Funds shareholders may access account information, including share balances and recent account activity online, by visiting our Web site at www.cdcnvestfunds.com. Transactions may also be processed online for certain accounts (restrictions may apply). Such transactions include purchases, redemptions and exchanges, and shareholders are automatically eligible for these features. CDC Nvest Funds has taken measures to ensure the security of shareholder accounts, including the encryption of data and the use of personal identification (PIN) numbers. In addition, you may restrict these privileges from your account by calling CDC Nvest Funds at 800-225-5478, or writing to us at P.O. Box 8551, Boston, MA 02116. More information regarding these features may be found on our Web site at www.cdcnvestfunds.com. Investor activity through these mediums is subject to the terms and conditions outlined in the following CDC NVEST FUNDS ONLINE AND TELEPHONIC CUSTOMER AGREEMENT. This agreement is also posted on our Web site. The initiation of any activity through the CDC Nvest Funds Personal Access Line(R), or Web site at www.cdcnvestfunds.com by an investor shall indicate agreement with the following terms and conditions: CDC NVEST FUNDS ONLINE AND TELEPHONIC CUSTOMER AGREEMENT NOTE: ACCESSING OR REQUESTING ACCOUNT INFORMATION OR TRANSACTIONS THROUGH THIS SITE CONSTITUTES AND SHALL BE DEEMED TO BE AN ACCEPTANCE OF THE FOLLOWING TERMS AND CONDITIONS. The accuracy, completeness and timeliness of all mutual fund information provided is the sole responsibility of the mutual fund company which provides the information. No party which provides a connection between this web site and a mutual fund or its transfer agency system can verify or ensure the receipt of any information transmitted to or from a mutual fund or its transfer agent, or the acceptance by, or completion of any transaction with, a mutual fund. The online acknowledgments or other messages which appear on your screen for transactions entered do not mean that the transactions have been received, accepted or rejected by the mutual fund. These acknowledgments are only an indication that the transactional information entered by you has either been transmitted to the mutual fund, or that it cannot be transmitted. It is the responsibility of the mutual fund to confirm to you that it has received the information and accepted or rejected a transaction. It is the responsibility of the mutual fund to deliver to you a current prospectus, confirmation statement and any other documents or information required by applicable law. 27 NO TRANSACTION SHALL BE DEEMED ACCEPTED UNTIL YOU RECEIVE A WRITTEN CONFIRMATION FROM THE FUND COMPANY. You are responsible for reviewing all mutual fund account statements received by you in the mail in order to verify the accuracy of all mutual fund account information provided in the statement and transactions entered through this site. You are also responsible for promptly notifying the mutual fund of any errors or inaccuracies relating to information contained in, or omitted from your mutual fund account statements, including errors or inaccuracies arising from the transactions conducted through this site. TRANSACTIONS ARE SUBJECT TO ALL REQUIREMENTS, RESTRICTIONS AND FEES AS SET FORTH IN THE PROSPECTUS OF THE SELECTED FUND. THE CONDITIONS SET FORTH IN THIS AGREEMENT EXTEND NOT ONLY TO TRANSACTIONS TRANSMITTED VIA THE INTERNET BUT TO TELEPHONIC TRANSACTIONS INITIATED THROUGH THE CDC NVEST FUNDS PERSONAL ACCESS LINE(R). You are responsible for the confidentiality and use of your personal identification numbers, account numbers, social security numbers and any other personal information required to access the site or transmit telephonically. Any individual that possesses the information required to pass through all security measures will be presumed to be you. All transactions submitted by an individual presumed to be you will be solely your responsibility. You agree that CDC Nvest Funds does not have the responsibility to inquire as to the legitimacy or propriety of any instructions received from you or any person believed to be you, and is not responsible or liable for any losses that may occur from acting on such instructions. CDC Nvest Funds is not responsible for incorrect data received via the Internet or telephonically from you or any person believed to be you. Transactions submitted over the Internet and telephonically are solely your responsibility and CDC Nvest Funds makes no warranty as to the correctness, completeness, or the accuracy of any transmission. Similarly CDC Nvest Funds bears no responsibility for the performance of any computer hardware, software, or the performance of any ancillary equipment and services such as telephone lines, modems, or Internet service providers. The processing of transactions over this site or telephonically will involve the transmission of personal data including social security numbers, account numbers and personal identification numbers. While CDC Nvest Funds has taken reasonable security precautions including data encryption designed to protect the integrity of data transmitted to and from the areas of our Web site that relate to the processing of transactions, we disclaim any liability for the interception of such data. You agree to immediately notify CDC Nvest Funds if any of the following occurs: 1. You do not receive confirmation of a transaction submitted via the Internet or telephonically within five (5) business days. 2. You receive confirmation of a transaction of which you have no knowledge and was not initiated or authorized by you. 3. You transmit a transaction for which you do not receive a confirmation number. 4. You have reason to believe that others may have gained access to your personal identification number (PIN) or other personal data. 5. You notice an unexplained discrepancy in account balances or other changes to your account, including address changes, and banking instructions on any confirmations or statements. 28 Any costs incurred in connection with the use of the CDC Nvest Funds Personal Access Line(R) or the CDC Nvest Funds Internet site including telephone line costs, and Internet service provider costs are solely your responsibility. Similarly CDC Nvest Funds makes no warranties concerning the availability of Internet services, or network availability. CDC Nvest Funds reserves the right to suspend, terminate or modify the Internet capabilities offered to shareholders without notice. YOU HAVE THE ABILITY TO RESTRICT INTERNET AND TELEPHONIC ACCESS TO YOUR ACCOUNTS BY NOTIFYING CDC NVEST FUNDS OF YOUR DESIRE TO DO SO. Written notifications to CDC Nvest Funds should be sent to: CDC Nvest Funds P.O. Box 8551 Boston, MA 02266-8551 Notification may also be made by calling 800-225-5478 during normal business hours. - -------------------------------------------------------------------------------- REDEMPTIONS - -------------------------------------------------------------------------------- The procedures for redemption of Fund shares are summarized in the Prospectus. Under certain conditions, exceptions may be made to the policies listed here and in the Prospectus, subject to senior management approval. As described in the Prospectus, a CDSC may be imposed in certain instances upon the redemption of Fund shares that were acquired through an exchange of shares of the CDC Nvest Funds. For purposes of the CDSC, an exchange of shares from one Fund to another Fund is not considered a redemption or purchase. For federal tax purposes, however, such an exchange is considered a sale and a purchase and, therefore, would be considered a taxable event on which you may recognize a gain or loss. Any applicable CDSC will be calculated in the manner described in the relevant prospectus of the CDC Nvest Funds and the related Statement of Additional Information. Signatures on redemption requests must be guaranteed by an "Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. However, a signature guarantee will not be required if the proceeds of the redemption do not exceed $100,000 and the proceeds check is made payable to the registered owner(s) and mailed to the record address. If you select the telephone redemption service in the manner described in the next paragraph, shares of a Fund may be redeemed by calling toll free 800-225-5478. A wire fee, currently $5.00, will be deducted from the proceeds. Telephone redemption requests must be received by the close of regular trading on the New York Stock Exchange (the "Exchange"). Requests made after that time or on a day when the Exchange is not open for business cannot be accepted and a new request on a later day will be necessary. The proceeds of a telephone withdrawal will normally be sent on the first business day following receipt of a proper redemption request, which complies with the redemption procedures established by the Funds from time to time. In order to redeem shares by telephone, a shareholder must either select this service when completing the Fund application or must do so subsequently on the Service Options Form, available from CIS or your investment dealer. When selecting the service, a shareholder may have their withdrawal proceeds sent to their bank, in which case the shareholder must designate a bank account on their application or Service Options Form to which the redemption proceeds should be sent as well as provide a check marked "VOID" and/or a deposit slip that includes the routing number of their bank. Any change in the bank account so designated may be made by furnishing to CIS or your investment dealer a completed Service Options Form with a signature guarantee. Whenever the Service Options Form is used, the shareholder's signature must be guaranteed as described above. Telephone redemptions may only be made if the designated bank is a member of the Federal Reserve System or has a correspondent bank that is a member of the System. If the account is with a savings bank, it must have only one correspondent bank that is a member of the System. The Funds, the Distributor and State Street Bank are not responsible for the authenticity of withdrawal instructions received by telephone, subject to established verification procedures. CIS, as agreed to with the Funds, will employ reasonable procedures to confirm that your telephone instructions are genuine, and if it does not, it may be liable for any losses due to unauthorized or fraudulent instructions. Such verification procedures include, but are not limited to, requiring a form of personal identification prior to acting on an investor's telephone instructions and recording an investor's instructions. 29 In order to redeem shares electronically through the ACH system, a shareholder's bank or credit union must be a member of the ACH system and the shareholder must have a completed, approved ACH application on file. In addition, the telephone request must be received no later than 4:00 p.m. (Eastern Time). Upon receipt of the required information, the appropriate number of shares will be redeemed and the monies forwarded to the bank designated on the shareholder's application through the ACH system. The redemption will be processed the day the telephone call is made and the monies generally will arrive at the shareholder's bank within three business days. The availability of these monies will depend on the individual bank's rules. Checkwriting is available on Class A shares of the Funds. To elect checkwriting for your account, select the checkwriting option on your application and complete the attached signature card. To add checkwriting to an existing account, please call 800-225-5478 for our Service Options Form. The Funds will send you checks drawn on State Street Bank. You will continue to earn dividends on shares redeemed by check until the check clears. Each check must be written for $250 or more. The checkwriting privilege does not apply to shares for which you have requested share certificates be issued. Checkwriting is not available for investor accounts containing Class A shares subject to a CDSC. If you use withdrawal checks, you will be subject to State Street Bank's rules governing checking accounts. The Funds and the Distributor are in no way responsible for any checkwriting account established with State Street Bank. You may not close your account by withdrawal check because the exact balance of you account will not be known until after the check is received by State Street Bank. The redemption price will be the net asset value per share (less any applicable CDSC) next determined after the redemption request and any necessary special documentation are received by State Street Bank or your investment dealer in proper form. Payment normally will be made by State Street Bank on behalf of the Fund within seven days thereafter. However, in the event of a request to redeem shares for which the Fund has not yet received good payment, the Funds reserve the right to withhold payments of redemption proceeds if the purchase of shares was made by a check which was deposited within ten calendar days prior to the redemption request (unless the Fund is aware that the check has cleared). The Funds will normally redeem shares for cash; however, the Funds reserve the right to pay the redemption price wholly or partly in kind if the relevant Trust's Board of Trustees determines it to be advisable and in the interest of the remaining shareholders of a Fund. The redemptions in kind will be selected by the Fund's subadviser in light of the Fund's objective and will not generally represent a pro rata distribution of each security held in the Fund's portfolio. If portfolio securities are distributed in lieu of cash, the shareholder will normally incur brokerage commissions upon subsequent disposition of any such securities. However, the Funds have elected to be governed by Rule 18f-1 under the 1940 Act, pursuant to which the Funds are obligated to redeem shares solely in cash for any shareholder during any 90-day period up to the lesser of $250,000 or 1% of the total net asset value of the relevant Fund at the beginning of such period. The Funds do not currently intend to impose any redemption charge (other than the CDSC imposed by the Funds' Distributor), although it reserves the right to charge a fee not exceeding 1% of the redemption price. A redemption constitutes a sale of shares for federal income tax purposes on which the investor may realize a long- or short-term capital gain or loss. See the sections "Net Income, Dividends and Valuation" and "Taxes" below. The Funds may also close your account and send you the proceeds if the balance in your account falls below a minimum amount set by each Trust's Board of Trustees (currently $1,000 for all accounts except Keogh, pension and profit sharing plans, automatic investment plans, IRA accounts and accounts that have fallen below the minimum solely because of fluctuations in the net asset value per share). Shareholders who are affected by this policy will be notified of the Fund's intention to close the account and will have 60 days immediately following the notice to bring the account up to the minimum. 30 - -------------------------------------------------------------------------------- NET INCOME, DIVIDENDS AND VALUATION - -------------------------------------------------------------------------------- DETERMINATION OF NET INCOME The net income of each Fund is determined as of the close of regular trading on the Exchange on each day that the Exchange is open for trading. The Exchange is expected to be closed on the following holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Net income includes (i) all interest accrued and discount earned on the portfolio investments of the Fund, minus (ii) amortized premium on such investments, plus or minus (iii) all realized gains and losses on such investments, and minus (iv) all expenses of the Fund. DAILY DIVIDENDS As described in the Prospectus, the net income of each Fund is declared as a dividend, at the closing of regular trading on the Exchange each day that the Exchange is open. In general, all investments in the fund begin to accrue dividends on the business day following the date the purchase amount is invested in the fund. Dividends accrue up to and including the date of redemption. Dividends will be paid in cash to the shareholder if the shareholder has notified State Street Bank in writing of the election on or before payable date. The net income for Saturdays, Sundays and other days on which the Exchange is closed is declared as a dividend on the immediately preceding business day. Although the Funds do not expect to realize any long-term capital gains, if such gains are realized they will be distributed once a year. If you elect to receive your dividends in cash and the dividend checks sent to you are returned "undeliverable" to the Fund or remain uncashed for six months, your cash election will be automatically changed and your future dividends will be reinvested. No interest will accrue on amounts represented by uncashed dividend or redemption checks. VALUATION OF THE FUNDS' PORTFOLIO INVESTMENTS The total net asset value of each Fund (the excess of the Fund's assets over its liabilities) is determined by State Street Bank as of the close of regular trading on the Exchange on each day the Exchange is open for trading. (See "Determination of Net Income.") The portfolio securities of each Fund are valued at their fair value as determined in good faith by the relevant Trust's Board of Trustees or persons acting at their direction. Under normal market conditions, portfolio securities will be valued at amortized cost as described below. Expenses of each Fund are paid or accrued each day. Under the amortized cost method of valuation, securities are valued at cost on the date of purchase. Thereafter, the value of securities purchased at a discount or premium is increased or decreased incrementally each day so that at maturity the purchase discount or premium is fully amortized and the value of the security is equal to its principal amount. Due to fluctuations in interest rates, the amortized cost value of the securities of a Fund may at times be more or less than their market value. 31 By using amortized cost valuation, the Funds seek to maintain a constant net asset value of $1.00 per share despite minor shifts in the market value of their portfolio securities. The yield on a shareholder's investment may be more or less than that which would be recognized if the net asset value per share were not constant and were permitted to fluctuate with the market value of the portfolio securities of each Fund. However, as a result of the following procedures, it is believed that any difference will normally be minimal. The trustees monitor quarterly the deviation between the net asset value per share of each Fund as determined by using available market quotations and its amortized cost price per share. RTAMLLC makes such comparisons at least weekly and will advise the trustees promptly in the event of any significant deviation. If the deviation exceeds 1/2 of 1% for any Fund, the relevant Board of Trustees will consider what action, if any, should be initiated to provide fair valuation of the portfolio securities of that Fund and prevent material dilution or other unfair results to shareholders. Such action may include redemption of shares in kind; selling portfolio securities prior to maturity; withholding dividends; or using a net asset value per share as determined by using available market quotations. There is no assurance that each Fund will be able to maintain its net asset value at $1.00. DETERMINATION OF YIELD YIELD. Each Fund's yield, as it may appear in advertisements or written sales material, represents the net change, exclusive of capital changes, in the value of a hypothetical account having a balance of one share at the beginning of the period for which yield is determined (the "base period"). Current yield for the base period (for example, seven calendar days) is calculated by dividing (i) the net change in the value of the account for the base period by (ii) the number of days in the base period. The resulting number is then multiplied by 365 to determine the net income on an annualized basis. This amount is divided by the value of the account as of the beginning of the base period, normally $1, in order to state the current yield as a percentage. Yield may also be calculated on a compound basis ("effective" or "compound" yield) which assumes continual reinvestment throughout an entire year of net income earned at the same rate as net income is earned by the account for the base period. Each Fund's yield for the seven days ended June 30, 2001 and effective yield based on such seven-day period were, respectively, ___% and ____% (Cash Management Trust - Money Market Series) and ____% and ____% (Tax Exempt Money Market Trust). The yield is based on the expenses paid by Classes A, B, and C shares. Yield is calculated without regard to realized and unrealized gains and losses. The yield of each Fund will vary depending on prevailing interest rates, operating expenses and the quality, maturity and type of instruments held in the portfolio of that Fund. Consequently, no yield quotation should be considered as representative of what the yield of the applicable Fund may be for any future period. The Funds' yields are not guaranteed. At any time in the future, yields and total return may be higher or lower than past yields and there can be no assurance that any historical results will continue. Investors in the other CDC Nvest Funds are specifically advised that share prices, expressed as the net asset values per share, will vary just as yield will vary. An investor's focus on the yield of a Fund to the exclusion of the consideration of the share price of that Fund may result in the investor's misunderstanding the total return he or she may derive from the Fund. Shareholders comparing a Fund's yield with that of alternative investments (such as savings accounts, various types of bank deposits, and other money market funds) should consider such things as liquidity, minimum balance requirements, checkwriting privileges, the differences in the periods and methods used in the calculation of the yields being compared, and the impact of taxes on alternative types of investments. 32 Yield information may be useful in reviewing each Fund's performance and providing a basis for comparison with other investment alternatives. However, unlike bank deposits, traditional corporate or municipal bonds or other investments which pay a fixed yield for a stated period of time, money market and tax exempt money market fund yields fluctuate. TAXABLE-EQUIVALENT YIELD. The Tax Exempt Money Market Trust may also advertise a taxable-equivalent yield or taxable-equivalent effective yield, calculated as described above, except that, for any given tax bracket, net investment income will be calculated using as gross investment income an amount equal to the sum of (i) any taxable income of the Fund plus (ii) the tax exempt income of the Fund divided by the difference between 1 and the effective federal income tax rate for taxpayers in that tax bracket. Taxable-Equivalent Yield and Taxable-Equivalent Effective Yield for the 7 day period ended June 30, 2001 [TO BE UPDATED] ------------------------------------------------------------------------ 7 day yield: ____% 7 day effective: ____% Federal Taxable-Equivalent Taxable-Equivalent Tax Rate Yield Effective Yield -------- ----- --------------- 15% 27.5% 30.5% 35.5% 39.1% CALCULATION OF TOTAL RETURN. Total return is a measure of the change in value of an investment in a Fund over the period covered, which assumes that any dividends or capital gains distributions are automatically reinvested in shares of the same class of that Fund rather than paid to the investor in cash. Each Fund may show each class' average annual total return for the one-year, five-year and ten-year periods (or for the life of the class, if shorter) through the end of the most recent calendar quarter. The formula for total return used by the Funds is prescribed by the SEC and includes three steps: (1) adding to the total number of shares of the particular class that would be purchased by a hypothetical $1,000 investment in the Fund (with or without giving effect to the deduction of sales charge or CDSC, if applicable) all additional shares that would have been purchased if all dividends and distributions paid or distributed during the period had been automatically reinvested; (2) calculating the value of the hypothetical initial investment as of the end of the period by multiplying the total number of shares owned at the end of the period by the net asset value per share of the relevant class on the last trading day of the period; and (3) dividing this account value for the hypothetical investor by the amount of the initial investment, and annualizing the result for periods of less than one year. Total return may be stated with or without giving effect to any expense limitations in effect for a Fund. If a Fund presents returns reflecting an expense limitation or waiver, its total return would have been lower if no limitation or waiver were in effect. 33 - -------------------------------------------------------------------------------- TAX-FREE INVESTING - -------------------------------------------------------------------------------- The table below compares taxable and tax-free yields, based on tax rates for 2001:
Federal Marginal Tax Taxable Income* Rate If Tax Exempt Yield Is - --------------------------------------------------- (2001) ------------------------------------------------------------ Single Joint 2% 3% 4% 5% 6% Return Return Then the Equivalent Taxable Yield Would Be - ----------------------------------------------------------------------------------------------------------------------------- $0 - $27,050 $0 - $45,200 15% 2.35% 3.53% 4.71% 5.88% 7.06% $27,051 - $65,550 $45,201 - $109,250 27.5% 2.76% 4.14% 5.52% 6.90% 8.27% $65,551 - $136,750 $109,251 - $166,450 30.5% 2.88% 4.32% 5.76% 7.19% 8.63% $136,751 - $297,300 $166,451 - $297,300 35.5% 3.10% 4.65% 6.20% 7.75% 9.30% $297,301 and over $297,301 and over 39.1% 3.28% 4.93% 6.57% 8.21% 9.85%
Taxable Rate = Exempt 1 - Federal Rate * This amount represents taxable income as defined in the Internal Revenue Code. The table above does not take into account the effect of state and local taxes, if any, or federal income taxes on social security benefits which may arise as a result of receiving tax exempt income. - -------------------------------------------------------------------------------- TAXES - -------------------------------------------------------------------------------- IN GENERAL The tax status of the Funds and the distributions that each Fund may make are summarized in the section of the Prospectus entitled "Tax Consequences." Each Fund intends to qualify each year for treatment as a regulated investment company under the provisions of Subchapter M of the Code. If each Fund so qualifies, the Fund will not be subject to federal income tax on net income and net realized capital gains distributed to shareholders provided it (i) distributes annually at least 90% of the sum of its net investment income, its net tax-exempt income and net realized short-term capital gains; (ii) derives at least 90% of its gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of securities or foreign currencies, or other income (including, but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies; and (iii) diversifies its holdings so that at the end of each fiscal quarter (a) at least 50% of the value of its total assets consists of cash, U.S. government securities, securities of other regulated investment companies, and other securities limited generally, with respect to any one issuer, to no more than 5% of the value of the Fund's total assets and 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of its assets is invested in the securities (other than those of the U.S. government or other regulated investment companies) of any one issuer or of two or more issuers which the Fund controls and which are engaged in the same, similar or related trades or businesses. 34 To avoid certain excise taxes, each Fund must distribute by December 31 each year substantially all of its ordinary income realized in that year, and any previously undistributed capital gains it realized in the twelve months ended on October 31 of that year. Certain dividends declared by a Fund in October, November or December but not actually received by you until January will be treated for federal tax purposes as though you had received them on December 31 of the year in which declared. CASH MANAGEMENT TRUST - MONEY MARKET SERIES It is not expected that the Fund will realize any long-term capital gains. However, to the extent that distributions of any net realized long-term capital gains (i.e., the excess of net gains from capital assets held for more than one year over net losses from capital assets held for not more than one year) are made to shareholders of the Fund, such gains are taxable to such shareholders as long-term capital gains, whether received in cash or additional shares and regardless of how long shareholders have held their shares. Such distributions are not eligible for the dividends received deduction for corporations. Distributions derived from short-term net capital gains and investment income are generally taxable to you at ordinary income rates. The Fund is required to withhold 31% of all income dividends and capital gains distributions it pays to you if you do not provide a correct, certified taxpayer identification number (TIN), if a Fund is notified that you have underreported income in the past, or if you fail to certify to a Fund that you are not subject to such withholding. If you are a tax-exempt shareholder, however, these backup withholding rules will not apply so long as you furnish the Fund with an appropriate certification. TAX EXEMPT MONEY MARKET TRUST The Fund intends to have at least 50% of its total assets invested in Municipal Securities at the close of each quarter of its taxable year so that dividends paid by the Fund which are derived from interest on Municipal Securities will be "exempt-interest dividends" within the meaning of the Code. Distributions that the Fund properly designates as exempt-interest dividends may be treated by shareholders as interest excludable from gross income under Section 103(a) of the Code. For federal income tax purposes it may be taxable for federal alternative minimum tax purposes and for state and local purposes. Dividends derived from income which is not exempt from federal income tax, including interest earned on investments in taxable money market securities or in repurchase agreements and any net short-term capital gains realized by the Fund, will be taxable to shareholders as ordinary income whether received in cash or additional shares. Determination of the taxability status of dividends is made using the average annual method. The percentage of income designated as tax-exempt for any particular distribution may be substantially different from the percentage of the Fund's income that was tax-exempt during the period covered by the distribution. The Fund will inform investors annually of the percent of its distribution designated as tax-exempt. The interest on certain types of Municipal Securities, known as "private activity" bonds, is an item of tax preference, subject to the federal alternative minimum tax with a maximum rate of 28%. The Fund has instituted procedures to avoid investment in "private activity" Municipal Securities in order to reduce the possibility that Fund dividends will constitute an item of tax preference. However, there can be no assurance that these procedures will be totally effective. The Fund intends to continue these procedures so long as it deems them necessary and prudent. Shareholders should be aware that, while these procedures are in effect, the Fund will not be able to invest in the full range of issues available in the Municipal Securities market. The Fund's investments in Municipal Securities that are subject to the federal alternative minimum tax, together with other investments the interest on which is subject to the alternative minimum tax, will not normally exceed 20% of Fund investments. See the Prospectus for information regarding certain other limitations on the tax-exempt status of interest on Municipal Securities. 35 Net long-term capital gain distributions, if any, will be taxable to shareholders as long-term capital gains, regardless of the length of time the shareholder has held shares of the Fund. None of the Fund's dividends or distributions are expected to be eligible for the dividends-received deduction available to corporations. Investors may not deduct part or all of the interest on indebtedness incurred or continued to purchase or carry shares of an investment company paying exempt-interest dividends, such as the Fund. Under rules used by the IRS, the purchase of shares may be considered to have been made with borrowed funds even though such funds are not directly traceable to the purchase of shares. Further, entities or persons who are "substantial users" (or persons related to "substantial users") of facilities financed by industrial development bonds (see Appendix B) should consult their tax advisers before purchasing shares of the Fund. Shareholders are advised to consult their own tax advisers for more detailed information concerning the federal income taxation of the Fund and the income tax consequences to its shareholders. BOTH FUNDS The sale, exchange or redemption of Fund shares may give rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if the shares have been held for more than 12 months. Otherwise the gain or loss on the sale, exchange or redemption of fund shares will be treated as short-term capital gain or loss. However, if a shareholder sells shares at a loss within six months of purchase, any loss will be disallowed for federal income tax purposes to the extent of any exempt-interest dividends received on such shares. In addition, any loss (not already disallowed as provided in the preceding sentence) realized upon a taxable disposition of shares held for six months or less will be treated as long-term, rather than short-term, to the extent of any long-term capital gain distributions received by the shareholder with respect to shares. All or a portion of any loss realized upon a taxable disposition of fund shares will be disallowed if other shares of the same fund are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss. For taxable years beginning after December 31, 2000, the maximum capital gains tax rates for capital assets (including Fund shares) held by a noncorporate shareholder for more than 5 years will be 8 percent and 18 percent (rather than 10 percent and 20 percent). The 18-percent rate applies only to assets the holding period for which begins after December 31, 2000 (including by way of an election to mark the asset to the market, and to pay the tax gain thereon, as of January, 2, 2001). The mark-to-market election may be disadvantageous from a federal tax perspective, and shareholders should consult their tax advisors before making such an election. The foregoing relates only to federal income taxation of individuals and corporations. Prospective shareholders should consult their tax advisers as to the possible application of state and local income tax laws to Fund dividends and capital gain distributions and the tax consequences of retirement plans offering tax benefits. Information regarding the tax status of distributions made by the Funds will be sent to shareholders shortly after the end of each calendar year. 36 - -------------------------------------------------------------------------------- FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The Financial Statements of each of the Funds and the related report of the independent accountants included in the annual report of the Funds for the year ended June 30, 2001 are incorporated herein by reference. Each Fund's annual and semiannual report is available upon request and without charge. Each Fund will send a single copy of its annual and semi-annual reports to an address at which more than one shareholder of record with the same last name has indicated that mail is to be delivered. Shareholders may request additional copies of any annual or semiannual report by telephone at (800) 225-5478 or by writing to the Funds at: CDC IXIS Asset Management Distributors, L.P., 399 Boylston Street, Boston, Massachusetts 02116. 37 - -------------------------------------------------------------------------------- APPENDIX A - -------------------------------------------------------------------------------- DESCRIPTION OF CERTAIN CDC NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES INVESTMENTS: OBLIGATIONS BACKED BY FULL FAITH AND CREDIT OF THE U.S. GOVERNMENT -- are bills, certificates of indebtedness, notes and bonds issued by (i) the U.S. Treasury or (ii) agencies, authorities and instrumentalities of the U.S. government or other entities and backed by the full faith and credit of the U.S. government. Such obligations include, but are not limited to, obligations issued by the Government National Mortgage Association, the Farmers' Home Administration and the Small Business Administration. OTHER U.S. GOVERNMENT OBLIGATIONS -- are bills, certificates of indebtedness, notes and bonds issued by agencies, authorities and instrumentalities of the U.S. government which are supported by the right of the issuer to borrow from the U.S. Treasury or by the credit of the agency, authority or instrumentality itself. Such obligations include, but are not limited to, obligations issued by the Tennessee Valley Authority, the Bank for Cooperatives, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks and the Federal National Mortgage Association. REPURCHASE AGREEMENTS -- are agreements by which the Fund purchases a security (usually a U.S. government obligation) and obtains a simultaneous commitment from the seller (a member bank of the Federal Reserve System or, to the extent permitted by the 1940 Act, a recognized securities dealer) to repurchase the security at an agreed upon price and date. The resale price is in excess of the purchase price and reflects an agreed upon market rate unrelated to the coupon rate on the purchased security. Such transactions afford an opportunity for the Fund to earn a return on temporarily available cash at minimal market risk, although the Fund may be subject to various delays and risks of loss if the seller is unable to meet its obligation to repurchase. CERTIFICATES OF DEPOSIT -- are certificates issued against funds deposited in a bank, are for a definite period of time, earn a specified rate of return and are normally negotiable. BANKERS' ACCEPTANCES -- are short-term credit instruments used to finance the import, export, transfer or storage of goods. They are termed "accepted" when a bank guarantees their payment at maturity. YANKEEDOLLAR OBLIGATIONS -- obligations of U.S. branches of foreign banks. EURODOLLAR OBLIGATIONS -- dollar-denominated obligations of foreign banks (including U.S. and London branches of foreign banks) and foreign branches of U.S. banks. COMMERCIAL PAPER -- refers to promissory notes issued by corporations in order to finance their short-term credit needs. (See Appendix C.) CORPORATE OBLIGATIONS -- include bonds and notes issued by corporations in order to finance longer-term credit needs. (See Appendix C.) A-1 - -------------------------------------------------------------------------------- APPENDIX B - -------------------------------------------------------------------------------- DESCRIPTION OF CERTAIN CDC NVEST TAX EXEMPT MONEY MARKET TRUST INVESTMENTS The three principal classifications of Municipal Securities are "Notes," "Bonds" and "Commercial Paper." MUNICIPAL NOTES. Municipal Notes are generally issued to finance short-term capital needs and generally have maturities of one year or less. Municipal Notes include: 1. PROJECT NOTES. Project Notes are issued by public bodies (called "local issuing agencies") created under the laws of a state, territory or U.S. possession. They have maturities that range up to one year from the date of issuance. These Notes provide financing for a wide range of financial assistance programs for housing, redevelopment and related needs (such as low-income housing programs and urban renewal programs). While they are the primary obligations of the local public housing agencies or the local urban renewal agencies, they are also backed by the full faith and credit of the U.S. government. 2. TAX ANTICIPATION NOTES. Tax Anticipation Notes are issued to finance working capital needs of states, counties, municipalities and other public bodies that have the legal power to tax. Generally, they are issued in anticipation of various seasonal tax revenues, such as real and personal property, income, sales, use and business taxes, and are payable from some or all of these specific future taxes. 3. REVENUE ANTICIPATION NOTES. Revenue Anticipation Notes are issued to provide interim financing in expectation of receipt of various types of non-tax revenue, such as revenues available to the issuer under various federal revenue sharing programs. In some cases, Revenue Anticipation Notes may be payable additionally from tax revenues. 4. BOND ANTICIPATION NOTES. Bond Anticipation Notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds, when sold and issued, then provide the money for repayment of the Notes. 5. CONSTRUCTION LOAN NOTES. Construction Loan Notes are sold to provide construction financing. After successful completion and acceptance, many projects receive permanent financing through the Federal Housing Administration under "Fannie Mae" (the Federal National Mortgage Association) or "Ginnie Mae" (the Government National Mortgage Association) programs. MUNICIPAL BONDS. Municipal Bonds, which meet longer-term capital needs and generally have maturities of more than one year when issued, have two principal classifications: General Obligation Bonds and Limited Obligation or Revenue Bonds. One type of Municipal Revenue Bonds is referred to as Industrial Development Bonds. These three are discussed below. 1. GENERAL OBLIGATION BONDS. Issuers of General Obligation Bonds include states, counties, cities, towns and regional districts. The proceeds of these obligations are used to fund a wide range of public projects, including construction or improvement of schools, highways and roads, and water and sewer systems. The basic security behind General Obligation Bonds is the issuer's pledge of its full faith and credit and taxing power for the payment of principal and interest. General Obligation Bonds are not payable from any particular fund or source. The characteristics and method of enforcement of General Obligation Bonds vary according to the law applicable to the particular issuer and payment may be dependent upon an appropriation by the issuer's legislative body. The taxes that can be levied for the payment of debt service may be limited or unlimited as to rate or amount. Such bonds may be additionally secured by special assessments. B-1 2. LIMITED OBLIGATION OR REVENUE BONDS. The principal source for repayment of a Revenue Bond is generally the net revenues derived from a particular facility or group of facilities or, in some cases, the proceeds of a special excise or other specific revenue source. Revenue Bonds have been or may be issued to finance a wide variety of capital projects including: electric, gas, water and sewer systems; highways, bridges and tunnels; port facilities; colleges and universities; and hospitals. Although the principal security behind these bonds may vary, many provide additional security in the form of a debt service reserve fund whose money may be used to make principal and interest payments on the issuer's obligations. Housing finance authorities have a wide range of security, including partially or fully insured mortgages, rent subsidies and/or collateralized mortgages, and/or the net revenues from housing or other public projects. Some authorities provide further security in the form of a state's ability (without obligation) to make up deficiencies in the debt service reserve fund. 3. INDUSTRIAL DEVELOPMENT BONDS. Prior to the Tax Reform Act of 1986, certain debt obligations known as Industrial Development Bonds could be issued by or on behalf of public authorities to raise money to finance various privately-operated facilities for business and manufacturing, housing, sports and pollution control; such obligations are included within the term Municipal Bonds if the interest paid thereon is, in the opinion of bond counsel, exempt from federal income tax. These bonds also have been or may be used to finance public facilities, which may be privately used and operated, such as airports, mass transit systems, ports and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility's user to meet its financial obligations and the pledge, if any, of real or personal property so financed as security for such payment. The Tax Reform Act of 1986 eliminated some types of industrial revenue bonds but retained others under the general category of "private activity bonds." TAX-EXEMPT COMMERCIAL PAPER. Tax-Exempt Commercial Paper is a short-term obligation with a stated maturity of 365 days or less. It is issued by agencies of state and local governments to finance seasonal working capital needs or as short-term financing in anticipation of longer term financing. Tax-Exempt Commercial Paper is often renewed or refunded at its maturity by the issuance of other short or long-term obligations. OTHER TYPES OF MUNICIPAL SECURITIES. The foregoing describes types of Municipal Securities which are presently available. CDC Nvest Tax Exempt Money Market Trust may, to the extent consistent with its investment objective, policies and restrictions, invest in other types of Municipal Securities as they become available in the future. B-2 - -------------------------------------------------------------------------------- APPENDIX C - -------------------------------------------------------------------------------- DESCRIPTION OF SECURITIES RATINGS Set forth below are descriptions of the highest ratings of Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") for corporate and municipal bonds, commercial paper and short-term tax-exempt obligations. Ratings for commercial paper have been included since certain of the obligations which the Funds are authorized to purchase have characteristics of commercial paper and have been rated as such by Moody's and S&P. MOODY'S INVESTORS SERVICE, INC. CORPORATE AND MUNICIPAL BOND RATINGS Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa: Bonds which are rated Aa are judged to be high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. Moody's bond ratings, where specified, are applicable to financial contracts, senior bank obligations and insurance company senior policyholder and claims obligations with an original maturity in excess of one year. Obligations relying upon support mechanisms such as letter-of-credit and bonds of indemnity are excluded unless explicitly rated. Obligations of a branch of a bank are considered to be domiciled in the country in which the branch is located. Unless noted as an exception, Moody's rating on a bank's ability to repay senior obligations extends only to branches located in countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch obligations are rated at the lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits for the country in which the branch is located. When the currency in which an obligation is denominated is not the same as the currency of the country in which the obligation is domiciled, Moody's ratings do not incorporate an opinion as to whether payment of the obligation will be affected by the actions of the government controlling the currency of denomination. In addition, risk associated with bilateral conflicts between an investor's home country and either the issuer's home country or the country where an issuer branch is located are not incorporated into Moody's ratings. Moody's makes no representation that rated bank obligations or insurance company obligations are exempt from registration under the Securities Act of 1933 or issued in conformity with any other applicable law or regulation. Nor does Moody's represent any specific bank or insurance company obligation is legally enforceable or a valid senior obligation of a rated issuer. Moody's applies numerical modifiers, 1, 2, and 3 in the generic rating classified Aa in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. C-1 SHORT-TERM MUNICIPAL NOTES RATINGS The two highest ratings of Moody's for short-term municipal notes are MIG-1 and MIG-2: MIG-1 denotes "best quality, enjoying strong protection from established cash flows;" MIG-2 denotes "high quality," with margins of protection ample although not so large as in the preceding group. COMMERCIAL PAPER RATINGS The rating P-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and an appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer's products in relation to competition and customer acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. CORPORATE SHORT-TERM DEBT RATINGS Moody's short-term debt ratings are opinions of the ability of issuers to repay punctually senior debt obligations. These obligations have an original maturity not exceeding one year, unless explicitly noted. PRIME-1: Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity. STANDARD & POOR'S RATINGS SERVICES ISSUE CREDIT RATING DEFINITIONS A Standard & Poor's issue credit rating is a current opinion of the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated. The issue credit rating is not a recommendation to purchase, sell, or hold a financial obligation, inasmuch as it does not comment as to market price or suitability for a particular investor. Issue credit ratings are based on current information furnished by the obligors or obtained by Standard & Poor's from other sources it considers reliable. Standard & Poor's does not perform an audit in connection with any credit rating and may, on occasion, rely on unaudited financial information. Credit ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or based on other circumstances. Issue credit ratings can be either long-term or short-term. Short-term ratings are generally assigned to those obligations considered short term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days -- including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating addresses the put feature, in addition to the usual long-term rating. Medium-term notes are assigned long-term ratings. C-2 Issue credit ratings are based, in varying degrees, on the following considerations: likelihood of payment -- capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; nature of and provisions of the obligation; protection afforded by , and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. The issue rating definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation applies when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.) Accordingly, in the case of junior debt, the rating may not conform exactly with the category definition. CORPORATE AND MUNICIPAL BOND RATINGS AAA: An obligation rated AAA has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: An obligation rated `AA' differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into account currency exchange and related uncertainties. SHORT-TERM MUNICIPAL NOTES RATINGS S&P does not rate short-term municipal notes as such. COMMERCIAL PAPER RATINGS DEFINITIONS A Standard & Poor's commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days. A-1: A short-term obligation rated `A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligors's capacity to meet its financial commitment on these obligations is extremely strong. A-2: A short-term obligation rated `A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. A commercial paper rating is not a recommendation to purchase, sell or hold a security inasmuch as it does not comment as to market price or suitability for a particular investor. The ratings are based on current information furnished to Standard & Poor's by the issuer or obtained from other sources it considers reliable. Standard & Poor's does not perform an audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in or unavailability of such information. C-3 - -------------------------------------------------------------------------------- APPENDIX D - -------------------------------------------------------------------------------- MEDIA THAT MAY CONTAIN FUND INFORMATION ABC and affiliates Fitch Insights Adam Smith's Money World Forbes America Online Fort Worth Star-Telegram Anchorage Daily News Fortune Atlanta Constitution Fox Network and affiliates Atlanta Journal Fund Action Arizona Republic Fund Decoder Austin American Statesman Global Finance Baltimore Sun (the) Guarantor Bank Investment Marketing Hartford Courant Barron's Houston Chronicle Bergen County Record (NJ) INC Bloomberg Business News Indianapolis Star B'nai B'rith Jewish Monthly Individual Investor Bond Buyer Institutional Investor Boston Business Journal International Herald Tribune Boston Globe Internet Boston Herald Investment Advisor Broker World Investment Company Institute Business Radio Network Investment Dealers Digest Business Week Investment Profiles CBS and affiliates Investment Vision CFO Investor's Business Daily Changing Times IRA Reporter Chicago Sun Times Journal of Commerce Chicago Tribune Kansas City Star Christian Science Monitor KCMO (Kansas City) Christian Science Monitor News Service KOA-AM (Denver) Cincinnati Enquirer Los Angeles Times Cincinnati Post Leckey, Andrew (syndicated column) CNBC Lear's CNN Life Association News Columbus Dispatch Lifetime Channel CompuServe Miami Herald Dallas Morning News Milwaukee Sentinel Dallas Times-Herald Money Denver Post Money Maker Des Moines Register Money Management Letter Detroit Free Press Morningstar Donoghues Money Fund Report Mutual Fund Market News Dorfman, Dan (syndicated column) Mutual Funds Magazine Dow Jones News Service National Public Radio Economist National Underwriter FACS of the Week NBC and affiliates Fee Adviser New England Business Financial News Network New England Cable News Financial Planning New Orleans Times-Picayune Financial Planning on Wall Street New York Daily News Financial Research Corp. New York Times Financial Services Week Newark Star Ledger Financial World Newsday D-1 Newsweek Nightly Business Report Orange County Register Orlando Sentinel Palm Beach Post Pension World Pensions and Investments Personal Investor Philadelphia Inquirer Porter, Sylvia (syndicated column) Portland Oregonian Prodigy Public Broadcasting Service Quinn, Jane Bryant (syndicated column) Registered Representative Research Magazine Resource Reuters Rocky Mountain News Rukeyser's Business (syndicated column) Sacramento Bee San Diego Tribune San Francisco Chronicle San Francisco Examiner San Jose Mercury Seattle Post-Intelligencer Seattle Times Securities Industry Management Smart Money St. Louis Post Dispatch St. Petersburg Times Standard & Poor's Outlook Standard & Poor's Stock Guide Stanger's Investment Advisor Stockbroker's Register Strategic Insight Tampa Tribune Time Tobias, Andrew (syndicated column) Toledo Blade UPI US News and World Report USA Today USA TV Network Value Line Wall St. Journal Wall Street Letter Wall Street Week Washington Post WBZ WBZ-TV WCVB-TV WEEI WHDH Worcester Telegram World Wide Web Worth Magazine WRKO D-2 - -------------------------------------------------------------------------------- APPENDIX E - -------------------------------------------------------------------------------- ADVERTISING AND PROMOTIONAL LITERATURE References may be included in CDC Nvest Funds' advertising and promotional literature to CDC IXIS North America and to its affiliates that perform advisory and subadvisory functions for CDC Nvest Funds including, but not limited to: Reich & Tang Asset Management, LLC. Harris Associates, L.P., Loomis, Sayles & Company, L.P., Capital Growth Management Limited Partnership, Westpeak Investment Advisors, L.P., Jurika & Voyles, L.P., Vaughan, Nelson, Scarborough & McCullough, L.P. and Kobrick Funds LLC. Reference also may be made to the Funds of their respective fund groups, namely, the Loomis Sayles Funds and the Oakmark Funds advised by Harris Associates, L.P. References may be included in CDC Nvest Funds' advertising and promotional literature to other - CDC IXIS North America affiliates including, but not limited to AEW Capital Management, L.P., Synder Capital Management, L.P., Reich & Tang Capital Management Group, Reich and Tang Funds and their fund groups. References to subadvisers unaffiliated with CDC IXIS North America that perform subadvisory functions on behalf of CDC Nvest Funds may be contained in CDC Nvest Funds' advertising and promotional literature including, but not limited to Montgomery Asset Management, LLC and RS Investment Management, L.P. CDC Nvest Funds' advertising and promotional material will include, but is not limited to, discussions of the following information about both affiliated and unaffiliated entities: o Specific and general assessments and forecasts regarding U.S. and world economies, and the economies of specific nations and their impact on the CDC Nvest Funds; o Specific and general investment emphasis, specialties, fields of expertise, competencies, operations and functions; o Specific and general investment philosophies, strategies, processes, techniques and types of analysis; o Specific and general sources of information, economic models, forecasts and data services utilized, consulted or considered in the course of providing advisory or other services; o The corporate histories, founding dates and names of founders of the entities; o Awards, honors and recognition given to the entities; o The names of those with ownership interest and the percentage of ownership interest; o The industries and sectors from which clients are drawn and specific client names and background information on current individual, corporate and institutional clients, including pension and profit sharing plans; o Current capitalizations, levels of profitability and other financial and statistical information; o Identification of portfolio managers, researchers, economists, principals and other staff members and employees; o The specific credentials of the above individuals, including, but not limited to, previous employment, current and past positions, titles and duties performed, industry experience, educational background and degrees, awards and honors; o Specific and general reference to past and present notable and renowned individuals including reference to their field of expertise and/or specific accomplishments; E-1 o Current and historical statistics regarding: -total dollar amount of assets managed -CDC Nvest Funds' assets managed in total and by fund -the growth of assets -asset types managed -numbers of principal parties and employees, and the length of their tenure, including officers, portfolio managers, researchers, economists, technicians and support staff -the above individuals' total and average number of years of industry experience and the total and average length of their service to the adviser or subadviser; o The general and specific strategies applied by the subadvisers in the management of CDC Nvest Funds portfolios including, but not limited to: -the pursuit of growth, value, income oriented, risk management or other strategies -the manner and degree to which the strategy is pursued -whether the strategy is conservative, moderate or extreme and an explanation of other features and attributes -the types and characteristics of investments sought and specific portfolio holdings -the actual or potential impact and result from strategy implementation -through its own areas of expertise and operations, the value added by sub-advisers to the management process -the disciplines it employs, e.g., in the case of Loomis, Sayles & Company, L.P., the strict buy/sell guidelines and focus on sound value it employs, and goals and benchmarks that it establishes in management, e.g., Capital Growth Management Limited Partnership pursues growth 50% above the S&P 500 -the systems utilized in management, the features and characteristics of those systems and the intended results from such computer analysis, e.g., Westpeak Investment Advisors, L.P.'s efforts to identify overvalued and undervalued issues; and o Specific and general references to portfolio managers and funds that they serve as portfolio manager of, other than CDC Nvest Funds, and those families of funds, other than CDC Nvest Funds. Any such references will indicate that CDC Nvest Funds and the other funds of the managers differ as to performance, objectives, investment restrictions and limitations, portfolio composition, asset size and other characteristics, including fees and expenses. References may also be made to industry rankings and ratings of the Funds and other funds managed by the Funds' advisers and subadvisers, including, but not limited to, those provided by Morningstar, Lipper, Inc., Forbes and Worth. In addition, communications and materials developed by CDC Nvest Funds will make reference to the following information about CDC IXIS North America and its affiliates: CDC IXIS North America is a subsidiary of CDC IXIS Asset Management. CDC IXIS Asset Management is part of the investment management arm of France's Caisse des Depots et Consignations ("CDC"), a major diversified financial institution. As of June 30, 2001 CDC IXIS North America had more than $[] billion in assets under management. In addition, promotional materials may include: o Specific and general references to CDC Nvest Funds multi-manager approach through CDC IXIS North America's affiliates and outside firms including, but not limited to, the following: -that each adviser/manager operates independently on a day-to-day basis and maintains an image and identity separate from CDC IXIS North America and the other investment managers -other fund companies are limited to a "one size fits all" approach but CDC Nvest Funds draws upon the talents of multiple managers whose expertise best matches the fund objective -in this and other contexts reference may be made to CDC Nvest Funds' slogan "Where The Best Minds Meet"(R) and that CDC Nvest Funds' ability to match the talent to the task is one more reason it is becoming known as "Where The Best Minds Meet." -CDC IXIS Advisers may distribute sales and advertising materials that illustrate the Star Concept by using historical category comparisons of a general nature. Categories from mutual fund ranking services, such as Morningstar, Inc., are selected for each of the Fund segments based on current investment styles and are subject to change with market conditions. There will be differences between the performance of the categories and the CDC Nvest Star Fund being illustrated. The illustrations are used for hypothetical purposes only as a general demonstration of how the Star Concept works. E-2 CDC IXIS Intermediary Services (formerly Nvest Managed Account Services, Nvest Advisor Services and Nvest Retirement Services , divisions of CDC IXIS North America, may be referenced in Fund advertising and promotional literature concerning the marketing services it provides to -CDC IXIS North America affiliated fund groups including: CDC Nvest Funds, Loomis Sayles Funds, Jurika & Voyles, Oakmark Funds, Delafield Fund and Kobrick Funds. CDC IXIS Intermediary Services will provide marketing support to CDC IXIS North America affiliated fund groups targeting financial advisers, financial intermediaries and institutional clients who may transact purchases and other fund-related business directly with these fund groups. Communications will contain information including, but not limited to: descriptions of clients and the marketplaces to which it directs its efforts; the mission and goals of CDC IXIS Intermediary Services and the types of services it provides which may include: seminars; its 1-800 number, web site, Internet or other electronic facilities; qualitative information about the funds' investment methodologies; information about specific strategies and management techniques; performance data and features of the funds; institutional oriented research and portfolio manager insight and commentary. Additional information contained in advertising and promotional literature may include: rankings and ratings of the funds including, but not limited to, those of Morningstar and Lipper, Inc.; statistics about the advisers', fund groups' or a specific fund's assets under management; the histories of the advisers and biographical references to portfolio managers and other staff including, but not limited to, background, credentials, honors, awards and recognition received by the advisers and their personnel; and commentary about the advisers, their funds and their personnel from third-party sources including newspapers, magazines, periodicals, radio, television or other electronic media. References may be included in CDC Nvest Funds' advertising and promotional literature about 401(k) and retirement plans. The information may include, but is not limited to: o Specific and general references to industry statistics regarding 401(k) and retirement plans including historical information, industry trends and forecasts regarding the growth of assets, numbers of plans, funding vehicles, participants, sponsors and other demographic data relating to plans, participants and sponsors, third party and other administrators, benefits consultants and other organizations involved in 401(k) and retirement programs with whom CDC Nvest Funds may or may not have a relationship. o Specific and general references to comparative ratings, rankings and other forms of evaluation as well as statistics regarding the CDC Nvest Funds as a 401(k) or retirement plan funding vehicle produced by, including, but not limited to, Investment Company Institute and other industry authorities, research organizations and publications. o Specific and general discussion of economic, legislative, and other environmental factors affecting 401(k) and retirement plans, including, but not limited to, statistics, detailed explanations or broad summaries of: -past, present and prospective tax regulation, IRS requirements and rules, including, but not limited to, reporting standards, minimum distribution notices, Form 5500, Form 1099R and other relevant forms and documents, Department of Labor rules and standards and other regulations. This includes past, current and future initiatives, interpretive releases and positions of regulatory authorities about the past, current or future eligibility, availability, operations, administration, structure, features, provisions or benefits of 401(k) and retirement plans; -information about the history, status and future trends of Social Security and similar government benefit programs including, but not limited to, eligibility and participation, availability, operations and administration, structure and design, features, provisions, benefits and costs; and -current and prospective ERISA regulation and requirements. E-3 o Specific and general discussion of the benefits of 401(k) investment and retirement plans, and in particular, the CDC Nvest Funds 401(k) and retirement plans, to the participant and plan sponsor, including explanations, statistics and other data, about: o Specific and general reference to the benefits of investing in mutual funds for 401(k) and retirement plans, and CDC Nvest Funds as a 401(k) or retirement plan funding vehicle. -increased employee retention -reinforcement or creation of morale -deductibility of contributions for participants -deductibility of expenses for employers -tax deferred growth, including illustrations and charts -loan features and exchanges among accounts -educational services materials and efforts, including, but not limited to, videos, slides, presentation materials, brochures, an investment calculator, payroll stuffers, quarterly publications, releases and information on a periodic basis and the availability of wholesalers and other personnel. o Specific and general reference to the role of the investment dealer and the benefits and features of working with a financial professional including: -access to expertise on investments -assistance in interpreting past, present and future market trends and economic events -providing information to clients including participants during enrollment and on an ongoing basis after participation -promoting and understanding the benefits of investing, including mutual fund diversification and professional management. E-4 Registration Nos. 2-68348 811-2819 CDC NVEST CASH MANAGEMENT TRUST PART C OTHER INFORMATION Item 23. Exhibits (a) Articles of Incorporation (1) The Registrant's Fourth Amended and Restated Agreement and Declaration of Trust dated September 10, 1993 (the "Agreement and Declaration") is incorporated by reference to exhibit b(1) to Post Effective Amendment ("PEA") No. 32 to the Registrant's initial registration statement ("Registration Statement") filed on August 20, 1997. (2) Amendment No. 1 dated September 23, 1993 to the Agreement and Declaration is incorporated by reference to exhibit b(1) to PEA No. 32 to the Registration Statement filed on August 20, 1997. (3) Amendment No. 2 dated January 28, 1994 to the Agreement and Declaration is incorporated by reference to B (1) to PEA No. 32 to the Registration Statement filed on August 20, 1997. (4) Amendment No. 3 dated November 12, 1999 to the Agreement and Declaration is filed herewith. (5) Amendment No. 4 dated March 23, 2001 to the Agreement and Declaration is filed herewith. (b) By-Laws (1) The Registrant's By-Laws are incorporated by reference to exhibit b(2) to PEA No. 30 to the Registration Statement filed on August 28, 1995. (2) Amendment dated August 25, 2000 to the By-Laws is incorporated by reference to exhibit b(2) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (c) Instruments Defining Rights of Security Holders Rights of shareholders are described in Article III, Section 6 of the Registrant's Agreement and Declaration incorporated by reference to exhibit b(1) to PEA No. 32 to the Registration Statement filed on August 20, 1997 and exhibit (a)(5) filed herewith. (d) Investment Advisory Contracts (1) Advisory Agreement dated October 30, 2000 between the Registrant, on behalf of its Money Market Series and CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers", formerly Nvest Funds Management, L.P.) is filed herewith. (2) Subadvisory Agreement dated October 30, 2000 between the Registrant, CDC IXIS Advisers and Back Bay Advisors, L.P. ("Back Bay") is filed herewith. (3) Subadvisory Agreement dated October 1, 2001 between the Registrant, CDC IXIS Advisers and Reich & Tang Asset Management, LLC. ("Reich & Tang") will be filed by Amendment. (e) Underwriting Contracts (1) Distribution Agreement dated October 30, 2000 between the Registrant, on behalf of its Money Market Series, and CDC IXIS Asset Management Distributors ("CDC IXIS Distributors", formerly Nvest Funds Distributor, L.P.) is filed herewith. (2) Form of Dealer Agreement used by CDC IXIS Distributors is filed herewith. (f) Bonus or Profit Sharing Contracts Not applicable. (g) Custodian Agreements (1) Custodian Agreement dated September 30, 1980 between the Registrant and State Street Bank & Trust Company ("State Street Bank") is incorporated by reference to exhibit B (8)(a) to PEA No. 32 to the Registration Statement filed on August 20, 1997. (2) Letter of Amendment dated June 1, 1982 between the Registrant and State Street Bank relating to the establishment of two series and its applicability to the Custodian Agreement is incorporated by reference to exhibit B (8)(b) to PEA No. 32 to the Registration Statement filed on August 20, 1997. (3) Amendment dated September 12, 1991 to Custodian Agreement between the Registrant and State Street Bank is incorporated by reference to exhibit B (8)(c) to PEA No. 32 to the Registration Statement filed on August 20, 1997. (4) Amendment dated February 28, 2000 to the Custodian Contract dated September 30, 1980 is incorporated by reference to exhibit g(4) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (h) Other Material Contracts (1) Transfer Agency and Services Agreement dated November 1, 1999 between the Registrant and CDC IXIS Asset Management Services, Inc. ("CIS", formerly Nvest Services Company, Inc.) is incorporated by reference to exhibit h(1) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (2) Amendment dated January 1, 2001 to Fee Schedule to Transfer Agency and Services Agreement dated November 1, 1999 is filed herewith. (3) Administrative Services Agreement dated October 30, 2000 between Registrant and CIS is filed herewith. (4) Amendment dated December 1, 2000 to Administrative Services Agreement dated October 30, 2000 is filed herewith. (5) Amendment dated January 2, 2001 to Administrative Services Agreement dated October 30, 2000 is filed herewith. (i) Legal Opinion Not applicable. (j) Other Opinions Consent of PricewaterhouseCoopers LLP will be filed by Amendment. (k) Omitted Financial Statements Not applicable. (l) Initial Capital Agreements Not applicable. (m) Rule 12b-1 Plans Not applicable. (n) Rule 18f-3 Plan (1) Plan pursuant to Rule 18f-3(d) under the Investment Company Act of 1940 as amended, effective December 1, 2000, is filed herewith. (p) Code of Ethics (1) Code of Ethics dated August 25, 2000 of Registrant is incorporated by reference to exhibit p(1) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (2) Code of Ethics dated July 1, 2000 for CDC IXIS Advisers and CDC IXIS Distributors is incorporated by reference to exhibit p(2) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (3) Code of Ethics dated April 1, 2000 of Back Bay is incorporated by reference to exhibit p(3) to PEA No. 37 to the Registration Statement filed on August 28, 2000. (4) Code of Ethics effective January 22, 2001 of Reich & Tang will be filed by Amendment. (q) Powers of Attorney Power of Attorney designating John M. Loder, John E. Pelletier and Thomas P. Cunningham as attorneys to sign for John T. Hailer is filed herewith. Item 24. Persons Controlled by or Under Common Control with Registrant None. Item 25. Indemnification Under Article 4 of the Registrant's By-Laws, any past or present Trustee or officer of the Registrant (hereinafter referred to as a "Covered Person") shall be indemnified to the fullest extent permitted by law against all liability and all expenses reasonably incurred by him or her in connection with any claim, action, suit or proceeding to which he or she may be a party or otherwise involved by reason of his or her being or having been a Covered Person. That provision does not authorize indemnification when it is determined that such covered person would otherwise be liable to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties. This description is modified in its entirety by the provision of Article 4 of the Registrant's By-Laws contained in the PEA No. 30 to the Registration Statement filed on August 28, 1995 as exhibit B (2) and is incorporated by reference. The Distribution Agreement, the Custodian Contract, the Transfer Agency and Service Agreement and the Administrative Services Agreement (the "Agreements") contained herein and in various post- effective amendments and incorporated herein by reference, provide for indemnification. The general effect of these provisions is to indemnify entities contracting with the Trust against liability and expenses in certain circumstances. This description is modified in its entirety by the provisions of the Agreements as contained in this Registration Statement and incorporated herein by reference. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act "), may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Trustee, officer or controlling person of the Registrant in connection with the successful defense of any claim, action, suit or proceeding) is asserted against the Registrant by such Trustee, officer or controlling person in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. Registrant and its Trustees, officers and employees are insured, under a policy of insurance maintained by the Registrant in conjunction with CDC IXIS Asset Management North America, L.P. ("CDC IXIS North America") and its affiliates, within the limits and subject to the limitations of the policy, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities that might be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such Trustees or officers. The policy expressly excludes coverage for any Trustee or officer for any claim arising out of any fraudulent act or omission, any dishonest act or omission or any criminal act or omission of the Trustee or officer. Item 26: Business and Other Connections of Investment Adviser (a) Back Bay is the subadviser of the Registrant's Money Market Series. Back Bay serves as investment adviser to a number of other registered investment companies. The list required by this Item 26 regarding any other business, profession, vocation or employment of substantial nature engaged in by officers and directors of Back Bay during the past two years is incorporated herein by reference to Schedules A and D of Form ADV filed by Back Bay pursuant to the Advisers Act (SEC File No. 801-27694). (b) CDC IXIS Advisers, a wholly-owned subsidiary of CDC IXIS North America, serves as investment adviser to the Money Market Series of the Registrant. CDC IXIS Advisers was organized in 1995. The list required by this Item 26 regarding any other business, profession or employment of a substantial nature engaged in by officers and directors of CDC IXIS Advisers during the past two years is incorporated herein by reference to Schedules A and D of Form ADV filed by CDC IXIS Advisers pursuant to the Advisers Act (SEC File No. 801-48408). (c) Reich & Tang is the subadviser of the Registrant's Money Market Series. Reich & Tang serves as the investment adviser to a number of other registered investment companies. The list required by this Item 26 regarding any other business, profession, vocation or employment of substantial nature engaged in by officers and directors of Reich & Tang during the past two years is incorporated herein by reference to Schedules A and D of form ADV filed by Reich & Tang pursuant to the Advisers Act (SEC File No. 801-47230). Item 27. Principal Underwriters (a) CDC IXIS Distributors, the principal underwriter of the Registrant, also serves as principal underwriter for: CDC Nvest Funds Trust I CDC Nvest Funds Trust II CDC Nvest Funds Trust III CDC Nvest Tax Exempt Money Market Trust CDC Nvest Companies Trust I CDC Kobrick Investment Trust (b) The general partner and officers of the Registrant's principal underwriter, CDC IXIS Distributors, and their addresses are as follows:
POSITIONS AND OFFICES POSITIONS AND OFFICES NAME WITH PRINCIPAL UNDERWRITER WITH REGISTRANT CDC IXIS Asset Management General Partner None Distribution Corporation John T. Hailer President and Chief Executive Officer President and Trustee John E. Pelletier Senior Vice President, General Secretary and Clerk Counsel, Secretary and Clerk Scott E. Wennerholm Senior Vice President, Treasurer, None Chief Financial Officer, and Chief Operating Officer Coleen Downs Dinneen Vice President, Associate General Assistant Secretary Counsel, Assistant Secretary and Assistant Clerk James Wall Vice President, Deputy General None Counsel, Assistant Secretary and Assistant Clerk Beatriz Pina Smith Vice President and Assistant None Treasurer Christine Howe Assistant Vice President and None Controller Frank S. Maselli Senior Vice President None Kirk Williamson Senior Vice President None Daniel Lynch Vice President None Marla McDougall Vice President None
The principal business address of all the above persons or entities is 399 Boylston Street, Boston, MA 02116. (c) Not applicable. Item 28. Location of Accounts and Records The following companies, in the aggregate, maintain possession of the documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules thereunder. (i) State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 (ii) CDC IXIS Asset Management Services, Inc. 399 Boylston Street Boston, MA 02116 (iii) CDC IXIS Asset Management Distributors, L.P. 399 Boylston Street Boston, Massachusetts 02116 (iv) CDC IXIS Asset Management Advisers, L.P. 399 Boylston Street Boston, MA 02116 (v) Back Bay Advisors, L.P. 399 Boylston Street Boston, Massachusetts 02116 (vi) Reich & Tang Asset Management, LLC 600 Fifth Avenue New York, NY 10020 Item 29. Management Services None. Item 30. Undertakings (a) The Registrant undertakes to provide its annual report of any of its series to any person who receives a prospectus for such series and who requests the annual report. CDC NVEST CASH MANAGEMENT TRUST SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this Post-Effective Amendment No. 38 to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston and the Commonwealth of Massachusetts on the 29th day of June, 2001. CDC Nvest Cash Management Trust BY: PETER S. VOSS* ------------------------------- Peter S. Voss Chief Executive Officer *BY:/S/ JOHN E. PELLETIER ------------------------------- John E. Pelletier Attorney-In-Fact Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE PETER S. VOSS* June 29, 2001 - ------------------------------------- Peter S. Voss Chairman of the Board; Chief Executive Officer; Trustee /s/ Thomas P. Cunningham June 29, 2001 - ------------------------------------- Thomas P. Cunningham Treasurer GRAHAM T. ALLISON, JR.* June 29, 2001 - ------------------------------------- Graham T. Allison, Jr. Trustee DANIEL M. CAIN* June 29, 2001 - ------------------------------------- Daniel M. Cain Trustee KENNETH J. COWAN* June 29, 2001 - ------------------------------------- Kenneth J. Cowan Trustee RICHARD DARMAN* June 29, 2001 - ------------------------------------- Richard Darman Trustee JOHN T. HAILER* Trustee June 29, 2001 - ------------------------------------- John T. Hailer SANDRA O. MOOSE* June 29, 2001 - ------------------------------------- Sandra O. Moose Trustee JOHN A. SHANE* June 29, 2001 - ------------------------------------- John A. Shane Trustee PENDLETON P. WHITE* June 29, 2001 - ------------------------------------- Pendleton P. White Trustee
*By: /S/ JOHN E. PELLETIER John E. Pelletier Attorney-In-Fact** June 29, 2001 ** Powers of Attorney are incorporated by reference to exhibit (h)(4) to PEA No. 35 to the Registration Statement filed on June 15, 1999 and to exhibit (q) filed herewith. CDC NVEST CASH MANAGEMENT TRUST EXHIBIT INDEX EXHIBITS FOR ITEM 23 OF FORM N-1A EXHIBIT EXHIBIT DESCRIPTION (a)(4) Amendment No. 3 dated November 12, 1999 to Agreement and Declaration of Trust (a)(5) Amendment No. 4 dated March 23, 2001 to Agreement and Declaration of Trust (d)(1) Advisory Agreement dated October 30, 2000 (d)(2) Subadvisory Agreement (Back Bay Advisors, L.P.) dated October 30, 2000 (e)(1) Distribution Agreement dated October 30, 2000 (e)(2) Form of Dealer Agreement (h)(2) Amendment dated January 1, 2001 to Fee Schedule to Transfer Agency and Services Agreement (h)(3) Administrative Services Agreement dated October 30, 2000 (h)(4) Amendment dated December 1, 2000 to Administrative Services Agreement (h)(5) Amendment dated January 2, 2001 to Administrative Services Agreement (n) Rule 18f-3 Plan dated December 1, 2000 (q) Power of Attorney EX-99.(A)(4) 2 d26079_ex-a4.txt AGREEMENT AND DECLARATION OF TRUST - AMEND NO. 3 Exhibit (a)(4) NEW ENGLAND CASH MANAGEMENT TRUST Amendment No. 3 to Fourth Amended and Restated Agreement and Declaration of Trust The undersigned, being at least a majority of the Trustees of New England Cash Management Trust (the "Trust"), having determined it to be consistent with the fair and equitable treatment of all shareholders of the Trust, hereby amend the Trust's Fourth Amended and Restated Agreement and Declaration of Trust, as amended by Amendments No. 1, 2 and 3 thereto (the "Declaration of Trust"), a copy of which is on file in the office of the Secretary of State of the Commonwealth of Massachusetts, as follows: 1. The name of the Trust is hereby amended to be "Nvest Cash Management Trust." 2. The first sentence of Section 6 of Article III of the Declaration of Trust is hereby amended to read in its entirety as follows: Without limiting the authority of the Trustees set forth in Section 5, INTER ALIA, to establish and designate any further Series or classes or to modify the rights and preferences of an Series or class, each of the following Series shall be, and is hereby, established and designated as a Multi-Class Series: the Money Market Series. The foregoing amendment shall become effective as of the time it is filed with the Secretary of State of the Commonwealth of Massachusetts. IN WITNESS WHEREOF, we have hereunto set our hand for ourselves and for our successors and assigns as of the 12th day of November, 1999. /S/ GRAHAM T. ALLISON, JR. /S/ SANDRA O. MOOSE - -------------------------- ------------------- Graham T. Allison, Jr. Sandra O. Moose /S/ DANIEL M. CAIN /S/ JOHN A. SHANE - ------------------ ----------------- Daniel M. Cain John A. Shane /S/ KENNETH J. COWAN /S/ PETER S. VOSS - -------------------- ----------------- Kenneth J. Cowan Peter S. Voss /S/ RICHARD DARMAN /S/ PENDLETON P. WHITE - ------------------ ----------------------- Richard Darman Pendleton P. White EX-99.(A)(5) 3 d26079_ex-a5.txt AGREEMENT AND DECLARATION OF TRUST - AMEND NO. 4 Exhibit (a)(5) NVEST CASH MANAGEMENT TRUST Amendment No. 4 to Fourth Amended and Restated Agreement and Declaration of Trust The undersigned, being at least a majority of the Trustees of Nvest Cash Management Trust (the "Trust"), having determined it to be consistent with the fair and equitable treatment of all shareholders of the Trust, hereby amend the Trust's Fourth Amended and Restated Agreement and Declaration of Trust, as amended by Amendments No. 1, 2 and 3 thereto (the "Declaration of Trust"), a copy of which is on file in the office of the Secretary of the Commonwealth of Massachusetts, as follows: 1. The name of the Trust is hereby amended to be "CDC Nvest Cash Management Trust." 2. The first sentence of Section 6 of Article III of the Declaration of Trust is hereby amended to read in its entirety as follows: Without limiting the authority of the Trustees set forth in Section 5, INTER ALIA, to establish and designate any further Series or classes or to modify the rights and preferences of an Series or class, each of the following Series shall be, and is hereby, established and designated as a Multi-Class Series: the Money Market Series. The foregoing amendment shall become effective as of the time it is filed with the Secretary of State of the Commonwealth of Massachusetts. IN WITNESS WHEREOF, we have hereunto set our hand for ourselves and for our successors and assigns as of the 23rd day of March, 2001. /S/ GRAHAM T. ALLISON, JR. /S/ JOHN T. HAILER - -------------------------- ------------------- Graham T. Allison, Jr. John T. Hailer /S/ DANIEL M. CAIN /S/ SANDRA O. MOOSE - ------------------ ------------------- Daniel M. Cain Sandra O. Moose /S/ KENNETH J. COWAN /S/ JOHN A. SHANE - -------------------- ----------------- Kenneth J. Cowan John A. Shane /S/ RICHARD DARMAN /S/ PETER S. VOSS - ------------------ ----------------- Richard Darman Peter S. Voss /S/ PENDLETON P. WHITE ---------------------- Pendleton P. White EX-99.(D)(1) 4 d26079_ex-d1.txt ADVISORY AGREEMENT Exhibit (d)(1) NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES ADVISORY AGREEMENT AGREEMENT made the 30th day of October, 2000, by and between NVEST CASH MANAGEMENT TRUST a Massachusetts business trust (the "Fund"), with respect to its Money Market Series (the "Series"), and NVEST FUNDS MANAGEMENT, L.P., a Delaware limited partnership (the "Manager"). WITNESSETH: WHEREAS, the Fund and the Manager wish to enter into an agreement setting forth the terms upon which the Manager (or certain other parties acting pursuant to delegation from the Manager) will perform certain services for the Series; NOW, THEREFORE, in consideration of the premises and covenants hereinafter contained, the parties agree as follows: 1. (a) The Fund hereby employs the Manager to furnish the Fund with Portfolio Management Services (as defined in Section 2 hereof) and Administrative Services (as defined in Section 3 hereof), subject to the authority of the Manager to delegate any or all of its responsibilities hereunder to other parties as provided in Sections 1(b) and (c) hereof. The Manager hereby accepts such employment and agrees, at its own expense, to furnish such services (either directly or pursuant to delegation to other parties as permitted by Sections 1(b) and (c) hereof) and to assume the obligations herein set forth, for the compensation herein provided; provided, however, that the Manager shall have no obligation to pay the fees of any Sub-Adviser (as defined in Section 1(b) hereof), to the extent that the Fund has agreed, under any contract to which the Fund and the Sub-Adviser are parties (a "Sub-Advisory Agreement") to pay such fees. The Manager shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund. (b) The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Portfolio Management Services (and assumption of related expenses) to one or more other parties (each such party, a "Sub-Adviser"), pursuant in each case to a written agreement with such Sub-Adviser that meets the requirements of Section 15 of the Investment Company Act of 1940 and the rules thereunder (the "1940 Act") applicable to contracts for service as investment adviser of a registered investment company (including without limitation the requirements for approval by the trustees of the Fund and the shareholders of the Series), subject, however, to such exemptions as may be granted by the Securities and Exchange Commission. Any Sub-Adviser may (but need not) be affiliated with the Manager. If different Sub-Advisers are engaged to provide Portfolio Management Services with respect to different segments of the portfolio of the Series, the Manager shall determine, in the manner described in the prospectus of the Series from time to time in effect, what portion of the assets belonging to the Series shall be managed by each Sub-Adviser. (c) The Manager may delegate any or all of its responsibilities hereunder with respect to the provision of Administrative Services to one or more other parties (each such party, an "Administrator") selected by the Manager. Any Administrator may (but need not) be affiliated with the Manager. 2. As used in this Agreement, "Portfolio Management Services" means management of the investment and reinvestment of the assets belonging to the Series, consisting specifically of the following: (a) obtaining and evaluating such economic, statistical and financial data and information and undertaking such additional investment research as shall be necessary or advisable for the management of the investment and reinvestment of the assets belonging to the Series in accordance with the Series' investment objectives and policies; (b) taking such steps as are necessary to implement the investment policies of the Series by purchasing and selling of securities, including the placing of orders for such purchase and sale; and (c) regularly reporting to the Board of Trustees of the Fund with respect to the implementation of the investment policies of the Series. 3. As used in this Agreement, "Administrative Services" means the provision to the Fund, by or at the expense of the Manager, of the following: (a) office space in such place or places as may be agreed upon from time to time by the Fund and the Manager, and all necessary office supplies, facilities and equipment; (b) necessary executive and other personnel for managing the affairs of the Series (exclusive of those related to and to be performed under contract for custodial, transfer, dividend and plan agency services by the entity or 2 entities selected to perform such services and exclusive of any managerial functions described in Section 4); (c) compensation, if any, of trustees of the Fund who are directors, officers or employees of the Manager, any Sub-Adviser or any Administrator or of any affiliated person (other than a registered investment company) of the Manager, any Sub-Adviser or any Administrator; and (d) supervision and oversight of the Portfolio Management Services provided by each Sub-Adviser, and oversight of all matters relating to compliance by the Fund with applicable laws and with the Series' investment policies, restrictions and guidelines, if the Manager has delegated to one or more Sub-Advisers any or all of its responsibilities hereunder with respect to the provision of Portfolio Management Services. 4. Nothing in section 3 hereof shall require the Manager to bear, or to reimburse the Fund for: (a) any of the costs of printing and mailing the items referred to in sub-section (n) of this section 4; (b) any of the costs of preparing, printing and distributing sales literature; (c) compensation of trustees of the Fund who are not directors, officers or employees of the Manager, any Sub-Adviser or any Administrator or of any affiliated person (other than a registered investment company) of the Manager, any Sub-Adviser or any Administrator; (d) registration, filing and other fees in connection with requirements of regulatory authorities; (e) the charges and expenses of any entity appointed by the Fund for custodial, paying agent, shareholder servicing and plan agent services; (f) charges and expenses of independent accountants retained by the Fund; (g) charges and expenses of any transfer agents and registrars appointed by the Fund; (h) brokers' commissions and issue and transfer taxes chargeable to the Fund in connection with securities transactions to which the Fund is a party; 3 (i) taxes and fees payable by the Fund to federal, state or other governmental agencies; (j) any cost of certificates representing shares of the Fund; (k) legal fees and expenses in connection with the affairs of the Fund, including registering and qualifying its shares with Federal and State regulatory authorities; (l) expenses of meetings of shareholders and trustees of the Fund; (m) interest, including interest on borrowings by the Fund; (n) the costs of services, including services of counsel, required in connection with the preparation of the Fund's registration statements and prospectuses, including amendments and revisions thereto, annual, semiannual and other periodic reports of the Fund, and notices and proxy solicitation material furnished to shareholders of the Fund or regulatory authorities; and (o) the Fund's expenses of bookkeeping, accounting, auditing and financial reporting, including related clerical expenses. 5. All activities undertaken by the Manager or any Sub-Adviser or Administrator pursuant to this Agreement shall at all times be subject to the supervision and control of the Board of Trustees of the Fund, any duly constituted committee thereof or any officer of the Fund acting pursuant to like authority. 6. The services to be provided by the Manager and any Sub-Adviser or Administrator hereunder are not to be deemed exclusive and the Manager and any Sub-Adviser or Administrator shall be free to render similar services to others, so long as its services hereunder are not impaired thereby. 7. As full compensation for all services rendered, facilities furnished and expenses borne by the Manager hereunder, the Fund shall pay the Manager compensation in an amount equal to the annual rate of 0.425% of the first $500 million of the average daily net assets of the Series, 0.40% of the next $500 million of the average daily net assets of the Series, 0.35% of the next $500 million of the average daily net assets of the Series, 0.30% of the next $500 million of the average daily net assets of the Series, and 0.25% over $2 billion of such assets, respectively (or such lesser amount as the Manager may from time to time agree to receive) minus any fees payable by the Fund, with respect to the period in question, to any one or more Sub-Advisers pursuant to any Sub-Advisory Agreements in effect with respect to such period. Such compensation shall be payable monthly in arrears or at such other intervals, not less frequently than quarterly, as the Board of Trustees of the Fund may from time to time determine and specify in writing to the Manager. The Manager 4 hereby acknowledges that the Fund's obligation to pay such compensation is binding only on the assets and property belonging to the Series. 8. If the total of all ordinary business expenses of the Fund as a whole (including investment advisory fees but excluding interest, taxes, portfolio brokerage commissions, distribution-related expenses and extraordinary expenses) for any fiscal year exceeds the lowest applicable percentage of average net assets or income limitations prescribed by any state in which shares of the Series are qualified for sale, the Manager shall pay such excess. Solely for purposes of applying such limitations in accordance with the foregoing sentence, the Series and the Fund shall each be deemed to be a separate fund subject to such limitations. Should the applicable state limitation provisions fail to specify how the average net assets of the Fund or belonging to the Series are to be calculated, that figure shall be calculated by reference to the average daily net assets of the Fund or the Series, as the case may be. 9. It is understood that any of the shareholders, trustees, officers, employees and agents of the Fund may be a shareholder, director, officer, employee or agent of, or be otherwise interested in, the Manager, any affiliated person of the Manager, any organization in which the Manager may have an interest or any organization which may have an interest in the Manager; that the Manager, any such affiliated person or any such organization may have an interest in the Fund; and that the existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided in the Agreement and Declaration of Trust of the Fund, the partnership agreement of the Manager or specific provisions of applicable law. 10. This Agreement shall become effective as of the date of its execution, and (a) unless otherwise terminated, this Agreement shall continue in effect for two years from the date of execution, and from year to year thereafter so long as such continuance is specifically approved at least annually (i) by the Board of Trustees of the Fund or by vote of a majority of the outstanding voting securities of the Series, and (ii) by vote of a majority of the trustees of the Fund who are not interested persons of the Fund or the Manager, cast in person at a meeting called for the purpose of voting on, such approval; (b) this Agreement may at any time be terminated on sixty days' written notice to the Manager either by vote of the Board of Trustees of the Fund or by vote of a majority of the outstanding voting securities of the Series; (c) this Agreement shall automatically terminate in the event of its assignment; 5 (d) this Agreement may be terminated by the Manager on ninety days' written notice to the Fund; Termination of this Agreement pursuant to this Section 10 shall be without the payment of any penalty. 11. This Agreement may be amended at any time by mutual consent of the parties, provided that such consent on the part of the Fund shall have been approved by vote of a majority of the outstanding voting securities of the Series and by vote of a majority of the trustees of the Fund who are not interested persons of the Fund or the Manager, cast in person at a meeting called for the purpose of voting on such approval. 12. For the purpose of this Agreement, the terms "vote of a majority of the outstanding voting securities," "interested person," "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under the 1940 Act. References in this Agreement to any assets, property or liabilities "belonging to" the Series shall have the meaning defined in the Fund's Agreement and Declaration of Trust as amended from time to time. 13. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be subject to any liability to the Fund, to any shareholder of the Fund or to any other person, firm or organization, for any act or omission in the course of, or connected with, rendering services hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. NVEST CASH MANAGEMENT TRUST on behalf of its Money Market Series By: /S/ JOHN T. HAILER ----------------------- Name: John T. Hailer Title: President NVEST FUNDS MANAGEMENT, L.P. By Nvest Distribution Corp., its general partner By: /S/ JOHN T. HAILER ----------------------- 6 Name: John T. Hailer Title: President 7 NOTICE A copy of the Agreement and Declaration of Trust establishing Nvest Cash Management Trust (the "Fund") is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed with respect to the Fund's Money Market Series (the "Series") on behalf of the Fund by officers of the Fund as officers and not individually and that the obligations of or arising out of this Agreement are not binding upon any of the trustees, officers or shareholders individually but are binding only upon the assets and property belonging to the Series. 8 EX-99.(D)(2) 5 d26079_ex-d2.txt SUBADVISORY AGREEMENT Exhibit (d)(2) NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES SUB-ADVISORY AGREEMENT (BACK BAY ADVISORS, L.P.) Sub-Advisory Agreement (this "Agreement") entered into as of 30th day of October, 2000, by and among Nvest Cash Management Trust, a Massachusetts business trust (the "Trust"), with respect to its Money Market Series (the "Series"), Nvest Funds Management, L.P., a Delaware limited partnership (the "Manager"), and Back Bay Advisors, L.P., a Delaware limited partnership (the "Sub-Adviser"). WHEREAS, the Manager has entered into an Advisory Agreement dated October 30, 2000 (the "Advisory Agreement") with the Trust, relating to the provision of portfolio management and administrative services to the Series; WHEREAS, the Advisory Agreement provides that the Manager may delegate any or all of its portfolio management responsibilities under the Advisory Agreement to one or more sub-advisers; WHEREAS, the Manager and the trustees of the Trust desire to retain the Sub-Adviser to render portfolio management services in the manner and on the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, the Trust, the Manager and the Sub-Adviser agree as follows: 1. SUB-ADVISORY SERVICES. a. The Sub-Adviser shall, subject to the supervision of the Manager and of any administrator appointed by the Manager (the "Administrator"), manage the investment and reinvestment of the assets of the Series, and have the authority on behalf of the Series to vote all proxies and exercise all other rights of the Series as a security holder of companies in which the Series from time to time invests. The Sub-Adviser shall manage the Series in conformity with (1) the investment objective, policies and restrictions of the Series set forth in the Trust's prospectus and statement of additional information relating to the Series, (2) any additional policies or guidelines established by the Manager or by the Trust's trustees that have been furnished in writing to the Sub-Adviser and (3) the provisions of the Internal Revenue Code (the "Code") applicable to "regulated investment companies" (as defined in Section 851 of the Code), all as from time to time in effect (collectively, the "Policies"), and with all applicable provisions of law, including without limitation all applicable provisions of the Investment Company Act of 1940 (the "1940 Act") and the rules and regulations thereunder. Subject to the foregoing, the Sub-Adviser is authorized, in its discretion and without prior consultation with the Manager, to buy, sell, lend and otherwise trade in any stocks, bonds and other securities and investment instruments on behalf of the Series, without regard to the length of time the securities have been held and the resulting rate of portfolio turnover or any tax considerations; and the majority or the whole of the Series may be invested in such proportions of stocks, bonds, other securities or investment instruments, or cash, as the Sub-Adviser shall determine. b. The Sub-Adviser shall furnish the Manager and the Administrator monthly, quarterly and annual reports concerning portfolio transactions and performance of the Series in such form as may be mutually agreed upon, and agrees to review the Series and discuss the management of it. The Sub-Adviser shall permit all books and records with respect to the Series to be inspected and audited by the Manager and the Administrator at all reasonable times during normal business hours, upon reasonable notice. The Sub-Adviser shall also provide the Manager with such other information and reports as may reasonably be requested by the Manager from time to time, including without limitation all material requested by or required to be delivered to the trustees of the Trust. c. The Sub-Adviser shall provide to the Manager a copy of the Sub-Adviser's Form ADV as filed with the Securities and Exchange Commission and a list of the persons whom the Sub-Adviser wishes to have authorized to give written and/or oral instructions to custodians of assets of the Series. 2. OBLIGATIONS OF THE MANAGER. a. The Manager shall provide (or cause the Series' Custodian (as defined in Section 3 hereof) to provide) timely information to the Sub-Adviser regarding such matters as the composition of assets of the Series, cash requirements and cash available for investment in the Series, and all other information as may be reasonably necessary for the Sub-Adviser to perform its responsibilities hereunder. b. The Manager has furnished the Sub-Adviser a copy of the prospectus and statement of additional information of the Series and agrees during the continuance of this Agreement to furnish the Sub-Adviser copies of any revisions or supplements thereto at, or, if practicable, before the time the revisions or supplements become effective. The Manager agrees to furnish the Sub-Adviser with minutes of meetings of the trustees of the Trust applicable to the Series to the extent they may affect the duties of the Sub-Adviser, and with 2 copies of any financial statements or reports made by the Series to its shareholders, and any further materials or information which the Sub-Adviser may reasonably request to enable it to perform its functions under this Agreement. 3. CUSTODIAN. The Manager shall provide the Sub-Adviser with a copy of the Series' agreement with the custodian designated to hold the assets of the Series (the "Custodian") and any modifications thereto (the "Custody Agreement"), copies of such modifications to be provided to the Sub-Adviser a reasonable time in advance of the effectiveness of such modifications. The assets of the Series shall be maintained in the custody of the Custodian identified in, and in accordance with the terms and conditions of, the Custody Agreement (or any sub-custodian properly appointed as provided in the Custody Agreement). The Sub-Adviser shall have no liability for the acts or omissions of the Custodian, unless such act or omission is taken in reliance upon instruction given to the Custodian by a representative of the Sub-Adviser properly authorized to give such instruction under the Custody Agreement. Any assets added to the Series shall be delivered directly to the Custodian. 4. PROPRIETARY RIGHTS. The Manager agrees and acknowledges that the Sub-Adviser is the sole owner of the name "Back Bay Advisors, L.P." and that all use of any designation consisting in whole or part of "Back Bay Advisors, L.P." under this Agreement shall inure to the benefit of the Sub-Adviser. The Manager on its own behalf and on behalf of the Series agrees not to use any such designation in any advertisement or sales literature or other materials promoting the Series, except with the prior written consent of the Sub-Adviser. Without the prior written consent of the Sub-Adviser, the Manager shall not, and the Manager shall use its best efforts to cause the Series not to, make representations regarding the Sub-Adviser in any disclosure document, advertisement or sales literature or other materials relating to the Series. Upon termination of this Agreement for any reason, the Manager shall cease, and the Manager shall use its best efforts to cause the Series to cease, all use of any such designation as soon as reasonably practicable. 5. EXPENSES. Except for expenses specifically assumed or agreed to be paid by the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be liable for any organizational, operational or business expenses of the Manager or the Trust including, without limitation, (a) interest and taxes, (b) brokerage commissions and other costs in connection with the purchase or sale of securities or other investment instruments with respect to the Series, and (c) custodian fees and expenses. Any reimbursement of advisory fees required by any expense limitation provision of any law shall be the sole responsibility of the Manager. The Manager and the Sub-Adviser shall not be considered as partners or participants in a joint venture. The Sub-Adviser will pay its own expenses incurred in furnishing the services to be provided by it pursuant to this Agreement. Neither the Sub-Adviser nor any affiliated person thereof shall be entitled to any compensation from the Manager or the Trust with respect to service by any 3 affiliated person of the Sub-Adviser as an officer or trustee of the Trust (other than the compensation to the Sub-Adviser payable by the Manager pursuant to Section 7 hereof). 6. PURCHASE AND SALE OF ASSETS. The Sub-Adviser shall place all orders for the purchase and sale of securities for the Series with brokers or dealers selected by the Sub-Adviser, which may include brokers or dealers affiliated with the Sub-Adviser, provided such orders comply with Rule 17e-1 under the 1940 Act in all respects. To the extent consistent with applicable law, purchase or sell orders for the Series may be aggregated with contemporaneous purchase or sell orders of other clients of the Sub-Adviser. The Sub-Adviser shall use its best efforts to obtain execution of transactions for the Series at prices which are advantageous to the Series and at commission rates that are reasonable in relation to the benefits received. However, the Sub-Adviser may select brokers or dealers on the basis that they provide brokerage, research or other services or products to the Series and/or other accounts serviced by the Sub-Adviser. To the extent consistent with applicable law, the Sub-Adviser may pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission or dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-Adviser determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research products and/or services provided by such broker or dealer. This determination, with respect to brokerage and research services or products, may be viewed in terms of either that particular transaction or the overall responsibilities which the Sub-Adviser and its affiliates have with respect to the Series or to accounts over which they exercise investment discretion. Not all such services or products need be used by the Sub-Adviser in managing the Series. To the extent permitted by applicable law, and in all instances subject to the foregoing policy of best execution, the Sub-Adviser may allocate brokerage transactions in a manner that takes into account the sale of shares of one or more funds distributed by Nvest Funds Distributor, L.P. ("Nvest Distributor"). In addition, the Sub-Adviser may allocate brokerage transactions to broker-dealers (including affiliates of Nvest Distributor) that have entered into arrangements in which the broker-dealer allocates a portion of the commissions paid by a fund toward the reduction of that fund's expenses, subject to the policy of best execution. 7. COMPENSATION OF THE SUB-ADVISER. As full compensation for all services rendered, facilities furnished and expenses borne by the Sub-Adviser hereunder, the Sub-Adviser shall be paid at the annual rate of 0.205% of the first $500 million of the average daily net assets of the Series, 0.18% of the next $500 million of the average daily net assets of the Series, 0.16% of the next $500 million of the average daily net assets of the Series, 0.14% of the next $500 million of the average daily net assets of the Series and 0.12% of such assets in excess of $2 billion (or such lesser amount as the Sub-Adviser may from time to time agree to receive). Such compensation shall be paid by the Trust (except to the extent that the Trust, the Sub-Adviser and the Manager otherwise agree in writing from time to time). Such compensation shall be payable 4 monthly in arrears or at such other intervals, not less frequently than quarterly, as the Manager is paid by the Series pursuant to the Advisory Agreement. 8. NON-EXCLUSIVITY. The Manager and the Series agree that the services of the Sub-Adviser are not to be deemed exclusive and that the Sub-Adviser and its affiliates are free to act as investment manager and provide other services to various investment companies and other managed accounts, except as the Sub-Adviser and the Manager or the Administrator may otherwise agree from time to time in writing before or after the date hereof. This Agreement shall not in any way limit or restrict the Sub-Adviser or any of its directors, officers, employees or agents from buying, selling or trading any securities or other investment instruments for its or their own account or for the account of others for whom it or they may be acting, provided that such activities do not adversely affect or otherwise impair the performance by the Sub-Adviser of its duties and obligations under this Agreement. The Manager and the Series recognize and agree that the Sub-Adviser may provide advice to or take action with respect to other clients, which advice or action, including the timing and nature of such action, may differ from or be identical to advice given or action taken with respect to the Series. The Sub-Adviser shall for all purposes hereof be deemed to be an independent contractor and shall, unless otherwise provided or authorized, have no authority to act for or represent the Series or the Manager in any way or otherwise be deemed an agent of the Series or the Manager. 9. LIABILITY. Except as may otherwise be provided by the 1940 Act or other federal securities laws, neither the Sub-Adviser nor any of its officers, directors, partners, employees or agents (the "Indemnified Parties") shall be subject to any liability to the Manager, the Trust, the Series or any shareholder of the Series for any error of judgment, any mistake of law or any loss arising out of any investment or other act or omission in the course of, connected with, or arising out of any service to be rendered under this Agreement, except by reason of willful misfeasance, bad faith or gross negligence in the performance of the Sub-Adviser's duties or by reason of reckless disregard by the Sub-Adviser of its obligations and duties hereunder. The Manager shall hold harmless and indemnify the Sub-Adviser for any loss, liability, cost, damage or expense (including reasonable attorneys' fees and costs) arising from any claim or demand by any past or present shareholder of the Series that is not based upon the obligations of the Sub-Adviser under this Agreement. The Manager acknowledges and agrees that the Sub-Adviser makes no representation or warranty, expressed or implied, that any level of performance or investment results will be achieved by the Series or that the Series will perform comparably with any standard or index, including other clients of the Sub-Adviser, whether public or private. 10. EFFECTIVE DATE AND TERMINATION. This Agreement shall become effective as of the date of its execution, and 5 a. unless otherwise terminated, this Agreement shall continue in effect for two years from the date of execution, and from year to year thereafter so long as such continuance is specifically approved at least annually (i) by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Series, and (ii) by vote of a majority of the trustees of the Trust who are not interested persons of the Trust, the Manager or the Sub-Adviser, cast in person at a meeting called for the purpose of voting on such approval; b. this Agreement may at any time be terminated on sixty days' written notice to the Sub-Adviser either by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Series; c. this Agreement shall automatically terminate in the event of its assignment or upon the termination of the Advisory Agreement; and d. this Agreement may be terminated by the Sub-Adviser on ninety days' written notice to the Manager and the Trust, or by the Manager on ninety days' written notice to the Sub-Adviser. Termination of this Agreement pursuant to this Section 10 shall be without the payment of any penalty. 11. AMENDMENT. This Agreement may be amended at any time by mutual consent of the Manager and the Sub-Adviser, provided that, if required by law, such amendment shall also have been approved by vote of a majority of the outstanding voting securities of the Series and by vote of a majority of the trustees of the Trust who are not interested persons of the Trust, the Manager or the Sub-Adviser, cast in person at a meeting called for the purpose of voting on such approval. 12. CERTAIN DEFINITIONS. For the purpose of this Agreement, the terms "vote of a majority of the outstanding voting securities," "interested person," "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under the 1940 Act. 13. GENERAL. a. The Sub-Adviser may perform its services through any employee, officer or agent of the Sub-Adviser, and the Manager shall not be entitled to the advice, recommendation or judgment of any specific person; provided, however, that the persons identified in the prospectus of the Series shall perform the day-to-day portfolio management duties described therein until the Sub-Adviser notifies the Manager that one or more other employees, officers or 6 agents of the Sub-Adviser, identified in such notice, shall assume such duties as of a specific date. b. If any term or provision of this Agreement or the application thereof to any person or circumstances is held to be invalid or unenforceable to any extent, the remainder of this Agreement or the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law. c. This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts. NVEST FUNDS MANAGEMENT, L.P. By Nvest Distribution Corp., its general partner By: /S/ JOHN T. HAILER ----------------------- Name: John T. Hailer Title: President Back Bay Advisors, L.P. By Back Bay Advisors, Inc., its general partner By: /S/ J. MICHAEL GAFFNEY ----------------------- Name: J. Michael Gaffney Title: President NVEST CASH MANAGEMENT TRUST on behalf of its Nvest Money Market Series By: /S/ JOHN T. HAILER ----------------------- Name: John T. Hailer Title: President 7 NOTICE A copy of the Agreement and Declaration of Trust establishing Nvest Cash Management Trust (the "Fund") is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed with respect to the Fund's Money Market Series (the "Series") on behalf of the Fund by officers of the Fund as officers and not individually and that the obligations of or arising out of this Agreement are not binding upon any of the trustees, officers or shareholders individually but are binding only upon the assets and property belonging to the Series. 8 EX-99.(E)(1) 6 d26079_ex-e1.txt DISTRIBUTION AGREEMENT DATED OCTOBER 30, 2000 Exhibit (e)(1) NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES DISTRIBUTION AGREEMENT AGREEMENT made this 30th day of October, 2000 by and between NVEST CASH MANAGEMENT TRUST, a Massachusetts business trust (the "Trust"), and NVEST FUNDS DISTRIBUTOR, L.P., a Delaware limited partnership (the "Distributor"). W I T N E S S E T H: In consideration of the covenants hereinafter contained, the Trust and the Distributor agree as follows: 1. DISTRIBUTOR. The Trust hereby appoints the Distributor as general distributor of shares of beneficial interest ("Series shares") of the Trust's Money Market Series (the "Series") during the term of this Agreement. The Trust reserves the right, however, to refuse at any time or times to sell any Series shares hereunder for any reason deemed adequate by the Board of Trustees of the Trust. 2. SALE AND PAYMENT. Under this agreement, the following provisions shall apply with respect to the sale of and payment for Series shares: (a) The Distributor shall have the right, as principal, to purchase Series shares from the Trust at their net asset value and to sell such shares to the public against orders therefore and to dealers against orders therefor, all at the net asset value per share in accordance with the provisions of the Trust's agreement and declaration of trust, and by-laws and the current prospectus of the Trust relating to the Series shares. No commission or other compensation for selling or obtaining subscriptions for series shares shall be paid by the Trust or charged as part of the subscription or selling price on any sale or subscription. (b) Prior to the time of delivery of any shares by the Trust to, or on the order of, the Distributor, the Distributor shall pay or cause to be paid to the Trust or to its order an amount in Boston or New York clearing house funds equal to the applicable net asset value of such shares. The Distributor shall retain so much of any sales charge or underwriting discount as is not allowed by it as a concession to dealers. 3. TRUST ISSUANCE OF SERIES SHARES. The delivery of Series shares shall be made promptly by a credit to a shareholder's open account for the Series. The Trust reserves the right (a) to issue Series shares at any time directly to the shareholders of the Series as a stock dividend or stock split, (b) to issue to such shareholders shares of the Series, or rights to subscribe to shares of the Series, as all or part of any dividend that may be distributed to shareholders of the Series or as all or part of any optional or alternative dividend that may be distributed to shareholders of the Series, and (c) to sell Series shares in accordance with the current applicable prospectus of the Trust relating to the Series shares. 4. REPURCHASE. The Distributor shall act as agent for the Trust in connection with the repurchase of Series shares by the Trust to the extent and upon the terms and conditions set forth in the current applicable prospectus of the Trust relating to the Series shares, and the Trust agrees to reimburse the Distributor, from time to time upon demand, for any reasonable expenses incurred in connection with such repurchases. 5. UNDERTAKING REGARDING SALES. The Distributor shall use reasonable efforts to sell Series shares but does not agree hereby to sell any specific number of Series shares and shall be free to act as distributor of the shares of other investment companies. Series shares will be sold by the Distributor only against orders therefor. The Distributor shall not purchase Series shares from anyone except in accordance with Section 4 and shall not take "long" or "short" positions in Series shares contrary to the agreement and declaration of trust or by-laws of the Trust. 6. COMPLIANCE. The Distributor shall conform to the Conduct Rules of the National Association of Securities Dealers, Inc. ("NASD") and the sale of securities laws of any jurisdiction in which it sells, directly or indirectly, any Series shares. The Distributor agrees to make timely filings, with the Securities and Exchange Commission in Washington, D.C. (the "SEC"), the NASD and such other regulatory authorities as may be required, of any sales literature relating to the Series and intended for distribution to prospective investors. The Distributor also agrees to furnish to the Trust sufficient copies of any agreements or plans it intends to use in connection with any sales of Series shares in adequate time for the Trust to file and clear them with the proper authorities before they are put in use (which the Trust agrees to use its best efforts to do as expeditiously as reasonably possible), and not to use them until so filed and cleared. 7. REGISTRATION AND QUALIFICATION OF SERIES SHARES. The Trust agrees to execute such papers and to do such acts and things as shall from time to time be reasonably requested by the Distributor for the purpose of qualifying and maintaining qualification of the Series shares for sale under the so-called Blue Sky Laws of any state or for maintaining the registration of the Trust and of the Series shares under the federal Securities Act of 1933 and the federal Investment Company Act of 1940 (the "1940 Act"), to the end that there will be available for sale from time to time such number of Series shares as the Distributor may reasonably be expected to sell. The Trust shall advise the Distributor promptly of (a) any action of the SEC or any authorities of any state or territory, of which it may be advised, affecting registration or qualification of the Trust or the Series shares, or rights to offer Series shares for sale, and (b) the happening of any event which makes untrue any statement or which requires the making of any change in the Trust's registration statement or its prospectus relating to the Series shares in order to make the statements therein not misleading. 8. DISTRIBUTOR INDEPENDENT CONTRACTOR. The Distributor shall be an independent contractor and neither the Distributor nor any of its officers or employees as such is or shall be an employee of the Trust. The Distributor is responsible for its own conduct and the employment, control and conduct of its agents and employees and for injury to such agents or employees or to others through its agents or employees. The Distributor assumes full responsibility for its agents and employees under applicable statutes and agrees to pay all employer taxes thereunder. 9. EXPENSES PAID BY DISTRIBUTOR. While the Distributor continues to act as agent of the Trust to obtain subscriptions for and to sell Series shares, the Distributor shall pay the following: (a) all expenses of printing (exclusive of typesetting) and distributing any prospectus for use in offering Series shares for sale, and all other copies of any such prospectus used by the Distributor, and (b) all other expenses of advertising and of preparing, printing and distributing all other literature or material for use in connection with offering Series shares for sale. 10. INTERESTS IN AND OF DISTRIBUTOR. It is understood that any of the shareholders, trustees, officers, employees and agents of the Trust may be a shareholder, director, officer, employee or agent of, or be otherwise interested in, the Distributor, any affiliated person of the Distributor, any organization in which the Distributor may have an interest or any organization which may have an interest in the Distributor; that the Distributor, any such affiliated person or any such organization may have an interest in the Trust; and that the existence of any such dual interest shall not affect the validity hereof or of any transaction hereunder except as otherwise provided in the agreement and declaration of trust or by-laws of the Trust, in the articles of organization or by-laws of the Distributor or by specific provision of applicable law. 11. EFFECTIVE DATE AND TERMINATION. This Agreement shall become effective as of the date of its execution, and -2- (a) Unless otherwise terminated, this Agreement shall continue in effect with respect to the shares of the Series so long as such continuation is specifically approved at least annually (i) by the Board of Trustees of the Trust or by the vote of a majority of the votes which may be cast by shareholders of the Series and (ii) by a vote of a majority of the Board of Trustees of the Trust who are not interested persons of the Distributor or the Trust, cast in person at a meeting called for the purpose of voting on such approval. (b) This Agreement may at any time be terminated on sixty days' notice to the Distributor either by vote of a majority of the Trust's Board of Trustees then in office or by the vote of a majority of the votes which may be cast by shareholders of the Series. (c) This Agreement shall automatically terminate in the event of its assignment. (d) This Agreement may be terminated by the Distributor on ninety days' written notice to the Trust. Termination of this Agreement pursuant to this section shall be without payment of any penalty. 12. DEFINITIONS. For purposes of this Agreement, the following definitions shall apply: (a) The "vote of a majority of the votes which may be cast by shareholders of the Series" means (1) 67% or more of the votes of the Series present (in person or by proxy) and entitled to vote at such meeting, if the holders of more than 50% of the outstanding shares of the Series entitled to vote at such meeting are present; or (2) the vote of the holders of more than 50% of the outstanding shares of the Series entitled to vote at such meeting, whichever is less. (b) The terms "affiliated person," "interested person" and "assignment" shall have their respective meanings as defined in the 1940 Act subject, however, to such exemptions as may be granted by the SEC under the 1940 Act. 13. AMENDMENT. This Agreement may be amended at any time by mutual consent of the parties, provided that such consent on the part of the Series shall be approved (i) by the Board of Trustees of the Trust or by vote of a majority of the votes which may be cast by shareholders of the Series and (ii) by a vote of a majority of the Board of Trustees of the Trust who are not interested persons of the Distributor or the Trust cast in person at a meeting called for the purpose of voting on such approval. 14. APPLICABLE LAW AND LIABILITIES. This Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts. All sales hereunder are to be made, and title to the Series shares shall pass, in Boston, Massachusetts. 15. LIMITED RECOURSE. The Distributor hereby acknowledges that the Trust's obligations hereunder with respect to the shares of the Series are binding only on the assets and property belonging to the Series. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. NVEST CASH MANAGEMENT TRUST, on behalf of its Money Market Series By: /S/ JOHN T. HAILER --------------------------- Name: John T. Hailer Title: President NVEST FUNDS DISTRIBUTOR, L.P. By: Nvest Distribution Corp., its general partner -3- By: /S/ JOHN T. HAILER --------------------------- Name: John T. Hailer Title: President -4- A copy of the Agreement and Declaration of Trust establishing Nvest Cash Management Trust is on file with the Secretary of The Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed with respect to the Trust's Money Market Series (the "Series") on behalf of the Trust by officers of the Trust as officers and not individually and that the obligations of or arising out of this Agreement are not binding upon any of the trustees, officers or shareholders of the Trust individually but are binding only upon the assets and property of the Series. -5- EX-99.(E)(2) 7 d26079_ex-e2.txt FORM OF DEALER AGREEMENT Exhibit (e)(2) CDC IXIS ASSET MANAGEMENT DISTRIBUTORS, L.P. 399 Boylston Street Boston, Massachusetts 02116 DEALER AGREEMENT As dealer for our own account, we offer to sell to you shares of each of the Funds distributed by us (the "Funds" and each a "Fund"), for each of which Funds we are a principal underwriter as defined in the Investment Company Act of 1940 (the "Act") and from which we have the right to purchase shares. With respect to each of the Funds (except for paragraph 4, which applies only with respect to each Fund having in effect from time to time a service plan or service and distribution plan adopted pursuant to Rule 12b-1 under the Act): 1. In all sales of shares of the Funds to the public you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for any of the Funds or for us. 2. Orders received from you will be accepted by us only at the public offering price applicable to each order, except for transactions to which a reduced offering price applies as provided in the then current Prospectus (which term as used herein shall include the Statement of Additional Information) of the Fund(s). The minimum dollar purchase of shares of each Fund by any investor shall be the applicable minimum amount described in the then current Prospectus of the Fund and no order for less than such amount will be accepted hereunder. The public offering price shall be the net asset value per share plus the sales charge, if any, applicable to the transaction, expressed as a percentage of the public offering price, as determined and effective as of the time specified in the then current Prospectus of the Fund(s). The procedures relating to the handling of orders shall be subject to any instructions that we shall forward from time to time to you. All orders are subject to acceptance or rejection by us in our sole discretion. You hereby agree to comply with the attached POLICIES AND PROCEDURES WITH RESPECT TO THE SALES OF SHARES OF FUNDS OFFERING MULTIPLE CLASSES OF SHARES. 3. The sales charge applicable to any sale of Fund shares by you and the dealer concession or commission applicable to any order from you for the purchase of Fund shares accepted by us shall be set forth in the then current Prospectus of the Fund. You may be deemed to be an underwriter in connection with sales by you of shares of the Fund where you receive all or substantially all of the sales charge as set forth in the Fund's Prospectus, and therefore you may be subject to applicable provisions of the Securities Act of 1933. We are entitled to a contingent deferred sales charge ("CDSC") on redemptions of applicable Classes of shares of the Funds, as described in the then current Prospectus. You agree that you will sell shares subject to a CDSC and that are to be held in omnibus accounts only if you are a NETWORKING participant with the National Securities Clearing Corporation and if such accounts are established pursuant to a NETWORKING Agreement. Reduced sales charges or no sales charge may apply to certain transactions under letter of intent, combined purchases or investments, reinvestment of dividends and distributions, repurchase privilege, unit investment trust distribution reinvestment or other programs, as described in the then current Prospectus of the Fund(s). 4. Rule 12b-1 Plans. The substantive provisions of this Paragraph 4 have been adopted pursuant to Rule 12b-1 under the Act by certain funds, under plans pursuant to such Rule (each a "Plan"). (a) You agree to provide (i) for the Funds with a Service Plan, personal services to investors in shares of the Funds and/or services related to the maintenance of shareholder accounts and (ii) for those Funds with a Service and Distribution Plan, both personal services to investors in shares of the funds and/or services related to the maintenance of shareholder accounts and also distribution and marketing services in the promotion of Fund shares. As compensation for these services, we shall pay you, upon receipt by us from the Fund(s), a quarterly services fee or services fee and distribution fee based on the average daily net asset value of Fund shares at the rate set forth with respect to the relevant Class(es) of shares of the Fund(s) in the then current Prospectus. This fee will be based on the average daily net asset value of Fund shares which are owned of record by your firm as nominee for your customers or which are owned by those shareholders whose records, as maintained by the Fund or its agent and designate your firm as the shareholder's dealer of record. No such fee will be paid to you with 1 respect to shares purchased by you or your customers and redeemed or repurchased by the Fund or by us as agent within seven (7) business days after the date of our confirmation of such purchase. No such fee will be paid to you with respect to any of your customers if the amount of such fee based upon the value of such customer's Fund shares would be less than $5.00. Normally, payment of such fee to you shall be made within forty-five (45) days after the close of each quarter for which such fee is payable. (b) You shall furnish us and the Fund with such information as shall reasonably be requested by the Trustees or Directors of the Fund with respect to the fees paid to you pursuant to this paragraph 4. (c) The provisions of this Paragraph 4 may be terminated by the vote of a majority of the Trustees or Directors of the Funds who are not interested persons of the Funds and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan, or by a vote of a majority of the Fund's outstanding shares, on sixty (60) days' written notice, without payment of any penalty. Such provisions will be terminated also by any act that terminates either the Fund's Distributor's Contract or Underwriting Agreement with us or this Dealer Agreement and shall terminate automatically in the event of the assignment (as that term is defined in the Act) of this Dealer Agreement. (d) The provisions of the Distributor's Contract or Underwriting Agreement between the Fund and us, insofar as they relate to the Plan, are incorporated herein by reference. The provisions of this paragraph 4 shall continue in full force and effect only so long as the continuance of the Plan, the Distributor's Contract or Underwriting Agreement and these provisions are approved at least annually by a vote of the Trustees or Directors, including a majority of the Trustees or Directors who are not interested persons of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan, cast in person at a meeting called for the purpose of voting thereon. 5. You agree to purchase shares only from us or from your customers. If you purchase shares from us, you agree that all such purchases shall be made only: (a) to cover orders already received by you from your customers; (b) for shares being acquired by your customers pursuant to either the exchange privilege or the reinvestment privilege, as described in the then current Prospectus of the Fund; (c) for your own bona fide investment; or (d) for investments by any IRS qualified pension, profit sharing or other trust established for the benefit of your employees or for investments in Individual Retirement Accounts established by your employees, and if you so advise us in writing prior to any sale of Fund shares pursuant to this subparagraph (d), you agree to waive all your dealer concessions to all sales of Fund shares pursuant to this subparagraph (d). If you purchase shares from your customers, you agree to pay such customers not less than the applicable redemption price as established by the then current Prospectus of the Fund. 6. You shall sell shares only: (a) to customers at the applicable public offering price, except for shares being acquired by your customers at net asset value pursuant to either the exchange privilege or the repurchase privilege as described in the then current Prospectus of the Fund, and (b) to us as agent for the Fund at the redemption price. In such a sale to us, you may act as either as principal for your own account or as agent for your customer. If you act as principal for your own account in purchasing shares for resale to us, you agree to pay your customer not less than the price that you receive from us. If you act as agent for your customer in selling shares to us, you agree not to charge your customer more than a fair commission or fee for handling the transaction, except that you agree to receive no compensation of any kind based on the reinvestment of redemption or repurchase proceeds pursuant to the repurchase privilege, as described in the current Prospectus of the Fund. 7. You hereby certify that all of your customers' taxpayer identification numbers ("TIN") or social security numbers ("SSN") furnished to us by you are correct and that you will not open an account without providing us with the customer's TIN or SSN. 8. You shall not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding; e.g., by a change in the net asset value from that used in determining the public offering price to your customers. 9. We will not accept from you any conditional orders for shares. 10. If any Fund shares sold to you or your customers under the terms of this Agreement are redeemed by the Fund or repurchased by us as agent for the Fund within seven (7) business days after the date of our confirmation of the original purchase by you or your customers, it is agreed that you shall forfeit your right to the dealer concession or commission received by you on such Fund shares. We will notify you of any such repurchase or redemption within ten (10) business 2 days after the date thereof and you shall forthwith refund to us the entire concession or commission allowed or paid to you on such sale. We agree, in the event of any such repurchase or redemption, to refund to the Fund the portion of the sales charge, if any, retained by us and, upon receipt from you of the concession allowed to you on Class A Shares, to pay such refund forthwith to the Fund. 11. Payment for Fund shares sold to you shall be made on or before the settlement date specified in our confirmation, at the office of our clearing agent, and by check payable to the order of the Fund, which reserves the right to delay issuance, redemption or transfer of shares until such check has cleared. If such payment is not received by us, we reserve the right, without notice, forthwith either to cancel the sale, or at our option, or to sell the shares ordered back to the Fund, in which case you shall bear any loss resulting from your failure to make payment as aforesaid. 12. You will also act as principal in all purchases by a shareholder for whom you are the dealer of record of fund shares with respect to payments sent directly by such shareholder to the Shareholder Services and Transfer agent (the "Agent") specified in the then current Prospectus of the Fund, and you authorize and appoint the Agent to execute and confirm such purchases to such shareholders on your behalf. The Agent will remit not less frequently than monthly to you the amount of any concessions due with respect to such purchases, except that no concessions will be paid to you on any transaction for which your net sales concession is less than $5.00 in any one month. You also represent that with respect to all such direct purchases by such shareholder, you may lawfully sell shares of such Fund in the state designated as such shareholder's record address. 13. Stock certificates for shares sold to you shall be issued only if specifically requested and upon terms specified from time to time by the Trustees of the Fund. If no open account registration or transfer instructions are received by the Agent within 20 days after payment by you for shares sold to you, an open account for such shares will be established in your name. You agree to hold harmless and indemnify us, the Agent and the Fund, for any loss or expenses resulting from such open account registration of such shares. 14. No person is authorized to make any representations concerning shares of the Funds except those contained in the then current Prospectuses of the Funds and in sales literature issued by us supplemental to such Prospectuses. In purchasing shares from us, you shall rely solely on the representations contained in such Prospectuses and such sales literature. We will furnish you with additional copies of such Prospectuses and such sales literature and other releases and information issued by us in reasonable quantities upon request. If, with prior approval from us, you use any advertisement or sales literature which has not been supplied by us, you are responsible for ensuring that the material complies with all applicable regulations and has been filed with the appropriate authorities. Also, you will send us copies of all such materials within (10) days after first use. You shall indemnify and hold us (and our directors, officers, employees, controlling persons and agents) harmless from and against any and all losses, claims, liabilities and expenses (including reasonable attorneys' fees)("Losses") incurred by us or any of them arising out of (i) your dissemination of information regarding any Fund that is alleged to contain an untrue statement of material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and that was not published or provided to you by or on behalf of us, or accurately derived from information published or provided by or on behalf of us or any of our Affiliates, (ii) any breach by you of any representation, warranty or agreement contained in this Agreement, or (iii) any willful misconduct or negligence on your part in the performance of, or failure to perform, your obligations under this Agreement, except to the extent such losses are caused by our breach of this Agreement or our willful misconduct or negligence in the performance, or failure to perform, our obligations under this Agreement. This Section (14) shall survive termination of this Agreement. 15. The Fund reserves the right in its discretion and we reserve the right in our discretion, without notice, to refuse any order for the purchase of Fund shares for any reason whatsoever, and to suspend sales or withdraw the offering of Fund shares (or shares of any class(es)) entirely. We reserve the right, by written notice to you, to amend, modify, cancel or assign this Dealer Agreement. Notice for all purposes shall be deemed to be given when mailed or electronically transmitted to you. 16. This Dealer Agreement shall replace any prior agreement between you and us or any of our predecessor entities (including but not limited to Nvest Funds Distributor, L.P., New England Funds, L.P., TNE Investment Services Corporation, and Investment Trust of Boston Distributors, Inc.) and is conditioned upon your representation and warranty that you are (i) a member of the National Association of Securities Dealers, Inc. (NASD) or a Registered Investment Advisor, or, (ii) that you are ineligible for NASD membership because you are a foreign dealer, in either case you agree that, 3 in making any sales to purchasers within the United States of securities acquired from us, you will conform to the provisions of paragraphs (a) and (b) of Rule 2420 of the NASD's Conduct Rules. You and we agree to abide by the Rules and Regulations of the NASD. Including without limitation Conduct Rules 2310, 3110, and 2830, and all applicable state and federal laws, rules and regulations. You will not offer Fund shares for sale in any state (a) where they are not qualified for sale under the blue sky laws and regulations of such state or (b) where you are not qualified to act as a dealer or advisor. In the event that you offer fund shares outside the United States, you agree to comply with the applicable laws, rules and regulations of the foreign government having jurisdiction over such sales, including any regulations of United States military authorities applicable to solicitations to military personnel. 17. In accordance with Regulation S-P, if non-public personal information regarding either party's customers or consumers is disclosed to the other party in connection with this Agreement, the party receiving such information will not disclose or use that information other than as necessary to carry out the purposes of this Agreement. 18. All communications to us should be sent to the above address. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below. This Agreement shall be effective when accepted by you below and shall be governed by and construed under the laws of the Commonwealth of Massachusetts. Accepted: CDC IXIS Asset Management Distributors, L.P. ______________________________ By:___________________________________ Dealer's Name Address ______________________________ By:___________________________ Authorized Signature of Dealer ______________________________ (Please print name) Date:_________________________ 4 5 POLICIES AND PROCEDURES WITH RESPECT TO SALES OF FUNDS OFFERING MULTIPLE CLASSES OF SHARES In connection with the offering of certain Funds (the "Funds") with multiple classes of shares, one subject to a front-end sales load and a service fee or service and distribution fee ("Class A shares"), one subject to a service fee, a distribution fee, no front-end sales load and a contingent deferred sales charge ("CDSC") on redemptions within a time period specified in the then current Prospectus of the Fund ("Class B shares"), one subject to a front-end sales load, service fee, distribution fee and a CDSC if redeemed in the first year ("Class C shares") and one intended only for certain institutional investors and subject to no front-end sales load ("Class Y shares"), an investor must choose the method of purchasing shares which best suits his/her particular circumstances. To assist investors in these decisions, the Distributor has instituted the following policies with respect to orders for Fund shares. These policies apply to each Broker-Dealer and Advisor distributing Fund shares. 1. No purchase order may be placed for Class B shares if the amount of the orders equals or exceeds $1,000,000 or the order is eligible for a net asset value purchase price (i.e. no front-end sales charge) of Class A shares, as provided in the Prospectus. 2. No purchase order may be placed for Class C shares if the amount of the order equals or exceeds $1,000,000 or the order is eligible for a net asset value purchase price (i.e. no front-end sales charge) of Class A shares unless the investor indicates on the relevant section of the application that the investor has been advised of the relative advantages and disadvantages of Class A and C shares. 3. Any purchase order for less than $1,000,000 may be for either Class A, B or C shares in light of the relevant facts and circumstances, including: a) the specific purchase order dollar amount; b) the length of time the investor expects to hold his/her shares; and c) any other relevant circumstances such as the availability of purchase under a Letter of Intent, Breakpoints (a volume discount), or Rights of Accumulation, as described in the Prospectus. 4. The following types of investors are eligible only to purchase Class Y shares, so long as they meet the minimum initial investment standard: a) tax-qualified retirement plans ($2,000,000 minimum initial investment); b) endowments, foundations and other tax-qualified organizations ($1,000,000 minimum initial investment); c) separate accounts of certain insurance companies (no minimum); d) omnibus accounts of retirement plans with at least 500 eligible plan participants and $1,000,000 of plan assets. Institutional investors described above who will not make the initial minimum investment amount are eligible to invest in Class A, B or C shares. They should be advised, however, of the lower fees and expenses applicable to Class Y shares and should consider whether a larger investment, to meet the Class Y requirements, would be appropriate and desirable for their circumstances. There are instances when purchasing one class of shares may be more appropriate than the others. For example, investors who would qualify for a significant discount from the maximum sales load on Class A shares may determine that payment of such a reduced front-end sales load and service fee is preferable to payment of a higher ongoing distribution fee. Investors whose orders would not qualify for such a discount and who anticipate holding their investment for more than eight years might consider Class B shares because 100% of the purchase price is invested immediately. Investors making smaller investments who anticipate redeeming their shares within eight years might consider Class C shares for the same reason. Appropriate supervisory personnel within your organization must ensure that all employees and representatives receiving investor inquiries about the purchase of shares of a Fund advise the investor of then available pricing structures offered by the Funds, and the impact of choosing one class of shares over another. In some instances it may be appropriate for a supervisory person to discuss a purchase with the investor. This policy is effective with respect to any order for the purchase of shares of a Fund offering multiple classes of shares. Questions relating to this policy should be directed to John T. Hailer, President and Chief Executive Officer, CDC IXIS Asset Management Distributors, L.P. at (617) 449-2500. 6 EX-99.(H)(2) 8 d26079_ex-h2.txt AMENDMENT TO FEE SCHEDULE Exhibit (h)(2) SCHEDULE 3.1 FEES DATED AS OF JANUARY 1, 2001 ANNUAL ACCOUNT SERVICE FEES - -------------------------------------------------------------------------------- Each Portfolio/Class Equity Funds (Classes A, B and C) *-- subject to the greater of the basis point fee listed below or the minimum aggregate fee for all equity funds within the Nvest Family of Funds (as defined below) of $10.5 million Average Daily Net Assets** Fee up to $5.7 billion 0.184% between $5.7 billion and $10.7 billion 0.180% in excess of $10.7 billion 0.175% Fixed Income Funds (Classes A, B and C) * -- subject to the greater of the basis point fee listed below or the minimum aggregate fee for all fixed income funds within the Nvest Family of Funds (as defined below) of $1.7 million Average Daily Net Assets ** Fee up to $1.2 billion 0.142% between $1.2 billion and $6.2 billion 0.135% in excess of $6.2 billion 0.130% Money Market Funds (Classes A, B and C) - subject to the greater of the basis point fee listed below or the minimum aggregate fee for all money market funds within the Nvest Family of Funds (as defined below) of $1.55 million Average Daily Net Assets ** Fee up to $650 million 0.239% between $650 million and $5.65 billion 0.200% in excess of $5.65 billion 0.195% - -------------------------------------------------------------------------------- Fees are billable on a monthly basis for the average daily net assets during each month. Account service fees are the higher of the basis point fees or the portfolio/class minimum. - -------------------------------------------------------------------------------- MONTHLY MINIMUMS Each Portfolio/Class Equity Funds (Classes A, B and C) * $1,500 Fixed Income Funds (Classes A, B and C) * $1,500 Money Market Funds (Classes A, B and C) $1,500 - -------------------------------------------------------------------------------- *Class Y Shares of the Equity and Fixed Income Funds are charged an asset based, flat fee of 10 basis points. - -------------------------------------------------------------------------------- **For purposes of calculating average daily net assets each month, all funds offered within the Nvest Family of Funds for which there are exchange privileges among the funds are included by fund type (e.g., Equity, Fixed Income, Money Market), provided, however, the net assets subject to the monthly portfolio/class minimum shown above are excluded from the net assets subject to the basis point fee. As of the date hereof, the Nvest Family of Funds consists of all series within the Nvest Funds Trust I, Nvest Funds Trust II, Nvest Funds Trust III, Nvest Cash Management Trust, Nvest Tax Exempt Money Market Trust, Nvest Kobrick Investment Trust, and Nvest Companies Trust I (Nvest AEW Real Estate Fund only) IRA CUSTODIAL FEES - -------------------------------------------------------------------------------- Annual Maintenance (payable by shareholders) $15.00/Account OUT OF POCKET EXPENSES - -------------------------------------------------------------------------------- Out-of-pocket expenses include, but are not limited to, confirmation statements, investor statements, postage, audio response, telephone, telecommunication and line charges, equipment (including imaging equipment and support), record storage, records retention, transcripts, microfilm, microfiche, disaster recovery capabilities, checks, forms (including year end forms), wire fees, mailing and tabulating proxies, sub-transfer agency fees including omnibus account fees and networking fees, costs associated with certain specialty products, systems, or services, as applicable (such as retirement plan recordkeeping, "Investor," "Voice," "FAN," and "Vision", electronic statements and electronic delivery initiatives), system conversion costs, and any other expenses incurred at the specific direction of the Fund. Subject to each party's right to terminate this Agreement pursuant to Section 13 hereof, the Transfer Agent and the Fund agree that the fees set forth in this Schedule 3.1 shall remain in effect for a period of one year from the date of this Agreement. Upon the expiration of such one year period, the Transfer Agent and the Fund hereby agree to negotiate in good faith such changes to this Schedule as they may deem necessary. NVEST FUNDS TRUST I NVEST SERVICES COMPANY, INC. NVEST FUNDS TRUST II NVEST FUNDS TRUST III NVEST CASH MANAGEMENT TRUST NVEST TAX EXEMPT MONEY MARKET TRUST BY: /S/ JOHN T. HAILER BY: /S/ CHRISTOPHER L. WILSON - ------------------------------ --------------------------------- John T. Hailer, President Christopher L. Wilson, President EX-99.(H)(3) 9 d26079_ex-h3.txt ADMINISTRATIVE SERVICES AGREEMENT Exhibit (h)(3) ADMINISTRATIVE SERVICES AGREEMENT AGREEMENT made as of the 30th day of October, 2000, by and between Nvest Services Company, Inc., a Massachusetts corporation ("NSC"), and Nvest Funds Trust I, Nvest Funds Trust II, Nvest Funds Trust III, Nvest Cash Management Trust and Nvest Tax Exempt Money Market Trust (collectively, the "Trusts"). WITNESSETH: WHEREAS, each Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Trusts desire to employ NSC to provide certain administrative services to the Trusts in the manner and on the terms set forth in this Agreement, and NSC wishes to perform such services; NOW, THEREFORE, in consideration of the premises and covenants hereinafter contained, the parties hereby agree as follows: 1. APPOINTMENT AND ACCEPTANCE. The Trusts hereby employ NSC to act as Administrator of the Trusts on the terms set forth in this agreement. NSC hereby accepts such employment and agrees to furnish the services and to assume the obligations herein set forth for the compensation herein provided. The Trusts will initially consist of the series and/or classes of shares (each a "Fund" and collectively, the "Funds") listed on Schedule A to this Agreement. In the event that any of the Trusts establish one or more additional Funds with respect to which such Trust wishes to employ NSC to act as Administrator hereunder, the Trust shall notify NSC in writing. Upon written acceptance by NSC, such Fund shall become subject to the provisions of this Agreement to the same extent as the existing Funds, except to the extent that such provisions (including those relating to the compensation and expenses payable by the Trusts and its Funds) may be modified with respect to each additional Fund in writing by the Trust and NSC at the time of the addition of the Fund. 2. SERVICES PROVIDED BY NSC. (a) NSC shall perform or arrange for the performance of the various administrative and clerical services listed in Schedule B hereto. The administrative services provided hereunder shall be subject to the control, supervision and direction of the Trusts and the review and comment by the Trusts' auditors and legal counsel and shall be performed in accordance with procedures which may be established from time to time between the Trusts and NSC. NSC shall provide the office space, facilities, equipment and the personnel required by it to perform the services contemplated herein. (b) In providing any or all of the services listed in Schedule B hereto, and in satisfaction of its obligations to provide such services, NSC may enter into agreements with one or more other third parties to provide such services to the Trusts; provided, however, that NSC shall be as fully responsible to the Trusts for the acts and omissions of any such third party service providers as it would be for its own acts or omissions hereunder. 3. COMPENSATION AND EXPENSES. (a) For the services provided by NSC hereunder, the Trusts shall pay NSC the greater of the following: (1) an annual minimum fee payable in equal monthly installments equal to $2,300,000. This minimum fee would only apply when and if the collective average net assets of the Trusts dropped below $7,000,000,000; or (2) a monthly fee (accrued daily) based on the Trusts' average daily net assets during the calendar month, such fee being calculated at the annualized rates set forth below: -------------------------------------- ------------------------------------ AVERAGE DAILY NET ASSETS ANNUALIZED FEE RATE AS A % OF AVERAGE DAILY NET ASSETS -------------------------------------- ------------------------------------ $0 - $5 billion 0.0350% -------------------------------------- ------------------------------------ Next $5 billion 0.0325% -------------------------------------- ------------------------------------ Over $10 billion 0.0300% -------------------------------------- ------------------------------------ (b) In addition, the Trusts shall reimburse NSC for its reasonable out-of-pocket expenses as well as any other advances incurred by NSC with the consent of the Trusts with respect to its provision of services hereunder. It is agreed that the expenses for Blue Sky administrative services performed and vendor costs incurred will be paid directly by the Trusts. (c) For any period less than a full calendar month, any fees payable to NSC for such period shall be pro-rated for such lesser period. All of the foregoing fees and expenses will be billed monthly in arrears by NSC. The Trusts shall pay such fees and reimburse such expenses promptly upon receipt of an invoice therefor and, in no event, later than five (5) business days after receipt of the invoice. (d) The Trusts agrees promptly to reimburse NSC for any equipment and supplies specially ordered by or for the Trusts through NSC at the request or with the consent of the Trusts, and for any other expenses not contemplated by this Agreement that NSC may incur on behalf of, at the request of, or with the consent of the Trusts. (e) The Trusts will bear all expenses that are incurred in its operation and not specifically assumed by NSC. Expenses to be borne by the Trusts, include, but are not limited to: organizational expenses; cost of services of independent accountants and outside legal and tax counsel (including such counsel's review of each Trust's registration statement, proxy materials, federal and state tax qualification as a regulated investment company and other reports and materials prepared by NSC under this Agreement); cost of any services contracted for by the Trusts directly from parties other than NSC; cost of trading operations and brokerage fees, commissions and transfer taxes in connection with the purchase and sale of securities for the Funds; investment advisory fees; taxes, insurance premiums and other fees and expenses applicable to 2 its operation; costs incidental to any meetings of shareholders including, but not limited to, legal and accounting fees, proxy filing fees and the costs of preparation, printing and mailing of any proxy materials; costs incidental to Board meetings, including fees and expenses of Board members; the salary and expenses of any non-affiliated officer or director/trustee or any employee of the Trusts; costs incidental to the preparation, printing and distribution of the Trusts' registration statements and any amendments thereto and shareholder reports; cost of typesetting and printing of prospectuses; cost of preparation and filing of each of the Fund's tax returns, Form N-1A and Form N-SAR, and all notices, registrations and amendments associated with applicable federal and state tax and securities laws; all applicable registration fees and filing fees required under federal and state securities laws; fidelity bond and directors' and officers' liability insurance; and cost of independent pricing services used in computing each Fund's net asset value. 4. LIMITATION OF LIABILITY; INDEMNIFICATION. (a) NSC shall not be liable to the Trusts for any error of judgment or mistake of law or for any loss arising out of any act or omission by NSC, or any persons engaged pursuant to Section 2(b) hereof, including officers, agents, and employees of NSC and its affiliates, in the performance of its duties hereunder; provided, however, that nothing contained herein shall be construed to protect NSC against any liability to the Trusts, the Funds, or the shareholders to which NSC shall otherwise be subject by reason of its willful misfeasance, bad faith, or negligence in the performance of its duties or the reckless disregard of its obligations and duties hereunder. (b) NSC will indemnify and hold harmless the Trusts, their officers, employees, and agents and any persons who control the Trusts (collectively, the "Trusts Indemnified Parties") and hold each of them harmless from any losses, claims, damages, liabilities, or actions in respect thereof to which the Trusts Indemnified Parties may become subject, including amounts paid in settlement with the prior written consent of NSC, insofar as such losses, claims, damages, liabilities, or actions in respect thereof arise out of or result from the failure of NSC to comply with the terms of this Agreement. NSC will reimburse the Trusts for reasonable legal or other expenses reasonably incurred by the Trusts in connection with investigating or defending against any such loss, claim, damage, liability, or action. NSC shall not be liable to the Trusts for any action taken or omitted by the Trusts in bad faith or with willful misfeasance or negligence or with reckless disregard by the Trusts of their respective obligations and duties hereunder. The indemnities herein shall, upon the same terms and conditions, extend to and inure to the benefit of each of the officers of the Trusts and any person controlling the Trusts. (c) The obligations set forth in this Section 4 shall survive the termination of this Agreement. 5. ACTIVITIES OF NSC NOT EXCLUSIVE; DUAL INTERESTS. (a) The services of NSC under this Agreement are not to be deemed exclusive, and NSC and any person controlled by or under common control with NSC shall be free to render similar services to others. 3 (b) It is understood that any of the officers, employees, and agents of the Trusts or the Manager may be a shareholder, director, officer, employee, or agent of, or be otherwise interested in, NSC, any affiliated person of NSC, any organization in which NSC may have an interest, or any organization that may have an interest in the Trusts. Except as otherwise provided by specific provisions of applicable law, the existence of any such dual interest shall not affect the validity of this Agreement or any of the transactions hereunder. 6. REPRESENTATIONS AND WARRANTIES. (a) The Trusts each represents and warrants to NSC that this Agreement has been duly authorized by each of them and, when executed and delivered, will constitute a legal, valid, and binding obligation of the Trusts, enforceable against the Trusts in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting the rights and remedies of creditors and secured parties. (b) NSC represents and warrants to the Trusts that this Agreement has been duly authorized by NSC and, when executed and delivered by NSC, will constitute a legal, valid, and binding obligation of NSC, enforceable against NSC in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting the rights and remedies of creditors and secured parties. 7. DURATION AND TERMINATION OF THIS AGREEMENT. (a) This Agreement shall become effective as of the date first above written and, unless otherwise terminated, shall continue indefinitely; provided, however, that this Agreement may be terminated at any time without the payment of any penalty by either party on not less than sixty (60) days' written notice to the other party. (b) This Agreement shall automatically terminate for any Fund in the attached Schedule A upon the termination of that Fund's Advisory Agreement. (c) Unless otherwise terminated, this Agreement shall continue in effect for one year from the date of execution, and from year to year thereafter so long as such continuance is specifically approved at least annually by the Board of Trustees of the Trusts. (d) NSC hereby agrees that any books and records prepared hereunder with respect to the Trusts are the property of the Trusts and shall be readily accessible to the Trusts and their respective trustees, officers and agents during normal business hours. NSC further agrees that, upon the termination of this Agreement or otherwise upon request, NSC will surrender promptly to the Trusts copies of all such books and records. 8. AMENDMENTS AND WAIVERS. This Agreement may be amended by the parties hereto only if such amendment is specifically approved by the Trusts' Board of Trustees, and such amendment is set forth in a written instrument executed by each of the parties hereto. At any time, any of the provisions hereof may be waived by the written mutual consent of the parties hereto. 4 9. NOTICES. All notices or other communications hereunder to either party shall be in writing and shall be deemed to be received on the earlier of the date actually received or on the fourth day after the postmark if such notice is mailed first class postage prepaid. Notices shall be sent to the addresses set forth below or to such other address as either party may designate by written notice to the other. IF TO NSC: Nvest Services Company, Inc. 399 Boylston Street Boston, MA 02116 Attention: President With a copy to: General Counsel IF TO THE TRUSTS: Nvest Funds Trust I Nvest Funds Trust II Nvest Funds Trust III Nvest Cash Management Trust Nvest Tax Exempt Money Market Trust 399 Boylston Street Boston, MA 02110 Attention: President With a copy to: Secretary Notice shall also be deemed sufficient if given electronically or by telex, telecopier, telegram, or other similar means of same day delivery (with a confirming copy by mail as provided herein). 10. ADDITIONAL PROVISIONS (A) SEPARATE PORTFOLIOS. This Agreement shall be construed to be made by the Trusts as a separate agreement with respect to each Fund, and under no circumstances shall the rights, obligations, or remedies with respect to a particular Fund be deemed to constitute a right, obligation, or remedy applicable to any other Fund. (B) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior arrangements, agreements, or understandings. (C) SEVERABILITY. If any term or provision of this Agreement or the application thereof to any person or circumstance is held to be invalid or unenforceable to any extent, the remainder of this Agreement or the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law. (D) GOVERNING LAW. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of The Commonwealth of Massachusetts as then in effect. 5 (E) COUNTERPARTS. This Agreement may be executed by the parties hereto in one or more counterparts, and, if so executed, the separate instruments shall constitute one agreement. (F) HEADINGS. Headings used in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. NVEST SERVICES COMPANY, INC. By: /S/ CHRISTOPHER L. WILSON ------------------------------------- Name: Christopher L. Wilson Title: President & Chief Executive Officer NVEST FUNDS TRUST I NVEST FUNDS TRUST II NVEST FUNDS TRUST III NVEST CASH MANAGEMENT TRUST NVEST TAX EXEMPT MONEY MARKET TRUST By: /S/ JOHN T. HAILER ------------------------------------- Name: John T. Hailer Title: President 6 SCHEDULE A TRUST PORTFOLIOS 1. Nvest Growth Fund 2. Nvest Capital Growth Fund 3. Nvest Growth & Income Fund 4. Nvest Equity Income Fund 5. Nvest Bullseye Fund 6. Nvest Balanced Fund 7. Nvest International Equity Fund 8. Nvest Star Value Fund 9. Nvest Star Advisers Fund 10. Nvest Star Worldwide Fund 11. Nvest Star Small Cap Fund 12. Nvest Bond Income Fund 13. Nvest High Income Fund 14. Nvest Government Securities Fund 15. Nvest Limited Term U.S. Government Fund 16. Nvest Strategic Income Fund 17. Nvest Short Term Income Fund 18. Nvest Municipal Income Fund 19. Nvest Massachusetts Tax Free Income Fund 20. Nvest Intermediate Term Tax Free Fund of California 21. Nvest Cash Management Trust - Money Market Series 22. Nvest Tax Exempt Money Market Trust 7 SCHEDULE B DESCRIPTION OF SERVICES PROVIDED NSC shall perform or arrange for the performance of the following administration and clerical service: CORPORATE SECRETARIAL SERVICES - ------------------------------ 1. provide Secretary and Assistant Secretaries for the Trusts and other officers as requested; 2. maintain general corporate calendar, tracking all legal and regulatory compliance through annual cycles; 3. prepare Board materials for quarterly Board meetings and Board committee meetings, including agenda and background materials for annual review of advisory and distribution fees, presentation of issues to the Board, prepare minutes and follow-up on matters raised at meetings; 4. maintain charter documents for the Trusts; 5. prepare organizational Board meeting materials for new Funds; 6. draft contracts, assisting in negotiation and planning, as appropriate, for example advisory, distribution and selling agreements, transfer agency and custodian agreements, 12b-1 and shareholder servicing plans and related agreements and various other agreements and amendments; 7. prepare and file proxy solicitation materials, oversee solicitation and tabulation efforts, conduct shareholder meetings and provide legal presence at meetings; REGISTRATION AND DISCLOSURE ASSISTANCE SERVICES - ----------------------------------------------- 8. prepare and file amendments to the Funds' registration statement, including updating prospectuses and SAIs; 9. prepare and file prospectus and SAI supplements, as needed; 10. prepare and file other regulatory documents, including N-SARs, Rule 24f-2/24e-2 Notices; 11. negotiate, obtain and file fidelity bonds and monitor compliance with Rule 17g-1 and Rule 17d-1(7) under the 1940 Act; 12. negotiate, obtain and monitor directors' and officers' errors and omissions policies; 13. prepare and file shareholder meeting materials and assist with all shareholder communications; 8 14. coordinate and monitor state Blue Sky qualification through an experienced vendor partner; LEGAL CONSULTING AND PLANNING SERVICES - -------------------------------------- 15. provide general legal advice on matters relating to portfolio management, Fund operations, mutual fund sales, development of advertising materials, changing or improving prospectus disclosure, and any potential changes in each Fund's investment policies, operations, or structure; 16. communicate significant emerging regulatory and legislative developments to the Adviser, the Trusts and the Board and provide related planning assistance; 17. develop or assist in developing guidelines and procedures to improve overall compliance by the Trusts and Funds; 18. provide advice with regard to litigation matters, routine fund examinations and investigations by regulatory agencies; 19. provide advice regarding long-term planning for the Funds, including creation of new funds or portfolios, corporate structural changes, mergers, acquisitions, and other asset gathering plans including new distribution methods; 20. maintain effective communications with fund counsel and counsel to the independent Trustees, if any; 21. create and implement timing and responsibility system for outside legal counsel when necessary to implement major projects and the legal management of such projects; 22. monitor activities and billing practices of counsel performing services for the Funds or in connection with related fund activities; 23. provide consultation and advice for resolving compliance questions along with the Adviser, its counsel, the Trusts and fund counsel; 24. provide active involvement with the management of SEC and other regulatory examinations; 25. maintain the Trust's Code of Ethics and monitor compliance of personnel; TRANSFER AGENT MONITORING SERVICES - ---------------------------------- 26. ensure that the content of confirmations, statements, annual and semi-annual reports, disclosure statements and shareholder administrative communications conform to regulatory requirements and are distributed within the mandated time frames; 9 27. monitor and review transfer agent activity in order to evaluate the status of regulatory compliance, protect the integrity of the funds and shareholders, search for systemic weaknesses, and examine for potential liability and fraud; 28. investigate and research customer and other complaints to determine liability, facilitate resolution and promote equitable treatment of all parties; 29. consult with transfer agent and other staff regarding prospectus and SAI provisions and requirements, distribution issues including payment programs, sub-transfer agent arrangements and other regulatory issues; TREASURY FINANCIAL SERVICES - --------------------------- 30. provide Treasurer and Assistant Treasurers for the Trusts as requested; 31. generate portfolio schedules utilizing State Street Safire system; 32. create financial statements and financial highlight tables; 33. maintain and update the notes to the financials; 34. supply State Street Bank with a listing of audit reports and schedules; 35. coordinate with external auditors for annual audit; 36. review financial statements for completeness accuracy and full disclosure; 37. coordinate ROCSOP adjustments with auditors; 38. determine and monitor expense accrual for each fund; 39. verify management and 12b-1 fees calculated by State Street; 40. review fund waivers and deferrals; 41. calculate total returns for each fund and respective classes using the Fundstation system; 42. oversee and review custodial bank services including maintenance of books and records; 43. provide service bureaus with funds statistical information; 44. oversee the determination and publication of the Funds' net asset values; 45. review the calculation, submit for approval by an officer of the Funds', and arrange for the payment of the Funds' expenses; 10 46. oversee and review the calculation of fees paid to the Funds' manager, subadvisers, custodian, transfer agent and distributor and submit to an officer for Funds' approval; TREASURY REGULATORY SERVICES - ---------------------------- 47. prepare and file annual and semi-annual N-SAR forms with the SEC; 48. provide Trustees with condensed portfolio information; 49. review securities lending activity; 50. review pricing errors; 51. review fair value pricing; 52. review stale pricing; 53. review collateral segregation; 54. provide bi-monthly summaries of pricing overrides to management; 55. provide a review of expense caps and management fee waivers to management; 56. review short sales; 57. review derivatives positions; 58. review brokerage commissions; 59. review dividends and capital gain distributions; TREASURY TAX SERVICES - --------------------- 60. provide annual tax information (Form 1099) for each fund or class of shares to shareholders and transfer agents; 61. calculate distribution of capital gains, income and spill back requirements; 62. provide estimates of capital gains; 63. provide 1099 information to vendors; 64. provide service bureaus, brokers and various parties with tax information noticed; 65. prepare excise tax returns; 11 66. prepare income tax returns; 67. prepare tax identification number filings; 68. perform IRS sub-Chapter M testing for 25% diversification, 50% diversification, 90% gross income, 90% income distribution requirement (annually), and 98% excise distribution requirement (annually); TREASURY COMPLIANCE SERVICES - ---------------------------- 69. perform oversight review to ensure investment manager compliance with investment policies and limitations; 70. obtain and review investment manager certification on adhering to all investment policies, restrictions and guidelines; 71. monitor SEC diversification with 75% diversification test and Section 12 diversification test; 72. review bi-monthly designated collateral on all fund derivative and delayed delivery positions; TREASURY SPECIAL SERVICES - ------------------------- 73. administer daily review of securities lending with Goldman Sachs and State Street Bank; 74. ensure semiannual review of Funds for opportunities with lending and review of current income levels; 75. establish opportunities with investment manager and brokers for directed commission programs; 76. monitor line of credit arrangement and payment of commitment fees; 77. maintain Trustee payments and monitor deferred compensation arrangements; 78. provide Trustees with Form 1099 information; 79. generate expense proformas for new products; 80. negotiate with vendors to ensure new products are brought in at the lowest costs; 81. ensure all aspects of new products are operationally ready. 12 EX-99.(H)(4) 10 d26079_ex-h4.txt ADMINISTRATIVE SVCS AGMNT AMEND. DATED 12/1/00 Exhibit (h)(4) NVEST FUNDS TRUST I NVEST FUNDS TRUST II NVEST FUNDS TRUST III NVEST CASH MANAGEMENT TRUST NVEST TAX EXEMPT MONEY MARKET TRUST AMENDMENT DATED DECEMBER 1, 2000 TO THE ADMINISTRATIVE SERVICES AGREEMENT DATED OCTOBER 30, 2000 -------------------------------------------------------- The following information replaces in its entirety section 3. Compensation and Expenses, in the Administrative Services Agreement dated October 30, 2000: 3. COMPENSATION AND EXPENSES. (a) For the services provided by NSC hereunder, the Trusts shall pay NSC the greater of the following: (1) an annual minimum fee payable in equal monthly installments of $2.5 million. This minimum fee would only apply when and if the collective average nets assets of the existing Trusts dropped below $7,155,000,000; or (2) a monthly fee (accrued daily) based on the Trusts' average daily net assets during the calendar month, such fee being calculated at the annualized rates set forth below: ------------------------------------- ------------------------------------- AVERAGE DAILY NET ASSETS ANNUALIZED FEE RATE AS A % OF AVERAGE DAILY NET ASSETS ------------------------------------- ------------------------------------- $0 - $5 billion 0.0350% ------------------------------------- ------------------------------------- Next $5 billion 0.0325% ------------------------------------- ------------------------------------- Over $10 billion 0.0300% ------------------------------------- ------------------------------------- (3) in addition, all new funds that become effective after January 1, 2001 would be subject to a fee the greater of the basis point fee or an annual administration fee of $100,000 for multi-manager Star products and $70,000 for funds managed by a single subadviser, or adviser in the absence of a subadviser. Subject to each party's right to terminate this Agreement pursuant to Section 7 hereof, the Administrator and the Fund agree that the fees as set forth in this Amendment shall remain in effect for a period of one year commencing December 1, 2000. Upon the expiration of such one year period, the Administrator and the Fund hereby agree to negotiate in good faith any such changes as they may deem necessary. NVEST FUNDS TRUST I NVEST SERVICES COMPANY, INC. NVEST FUNDS TRUST II NVEST FUNDS TRUST III NVEST CASH MANAGEMENT TRUST NVEST TAX EXEMPT MONEY MARKET TRUST BY:/S/ JOHN T. HAILER BY: /S/ CHRISTOPHER L. WILSON - ------------------------------- --------------------------------- John T. Hailer, President Christopher L. Wilson, President EX-99.(H)(5) 11 d26079_ex-h5.txt ADMINISTRATIVE SERVICES AGMNT AMEND. DATED 1/2/01 Exhibit (h)(5) AMENDMENT TO ADMINISTRATIVE SERVICES AGREEMENT Agreement made as of January 2, 2001, by and between Nvest Services Company, Inc. ("NSC"), Nvest Funds Trust I, Nvest Funds Trust II, Nvest Funds Trust III, Nvest Cash Management Trust - Money Market Series and Nvest Tax Exempt Money Market Trust (collectively, the "Nvest Trusts"), and Nvest Companies Trust I, on behalf of the Nvest AEW Real Estate Fund (the "Trust"). WHEREAS, NSC and the Nvest Trusts are parties to an Administrative Services Agreement dated October 30, 2000, as amended December 1, 2000 (the "Agreement"), governing the terms and conditions under which NSC provides certain administrative services to the respective series of the Nvest Trusts; WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended; WHEREAS, NSC and the Trust entered into an Administrative Services Agreement dated September 1, 2000, governing the terms and conditions under which NSC provides certain administrative services to the Nvest AEW Real Estate Fund series of the Trust, which has been terminated in accordance with its relevant terms and conditions; WHEREAS, the Trust desires to retain NSC to provide certain administrative services to the Trust in the manner and on the terms set forth in the Agreement, and NSC wishes to perform such services; and WHEREAS, NSC and the Nvest Trusts desire to amend the Agreement to include Nvest Companies Trust I as a party to the Agreement on behalf of the Fund; NOW THEREFORE, in consideration of the premises and covenants contained herein, NSC, the Nvest Trusts and the Trust hereby agree as follows: 1. Pursuant to the relevant provisions set forth in the Agreement, Nvest Companies Trust I is hereby added as a party to and shall be governed by the terms and conditions of the Agreement. 2. With respect to the terms and conditions of the Agreement, including, but not limited to, the terms of the section entitled Compensation and Expenses, the term the "Trusts", as used in the Agreement, shall include the Nvest Trusts and the Trust, on behalf of the Fund. 3. NSC shall perform all administrative and clerical services for the Trust as described in Schedule B of the Agreement. 4. Except as specifically superseded or modified herein, the terms and provisions of the Agreement shall continue to apply with full force and effect. 5. Any notice or other instrument or materials authorized or required by the Agreement to be given in writing to the Trust shall be sufficiently given to it at the address set forth below or at such other place as it may time to time designate in writing: Nvest Companies Trust I 399 Boylston Street Boston, MA 02116 Attention: President With a copy to: Secretary 6. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed as a sealed instrument in its name and behalf by its duly authorized representative this 29th day of December, 2000. NVEST SERVICES COMPANY, INC. By: /S/ CHRISTOPHER L. WILSON ------------------------------- Christopher L. Wilson, President NVEST FUNDS TRUST I By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President NVEST FUNDS TRUST II By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President NVEST FUNDS TRUST III By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President NVEST CASH MANAGEMENT TRUST - MONEY MARKET SERIES By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President NVEST TAX EXEMPT MONEY MARKET TRUST By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President NVEST COMPANIES TRUST I By: /S/ JOHN T. HAILER ------------------------ John T. Hailer, President EX-99.(N) 12 d26079_ex-n.txt RULE 18F-3 PLAN Exhibit (n) NVEST CASH MANAGEMENT TRUST NVEST TAX EXEMPT MONEY MARKET TRUST PLAN PURSUANT TO RULE 18F-3(D) UNDER THE INVESTMENT COMPANY ACT OF 1940 ----------------------------------------------------------------------- As amended effective December 1, 2000 Each series ("Fund") of Nvest Cash Management Trust and Nvest Tax Exempt Money Market Trust (the "Trusts") may from time to time issue one or more of the of the following classes of shares: Class A shares, Class B shares, and Class C shares. Each class is subject to such investment minimums and other conditions of eligibility as are set forth in the Fund's prospectus as from time to time in effect. The differences in expenses among these classes of shares, and the conversion and exchange features of each class of shares, are set forth below in this Plan, which is subject to change, to the extent permitted by law and by the Declaration of Trust and By-Laws of each Trust by action of the Board of Trustees of each Trust. INITIAL SALES CHARGE/CONTINGENT DEFERRED SALES CHARGE ("CDSC") - -------------------------------------------------------------- Classes A, B, and C shares are offered at their net asset value ("NAV"), without an initial sales charge or CDSC. SERVICE, ADMINISTRATION AND DISTRIBUTION FEES - --------------------------------------------- Classes A, B and C shares are identical except with respect to certain exchange privileges described below and in the Fund's prospectus. Class A, B, and C shares do not pay any distribution or service fees. CONVERSION AND EXCHANGE FEATURES - -------------------------------- Class A shares of a Fund can be exchanged for Class A shares of any other Fund with no sales charge. Class A, Class B, or Class C shares of a Fund acquired by exchange from either another Fund or a series of Nvest Funds Trust I, Nvest Funds Trust II, Nvest Funds Trust III, Nvest Kobrick Investment Trust, or Nvest Companies Trust I (Nvest AEW Real Estate Fund series only) (the "Stock or Bond Funds") will be subject to a CDSC if, and to the same extent as, the shares exchanged were subject to a CDSC. Class A shares on which no sales charge was previously paid may be exchanged for Class A shares of any of the Stock or Bond Funds on the basis of relative net asset value plus the sales charge applicable to initial purchases of Class A shares of the Stock or Bond Fund into which the shareholder is exchanging. Class A shares which have previously been subject to a sales charge may be exchanged on the basis of relative net asset value, without the payment of a sales charge, for Class A shares of any of the Stock or Bond Funds, except as described in the remainder of this paragraph. The absence of sales charges on exchanges described in the previous sentence is subject to two exceptions: (i) Class A shares of a Fund acquired through exchange from Class A shares of Nvest Intermediate Term Tax Free Fund of California may be exchanged for Class A shares of another Stock or Bond Fund at net asset value only if the shareholder held the California Fund shares for at least six months; otherwise, such shareholder will pay the difference between any sales charge already paid on the California Fund shares and the higher sales charge of the Stock or Bond Fund into which such shareholder is exchanging; and (ii) if Class A shares of a Fund acquired through exchange from Class A shares of Nvest Short Term Corporate Income Fund (the "Short Term Corporate Fund")purchased before December 1, 1998 are exchanged for shares of another Stock or Bond Fund that has a higher sales charge, the shareholder will pay the difference between any sales charge already paid on the Short Term Corporate Fund 1 shares and the higher sales charge of the Stock or Bond Fund into which such shareholder is exchanging will be paid. Class B shares of a Fund may be exchanged for Class B shares of any other Fund with no sales charge. Class B shares of a Fund may be exchanged for Class B shares of any of the Stock or Bond Funds on the basis of relative net asset value, subject to the CDSC schedule of the Stock or Bond Fund acquired. For purposes of computing the CDSC payable upon redemption of shares acquired by such exchange, and the conversion of such shares to Class A shares, the holding period of any Class B Stock or Bond Fund shares that were exchanged for Class B shares of a Fund is included, but the holding period of the Class B shares of a Fund is not included. Class C shares in accounts of Cash Management Trust - Money Market Series established prior to November 21, 2000 or that have previously been subject to a sales charge may be exchanged for Class C shares of any Stock or Bond Fund without a sales charge. Class C shares in accounts of Cash Management Trust - Money Market Series established on or after December 1, 2000 may be exchanged for Class C shares of any Stock or Bond Fund subject to the Stock or Bond Fund's sales charge and CDSC schedule. 2 EX-99.(Q) 13 d26079_ex-q.txt POWER OF ATTORNEY Exhibit (q) CDC NVEST FUNDS TRUST I CDC NVEST FUNDS TRUST II CDC NVEST FUNDS TRUST III CDC NVEST CASH MANAGEMENT TRUST CDC NVEST TAX EXEMPT MONEY MARKET TRUST POWER OF ATTORNEY I, the undersigned, hereby constitute John M. Loder, John E. Pelletier and Thomas P. Cunningham, each of them singly, my true and lawful attorneys, with full power to them and each of them to sign for me, and in my name in the capacity indicated below, any and all registration statements and any and all amendments thereto to be filed with the Securities and Exchange Commission for the purpose of registering from time to time investment companies of which I am now or hereafter a Director or Trustee and to register the shares of such companies and generally to do all such things in my name and on my behalf to enable such registered investment companies to comply with the provisions of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, and all requirements and regulations of the Securities and Exchange Commission, hereby ratifying and confirming my signature as it may be signed by my said attorneys and any and all registration statements and amendments thereto. Witness my hand on the 7th day of May, 2001. /S/ JOHN T. HAILER - ------------------------ John T. Hailer - Trustee -----END PRIVACY-ENHANCED MESSAGE-----