As filed with the Securities and Exchange Commission on March 13, 2000
Registration No. 333-00767
ICA No. 811-07531
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. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 8 [X]
(Check appropriate box or boxes)
AMERINDO FUNDS INC.
-----------------------------
(Exact Name of Registrant as Specified in Charter)
c/o Amerindo Funds Inc.
399 Park Avenue, New York, New York 10022
------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 371-6360
DANA E. SMITH
Amerindo Funds Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
-------------------------
(Name and Address of Agent for Service)
Copy to: MICHAEL R. ROSELLA, Esq.
Battle Fowler LLP
75 East 55th Street New York,
New York 10022
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
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)
[ ] on (date) pursuant to paragraph (a)(1)
[x] 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 filed post-effective amendment.
922097.1
<PAGE>
- --------------------------------------------------------------------------------
AMERINDO FUNDS INC. PROSPECTUS
Class A Shares; Class C Shares May 29, 2000
- --------------------------------------------------------------------------------
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND
AMERINDO TECHNOLOGY FUND II
Each Fund's investment objective is to seek long-term capital appreciation.
The Securities and Exchange Commission Has Not Approved or
Disapproved These Securities or Passed upon the Adequacy of this
Prospectus. Any Representation to the Contrary is a Criminal Offense.
<TABLE>
<S> <C> <C>
Risk/Return Summary: Investments, Risks and How to Purchase Shares.........................13
Performance......................................2
How to Redeem Shares...........................16
Fee Table........................................6
Exchanging Fund Shares.........................18
Investment Objectives, Principal Investment
Strategies and Related Risks.....................8
Dividends and Distributions....................18
Additional Investment Information and
Risk Factors.....................................9 Tax Consequences...............................18
Management, Organization and Capital Distribution Arrangements......................19
Structure.......................................10
Pricing of Fund Shares..........................13
</TABLE>
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Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Internet B2B Fund, the Amerindo Health
& Biotechnology Fund and the Amerindo Technology Fund II portfolios only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO INTERNET B2B FUND
Investment Objective
The Amerindo Internet B2B Fund's investment objective is to seek long-term
capital appreciation. Current income is incidental to the Fund's investment
objective. There is no assurance that the Fund will achieve its investment
objective.
Principal Investment Strategies
The Internet B2B Fund seeks to achieve its investment objective by investing at
least 65% of its total assets (although the Fund intends, as a non-fundamental
policy, to invest at least 80% of its assets) in the common stocks of technology
companies in the Internet Business to Business ("B2B") Sector. B2B companies are
those companies with primary business operations enabling or managing through
services, software or components, business to business operations over the
Internet. Investment strategy will focus on three primary areas that are driving
the growth of the Internet: infrastructure software, telecommunications
companies supporting B2B and pure B2B e-commerce companies. In addition to
investing at least 65% of its assets in technology companies, the Fund may also
invest in the stocks of companies that should benefit from the commercialization
of technological advances, although they may not be directly involved in
research and development.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by
the Fund can each decline in value.
o Investments in companies in the rapidly changing field of
technology face special risks such as competitive pressures
and technological obsolescence and may be subject to greater
governmental regulation than many other industries.
o Investments in smaller capitalized companies may involve
greater risks, such as limited product lines, markets and
financial or managerial resources.
o As a non-diversified fund, compared to other mutual funds,
this Fund may invest a greater percentage of its assets in a
particular issuer. Therefore, investors should consider this
greater risk versus the safety that comes with a more
diversified portfolio.
Who May Want to Invest in the Amerindo Internet B2B Fund
The Amerindo Internet B2B Fund is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
2
<PAGE>
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Investment Objective
The Amerindo Health & Biotechnology Fund's investment objective is to seek
long-term capital appreciation. Current income is incidental to the Fund's
investment objective. There is no assurance that the Fund will achieve its
investment objective.
Principal Investment Strategies
The Amerindo Health & Biotechnology Fund seeks to achieve its investment
objective by investing at least 65% of its total assets (although the Fund
intends, as a non-fundamental policy, to invest at least 80% of its assets) in
the common stocks of companies in the health and biotechnology fields, which,
in the opinion of the Adviser, have the potential for capital appreciation. The
health and biotechnology fields include health care management technology,
pharmaceuticals and services or devices.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by
the Fund can each decline in value.
o The healthcare industry is subject to government
regulations and governmental approval of products and
services. This governmental involvement can have a
significant effect on price and availability of products and
services. The healthcare industry is also greatly affected
by rapid obsolescence.
o The biotechnology industry can be significantly affected
affected by patent considerations, intense competition,
rapid technological change and obsolescence. This industry
can also be greatly affected by governmental regulation.
o Investments in smaller capitalized companies may involve
greater risks, such as limited product lines, markets and
financial or managerial resources.
o As a non-diversified fund, compared to other mutual funds,
this Fund may invest a greater percentage of its assets in a
particular issuer. Therefore, investors should consider this
greater risk versus the safety that comes with a more
diversified portfolio.
Who May Want to Invest in the Amerindo Health & Biotechnology Fund
The Amerindo Health & Biotechnology Fund is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
3
<PAGE>
AMERINDO TECHNOLOGY FUND II
Investment Objective
The Amerindo Technology Fund II's investment objective is to seek long-term
capital appreciation. Current income is incidental to the Fund's investment
objective. There is no assurance that the Fund will achieve its investment
objective.
Principal Investment Strategies
The Amerindo Technology Fund II seeks to achieve its investment objective by
investing at least 65% of its total assets (although the Fund intends, as a
non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas.
Industries likely to be represented in the portfolio include the Internet,
computers, networking and internetworking software, computer-aided design,
telecommunications, media and information services, medical devices and
biotechnology. In addition to investing at least 65% of its assets in technology
companies, the Fund may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by
the Fund can each decline in value.
o Investments in companies in the rapidly changing fields of
technology and science face special risks such as
competitive pressures and technological obsolescence and may
be subject to greater governmental regulation than many
other industries.
o Investments in smaller capitalized companies involve greater
risks, such as limited product lines, markets and financial
or managerial resources.
o As a non-diversified fund, compared to other mutual funds,
this Fund may invest a greater percentage of its assets in a
particular issuer. Therefore, investors should consider this
greater risk versus the safety that comes with a more
diversified portfolio.
Who May Want to Invest in the Amerindo Technology Fund II
The Amerindo Technology Fund II is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
The Board of Directors reserves the right at its discretion to close this Fund
to new investors at such time as it deems appropriate.
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Risk/Return Bar Chart and Table
The following bar chart and table may assist in your decision to invest in the
Fund. The bar chart shows the average annual returns of Class A shares of the
Amerindo Technology Fund (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II), which is
not offered in this prospectus. The table shows how the Amerindo Technology
Fund's Class A shares' average annual returns for the one-year and since
inceptions periods compare with that of the Hambrecht & Quist Growth Index.*
While analyzing this information, please note that the Amerindo Technology
Fund's past performance is not an indication of how the Amerindo Technology Fund
II will perform in the future. It is also important to note that the Amerindo
Technology Fund II will not necessarily invest in the same securities or issuers
in which the Amerindo Technology Fund has invested or will invest.
Year-by-Year Total Return as of December 31(1)
(Class A Shares)
In the printed version of the document, a line graph appears which depicts the
following plot points:
300.00%
250.60%
250.00%
200.00%
150.00%
100.00%
50.00%
0.00%
1999
Best Quarter 3/31/99: 67.92% Worst Quarter 9/30/99: (8.78%)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year(5) Since Inception (6)
ending 12/31/99)(2)(3)(4)
<S> <C> <C>
Amerindo Technology Fund - Class A Shares 230.42% 227.11%
Hambrecht & Quist Growth Index* 180.12% 231.94%**
</TABLE>
* The Hambrecht & Quist Growth Index is a multiple-sector growth stock
composite comprised of the publicly traded stocks of approximately 275
companies that have annual revenues of less than $300 million. The Index
includes companies in the technology, healthcare services, branded
consumer, and Internet sectors. You may not invest in the Hambrecht & Quist
Growth Index and unlike the Fund, it does not incur fees or charges.
** Since August 31, 1998.
(1) Sales loads are not reflected in the year-by-year total return or in the
best and worst quarterly returns. If they were, returns would be less than
those shown.
(2) Reflects 5.75% sales load.
(3) Shareholder Organizations may charge a fee to investors for purchasing or
redeeming shares. The net return to such investors may be less than if they
had invested in the Fund directly.
(4) Performance information for Class C shares will differ from Class A shares
due to differences in their sales loads.
(5) The year-to-date return for the Class A shares as of March 31, 2000 was
_______%.
(6) The date of inception of the Class A shares was August 3, 1998.
5
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<CAPTION>
Health &
Technology Fund II Internet B2B Fund Biotechnology Fund
------------------ ----------------- ------------------
Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- -------
Shareholder Fees
(fees paid directly from
your investment)
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) 5.75% None 5.75% None 5.75% None
Imposed on Purchases (as a
percentage of the offering
price)
Maximum Deferred Sales None 1.00% None 1.00% None 1.00%
Charge for shares held less
than 1 year (as a percentage
of the lesser of original
purchase price or redemption
proceeds)
Redemption Fees for shares 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
held less than 1 year (as a
percent of amount redeemed)
Exchange Fees None None None None None None
Annual Fund Operating
Expenses(1)
(expenses that are deducted
from Fund assets)
Management Fees 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Distribution and/or
Service 12b-1 Fees 0.25% 1.00% 0.25% 1.00% 0.25% 1.00%
Other Expenses(2) 0.45% 0.45% 0.34% 0.34% 1.71% 1.71%
----- ----- ----- ----- ----- -----
Total Annual Fund
Operating Expenses 2.20% 2.95% 2.09% 2.84% 3.46% 4.21%
Fee Waiver/Expense
Reimbursement 1.21% 1.21%
----- -----
Net Total Annual Fund
Operating Expenses 2.25% 3.00%
(1) The Adviser is contractually obligated to waive its fees and to reimburse any expenses to the extent
that the Total Annual Fund Operating Expenses exceed 2.25% for Class A shares and 3.00% for Class C shares.
This Expense Limitation Agreement will terminate on ( ).
(2) Other Expenses are based on estimated amounts for the current fiscal year.
</TABLE>
6
<PAGE>
Example: This example 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 you invest $10,000 in a Fund over the time
periods indicated and then redeem all of your shares at the end of
those periods. The Example also assumes that your investment has a
5% return each year and that a Fund's operating expenses remain the
same. The information would be the same if you redeemed your
shares. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
Year 1 Year 3
Technology Fund II
Class A $785 $ 1,224
Class C $298 $ 913
Internet B2B Fund
Class A $775 $ 1,192
Class C $287 $880
Health & Biotechnology Fund
Class A $790 $ 1,238
Class C $303 $ 927
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<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
Investment Objective. Each Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that a Fund's investment
objective will be achieved. The investment objective is fundamental to a Fund
and may not be changed without shareholder approval. Current income is
incidental to a Fund's investment objective.
The following information applies to the Amerindo Internet B2B and the Amerindo
Technology Fund II:
Principal Investment Strategies. Each Fund seeks to achieve its investment
objectives by investing at least 65% of its assets (although each Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. With respect to the Amerindo Internet B2B Fund,
such technology companies will be in the Internet Business to Business ("B2B")
Sector. B2B companies are those companies with primary business operations
enabling or managing through services, software or components business to
business operations over the Internet.
With respect to the Amerindo Technology Fund II, technology companies are those
companies with primary business operations in either the technology or science
areas. Industries likely to be represented in the portfolio include the
Internet, computers, networking and internetworking software, computer-aided
design, telecommunications, media and information services, medical devices and
biotechnology.
In addition to investing at least 65% of its assets in the Internet, technology
companies, [each Fund] may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
The following information applies to the Amerindo Health & Biotechnology Fund:
Principal Investment Strategies. The Amerindo Health & Biotechnology Fund seeks
to achieve its investment objectives by investing at least 65% of its assets
(although the Fund intends, as a non-fundamental policy, to invest at least 80%
of its assets) in the common stocks of companies in the health and biotechnology
fields, which, in the opinion of the Adviser, have the potential for capital
appreciation. The health and biotechnology fields include healthcare management
technology, pharmaceuticals and services or devices.
The following information applies to each of the Funds:
The Adviser believes that because of rapid advances in technology, science,
healthcare and biotechnology, an investment in companies with business
operations in these areas will offer substantial opportunities for long-term
capital appreciation. Of course, prices of common stocks of even the best
managed, most profitable corporations are subject to market risk, which means
their stock prices can decline. In addition, swings in investor psychology or
significant trading by large institutional investors can result in price
fluctuations.
The technology, science, healthcare and biotechnology areas have exhibited and
continue to demonstrate rapid growth, due to the mass adoption of the Internet,
increasing demand for existing products and services and the broadening of the
technology market. In general, the stocks of large capitalized companies that
are well established in the technology market can be expected to grow with the
market and will frequently be found in the portfolio of each Fund. The expansion
of technology, science, healthcare and biotechnology areas, however, also
provides a favorable environment for investment in small to medium capitalized
companies. The Fund's investment policy is not limited to any minimum
capitalization requirement and each Fund may hold securities without regard to
the capitalization of the issuer. The Adviser's overall stock selection for each
Fund is not based on the capitalization or size of the company but rather on an
assessment of the company's fundamental prospects. The Funds will not purchase
stocks of companies during their initial public offering or during an additional
public offering of the same security. The Adviser anticipates, however, that a
significant portion of each Fund's holdings will be invested in newly-issued
securities being sold in the secondary market.
8
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Although the Funds will primarily invest in common stocks issued by U.S.
companies, the Funds also may invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the investment in
such securities is considered consistent with each Fund's investment objective
by the Adviser.
A Fund will not invest more than 20% of its total assets in convertible stocks,
preferred stocks, bonds and warrants. The bonds in which the Funds may invest
are not required to be rated by a recognized rating agency. As a matter of
policy, however, the Funds will invest only in "investment grade" debt
securities (i.e., rated within the four highest ratings categories by a
nationally recognized statistical rating organization, e.g., BBB or higher by
Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc. ("S&P"), Baa or higher by Moody's Investor Service, Inc. ("Moody's"), BBB
or higher by Fitch Investors Services, Inc. ("Fitch"), or BBB or higher by Duff
& Phelps Credit Rating Co.) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. In addition, the Funds will not necessarily dispose of any
securities that fall below investment grade based upon the Adviser's
determination as to whether retention of such a security is consistent with the
Fund's investment objective, provided, however, that such securities do not
exceed 5% of a Fund's total assets.
Portfolio Turnover. Purchases and sales are made for each Fund whenever
necessary, in the Adviser's opinion, to meet each Fund's investment objective,
other investment policies, and the need to meet redemptions. Each Fund will
minimize portfolio turnover because it will not seek to realize profits by
anticipating short-term market movements and intends to buy securities for
long-term capital appreciation under ordinary circumstances. Portfolio turnover
may involve the payment by a Fund of dealer spreads or underwriting commissions,
and other transaction costs, on the sale of securities, as well as on the
investment of the proceeds in other securities. The greater the portfolio
turnover the greater the transaction costs to a Fund which could have an adverse
effect on a Fund's total rate of return. A greater portfolio turnover rate will
also result in a greater rate of gain or loss recognition for tax purposes, and
can accelerate the time at which shareholders must pay tax on any gains realized
by the Fund.
Buy/Sell Decisions. The Funds' investment adviser considers the following
factors when buying and selling securities for each Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the determinants of corporate profits, (iii) corporate cash flow, (iv) balance
sheet changes, (v) management capability and practices and (vi) the economic and
political outlook.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
Unless otherwise stated, the following information refers to each Fund.
The Technology and Science Areas. Companies in the rapidly changing fields of
technology and science face special risks. For example, their products or
services may not prove commercially successful or may become obsolete quickly.
The value of a Fund's shares may be susceptible to factors affecting the
technology and science areas and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, a Fund is not an appropriate
investment for individuals who are not long-term investors and who, as their
primary objective, require safety of principal or stable income from their
investments. The technology and science areas may be subject to greater
governmental regulation than many other areas and changes in governmental
policies and the need for regulatory approvals may have a material adverse
effect on these areas. Additionally, companies in these areas may be subject to
risks of developing technologies, competitive pressures and other factors and
are dependent upon consumer and business acceptance as new technologies evolve.
The Health Care and Biotechnology Areas (Amerindo Health & Biotechnology Fund).
The health care industry is subject to government regulation and government
approval of products and services, which could have a significant effect on
price and availability. Furthermore, the types of products or services produced
or provided by health care companies can quickly become obsolete. The
biotechnology industry can be significantly affected by patent consideration,
intense competition, rapid technological change and obsolescence, and government
regulation. Biotechnology companies may have persistent losses during a new
product's transition from development to production, and revenue patterns may be
erratic.
Concentration. The volatile nature of the technology, science, healthcare and
biotechnology areas could cause price appreciation in a particular security or
securities that results in that investment increasing its concentration in the
portfolio, in some cases, well above the level at which it was originally
purchased. For
9
<PAGE>
instance, even though an investment may have been purchased at a time when it
represented less than 25% of a portfolio, appreciation may cause that
concentration to be significantly greater than 25% at various times in a rising
market.
The Adviser reviews the positions of each Fund on a regular basis to ensure that
all tax and regulatory requirements are maintained. In instances where the value
of an investment has risen above 25%, the Adviser will evaluate the
appropriateness of that level of investment in light of the overall investment
strategy of a Fund and applicable regulatory and tax implications.
Smaller Capitalized Companies. The Adviser believes that smaller capitalized
companies generally have greater earnings and sales growth potential than larger
capitalized companies. The level of risk will be increased to the extent that a
Fund has significant exposure to smaller capitalized or unseasoned companies
(those with less than a three-year operating history). Investments in smaller
capitalized companies may involve greater risks, such as limited product lines,
markets and financial or managerial resources. In addition, less
frequently-traded securities may be subject to more abrupt price movements than
securities of larger capitalized companies.
Borrowing. Each Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes. Such borrowing will not exceed
an amount equal to one-third of the value of a Fund's total assets less its
liabilities and will be made at prevailing interest rates. A Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities subject
to certain restrictions on their transfer) and other securities that are not
readily marketable, such as repurchase agreements maturing in more than one
week, provided, however, that any illiquid securities purchased by a Fund will
have been registered under the Securities Act of 1933 or be securities of a
class, or convertible into a class, which is already publicly traded and the
issuer of which is filing reports required by Section 13 or 15 of the Securities
Exchange Act of 1934.
Temporary Investments. When the Adviser believes that adverse business or
financial conditions warrant a temporary defensive position, a Fund may invest
up to 100% of its assets in short-term instruments such as commercial paper,
bank certificates of deposit, bankers' acceptances, variable rate demand
instruments or repurchase agreements for such securities and securities of the
U.S. Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. Investments in domestic bank
certificates of deposit and bankers' acceptances will be limited to banks that
have total assets in excess of $500 million and are subject to regulatory
supervision by the U.S. Government or state governments. While taking a
defensive position, a Fund may not achieve its investment objective.
Repurchase Agreements. A Fund's portfolio position in cash or cash equivalents
may include entering into repurchase agreements. A repurchase agreement is an
instrument under which an investor purchases a U.S. Government security from a
vendor, with an agreement by the vendor to repurchase the security at the same
price, plus interest at a specified rate. Repurchase agreements may be entered
into with member banks of the Federal Reserve System or "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S. Government
securities. Repurchase agreements usually have a short duration, often less than
one week. Each Fund requires continual maintenance by the Funds' custodian of
the market value of underlying collateral in amounts equal to, or in excess of,
the value of the repurchase agreement including the agreed upon interest. If the
institution defaults on the repurchase agreement, a Fund will retain possession
of the underlying securities. In addition, if bankruptcy proceedings are
commenced with respect to the seller, realization on the collateral by a Fund
may be delayed or limited and a Fund may incur additional costs. In such case
the Fund will be subject to risks associated with changes in the market value of
the collateral securities. Each Fund intends to limit repurchase agreements to
transactions with institutions believed by the Adviser to present minimal credit
risk. Repurchase agreements may be considered to be loans under the Investment
Company Act of 1940, as amended.
Non-Diversified Status. A "non-diversified" fund has the ability to take larger
positions in a smaller number of issuers. Because the appreciation or
depreciation of a single stock may have a greater impact on the net asset value
of a non-diversified fund, its share price can be expected to fluctuate more
than a comparable diversified fund. This fluctuation, if significant, may affect
the performance of a Fund.
MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Adviser. Amerindo Investment Advisors Inc. (the "Adviser" or "Amerindo"), a
registered investment adviser, is a California corporation with its principal
office located at One Embarcadero, Suite 2300, San Francisco, California 94111.
The Adviser, an emerging growth stock manager specializing in the
10
<PAGE>
technology and healthcare sectors, had assets under management of approximately
$5.8 billion as of December 31, 1999. Alberto W. Vilar and Dr. Gary A. Tanaka
are primarily responsible for the day-to-day management of the Fund's portfolio.
Their biographies are as follows:
Alberto W. Vilar, 59, has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since its inception. He began his career with
Citibank N.A. in New York in 1964 and worked there as an International Credit
Officer until 1967. From 1967 to 1971, he served as Vice President, Portfolio
Manager and Manager of the Investment Management Division of Drexel Burnham
Lambert in New York. From 1971 to 1973, he served as Executive Vice President,
Portfolio Manager and Director of Equity Strategy at M.D. Sass Investor Services
in New York. In 1973, he became Vice President and Portfolio Manager of
Endowment Management & Research Corporation in Boston. From 1977 to 1979, he
served as Senior Vice President, Director of Research, Chief Investment
Strategist and Partnership Manager of the Boston Company in Boston. He founded
the predecessors of Amerindo Advisors (U.K.) Limited and Amerindo Investment
Advisors, Inc. (Panama) in 1979 and has served since then as a Principal
Portfolio Manager. He holds the degrees of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from Iona College, and he completed the Doctoral
Studies Program in Economics at New York University. Mr. Vilar was awarded an
Honorary Doctorate of Humanities degree from Washington & Jefferson College. He
has been a Chartered Financial Analyst since 1975.
Dr. Gary A. Tanaka, 56, has been a Director and President of the Company since
its inception. He served as a Portfolio Manager for Crocker Bank in San
Francisco from 1971 to 1977, and as a Partnership Manager for Crocker Investment
Management Corp. in San Francisco from 1978 to 1980. From 1975 to 1980, he also
served as a Consultant to Andron Cechettini & Associates in San Francisco. In
1980, he joined the predecessors of Amerindo Advisors (U.K.) Limited and
Amerindo Investment Advisors, Inc. (Panama) as a Principal Portfolio Manager and
has served in this position since that time. Dr. Tanaka holds the degrees of
B.S. in Mathematics from Massachusetts Institute of Technology and Ph.D. in
Applied Mathematics from Imperial College, University of London.
Pursuant to the Investment Advisory Contract for the Fund, the Adviser manages
the Fund's portfolio of securities and makes the decisions with respect to the
purchase and sale of investments subject to the general control of the Board of
Directors of the Fund.
Adviser's Fees. Pursuant to the terms of the Investment Advisory Agreement, each
Fund will pay an annual advisory fee, paid monthly, equal to 1.50% of each
Fund's average daily net assets. The advisory fee is higher than the fee paid by
most other mutual funds, however, the Board of Directors believes it to be
reasonable in light of the advisory services each Fund receives. Any portion of
the advisory fees received by the Adviser may be used by the Adviser to provide
investor and administrative services and for distribution of Fund shares. The
Adviser may also voluntarily waive a portion of its fee or assume certain
expenses of a Fund. The Adviser is contractually obligated to waive its fees and
to reimburse any expenses to the extent that the Total Annual Fund Operating
Expenses exceed 2.25% for Class A shares and 3.00% for Class C shares. This
Expense Limitation Agreement will terminate on December 31, 2000. The
contractual waiver and any voluntary waivers or reimbursements have the effect
of lowering the overall expense ratio of a Fund and of increasing yield to
investors in the Fund. See " Expense Limitation" in Section V.A.2 of the
Statement of Additional Information.
The following information relates to the Amerindo Technology Fund II only:
Performance of the Adviser. In the early 1980s, Amerindo pioneered the
management of dedicated emerging technology portfolios of high technology and
healthcare stocks designed to service the financial needs of the institutional
investor. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers respectively by Money
Manger Review for calendar years 1998 and 1999, respectively. This information
represents the ranking of participating equity money managers with at least $30
million under management and at least 5 years of history. This performance
information relates to Amerindo's management of institutional accounts and
should not be interpreted as indicative of future performance of the Funds. The
performance figures upon which these rankings were based do not include a
reduction for any charges or expenses with respect to such accounts. Further,
Amerindo has not independently verified the accuracy, completeness or process
underlying the performance figures upon which these rankings were based, the
performance of other equity managers or its ranking among them, and makes no
representation as to the accuracy or completeness of this performance
information.
11
<PAGE>
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology Fund and the Amerindo Technology Fund II of all clients which are
institutions, such as qualified retirement plans, charitable foundations and
educational endowment funds, for which investment income and realized capital
gains are exempt from Federal income tax, and for which Amerindo has full
discretionary authority to manage in accordance with the firm's equity strategy
for separate accounts. Amerindo has elected to comply with the American
Association for Investment Management and Research ("AIMR") presentation
standards for the period October 1, 1987 (inception of the composite) through
December 31, 1999. An independent accounting firm has conducted an examination
with respect to Amerindo for the period October 1, 1987 through December 31,
1998, and has confirmed that Amerindo's performance presentation contained
herein for such period conforms with AIMR standards. The 1999 review is
currently in progress. The Independent Accountants' Report is available upon
request. AIMR has not been involved with the preparation or review of the
Independent Accountants' Report. The AIMR method of performance differs from
that of the SEC and can contain different results. The private accounts listed
do not have to comply with the Investment Company Act of 1940 or Subchapter M of
the Internal Revenue Code. If this compliance was necessary, the account's
performance could be adversely affected. The following Schedule represents the
rates of return for the equity composite for the annual investment periods from
January 1, 1990 through December 31, 1999. Accounts benchmarks are the Standard
& Poor's 500 Composite Stock Index, Hambrecht & Quist Growth Index and the
Russell 2000 Growth Index. The Independent Accountants' Report relates to their
examination of Amerindo's performance from the inception of the composite
October 1, 1987 through December 31, 1998, which is in accordance with AIMR
standards. The 1999 review is currently in progress.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology II Fund or of any other Fund nor is it indicative of
future performance of the Amerindo Technology II Fund or of any other Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted Russell
Composite Rate of Composite Rate of H&Q Growth 2000 Growth
Return Net of Return Gross of S&P 500 Index Index Index
Year Advisory Fees(1) Advisory Fees(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1990 6.75% 8.49% -3.19% 3.89% -17.41%
1991 76.52% 78.39% 30.55% 94.49% 51.18%
1992 7.61% 8.73% 7.68% -3.57% 7.77%
1993 15.08% 16.42% 10.00% 7.81% 13.36%
1994 -2.66% -1.53% 1.33% 3.38% -2.43%
1995 87.51% 89.39% 37.50% 61.72% 31.04%
1996 8.04% 9.61% 23.22% 10.86% 11.26%
1997 -26.61% -26.05% 33.34% 2.39% 12.95%
1998 61.67% 64.14% 28.58% 45.04% 1.23%
1999 248.42% 251.31% 21.03% 180.08% 43.09%
Annualized rates of return for the period January 1, 1990 to December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
(1) Composite returns are shown both gross and net of investment
management fees. The composite is derived from all fully
discretionary, tax-free sheltered equity accounts in this style
with assets above $5,000,000. Past performance is no guarantee of
future results.
The Amerindo Technology Fund's (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II) total
return with respect to Class A shares for the period August 3, 1998
(commencement of operations) through December 31, 1999 was 227.11%. The Amerindo
Technology Fund's total return for the calendar year ended December 31, 1999 was
230.42%.
The following information relates to each Fund:
The performance of a Fund may be compared in various financial and news
publications to the performance of various indices and investments for which
reliable performance data is available. The
12
<PAGE>
performance of a Fund may be compared in publications to averages, performance
rankings, or other information prepared by nationally recognized mutual fund
ranking and statistical services. As with other performance data, performance
comparisons should not be considered representative of a Fund's relative
performance for any future period.
PRICING OF FUND SHARES
Net asset values per share for each class is determined by subtracting from the
value of such Class' total assets the amount of its liabilities and dividing the
remainder by the number of its outstanding shares. The value of each security
for which readily available market quotations exist is based on a decision as to
the broadest and most representative market for the security. The value is based
either on the last sale price on a national securities exchange, or, in the
absence of recorded sales, at the readily available closing bid price on such
exchanges, or at the quoted bid price in the over-the-counter market. Assets for
which market quotations are not readily available are valued in accordance with
procedures established by the Funds' Board of Directors, including use of an
independent pricing service or services which use prices based on yields or
prices of comparable securities, indications as to values from dealers and
general market conditions.
Each Fund computes the net asset value once daily on Monday through Friday, at
the regularly scheduled close of normal trading on the New York Stock Exchange,
which normally occurs at 4:00 p.m. Eastern time, except on New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
HOW TO PURCHASE SHARES
Initial Investments by Wire. You may purchase shares of each class of shares of
the Funds by wiring immediately available federal funds (subject to each class's
minimum investment) to Bankers Trust Company from your bank. Your bank may
charge a fee for doing so (see instructions below). The minimum initial
investment in Class A and Class C shares is $2,500 ($1,000 for IRA accounts),
each of which may be waived by a Fund.
If money is to be wired, you must call the Transfer Agent at 1-888-968-4964 to
set up your account and obtain an account number. You should be prepared at that
time to provide the information on the application. Then you should provide your
bank with the following information for purposes of wiring your investment:
Bankers Trust Company
New York, New York
ABA# 021001033
Account # 01-465-547
F/B/O [name of Fund]
Class [A/C]
Fund Acct. No.
Social Security or Tax Identification No.__________________
You are required to mail a signed application to the Transfer Agent at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Funds and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase accepted by the Fund. Shareholders will
receive the next determined net asset value per share after receipt of such wire
and the acceptance of the purchase by the Fund. Any delays which may occur in
wiring money, including delays which may occur in processing by the banks, are
not the responsibility of the Fund or the Transfer Agent. There is presently no
fee for the receipt of wired funds, but the right to charge shareholders for
this service is reserved by the Funds.
Initial Investments by Mail. An account may be opened by completing and signing
an Account Application and mailing it to a Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
Amerindo Funds Inc.
P.O. Box 446
Portland, ME 04112
13
<PAGE>
Payment for the purchase of shares received by mail will be credited to a
shareholder's account at the net asset value per share of the particular Class
next determined after receipt. Such payment need not be converted into federal
funds (monies credited to the Fund's custodian bank by a Federal Reserve Bank)
before acceptance by the Fund's Distributor. In the event that there are
insufficient funds to cover a check, such prospective investor or investors will
be assessed a $15.00 charge.
Additional Investments. Additional investments may be made at any time (subject
to a minimum subsequent investment of $500) by purchasing shares at net asset
value, plus any applicable sales load, by mailing a check to the Fund at the
address noted under "Initial Investments by Mail" (payable to Amerindo Internet
B2B Fund Class A or Class C, Amerindo Health & Biotechnology Fund Class A or
Class C or Amerindo Technology Fund II Class A or Class C) or by wiring monies
to the clearing bank as outlined above, or by telephone with payment by
Automated Clearing House ("ACH"), electronically transferring funds from the
investor's designated bank account. In order to purchase shares by telephone and
make payment by ACH, an investor must complete the appropriate sections of the
application. Shareholders who have authorized telephone purchases may effect
purchases by calling the Transfer Agent at 1-888-968-4964.
Sales Charges. The purchase price paid for shares of each Class is the current
public offering price, that is, the next determined net asset value of the
shares after the order is placed plus any applicable sales charge. See "Pricing
of Fund Shares" herein.
Class A shares
The purchase price paid for the Class A shares is the current public offering
price, that is, the next determined net asset value of the shares after the
order is placed plus the applicable sales charge. The sales load, with respect
to Class A shares, is a one-time charge paid at the time of purchase of shares,
most of which ordinarily goes to the investor's broker-dealer as compensation
for the services provided the investor. Class A shares of the Funds are sold on
a continuous basis with a maximum front-end sales charge of 5.75% of the net
asset value per share. Volume discounts are provided for initial purchase, as
well as for additional purchases of shares of the Fund. See "Reduction or
Elimination of Sales Loads" herein.
Class C shares
The Fund sells Class C shares without an initial charge but if the shares are
held less than one year, investors will pay a contingent deferred sales charge
("CDSC") of 1%. The amount of the CDSC is determined as a percentage of the
lesser of the current market value of the cost of the shares being redeemed.
Thus, when a share that has appreciated in value is redeemed during the CDSC
period, a CDSC is assessed only on its initial purchase price. Shares acquired
by reinvestment of distributions are not subject to the CDSC. The Funds will
also waive the CDSC for: (i) redemptions made within one year after death of a
shareholder or registered joint owner, (ii) minimum required distributions made
from an IRA or other individual retirement plan account after a shareholder
reaches age 70 1/2 or (iii) involuntary redemptions made by the Funds. Class C
shares provide the investor the benefit of putting all of the investor's dollars
to work from the time the investment is made rather than paying an upfront sales
charge.
Class C shares may have a higher expense ratio and pay lower dividends than
other classes of shares offered by the Fund because the Class C shares bear a
higher 12b-1 fee than other classes and because of other related expenses.
The Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under the method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the CDSC will be assessed. In determining
"one year" the Funds will use the anniversary date of a transaction. Thus,
shares purchased on March 2, 2000, for example, will be subject to the fee if
they are redeemed on or prior to March 1, 2001. If they are redeemed on or after
March 2, 2001, the shares will not be subject to the CDSC. The CDSC will be
applied on redemptions of each investment made by a shareholder that does not
remain in the Fund for a one-year period from the date of purchase. In
determining whether a CDSC is payable on any redemption, shares not subject to
any charge will be redeemed first, followed by shares held longest during the
CDSC period. The CDSC ordinarily goes to the investor's broker-dealer as
compensation for the services provided the investor. In addition, Class C
investors will be charged a redemption fee of 2.00% for shares held less than 1
year. See "How to Redeem Shares."
Other Purchase Information. Investors may open accounts in the Funds only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for each Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on a Fund until accepted by the Fund as principal. See
"Distribution Agreements."
14
<PAGE>
Each Fund reserves the right to redeem, after 60 days' written notice, shares in
accounts that fall below the minimum balance by reason of redemption and return
the proceeds to investors. The investors may restore and maintain a minimum
balance during the notice period.
The Fund must receive an order and payment by the close of business for the
purchase to be effective and dividends to be earned on the same day. If funds
are received after the close of business, the purchase will become effective and
dividends will be earned on the next business day. Each Fund reserves the right
to reject any purchase order if it determines that accepting the order would not
be in the best interests of the Fund or its shareholders.
Shares of a Fund may be purchased in exchange for securities which are
permissible investments of the Fund, subject to the Adviser's determination that
the securities are acceptable. Securities accepted in exchange will be valued at
the mean between their bid and asked quotations. In addition, securities
accepted in exchange must be liquid securities that are not restricted as to
transfer and will have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on NASDAQ,
the American Stock Exchange or the New York Stock Exchange, or on the basis of
prices provided by a pricing service. Each Fund and its Adviser reserve the
right to reject any such purchase order. Shareholders will bear any costs
associated with a purchase of Fund shares through such an exchange.
All purchases of a Fund's shares will be made in full and fractional shares of a
Fund calculated to three decimal places. The Funds do not intend to issue
certificates evidencing Fund shares.
Shares of each Fund may also be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
("Shareholder Organizations"). Investors purchasing and redeeming shares of a
Fund through a Shareholder Organization may be charged a transaction-based fee
or other fee for the services of such organization. Each Shareholder
Organization is responsible for transmitting to its customers a schedule of any
such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Customers of Shareholder Organizations
should read this Prospectus in light of the terms governing accounts with their
organization. The Funds do not pay to or receive compensation from Shareholder
Organizations for the sale of Fund shares.
Purchases of Class A shares at net asset value may be made by investment
advisors or financial planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services and by clients of such investment advisors or financial
planners who place trades for their own accounts if the accounts are linked to
the master account of such investment advisor or financial planner on the books
and records of the investment advisor or financial planner.
Each Fund has available a form of Individual Retirement Account ("IRA") which
may be obtained from the Fund that permits the IRA to invest in either Class A
or Class C shares of Fund. The minimum initial investment for all retirement
plans is $1,000 with a subsequent minimum investment of $500. Investors desiring
information regarding investments through IRAs should write or telephone each
Fund.
FOR CLASS A SHAREHOLDERS ONLY
REDUCTION OR ELIMINATION OF SALES LOADS
Volume Discounts. Volume discounts are provided if the total amount being
invested in Class A shares of a Fund reaches the levels indicated in the sales
load schedule provided below. The applicable volume discount available to
investors is determined by aggregating all Class A share purchases of a Fund.
Volume discounts are also available to investors making sufficient additional
purchases of Class A shares. The applicable sales charge may be determined by
adding to the total current value of Class A shares already owned in a Fund the
value of new purchases computed at the offering price on the day the additional
purchase is made. For example, if an investor previously purchased, and still
holds, Class A shares worth $40,000 at the current offering price and purchases
an additional $10,000 worth of Class A shares, the sales charge applicable to
the new purchase would be that applicable to the $50,000 to $99,999 bracket in
the sales load schedule provided below.
<TABLE>
<CAPTION>
Amount of Sales
Sales Charge as a % Charge Reallowed to
of Net Amount Dealers as a Percent
Amount of Purchase Sales Charge Invested of Offering Price
- ---------------------------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.50%
$50,000 but less than $100,000 4.30% 4.71% 4.05%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
</TABLE>
15
<PAGE>
Letter of Intent. Any investor in Class A shares may sign a Letter of Intent,
available from a Fund, stating an intention to make purchases of Class A shares
totaling a specified amount on an aggregate basis within a period of thirteen
months. Purchases within the thirteen-month period can be made at the reduced
sales load applicable to the total amount of the intended purchase noted in the
Letter of Intent. If a larger purchase is actually made during the period, then
a downward adjustment will be made to the sales charge based on the actual
purchase size. Any shares purchased within 90 days preceding the actual signing
of the Letter of Intent are eligible for the reduced sales charge and the
appropriate price adjustment will be made on those share purchases. A number of
shares equal to 5% of the dollar amount of intended purchases specified in the
Letter of Intent is held in escrow by the Distributor until the purchases are
completed. Dividends and distributions on the escrowed Class A shares are paid
to the investor. If the intended purchases are not completed during the Letter
of Intent period, the investor is required to pay the Fund an amount equal to
the difference between the regular sales load applicable to a single purchase of
the number of Class A shares actually purchased and the sales load actually
paid. If such payment is not made within 20 days after written request by the
Fund, then the Fund has the right to redeem a sufficient number of escrowed
Class A shares to effect payment of the amount due. Any remaining escrowed Class
A shares are released to the investor's account. Agreeing to a Letter of Intent
does not obligate you to buy, or the Fund to sell, the indicated amount of Class
A shares. You should read the Letter of Intent carefully before signing.
Purchases At Net Asset Value. There is no initial sales charge for "Qualified
Persons." Qualified Persons is defined to include persons who are active or
retired Trustees, Directors, officers, partners, employees, clients, independent
professional contractors, shareholders or registered representatives (including
their spouses and children) of the Investment Adviser, Distributor or any
affiliates or subsidiaries thereof (the Directors, officers or employees of
which shall also include their parents and siblings for all purchases of Fund
shares) or any Director, officer, partner, employee or registered representative
(including their spouses and children) of any Broker-Dealer who has executed a
valid and currently active selling agreement with the Distributor.
HOW TO REDEEM SHARES
Shares of a Fund may be redeemed by mail, or, if authorized, by telephone. The
value of shares redeemed may be more or less than the purchase price, depending
on the market value of the investment securities held by a Fund.
By Mail. Each Fund will redeem its shares at the net asset value next determined
after the request is received in "good order." The net asset value per share of
each Fund is determined as of 4:00 p.m., New York time, on each day that the New
York Stock Exchange, Inc. (the "NYSE"), the Fund and the Distributor are open
for business. Requests should be addressed to Amerindo Funds Inc., P.O. Box 446,
Portland, ME 04112.
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, or a stock
assignment specifying the number of ) shares or dollar
amount to be redeemed, signed by all registered owners of
the shares in the exact names in which they are
registered;
(b) any required signature guarantees (see "Signature Guarantees"
below); and
(c) other supporting legal documents, if required, in the case
of estates, trusts, ..... guardianships, custodianships,
corporations, pension and profit sharing plans and other
organizations.
Signature Guarantees. To protect shareholder accounts, each Fund and its
transfer agent from fraud, signature guarantees are required to enable a Fund to
verify the identity of the person who has authorized a redemption from an
account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareholder(s) and
the registered address and (2) share transfer requests. Signature guarantees may
be obtained from certain eligible financial institutions, including but not
limited to, the following: banks, trust companies, credit unions, securities
brokers and dealers, savings and loan associations and participants in the
Securities Transfer Association Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange Medallion Signature
Program ("MSP"). Shareholders may contact the Fund at 1-888-968-4964 for further
details.
16
<PAGE>
By Telephone. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling a Fund at 1-888-968-4964 and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is authorized, the Fund and its transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or its transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or its transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by a Fund or its transfer agent to be genuine.
Each Fund will employ reasonable procedures to confirm that instructions
communicated are genuine and, if it does not, it may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures employed by a
Fund in connection with transactions initiated by telephone may include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
Optional Redemption by the Funds. Investors are required to maintain a minimum
account balance of at least $2,500. Each Fund reserves the right to redeem,
after 60 days' written notice, shares in accounts that fall below the minimum
balance by reason of redemption and return the proceeds to investors. The
investors may restore and maintain a minimum balance during the notice period.
Further Redemption Information. Redemption proceeds for shares of a Fund
recently purchased by check may not be distributed until payment for the
purchase has been collected, which may take up to fifteen business days from the
purchase date. Shareholders can avoid this delay by utilizing the wire purchase
option.
Other than as described above, payment of the redemption proceeds will be made
within seven days after receipt of an order for a redemption. Each Fund may
suspend the right of redemption or postpone the date at times when the NYSE or
the bond market is closed or under any emergency circumstances as determined by
the United States Securities and Exchange Commission (the "SEC").
If the Fund determines that it would be detrimental to the best interests of the
remaining shareholders of a Fund to make a payment wholly or partly in cash, a
Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by a Fund in lieu of cash in
conformity with applicable rules of the SEC. Investors generally will incur
brokerage charges on the sale of portfolio securities so received in payment of
redemptions.
Redemption Fee. The Funds are designed for long-term investors willing to accept
the risks associated with a long- term investment in the common stocks of
companies in the technology, technology-related, science, healthcare and
biotechnology industries. The Funds are not designed for short-term traders
whose frequent purchases and redemptions can generate substantial cash flow.
These cash flows can unnecessarily disrupt a Fund's investment program.
Short-term traders often redeem when the market is most turbulent, thereby
forcing the sale of underlying securities held by a Fund at the worst possible
time as far as long-term investors are concerned. Additionally, short-term
trading drives up a Fund's transaction costs--measured by both commissions and
bid/ask spreads--which are borne by the remaining long-term investors. For these
reasons, each Fund assesses a 2.00% fee on the redemption of Class A and Class C
shares held for less than one year. Redemption fees will be paid to the Fund to
help offset transaction costs. The fee does not apply to any shares purchased
through reinvested distributions (dividends and capital gains). This fee also
does not apply to separate account clients of Amerindo Advisers Inc. and its
affiliates that hold shares in IRA accounts or in retirement plans (such as
401(k), 403(b), 457, Keogh, Profit Sharing Plans, and Money Purchase Pension
Plans).
Each Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the redemption fee will be assessed. In
determining "one year" a Fund will use the anniversary date of a transaction.
Thus, shares purchased on April 5, 2000, for example, will be subject to the fee
if they are redeemed on or prior to April 4, 2001. If they are redeemed on or
after April 5, 2001, the shares will not be subject to the redemption fee. The
redemption fee will be applied on redemptions of each investment made by a
shareholder that does not remain in a Fund for a one-year period from the date
of purchase.
17
<PAGE>
EXCHANGING FUND SHARES
You may exchange some or all of your shares in a Fund with any other Fund
identified in this prospectus or with the Amerindo Technology Fund, which is
offered through a separate prospectus. Exchanges from one Fund into another must
be for the same class of shares.
When you exchange shares, you are really selling shares of one Fund and buying
shares of another Fund. So, your sale price and purchase price will be based on
the NAV next calculated after we receive your exchange request. Please note that
an exchange may have tax consequences for you. You may exchange your shares on
any Business Day by contacting us directly by mail or telephone. You may also
exchange shares through your financial institution by mail or telephone. If you
establish a new account by exchange, the exchanged shares must have a minimum
value of $2,500. All subsequent exchanges must have a minimum value of $250 per
Fund. If you recently purchased shares by check or through ACH, you may not be
able to exchange your shares until your check has cleared (which may take up to
15 days from the date of purchase). Each Fund assesses the 2.00% redemption fee
on the exchange of shares held less than one year (see "How To Redeem
Shares - Redemption Fee" above).
There is currently no fee for exchanges, however, the Fund may change or
terminate this privilege on 60 days notice. Please note that exchanges may be
made only two (2) times a year. The exchange privilege is not intended as a
vehicle for short-term or excessive trading. The Funds do not permit excessive
trading or market timing. Excessive purchases, redemption, or exchanges of Fund
shares disrupt portfolio management and drive Fund expenses higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of net investment income of each Class of each Fund will be
declared as dividends and paid annually. If an investor's shares are redeemed
prior to the date on which dividends are normally declared and paid, accrued but
unpaid dividends will be paid with the redemption proceeds. Substantially, all
the realized net capital gains for each Class of each Fund, if any, are declared
and paid on an annual basis. Dividends are payable to investors of record at the
time of declaration. For a discussion of the taxation of dividends or
distributions, see 'Taxes.'
The net investment income of each Class of each Fund for each business day is
determined immediately prior to the determination of net asset value. Net
investment income for other days is determined at the time net asset value is
determined on the prior business day. Shares of each Class of each Fund earn
dividends on the business day their purchase is effective but not on the
business day their redemption is effective. See "Purchase of Shares" and
"Redemption of Shares."
Choosing a Distribution Option. Distribution of dividends from each Class of
each Fund may be made in accordance with several options. A shareholder may
select one of three distribution options:
1. Automatic Reinvestment Option. Both dividends and capital gains distributions
will be automatically reinvested in additional shares of a Fund unless the
investor has elected one of the other two options.
2. Cash Dividend Option. Dividends will be paid in cash, and capital gains, if
any, will be reinvested in additional shares.
3. All Cash Option. Both dividends and capital gains distributions will be paid
in cash.
TAX CONSEQUENCES
Each Fund intends to qualify annually and to elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986 effective for its
taxable year beginning November 1, 2000. By qualifying, a Fund will generally
not be subject to Federal income tax on net ordinary income and net realized
capital gains paid out to its stockholders. A Fund can also avoid an annual 4%
excise tax if it distributes substantially all of its ordinary income and short
and long-term capital gain each year. Each Fund's policy is to distribute as
dividends each year 100% (and in no event less than 90%) of its investment
company taxable income (which includes interest, dividends and net short term
capital gains). Each Fund has adopted a policy of declaring dividends annually.
Distributions of net ordinary income and net short-term capital gains are
taxable to stockholders as ordinary income. Although corporate stockholders
would generally be entitled to the dividends-received deduction to the extent
that a Fund's income is derived from qualifying dividends from domestic
corporations, each Fund does not believe that any of its distributions will
qualify for this deduction.
The excess of net long-term capital gains over net short-term capital losses
realized and distributed by a Fund as capital gains distributions is taxable to
stockholders as long-term capital gains, without regard to
18
<PAGE>
the length of time the stockholder may have held its shares in the Fund.
Long-term capital gains distributions are not eligible for the
dividends-received deduction referred to above. Long-term capital gains on sales
of securities are currently taxable at a maximum rate of 20% for non-corporate
shareholders. Capital gain dividends, designated in a notice mailed to investors
not later than 60 days after the Fund taxable year closes, will be taxed as
long-term capital gain without regard to the length of time for which the
investor has held its shares. In determining the amount of capital gains to be
distributed, any capital loss carry over from prior years will be taken into
account in determining the amount of net long term capital gain. However, if an
investor receives a capital gain dividend and sells shares after holding them
for six months or less (not including, for purposes of determining the length of
the holding period, periods during which the investor holds an offsetting
position), then any loss realized on the sale will be treated as long-term
capital loss to the extent of such capital gain dividend.
Distributions are taxable to investors whether received in cash or reinvested in
additional shares of a Fund. Any dividend or distribution received by a
stockholder shortly after the purchase of shares will reduce the net asset value
of the shares by the amount of the dividend or distribution. Furthermore, such
dividend or distribution is subject to tax even though it is, in effect, a
return of capital.
The redemption of shares may result in the stockholder's receipt of more or less
than the stockholder paid for its shares and, thus, in a taxable gain or loss to
the stockholder. If the redeemed shares have been held for more than one year,
the stockholder will generally realize a long-term capital gain or loss.
Each Fund is required, subject to certain exemptions, to withhold at a rate of
31% from dividends paid or credited to stockholders and from the proceeds from
the redemption of Fund shares, if a correct taxpayer identification number,
certified when required, is not on file with the Fund, or if the Fund or the
shareholder has been notified by the Internal Revenue Service that the
shareholder is subject to these backup withholding rates. Corporate stockholders
are not subject to this requirement.
If a Fund invests in securities of foreign issuers, it may be subject to
withholding and other similar income taxes imposed by a foreign country.
Dividends and distributions may be subject to state and local taxes.
Dividends paid or credited to accounts maintained by non-resident shareholders
may also be subject to U.S. non-resident withholding taxes. You should consult
your tax adviser regarding specific questions as to Federal, state and local
income withholding taxes.
DISTRIBUTION ARRANGEMENTS
Distributor. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a Distribution Agreement with each Fund to serve
as the Funds' distributor ("the Distributor"). As agent for the Funds, the
Distributor solicits orders for the purchase of a Fund's shares, provided that
any orders will not be binding on a Fund until accepted by the Fund as
principal. With respect to the Class A shares, SIDCO will be entitled to receive
a service and/or distribution fee equal to 0.25% of the Class A shares' average
daily net assets under the terms of the Fund's 12b-1 distribution and service
plan (the "Plan") and the Distribution Agreement. With respect to the Class C
shares, SIDCO will be entitled to receive a distribution fee equal to 0.75%
pursuant to the Distribution Agreement and a shareholder service fee equal to
0.25% of the Class C shares' average daily net assets under the terms of the
Plan and pursuant to the Shareholders Servicing Agreement.
12b-1 Plan. Each Fund, on behalf of each class of shares, has adopted a
distribution and service plan, pursuant to Rule 12b-1 under the Investment
Company Act. Rule 12b-1 provides that an investment company which bears any
direct or indirect expense of distributing its shares must do so only in
accordance with a plan permitted by this Rule. The Plan provides that the
Distributor will receive compensatory payments from a Fund for soliciting orders
for the purchase of Fund shares and for making payments to broker-dealer and
other financial institutions with which it has written agreements and whose
clients are Fund shareholders, for providing distribution assistance on behalf
of the Fund.
The total amounts payable under the Plan by the Class A and Class C shares of
the Funds may not exceed 0.25% and 1.00%, per annum, respectively. Fees paid
under the Plan may not be waived for individual shareholders. Because these fees
are paid out of a Fund's asset on an ongoing basis, over time these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
Consistent with the Plan, under the Distribution Agreement the Distributor
receives from the Class C shares of the Funds a compensatory distribution fee
equal to 0.75% per annum of the Class C shares' average daily net assets. This
distribution fee is an asset-based sales charge. The Distributor uses this fee
to make payments to broker-dealer and other financial institutions with which it
has written agreements and whose
19
<PAGE>
clients are Class C shareholders for providing distribution assistance for sales
of the Class C shares. The fees are accrued daily and paid monthly.
The Plan also provides that with respect to Class C, the Funds will compensate
the Distributor for certain expenses and costs incurred in connection with
providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of Class C for providing servicing to their clients ("shareholder
servicing").
Under the Shareholder Servicing Agreement, the Distributor receives a maximum
service fee of 0.25% per annum of the Class C's average daily net assets. The
fees are accrued daily and paid monthly. The Distributor uses this fee to
perform, or to arrange to have others perform, under the Distribution Agreement.
The shareholder servicing agents that the Adviser retains will perform the
following services: (i) answer customer inquiries regarding account status and
history, the manner in which purchases and redemptions of shares of a Fund may
be effected and certain other matters pertaining to a Fund; (ii) assist
shareholders in designating and changing dividend options, account designations
and addresses; (iii) provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; (iv) assist in processing purchase
and redemption transactions; (v) arrange for the wiring of funds; (vi) transmit
and receive funds in connection with customer orders to purchase or redeem
shares; (vii) verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder designated accounts;
(viii) furnish (either separately or on an integrated basis with other reports
sent to a shareholder by a Fund) quarterly and year-end statements and
confirmations in a timely fashion after activity is generated in the account;
(ix) transmit, on behalf of each Fund, proxy statements, annual reports,
updating prospectuses and other communications from a Fund to shareholders; (x)
receive, tabulate and transmit to a Fund, proxies executed by shareholders with
respect to meetings of shareholders of a Fund; and (xi) provide such other
related services as a Fund or a shareholder may request.
The Plan provides that the Adviser and the Distributor may make payments from
time to time from their own resources which may include the advisory fee and
past profits for the following purposes: (i) to defray the costs of and to
compensate others, including financial intermediaries with whom the Distributor
or Adviser has entered into written agreements, for performing shareholder
servicing and related administrative functions; (ii) to compensate certain
financial intermediaries for providing assistance in distributing Class D
shares; (iii) to pay the costs of printing and distributing the Funds'
prospectuses to prospective investors; and (iv) to defray the cost of the
preparation and printing of brochures and other promotional materials, mailings
to prospective shareholders, advertising, and other promotional activities,
including the salaries and/or commissions of sales personnel in connection with
the distribution of the Funds' shares. The Distributor or the Adviser, as the
case may be, in their sole discretion, will determine the amount of such
payments made pursuant to the Plan with the shareholder servicing agents and
broker-dealers they have contracted with, provided that such payments made
pursuant to the Plan will not increase the amount which a Fund is required to
pay to the Distributor or the Adviser for any fiscal year under the shareholder
servicing agreements or otherwise. Any servicing fees paid to the Adviser also
may be used for purposes of (i) above and any asset based sales charges paid to
the Distributor also may be used for purposes of (ii), (iii), or (iv) above.
Shareholder servicing agents and broker-dealers may charge investors a fee in
connection with their use of specialized purchase and redemption procedures
offered to investors by the shareholder servicing agents and broker-dealers. In
addition, shareholder servicing agents and broker-dealers offering purchase and
redemption procedures similar to those offered to shareholders who invest in a
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in a
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
a Fund directly. An investor should read the prospectus in conjunction with the
materials provided by the shareholder servicing agent and broker-dealer
describing the procedures under which Fund shares may be purchased and redeemed
through the shareholder servicing agent and broker-dealer.
20
<PAGE>
Amerindo Funds Inc.
Board of Directors
Alberto W. Vilar...............................Amerindo Investment Advisors Inc.
Gary A. Tanaka.................................Amerindo Investment Advisors Inc.
John Rutledge..................................Rutledge Capital LLC
Jude T. Wanniski...............................Polyconomics, Inc.
Officers
Alberto W. Vilar...............................Chairman of the Board
Gary A. Tanaka.................................President
Anthony Ciulla.................................Vice President
Dana E. Smith..................................Vice President
21
<PAGE>
AMERINDO FUNDS INC.
May 29, 2000
Investment Adviser
Amerindo Investment Advisors Inc.
San Francisco, California
New York, New York
Administrator
SEI Investments Mutual Funds Services
Oaks, Pennsylvania
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania
Transfer and Dividend Agent
Forum Shareholder Services LLC
Portland, Maine
Custodian
The Northern Trust Company
Chicago, Illinois
Alahad
Legal Counsel
Battle Fowler LLP
New York, New York
Independent Auditors
Morrison, Brown, Argiz & Company
Miami, Florida
1-888-968-4964
www.amerindo.com
SEC File Number: 811-07531
A Statement of Additional Information (SAI), dated May 29, 2000 includes
additional information about each Fund and its investments and are incorporated
by reference into this prospectus. You may obtain the SAI without charge by
calling the Fund at 1-888-968-4964. To request other information, please call
your financial intermediary or the Fund.
A Current SAI has been filed with the Securities and Exchange Commission. You
may visit the Securities and Exchange Commission's Internet website
(www.sec.gov) to view the SAI, material incorporated by reference and other
information. These materials can also be reviewed and copied at the Commission's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. In addition, copies of these materials may be obtained, upon
payment of a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, DC 20549-6009 or by electronic request at public
[email protected].
22
<PAGE>
- ------------------------------------------------------------------------------
AMERINDO FUNDS INC. PROSPECTUS
Class D Shares May 29, 2000
- ------------------------------------------------------------------------------
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND
AMERINDO TECHNOLOGY FUND II
Each Fund's investment objective is to seek long-term capital appreciation.
The Securities and Exchange Commission Has Not Approved or
Disapproved These Securities or Passed upon the Adequacy of this
Prospectus. Any Representation to the Contrary is a Criminal Offense.
<TABLE>
- ------------------------------------------------------- -------------------------------------------------
<S> <C> <C> <C>
How to Purchase Shares.........................12
Risk/Return Summary: Investments, Risks and
Performance......................................2
How to Redeem Shares...........................14
Fee Table........................................6
Exchanging Fund Shares.........................16
Investment Objectives, Principal Investment
Strategies and Related Risks.....................7 Dividends and Distributions....................16
Additional Investment Information and Tax Consequences...............................16
Risk Factors.....................................8
Distribution Arrangements......................17
Management, Organization and Capital
Structure.......................................10
Pricing of Fund Shares..........................12
- ------------------------------------------------------- -----------------------------------------------------
</TABLE>
-1-
<PAGE>
Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Internet B2B Fund, the Amerindo Health
& Biotechnology Fund and the Amerindo Technology Fund II only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO INTERNET B2B FUND
Investment Objective
The Amerindo Internet B2B Fund's investment objective is to seek long-term
capital appreciation. Current income is incidental to the Fund's investment
objective. There is no assurance that the Fund will achieve its investment
objective.
Principal Investment Strategies
The Internet B2B Fund seeks to achieve its investment objective by investing at
least 65% of its total assets (although the Fund intends, as a non-fundamental
policy, to invest at least 80% of its assets) in the common stocks of technology
companies in the Internet business to business ("B2B") sector. B2B companies are
those companies with primary business operations enabling or managing through
services, software or components, business to business operations over the
Internet. Investment strategy will focus on three primary areas that are driving
the growth of the Internet: infrastructure software, telecommunications
companies supporting B2B and pure B2B e-commerce companies. In addition to
investing at least 65% of its assets in technology companies, the Fund may also
invest in the stocks of companies that should benefit from the commercialization
of technological advances, although they may not be directly involved in
research and development.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by the Fund
can each decline in value.
o Investments in companies in the rapidly changing field of
technology face special risks such as competitive pressures and
technological obsolescence and may be subject to greater
governmental regulation than many other industries.
o Investments in smaller capitalized companies may involve greater
risks, such as limited product lines, markets and financial or
managerial resources.
o As a non-diversified fund, compared to other mutual funds, this
Fund may invest a greater percentage of its assets in a particular
issuer. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified portfolio.
Who May Want to Invest in the Amerindo Internet B2B Fund
The Amerindo Internet B2B Fund is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
-2-
<PAGE>
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Investment Objective
The Amerindo Health & Biotechnology Fund's investment objective is to seek
long-term capital appreciation. Current income is incidental to the Fund's
investment objective. There is no assurance that the Fund will achieve its
investment objective.
Principal Investment Strategies
The Amerindo Health & Biotechnology Fund seeks to achieve its investment
objective by investing at least 65% of its total assets (although the Fund
intends, as a non-fundamental policy, to invest at least 80% of its assets), in
the opinion of the Adviser, in the common stocks of companies in the health and
biotechnology fields, which, in the opinion of the Adviser, have the potential
for capital appreciation. The health and biotechnology fields include healthcare
management technology, pharmaceuticals and services or devices.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by the Fund
can each decline in value.
o The healthcare industry is subject to government regulations and
governmental approval of products and services. This governmental
involvement can have a significant effect on price and
availability of products and services. The healthcare industry is
also greatly affected by rapid obsolescence.
o The biotechnology industry can be significantly affected by patent
considerations, intense competition, rapid technological change
and obsolescence. This industry can also be greatly affected by
governmental regulation.
o Investments in smaller capitalized companies may involve greater
risks, such as limited product lines, markets and financial or
managerial resources.
o As a non-diversified fund, compared to other mutual funds, this
Fund may invest a greater percentage of its assets in a particular
issuer. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified portfolio.
Who May Want to Invest in the Amerindo Health & Biotechnology Fund
The Amerindo Health & Biotechnology Fund is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
-3-
<PAGE>
AMERINDO TECHNOLOGY FUND II
Investment Objective
The Amerindo Technology Fund II's investment objective is to seek long-term
capital appreciation. Current income is incidental to the Fund's investment
objective. There is no assurance that the Fund will achieve its investment
objective.
Principal Investment Strategies
The Amerindo Technology Fund II seeks to achieve its investment objective by
investing at least 65% of its total assets (although the Fund intends, as a
non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas.
Industries likely to be represented in the portfolio include the Internet,
computers, networking and internetworking software, computer-aided design,
telecommunications, media and information services, medical devices and
biotechnology. In addition to investing at least 65% of its assets in technology
companies, the Fund may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
Principal Risks
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by the Fund
can each decline in value.
o Investments in companies in the rapidly changing fields of
technology and science face special risks such as competitive
pressures and technological obsolescence and may be subject to
greater governmental regulation than many other industries.
o Investments in smaller capitalized companies involve greater
risks, such as limited product lines, markets and financial or
managerial resources.
o As a non-diversified fund, compared to other mutual funds, this
Fund may invest a greater percentage of its assets in a particular
issuer. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified portfolio.
Who May Want to Invest in the Amerindo Technology Fund II
The Amerindo Technology Fund II is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not represent your complete
investment program or be used for short-term trading purposes.
The Board of Directors reserves the right at its discretion to close this Fund
to new investors at such time as it deems appropriate.
-4-
<PAGE>
Risk/Return Bar Chart and Table
The following bar chart and table may assist in your decision to invest in the
Fund. The bar chart shows the average annual returns of Class D shares of the
Amerindo Technology Fund (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II), which is
not offered in this prospectus. The table shows how the Amerindo Technology
Fund's Class D shares' average annual returns for the one-year and since
inceptions periods compare with that of the Hambrecht & Quist Growth Index.*
While analyzing this information, please note that the Amerindo Technology
Fund's past performance is not an indication of how the Amerindo Technology Fund
II will perform in the future. It is also important to note that the Amerindo
Technology Fund II will not necessarily invest in the same securities or issuers
in which the Amerindo Technology Fund has invested or will invest.
Year-by-Year Total Return as of December 31(1)
Class D Shares
In the printed version of the document, a line graph appears which depicts the
following plot points:
300.00%
250.00%
248.66%
200.00%
150.00%
100.00%
84.67%
50.00%
0.00%
-18.11%
- -50.00%
1997 1998 1999
Best Quarter 3/3/99: 66.72%. Worst Quarter 3/31/99: (28.89%)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year(3) Since Inception (4)
ending 12/31/99) (2)
<S> <C> <C>
Amerindo Technology Fund - Class D Shares 248.86% 63.32%
Hambrecht & Quist Growth Index* 180.12% 57.00%**
</TABLE>
* The Hambrecht & Quist Growth Index is a multiple-sector growth stock
composite comprised of the publicly traded stocks of approximately 275
companies that have annual revenues of less than $300 million. The
Index includes companies in the technology, healthcare services,
branded consumer, and Internet sectors. You may not invest in the
Hambrecht & Quist Growth Index and unlike the Fund, it does not incur
fees or charges.
** Since October 28, 1996.
(1) Investors purchasing Class D shares are not charged a sales load,
therefore, a sales load is not reflected in the Bar Chart.
(2) Shareholder Organizations may charge a fee to investors for purchasing
or redeeming shares. The net return to such investors may be less than
if they had invested in the Fund directly.
(3) The year-to-date return for the Class D shares as of March 31, 2000
was ___%.
(4) The date of inception of the Amerindo Technology Fund Class D shares
was October 28, 1996.
-5-
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<CAPTION>
Health &
Technology Internet B2B Biotechnology
Fund II Fund Fund
Shareholder Fees
(fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on None None None
Purchases (as a percentage of the offering
price)
Redemption Fees for shares held less than 1 2.00% 2.00% 2.00%
year (as a percent of amount redeemed)
Exchange Fees None None None
Annual Fund Operating Expenses(1)
(expenses that are deducted from Fund assets)
Management Fees 1.50% 1.50% 1.50%
Distribution and/or Service 12b-1 Fees 0.25% 0.25% 0.25%
Other Expenses 0.45% 0.34% 1.71%
----- ----- -----
Total Annual Fund Operating Expenses 2.20% 2.09% 3.46%
Fee Waiver/Expense Reimbursement 1.21%
-----
Net Total Annual Fund Operating Expenses 2.25%
</TABLE>
(1) The Adviser is contractually obligated to waive its fees and to reimburse
any expenses to the extent that the Total Annual Fund Operating Expenses
exceed 2.25%. This Expense Limitation Agreement will terminate on ( ).
(2) Other Expenses are based on estimated amounts for the current fiscal year.
Example: This Example 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 you invest $10,000 in a Fund over the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that a Fund's operating
expenses remain the same. The information would be the same if you redeemed your
shares. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
Year 1 Year 3
Technology Fund II $223 $688
Internet B2B Fund $212 $655
Health Sciences & Biotechnology Fund $228 $703
-6-
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
Investment Objective. Each Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that a Fund's investment
objective will be achieved. The investment objective is fundamental to a Fund
and may not be changed without shareholder approval. Current income is
incidental to a Fund's investment objective.
The following information applies to the Amerindo Internet B2B Fund and the
Amerindo Technology Fund II:
Principal Investment Strategies. Each Fund seeks to achieve its investment
objectives by investing at least 65% of its assets (although each Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. With respect to the Amerindo Internet B2B Fund,
such technology companies will be in the Internet business to business ("B2B")
sector. B2B companies are those companies with primary business operations
enabling or managing through services, software or components business to
business operations over the Internet.
With respect to the Amerindo Technology Fund II, technology companies are those
companies with primary business operations in either the technology or science
areas. Industries likely to be represented in the portfolio include the
Internet, computers, networking and internetworking software, computer-aided
design, telecommunications, media and information services, medical devices and
biotechnology.
In addition to investing at least 65% of its assets in technology companies,
each Fund may also invest in the stocks of companies that should benefit from
the commercialization of technological advances, although they may not be
directly involved in research and development.
The following information applies to the Amerindo Health & Biotechnology Fund:
Principal Investment Strategies. The Amerindo Health & Biotechnology Fund seeks
to achieve its investment objectives by investing at least 65% of its assets
(although the Fund intends, as a non-fundamental policy, to invest at least 80%
of its assets) in the common stocks of companies in the health and biotechnology
fields, which, in the opinion of the Adviser, have the potential for capital
appreciation. The health and biotechnology fields include healthcare management
technology, pharmaceuticals and services or devices.
The following information applies to each of the Funds:
The Adviser believes that because of rapid advances in the Internet, technology,
science, healthcare and biotechnology, an investment in companies with business
operations in these areas will offer substantial opportunities for long-term
capital appreciation. Of course, prices of common stocks of even the best
managed, most profitable corporations are subject to market risk, which means
their stock prices can decline. In addition, swings in investor psychology or
significant trading by large institutional investors can result in price
fluctuations.
The technology, science, healthcare and biotechnology areas have exhibited and
continue to demonstrate rapid growth, due to the mass adoption of the Internet,
increasing demand for existing products and services and the broadening of the
technology market. In general, the stocks of large capitalized companies that
are well established in the technology market can be expected to grow with the
market and will frequently be found in the portfolio of each Fund. The expansion
of technology, science, healthcare and biotechnology, areas, however, also
provides a favorable environment for investment in small to medium capitalized
companies. The Funds' investment policy is not limited to any minimum
capitalization requirement and each Fund may hold securities without regard to
the capitalization of the issuer. The Adviser's overall stock selection for each
Fund is not based on the capitalization or size of the company but rather on an
assessment of the company's fundamental prospects. The Funds will not purchase
stocks of companies during their initial public offering or during an additional
public offering of the same security. The Adviser anticipates, however, that a
significant portion of each Fund's holdings will be invested in newly-issued
securities being sold in the secondary market.
-7-
<PAGE>
Although the Funds will primarily invest in common stocks issued by U.S.
companies, the Funds may also invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the investment in
such securities is considered consistent with each Fund's investment objective
by the Adviser.
A Fund will not invest more than 20% of its total assets in convertible stocks,
preferred stocks, bonds and warrants. The bonds in which the Funds may invest
are not required to be rated by a recognized rating agency. As a matter of
policy, however, the Funds will invest only in "investment grade" debt
securities (i.e., rated within the four highest ratings categories by a
nationally recognized statistical rating organization, e.g., BBB or higher by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P"), Baa or higher by Moody's Investor Service, Inc. ("Moody's"), BBB
or higher by Fitch Investors Services, Inc. ("Fitch"), or BBB or higher by Duff
& Phelps Credit Rating Co) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. In addition, the Funds will not necessarily dispose of any
securities that fall below investment grade based upon the Adviser's
determination as to whether retention of such a security is consistent with the
Fund's investment objective, provided, however, that such securities do not
exceed 5% of a Fund's total assets.
Portfolio Turnover. Purchases and sales are made for each Fund whenever
necessary, in the Adviser's opinion, to meet each Fund's investment objective,
other investment policies, and the need to meet redemptions. Each Fund will
minimize portfolio turnover because it will not seek to realize profits by
anticipating short-term market movements and intends to buy securities for
long-term capital appreciation under ordinary circumstances. Portfolio turnover
may involve the payment by a Fund of dealer spreads or underwriting commissions,
and other transaction costs, on the sale of securities, as well as on the
investment of the proceeds in other securities. The greater the portfolio
turnover the greater the transaction costs to a Fund which could have an adverse
effect on a Fund's total rate of return. A greater portfolio turnover rate will
also result in a greater rate of gain or loss recognition for tax purposes, and
can accelerate the time at which shareholders must pay tax on any gains realized
by the Fund.
Buy/Sell Decisions. The Funds' investment adviser considers the following
factors when buying and selling securities for each Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the determinants of corporate profits, (iii) corporate cash flow, (iv) balance
sheet changes, (v) management capability and practices and (vi) the economic and
political outlook.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
Unless otherwise stated, the following information refers to each Fund.
The Technology and Science Areas. Companies in the rapidly changing fields of
technology and science face special risks. For example, their products or
services may not prove commercially successful or may become obsolete quickly.
The value of a Fund's shares may be susceptible to factors affecting the
technology and science areas and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, a Fund is not an appropriate
investment for individuals who are not long-term investors and who, as their
primary objective, require safety of principal or stable income from their
investments. The technology and science areas may be subject to greater
governmental regulation than many other areas and changes in governmental
policies and the need for regulatory approvals may have a material adverse
effect on these areas. Additionally, companies in these areas may be subject to
risks of developing technologies, competitive pressures and other factors and
are dependent upon consumer and business acceptance as new technologies evolve.
Healthcare and Biotechnology Areas (Amerindo Health & Biotechnology Fund). The
healthcare industry is subject to government regulation and government approval
of products and services, which could have a significant effect on price and
availability. Furthermore, the types of products or services produced or
provided by healthcare companies can quickly become obsolete. The biotechnology
industry can be significantly affected by patent considerations, intense
competition, rapid technological change and obsolescence, and government
regulation. Biotechnology companies may have persistent losses during a new
product's transition from development to production, and revenue patterns may be
erratic.
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<PAGE>
Concentration. The volatile nature of the technology, science, healthcare and
biotechnology areas could cause price appreciation in a particular security or
securities that results in that investment increasing its concentration in the
portfolio, in some cases, well above the level at which it was originally
purchased. For instance, even though an investment may have been purchased at a
time when it represented less than 25% of a portfolio, appreciation may cause
that concentration to be significantly greater than 25% at various times in a
rising market.
The Adviser reviews the positions of each Fund on a regular basis to ensure that
all tax and regulatory requirements are maintained. In instances where the value
of an investment has risen above 25%, the Adviser will evaluate the
appropriateness of that level of investment in light of the overall investment
strategy of a Fund and applicable regulatory and tax implications.
Smaller Capitalized Companies. The Adviser believes that smaller capitalized
companies generally have greater earnings and sales growth potential than larger
capitalized companies. The level of risk will be increased to the extent that a
Fund has significant exposure to smaller capitalized or unseasoned companies
(those with less than a three-year operating history). Investments in smaller
capitalized companies may involve greater risks, such as limited product lines,
markets and financial or managerial resources. In addition, less
frequently-traded securities may be subject to more abrupt price movements than
securities of larger capitalized companies.
Borrowing. Each Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes. Such borrowing will not exceed
an amount equal to one-third of the value of a Fund's total assets less its
liabilities and will be made at prevailing interest rates. A Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities subject
to certain restrictions on their transfer) and other securities that are not
readily marketable, such as repurchase agreements maturing in more than one
week, provided, however, that any illiquid securities purchased by a Fund will
have been registered under the Securities Act of 1933 or be securities of a
class, or convertible into a class, which is already publicly traded and the
issuer of which is filing reports required by Section 13 or 15 of the Securities
Exchange Act of 1934.
Temporary Investments. When the Adviser believes that adverse business or
financial conditions warrant a temporary defensive position, a Fund may invest
up to 100% of its assets in short-term instruments such as commercial paper,
bank certificates of deposit, bankers' acceptances, variable rate demand
instruments or repurchase agreements for such securities and securities of the
U.S. Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. Investments in domestic bank
certificates of deposit and bankers' acceptances will be limited to banks that
have total assets in excess of $500 million and are subject to regulatory
supervision by the U.S. Government or state governments. While taking a
defensive position, a Fund may not achieve its investment objective.
Repurchase Agreements. A Fund's portfolio position in cash or cash equivalents
may include entering into repurchase agreements. A repurchase agreement is an
instrument under which an investor purchases a U.S. Government security from a
vendor, with an agreement by the vendor to repurchase the security at the same
price, plus interest at a specified rate. Repurchase agreements may be entered
into with member banks of the Federal Reserve System or "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S. Government
securities. Repurchase agreements usually have a short duration, often less than
one week. Each Fund requires continual maintenance by the Funds' custodian of
the market value of underlying collateral in amounts equal to, or in excess of,
the value of the repurchase agreement including the agreed upon interest. If the
institution defaults on the repurchase agreement, a Fund will retain possession
of the underlying securities. In addition, if bankruptcy proceedings are
commenced with respect to the seller, realization on the collateral by a Fund
may be delayed or limited and a Fund may incur additional costs. In such case
the Fund will be subject to risks associated with changes in the market value of
the collateral securities. Each Fund intends to limit repurchase agreements to
transactions with institutions believed by the Adviser to present minimal credit
risk. Repurchase agreements may be considered to be loans under the Investment
Company Act of 1940, as amended.
Non-Diversified Status. A "non-diversified" fund has the ability to take larger
positions in a smaller number of issuers. Because the appreciation or
depreciation of a single stock may have a greater impact on the net asset value
of a non-diversified fund, its share price can be expected to fluctuate more
than a comparable diversified fund. This fluctuation, if significant, may affect
the performance of a Fund.
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MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Adviser. Amerindo Investment Advisors Inc. (the "Adviser" or "Amerindo"), a
registered investment adviser, is a California corporation with its principal
office located at One Embarcadero, Suite 2300, San Francisco, California 94111.
The Adviser, an emerging growth stock manager specializing in the technology and
healthcare sectors, had assets under management of approximately $5.8 billion as
of December 31, 1999. Alberto W. Vilar and Dr. Gary A. Tanaka are primarily
responsible for the day-to-day management of the Fund's portfolio. Their
biographies are as follows:
Alberto W. Vilar, 59, has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since its inception. He began his career with
Citibank N.A. in New York in 1964 and worked there as an International Credit
Officer until 1967. From 1967 to 1971, he served as Vice President, Portfolio
Manager and Manager of the Investment Management Division of Drexel Burnham
Lambert in New York. From 1971 to 1973, he served as Executive Vice President,
Portfolio Manager and Director of Equity Strategy at M.D. Sass Investor Services
in New York. In 1973, he became Vice President and Portfolio Manager of
Endowment Management & Research Corporation in Boston. From 1977 to 1979, he
served as Senior Vice President, Director of Research, Chief Investment
Strategist and Partnership Manager of the Boston Company in Boston. He founded
the predecessors of Amerindo Advisors (U.K.) Limited and Amerindo Investment
Advisors, Inc. (Panama) in 1979 and has served since then as a Principal
Portfolio Manager. He holds the degrees of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from Iona College, and he completed the Doctoral
Studies Program in Economics at New York University. Mr. Vilar was awarded an
Honorary Doctorate of Humanities degree from Washington & Jefferson College. He
has been a Chartered Financial Analyst since 1975.
Dr. Gary A. Tanaka, 56, has been a Director and President of the Company since
its inception. He served as a Portfolio Manager for Crocker Bank in San
Francisco from 1971 to 1977, and as a Partnership Manager for Crocker Investment
Management Corp. in San Francisco from 1978 to 1980. From 1975 to 1980, he also
served as a Consultant to Andron Cechettini & Associates in San Francisco. In
1980, he joined the predecessors of Amerindo Advisors (U.K.) Limited and
Amerindo Investment Advisors, Inc. (Panama) as a Principal Portfolio Manager and
has served in this position since that time. Dr. Tanaka holds the degrees of
B.S. in Mathematics from Massachusetts Institute of Technology and Ph.D. in
Applied Mathematics from Imperial College, University of London.
Pursuant to the Investment Advisory Contract for the Fund, the Adviser manages
the Fund's portfolio of securities and makes the decisions with respect to the
purchase and sale of investments subject to the general control of the Board of
Directors of the Fund.
Adviser's Fees. Pursuant to the terms of the Investment Advisory Agreement, each
Fund will pay an annual advisory fee, paid monthly, equal to 1.50% of each
Fund's average daily net assets. The advisory fee is higher than the fee paid by
most other mutual funds, however, the Board of Directors believes it to be
reasonable in light of the advisory services each Fund receives. Any portion of
the advisory fees received by the Adviser may be used by the Adviser to provide
investor and administrative services and for distribution of Fund shares. The
Adviser may also voluntarily waive a portion of its fee or assume certain
expenses of a Fund. The Adviser is contractually obligated to waive its fees and
to reimburse any expenses to the extent that the Total Annual Fund Operating
Expenses exceed 2.25%. This Expense Limitation Agreement will terminate on
October 31, 2000. The contractual waiver and any voluntary waivers or
reimbursements have the effect of lowering the overall expense ratio of a Fund
and of increasing yield to investors in the Fund. See "Expense Limitation" in
Section V.A.2 of the Statement of Additional Information. In addition, the
Adviser receives service fees of 0.25% of the Class D shares' average daily net
assets.
The following information relates to the Amerindo Technology Fund II only:
Performance of the Adviser. In the early 1980s, Amerindo pioneered the
management of dedicated emerging technology portfolios of high technology and
healthcare stocks designed to service the financial needs of the institutional
investor. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers respectively by Money
Manger Review for calendar years 1998 and 1999, respectively. This information
represents the ranking of participating equity money managers with at least $30
million under management and at least 5 years of history. This performance
information relates to Amerindo's management of institutional accounts and
should not be interpreted as indicative of future performance of the Amerindo
Technology Fund II or of any other Fund. The performance figures upon which
these rankings were based do not include a reduction for any charges or
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expenses with respect to such accounts. Further, Amerindo has not independently
verified the accuracy, completeness or process underlying the performance
figures upon which these rankings were based, the performance of other equity
managers or its ranking among them, and makes no representation as to the
accuracy or completeness of this performance information.
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology Fund and the Amerindo Technology Fund II of all clients which are
institutions, such as qualified retirement plans, charitable foundations and
educational endowment funds, for which investment income and realized capital
gains are exempt from Federal income tax, and for which Amerindo has full
discretionary authority to manage in accordance with the firm's equity strategy
for separate accounts. Amerindo has elected to comply with the American
Association for Investment Management and Research ("AIMR") presentation
standards for the period October 1, 1987 (inception of the composite) through
December 31, 1999. An independent accounting firm has conducted an examination
with respect to Amerindo for the period October 1, 1987 through December 31,
1998, and has confirmed that Amerindo's performance presentation contained
herein for such period conforms with AIMR standards. The 1999 review is
currently in progress. The Independent Accountants' Report is available upon
request. AIMR has not been involved with the preparation or review of the
Independent Accountants' Report. The AIMR method of performance differs from
that of the SEC and can contain different results. The private accounts listed
do not have to comply with the Investment Company Act of 1940 or Subchapter M of
the Internal Revenue Code. If this compliance was necessary, the account's
performance could be adversely affected. The following Schedule represents the
rates of return for the equity composite for the annual investment periods from
January 1, 1990 through December 31, 1999. Accounts benchmarks are the Standard
& Poor's 500 Composite Stock Index, Hambrecht & Quist Growth Index and the
Russell 2000 Growth Index. The Independent Accountants' Report relates to their
examination of Amerindo's performance from the inception of the composite
October 1, 1987 through December 31, 1998, which is in accordance with AIMR
standards. The 1999 review is currently in progress.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology Fund, the Amerindo Technology Fund II or of any other
Fund nor is it indicative of future performance of the Amerindo Technology Fund,
the Amerindo Technology Fund II or of any other Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted Russell
Composite Rate of Composite Rate of H&Q Growth 2000 Growth
Return Net of Return Gross of S&P 500 Index Index Index
Year Advisory Fees(1) Advisory Fees(1)
<S> <C> <C> <C> <C> <C>
1990 6.75% 8.49% -3.19% 3.89% -17.41%
1991 76.52% 78.39% 30.55% 94.49% 51.18%
1992 7.61% 8.73% 7.68% -3.57% 7.77%
1993 15.08% 16.42% 10.00% 7.81% 13.36%
1994 -2.66% -1.53% 1.33% 3.38% -2.43%
1995 87.51% 89.39% 37.50% 61.72% 31.04%
1996 8.04% 9.61% 23.22% 10.86% 11.26%
1997 -26.61% -26.05% 33.34% 2.39% 12.95%
1998 61.67% 64.14% 28.58% 45.04% 1.23%
1999 248.42% 251.31% 21.03% 180.08% 43.09%
Annualized rates of return for the period January 1, 1990 to December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
(1) Composite returns are shown both gross and net of investment
management fees. The composite is derived from all fully
discretionary, tax-free sheltered equity accounts in this style
with assets above $5,000,000. Past performance is no guarantee of
future results.
The Amerindo Technology Fund's (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II) total
return with respect to Class D shares for the period
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October 28, 1996 (commencement of operations) through December 31, 1999 was
248.86%. The Amerindo Technology Fund's total return for the calendar year ended
December 31, 1999 was 63.32%.
The following information relates to each Fund:
The performance of a Fund may be compared in various financial and news
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of a Fund may be
compared in publications to averages, performance rankings, or other information
prepared by nationally recognized mutual fund ranking and statistical services.
As with other performance data, performance comparisons should not be considered
representative of a Fund's relative performance for any future period.
PRICING OF FUND SHARES
Net asset values per share for the Class D shares of the Funds are determined by
subtracting from the value of such Class' total assets the amount of its
liabilities and dividing the remainder by the number of its outstanding shares.
The value of each security for which readily available market quotations exist
is based on a decision as to the broadest and most representative market for the
security. The value is based either on the last sale price on a national
securities exchange, or, in the absence of recorded sales, at the readily
available closing bid price on such exchanges, or at the quoted bid price in the
over-the-counter market. Assets for which market quotations are not readily
available are valued in accordance with procedures established by the Funds'
Board of Directors, including use of an independent pricing service or services
which use prices based on yields or prices of comparable securities, indications
as to values from dealers and general market conditions.
Each Fund computes the net asset value once daily on Monday through Friday, at
the regularly scheduled close of normal trading on the New York Stock Exchange,
which normally occurs at 4:00 p.m. Eastern time, except on New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
HOW TO PURCHASE SHARES
Initial Investments by Wire. You may purchase Class D shares of each Fund by
wiring immediately available federal funds (subject to the minimum investment)
to Bankers Trust Company from your bank. Your bank may charge a fee for doing so
(see instructions below). The minimum initial investment in Class D shares is
$2,500 ($1,000 for IRA accounts), each of which may be waived by a Fund.
If money is to be wired, you must call the Transfer Agent at 1-888-832-4386 to
set up your account and obtain an account number. You should be prepared at that
time to provide the information on the application. Then you should provide your
bank with the following information for purposes of wiring your investment:
Bankers Trust Company
New York, New York
ABA# 021001033
Account # 01-465-547
F/B/O [name of Fund]
Class D
Fund Acct. No.
Social Security or Tax Identification No.__________________
You are required to mail a signed application to the Transfer Agent at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Funds and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase accepted by the Fund. Shareholders will
receive the next determined net asset value per share after receipt of such wire
and the acceptance of the purchase by the Fund. Any delays which may occur in
wiring money, including delays which may occur in processing by the banks, are
not the responsibility of the Fund or the Transfer Agent. There is presently no
fee for the receipt of wired funds, but the right to charge shareholders for
this service is reserved by the Funds.
Initial Investments by Mail. An account may be opened by completing and signing
an Account Application and mailing it to a Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
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Amerindo Funds Inc.
P.O. Box 446
Portland, ME 04112
Payment for the purchase of shares received by mail will be credited to a
shareholder's account at the net asset value per share of the Class D shares
next determined after receipt. Such payment need not be converted into federal
funds (monies credited to the Funds' custodian bank by a Federal Reserve Bank)
before acceptance by the Funds' Distributor. In the event that there are
insufficient funds to cover a check, such prospective investor or investors will
be assessed a $15.00 charge.
Additional Investments. Additional investments may be made at any time (subject
to a minimum subsequent investment of $500) by purchasing shares at net asset
value by mailing a check to a Fund at the address noted under "Initial
Investments by Mail" (payable to Amerindo Internet B2B Fund Class D, Amerindo
Health Sciences Fund Class D or Amerindo Technology Fund II Class D) or by
wiring monies to the clearing bank as outlined above, or by telephone with
payment by Automated Clearing House ("ACH"), electronically transferring funds
from the investor's designated bank account. In order to purchase shares by
telephone and make payment by ACH, an investor must complete the appropriate
sections of the application. Shareholders who have authorized telephone
purchases may effect purchases by calling the Transfer Agent at 1-888-832-4386.
Other Purchase Information. Investors may open accounts in the Funds only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for each Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on a Fund until accepted by the Fund as principal. See
"Distribution Arrangements."
Each Fund reserves the right to redeem, after 60 days' written notice, shares in
accounts that fall below the minimum balance by reason of redemption and return
the proceeds to investors. The investors may restore and maintain a minimum
balance during the notice period.
The purchase price paid for Class D shares is the current public offering price,
that is, the next determined net asset value of the shares after the order is
placed. See "Pricing of Fund Shares" herein. Class D shares are sold without a
front-end sales load. Each Fund reserves the right to reject any purchase order
if it determines that accepting the order would not be in the best interests of
the Fund or its shareholders.
The Funds must receive an order and payment by the close of business for the
purchase to be effective and dividends to be earned on the same day. If funds
are received after the close of business, the purchase will become effective and
dividends will be earned on the next business day.
Shares of each Fund may be purchased in exchange for securities which are
permissible investments of the Fund, subject to the Adviser's determination that
the securities are acceptable. Securities accepted in exchange will be valued at
the mean between their bid and asked quotations. In addition, securities
accepted in exchange must be liquid securities that are not restricted as to
transfer and will have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on NASDAQ,
the American Stock Exchange or the New York Stock Exchange, or on the basis of
prices provided by a pricing service. Each Fund and the Adviser reserve the
right to reject any such purchase order. Shareholders will bear any costs
associated with a purchase of Fund shares through such an exchange.
All purchases of a Fund's shares will be made in full and fractional shares of a
Fund calculated to three decimal places. The Funds do not intend to issue
certificates evidencing Fund shares.
Shares of each Fund may also be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
("Shareholder Organizations"). Investors purchasing and redeeming shares of a
Fund through a Shareholder Organization may be charged a transaction-based fee
or other fee for the services of such organization. Each Shareholder
Organization is responsible for transmitting to its customers a schedule of any
such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Customers of Shareholder Organizations
should read this Prospectus in light of the terms governing accounts with their
organization. The Funds do not pay to or receive compensation from Shareholder
Organizations for the sale of Fund shares.
Each Fund has available a form of Individual Retirement Account ("IRA") which
may be obtained from the Fund that permits the IRA to invest in Class D shares
of the Fund. The minimum initial investment for all retirement plans is $1,000
with a subsequent minimum investment of $500. Investors desiring information
regarding investments through IRAs should write or telephone each Fund.
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HOW TO REDEEM SHARES
Shares of a Fund may be redeemed by mail, or, if authorized, by telephone. The
value of shares redeemed may be more or less than the purchase price, depending
on the market value of the investment securities held by a Fund.
By Mail. Each Fund will redeem its shares at the net asset value next determined
after the request is received in "good order." The net asset value per share of
each Fund is determined as of 4:00 p.m., New York time, on each day that the New
York Stock Exchange, Inc. (the "NYSE"), the Fund and the Distributor are open
for business. Requests should be addressed to Amerindo Funds Inc., P.O. Box 446,
Portland, ME 04112.
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, or a stock assignment specifying
the number of ) shares or dollar amount to be redeemed, signed by all
registered owners of the shares in the exact names in which they are
registered;
(b) any required signature guarantees (see "Signature Guarantees" below);
and
(c) other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
Signature Guarantees. To protect shareholder accounts, each Fund and the
transfer agent from fraud, signature guarantees are required to enable a Fund to
verify the identity of the person who has authorized a redemption from an
account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareholder(s) and
the registered address and (2) share transfer requests. Signature guarantees may
be obtained from certain eligible financial institutions, including but not
limited to, the following: banks, trust companies, credit unions, securities
brokers and dealers, savings and loan associations and participants in the
Securities Transfer Association Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange Medallion Signature
Program ("MSP"). Shareholders may contact the Funds at 1-888-832-4386 for
further details.
By Telephone. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling a Fund at 1-888-832-4386 and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is authorized, each Fund and the transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or the transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or its transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by a Fund or the transfer agent to be genuine.
Each Fund will employ reasonable procedures to confirm that instructions
communicated are genuine and, if it does not, it may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures employed by a
Fund in connection with transactions initiated by telephone may include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
Optional Redemption by the Funds. Investors are required to maintain a minimum
account balance of at least $2,500. Each Fund reserves the right to redeem,
after 60 days' written notice, shares in accounts that fall below the minimum
balance by reason of redemption and return the proceeds to investors. The
investors may restore and maintain a minimum balance during the notice period.
Further Redemption Information. Redemption proceeds for shares of a Fund
recently purchased by check may not be distributed until payment for the
purchase has been collected, which may take up to fifteen business days from the
purchase date. Shareholders can avoid this delay by utilizing the wire purchase
option.
Other than as described above, payment of the redemption proceeds will be made
within seven days after receipt of an order for a redemption. Each Fund may
suspend the right of redemption or postpone the date at times when the NYSE or
the bond market is closed or under any emergency circumstances as determined by
the United States Securities and Exchange Commission (the "SEC").
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If a Fund determines that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make a payment wholly or partly in cash,
the Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by the Fund in lieu of cash in
conformity with applicable rules of the SEC. Investors generally will incur
brokerage charges on the sale of portfolio securities so received in payment of
redemptions.
Redemption Fee. The Funds are designed for long-term investors willing to accept
the risks associated with a long- term investment in the common stocks of
companies in the technology, technology-related, science, healthcare and
biotechnology industries. The Funds are not designed for short-term traders
whose frequent purchases and redemptions can generate substantial cash flow.
These cash flows can unnecessarily disrupt a Fund's investment program.
Short-term traders often redeem when the market is most turbulent, thereby
forcing the sale of underlying securities held by a Fund at the worst possible
time as far as long-term investors are concerned. Additionally, short-term
trading drives up a Fund's transaction costs--measured by both commissions and
bid/ask spreads--which are borne by the remaining long-term investors. For these
reasons, each Fund assesses a 2.00% fee on the redemption of Class D shares held
for less than one year. Redemption fees will be paid to the Fund to help offset
transaction costs. The fee does not apply to any shares purchased through
reinvested distributions (dividends and capital gains). This fee also does not
apply to separate account clients of Amerindo Advisers Inc. and its affiliates
that hold shares in IRA accounts or in retirement plans (such as 401(k), 403(b),
457, Keogh, Profit Sharing Plans, and Money Purchase Pension Plans).
Each Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the redemption fee will be assessed. In
determining "one year" a Fund will use the anniversary date of a transaction.
Thus, shares purchased on April 5, 2000, for example, will be subject to the fee
if they are redeemed on or prior to April 4, 2001. If they are redeemed on or
after April 5, 2001, the shares will not be subject to the redemption fee. The
redemption fee will be applied on redemptions of each investment made by a
shareholder that does not remain in the Fund for a one-year period from the date
of purchase.
EXCHANGING FUND SHARES
You may exchange some or all of your shares in a Fund with any other Fund
identified in this prospectus or with the Amerindo Technology Fund, which is
offered through a separate prospectus. Exchanges from one Fund to another must
be for the same class of shares.
When you exchange shares, you are really selling your shares of one Fund and
buying shares of another Fund. So, your sale price and purchase price will be
based on the NAV next calculated after we receive your exchange request. Please
note that an exchange may have tax consequences for you. You may exchange your
shares on any Business Day by contacting us directly by mail or telephone. You
may also exchange shares through your financial institution by mail or
telephone. If you establish a new account by exchange, the exchanged shares must
have a minimum value of $2,500. All subsequent exchanges must have a minimum
value of $250 per Fund. If you recently purchased shares by check or through
ACH, you may not be able to exchange your shares until your check has cleared
(which may take up to 15 days from the date of purchase). Each Fund assesses the
2.00% redemption fee on the exchange of shares held less than one year (see "How
To Redeem Shares - Redemption Fee" above).
There is currently no fee for exchanges, however, the Funds may change or
terminate this privilege on 60 days notice. Please note that exchanges may be
made only two (2) times a year. The exchange privilege is not intended as a
vehicle for short-term or excessive trading. The Funds do not permit excessive
trading or market timing. Excessive purchases, redemption, or exchanges of Fund
shares disrupt portfolio management and drive Fund expenses higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of each Fund's net investment income will be declared as dividends
and paid annually. If an investor's shares are redeemed prior to the date on
which dividends are normally declared and paid, accrued but unpaid dividends
will be paid with the redemption proceeds. Substantially, all the realized net
capital gains for the Fund shares, if any, are declared and paid on an annual
basis. Dividends are payable to investors of record at the time of declaration.
For a discussion of the taxation of dividends or distributions, see "Taxes."
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<PAGE>
The net investment income of Fund shares for each business day is determined
immediately prior to the determination of net asset value. Net investment income
for other days is determined at the time net asset value is determined on the
prior business day. Shares of the Funds earn dividends on the business day their
purchase is effective but not on the business day their redemption is effective.
See "Purchase of Shares" and "Redemption of Shares."
Choosing a Distribution Option. Distribution of dividends from Fund shares may
be made in accordance with several options. A shareholder may select one of
three distribution options:
1. Automatic Reinvestment Option. Both dividends and capital gains
distributions will be automatically reinvested in additional Class D shares
of a Fund unless the investor has elected one of the other two options.
2. Cash Dividend Option. Dividends will be paid in cash, and capital gains, if
any, will be reinvested in additional shares.
3. All Cash Option. Both dividends and capital gains distributions will be
paid in cash.
TAX CONSEQUENCES
Each Fund has elected and intends to qualify annually to be treated as a
regulated investment company under the Internal Revenue Code of 1986. By
qualifying, a Fund will generally not be subject to Federal income tax on net
ordinary income and net realized capital gains paid out to its stockholders. A
Fund can also avoid an annual 4% excise tax if it distributes substantially all
of its ordinary income and short and long-term capital gain each year. Each
Fund's policy is to distribute as dividends each year 100% (and in no event less
than 90%) of its investment company taxable income (which includes interest,
dividends and net short term capital gains). Each Fund has adopted a policy of
declaring dividends annually. Distributions of net ordinary income and net
short-term capital gains are taxable to stockholders as ordinary income.
Although corporate stockholders would generally be entitled to the
dividends-received deduction to the extent that a Fund's income is derived from
qualifying dividends from domestic corporations, the Funds do not believe that
any of its distributions will qualify for this deduction.
The excess of net long-term capital gains over net short-term capital losses
realized and distributed by a Fund as capital gains distributions is taxable to
stockholders as long-term capital gains, without regard to the length of time
the stockholder may have held its shares in the Fund. Long-term capital gains
distributions are not eligible for the dividends-received deduction referred to
above. Long-term capital gains on sales of securities are currently taxable at a
maximum rate of 20% for non-corporate shareholders. Capital gain dividends,
designated in a notice mailed to investors not later than 60 days after the Fund
taxable year closes, will be taxed as long-term capital gain without regard to
the length of time for which the investor has held its shares. In determining
the amount of capital gains to be distributed, any capital loss carry over from
prior years will be taken into account in determining the amount of net long
term capital gain. However, if an investor receives a capital gain dividend and
sells shares after holding them for six months or less (not including, for
purposes of determining the length of the holding period, periods during which
the investor holds an offsetting position), then any loss realized on the sale
will be treated as long-term capital loss to the extent of such capital gain
dividend.
Distributions are taxable to investors whether received in cash or reinvested in
additional shares of a Fund. Any dividend or distribution received by a
stockholder shortly after the purchase of shares will reduce the net asset value
of the shares by the amount of the dividend or distribution. Furthermore, such
dividend or distribution is subject to tax even though it is, in effect, a
return of capital.
The redemption of shares may result in the stockholder's receipt of more or less
than the stockholder paid for its shares and, thus, in a taxable gain or loss to
the stockholder. If the redeemed shares have been held for more than one year,
the stockholder will generally realize a long-term capital gain or loss.
Each Fund is required, subject to certain exemptions, to withhold at a rate of
31% from dividends paid or credited to stockholders and from the proceeds from
the redemption of Fund shares, if a correct taxpayer identification number,
certified when required, is not on file with the Fund, or if the Fund or the
shareholder has been notified by the Internal Revenue Service that the
shareholder is subject to these backup withholding rates. Corporate stockholders
are not subject to this requirement.
If a Fund invests in securities of foreign issuers, it may be subject to
withholding and other similar income taxes imposed by a foreign country.
Dividends and distributions may be subject to state and local taxes.
Dividends paid or credited to accounts maintained by non-resident shareholders
may also be subject to U.S. non-resident withholding taxes. You should consult
your tax adviser regarding specific questions as to Federal, state and local
income withholding taxes.
-16-
<PAGE>
DISTRIBUTION ARRANGEMENTS
Distributor. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a Distribution Agreement with each Fund to serve
as the Funds' distributor ("the Distributor"). For nominal consideration and as
agent for each Fund, the Distributor solicits orders for the purchase of Fund
shares provided that any orders will not be binding on a Fund until accepted by
the Fund as principal. See "Management of Fund" in the Statement of Additional
Information.
12b-1 Plan. Each Fund, on behalf of Class D shares, has adopted a distribution
and service plan, pursuant to Rule 12b-1 under the Investment Company Act (the
"Plan"). Rule 12b-1 provides that an investment company which bears any direct
or indirect expense of distributing its shares must do so only in accordance
with a plan permitted by this Rule. The total amounts payable under the Plan by
the Class D shares of a Fund may not exceed 0.25% per annum. Fees paid under the
Plan may not be waived for individual shareholders.
In accordance with the Plan, the Shareholder Servicing Agreement provides that
the Class D shares will compensate the Adviser for certain expenses and costs
incurred in connection with providing shareholder servicing and maintaining
shareholder accounts and to compensate parties with which it has written
agreements and whose clients own Class D shares for providing servicing to their
clients ("shareholder servicing"). Each Fund is subject to a maximum service fee
of 0.25% per annum of the Class D shares' average daily net assets. The
shareholder servicing agents that the Adviser retains will perform the following
services: (i) answer customer inquiries regarding account status and history,
the manner in which purchases and redemptions of shares of a Fund may be
effected and certain other matters pertaining to a Fund; (ii) assist
shareholders in designating and changing dividend options, account designations
and addresses; (iii) provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; (iv) assist in processing purchase
and redemption transactions; (v) arrange for the wiring of funds; (vi) transmit
and receive funds in connection with customer orders to purchase or redeem
shares; (vii) verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder designated accounts;
(viii) furnish (either separately or on an integrated basis with other reports
sent to a shareholder by a Fund) quarterly and year-end statements and
confirmations in a timely fashion after activity is generated in the account;
(ix) transmit, on behalf of each Fund, proxy statements, annual reports,
updating prospectuses and other communications from a Fund to shareholders; (x)
receive, tabulate and transmit to a Fund, proxies executed by shareholders with
respect to meetings of shareholders of a Fund; and (xi) provide such other
related services as a Fund or a shareholder may request.
The Plan provides that the Adviser and the Distributor may make payments from
time to time from their own resources which may include the advisory fee and
past profits for the following purposes: (i) to defray the costs of and to
compensate others, including financial intermediaries with whom the Distributor
or Adviser has entered into written agreements, for performing shareholder
servicing and related administrative functions; (ii) to compensate certain
financial intermediaries for providing assistance in distributing Class D
shares; (iii) to pay the costs of printing and distributing the Funds'
prospectuses to prospective investors; and (iv) to defray the cost of the
preparation and printing of brochures and other promotional materials, mailings
to prospective shareholders, advertising, and other promotional activities,
including the salaries and/or commissions of sales personnel in connection with
the distribution of the Funds' shares. The Distributor or the Adviser, as the
case may be, in their sole discretion, will determine the amount of such
payments made pursuant to the Plan with the shareholder servicing agents and
broker-dealers they have contracted with, provided that such payments made
pursuant to the Plan will not increase the amount which a Fund is required to
pay to the Distributor or the Adviser for any fiscal year under the shareholder
servicing agreements or otherwise. Any servicing fees paid to the Adviser also
may be used for purposes of (i) above.
Shareholder servicing agents and broker-dealers may charge investors a fee in
connection with their use of specialized purchase and redemption procedures
offered to investors by the shareholder servicing agents and broker-dealers. In
addition, shareholder servicing agents and broker-dealers offering purchase and
redemption procedures similar to those offered to shareholders who invest in a
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in a
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
a Fund directly. An investor should read the prospectus in conjunction with the
materials provided by the shareholder servicing agent and broker-dealer
describing the procedures under which Fund shares may be purchased and redeemed
through the shareholder servicing agent and broker-dealer.
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<PAGE>
Amerindo Funds Inc.
Board of Directors
Alberto W. Vilar....................Amerindo Investment Advisors Inc.
Gary A. Tanaka......................Amerindo Investment Advisors Inc.
John Rutledge.......................Rutledge Capital LLC
Jude T. Wanniski....................Polyconomics, Inc.
Officers
Alberto W. Vilar....................Chairman of the Board
Gary A. Tanaka......................President
Anthony Ciulla......................Vice President
Dana E. Smith.......................Vice President
-18-
<PAGE>
AMERINDO FUNDS INC.
May 29, 2000
Investment Adviser
Amerindo Investment Advisors Inc.
San Francisco, California
New York, New York
Administrator
SEI Investments Mutual Funds Services
Oaks, Pennsylvania
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania
Transfer and Dividend Agent
Forum Shareholder Services LLC
Portland, Maine
Custodian
The Northern Trust Company
Chicago, Illinois
Legal Counsel
Battle Fowler LLP
New York, New York
Independent Auditors
Morrison, Brown, Argiz & Company
Miami, Florida
1-888-832-4386
www.amerindo.com
SEC File Number: 811-07531
A Statement of Additional Information (SAI), dated May 29, 2000 includes
additional information about each Fund and its investments and are incorporated
by reference into this prospectus. You may obtain the SAI without charge by
calling the Fund at 1-888-832-4386. To request other information, please call
your financial intermediary or the Fund.
A Current SAI has been filed with the Securities and Exchange Commission. You
may visit the Securities and Exchange Commission's Internet website
(www.sec.gov) to view the SAI, material incorporated by reference and other
information. These materials can also be reviewed and copied at the Commission's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. In addition, copies of these materials may be obtained, upon
payment of a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, DC 20549-6009 or by electronic request at public
[email protected].
<PAGE>
AMERINDO FUNDS INC.
Amerindo Technology Fund II
Amerindo Internet B2B Fund
Amerindo Health & Biotechnology Fund
-----------------------------------------------------------------
MAY 29, 2000
RELATING TO THE AMERINDO TECHNOLOGY FUND II
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND
PROSPECTUS FOR CLASS A AND C SHARES
AND THE PROSPECTUS FOR THE CLASS D SHARES
DATED MAY 29, 2000
-----------------------------------------------------------------
This Statement of Additional Information ("SAI") sets forth information
which may be of interest to investors but which is not necessarily included in
the Funds' prospectuses, dated May 29, 2000 (the "Prospectuses").
This SAI is not a prospectus and should be read in conjunction with the
Funds' Prospectuses, copies of which may be obtained without charge by writing
to the Funds at 399 Park Avenue, 22nd Floor, New York, New York 10022.
This SAI is incorporated by reference into the Prospectuses in its
entirety.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
Fund History.................................................1 Capital Stock and Other Securities.................17
Description of the Fund and its Investments and Risks........1 Purchase, Redemption and Pricing of Shares........ 18
Management of the Fund .................................... 9 Taxation of the Fund.............................. 19
Control Persons and Principal Holders
of Securities..............................................12 Underwriters...................................... 21
Investment Advisory and Other
Services....................................................12 Calculation of Performance Data .................. 22
Brokerage Allocation and Other Practices....................16
</TABLE>
- ------------------------------------------------------------------------------
915866.4
<PAGE>
I. FUND HISTORY
Amerindo Funds Inc. (the "Company") was incorporated in Maryland
on February 6, 1996. This SAI relates to the Amerindo Technology Fund II, the
B2B Internet Fund, and the Health & Biotechnology Fund (each, a "Fund", and
collectively, the "Funds").
II. DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
A. INVESTMENT STRATEGIES AND RISKS
Amerindo Technology Fund II
The Amerindo Technology Fund II is a non-diversified, open-end,
management investment company. This Fund's investment objective is to seek
long-term capital appreciation. The Fund seeks to achieve its objective by
investing at least 65% of its assets (although the Fund intends, as a
non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas. Current
income is incidental to the Fund's investment objective. The investment
objective is fundamental to the Fund and may not be changed without shareholder
approval. There can be no assurance that the Fund's investment objective will be
achieved.
This Fund is designed for long-term investors who understand and
are willing to accept the risk of loss involved in investing in a mutual fund
seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not be used as a trading
vehicle.
Amerindo Internet B2B Fund
The Amerindo Internet B2B Fund is a non-diversified, open-end,
management investment company. This Fund's investment objective is to seek
long-term capital appreciation. The Fund seeks to achieve its objective by
investing at least 65% of its assets (although the Fund intends, as a
non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies in the Internet business to business ("B2B")
Sector. B2B companies are those companies with primary business operations
enabling or managing through services, software or components business to
business operations over the Internet. Current income is incidental to the
Fund's investment objective. The investment objective is fundamental to the Fund
and may not be changed without shareholder approval. There can be no assurance
that the Fund's investment objective will be achieved.
This Fund is designed for long-term investors who understand and
are willing to accept the risk of loss involved in investing in a mutual fund
seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not be used as a trading
vehicle.
Amerindo Health & Biotechnology Fund
The Amerindo Health & Biotechnology Fund is a non-diversified,
open-end, management investment company. This Fund's investment objective is to
seek long-term capital appreciation. The Fund seeks to achieve its objective by
investing at least 65% of its assets (although the Fund intends, as a
non-fundamental policy,
915866.4
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<PAGE>
to invest at least 80% of its assets) in the common stocks of companies in the
healthcare and biotechnology fields [, which have the potential for capital
appreciation.]. The healthcare and biotechnology fields include health care
management technology, pharmaceuticals and services or devices. Current income
is incidental to the Fund's investment objective. The investment objective is
fundamental to the Fund and may not be changed without shareholder approval.
There can be no assurance that the Fund's investment objective will be achieved.
This Fund is designed for long-term investors who understand and
are willing to accept the risk of loss involved in investing in a mutual fund
seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not be used as a trading
vehicle.
B. DESCRIPTION OF THE FUNDS' INVESTMENT SECURITIES AND DERIVATIVES
Unless otherwise stated, the following information refers to each
fund:
1. The Technology and Science Areas. The Adviser believes that
because of rapid advances in technology, science, healthcare and biotechnology,
an investment in companies with business operations in these areas will offer
substantial opportunities for long-term capital appreciation. Of course, prices
of common stocks of even the best managed, most profitable corporations are
subject to market risk, which means their stock prices can decline. In addition,
swings in investor psychology or significant trading by large institutional
investors can result in price fluctuations. Industries likely to be represented
in the portfolio include the Internet, computers, networking and internetworking
software, computer aided design, telecommunications, media and information
services, medical devices and biotechnology. The Funds may also invest in the
stocks of companies that should benefit from the commercialization of
technological advances, although they may not be directly involved in research
and development.
The technology, science, healthcare and biotechnology areas have
exhibited and continue to exhibit rapid growth due to the mass adoption of the
Internet, both through increasing demand for existing products and services and
the broadening of the technology market. In general, the stocks of large
capitalized companies that are well established in the technology market can be
expected to grow with the market and will frequently be found in each of the
Fund's portfolios. The expansion of technology and its related industries,
however, also provides a favorable environment for investment in small to medium
capitalized companies. The Funds' investment policies are not limited to any
minimum capitalization requirement and the Funds may hold securities without
regard to the capitalization of the issuer. The Adviser's overall stock
selection for the Funds is not based on the capitalization or size of the
company but rather on an assessment of the company's fundamental prospects. The
Funds will not purchase stocks of companies during their initial public offering
or during an additional public offering of the same security. The Adviser
anticipates, however, that a significant portion of each Fund's holdings will be
invested in newly-issued securities being sold in the secondary market.
Companies in the rapidly changing fields of technology, science,
healthcare and biotechnology face special risks. For example, their products or
services may not prove commercially successful or may become obsolete quickly.
The value of a Fund's shares may be susceptible to factors affecting the
technology and science areas and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, the Funds are not an
appropriate investment for individuals who are not long-term investors and who,
as their primary objective, require safety of principal or stable income from
their investments. The technology, science, healthcare and biotechnology areas
may be subject to greater governmental regulation than many other areas and
changes in governmental policies and the need for regulatory approvals may have
a material adverse effect on these areas. Additionally, companies in
915866.4
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<PAGE>
these areas may be subject to risks of developing technologies, competitive
pressures and other factors and are dependent upon consumer and business
acceptance as new technologies evolve.
2. The Health and Biotechnology Areas. (applicable to the Amerindo
Health & Biotechnology Fund). The healthcare industry is subject to government
regulation and government approval of products and services, which could have a
significant effect on price and availability. Furthermore, the types of products
or services produced or provided by healthcare companies can quickly become
obsolete. The biotechnology industry can be significantly affected by patent
considerations, intense competition, rapid technological change and
obsolescence, and governmental regulation. Biotechnology companies may have
persistent losses during a new products' transition from development to
production, and revenue may be erratic.
3. Foreign Securities. Each Fund may invest up to 20% of its
assets in foreign securities. It is, however, the present intention of each Fund
to limit the investment in foreign securities to no more than 5% of its assets.
By investing a portion of its assets in foreign securities, a Fund will attempt
to take advantage of differences among economic trends and the performance of
securities markets in various countries. To date, the market values of
securities of issuers located in different countries have moved relatively
independently of each other. During certain periods, the return on equity
investments in some countries has exceeded the return on similar investments in
the United States. The Adviser believes that, in comparison with investment
companies investing solely in domestic securities, it may be possible to obtain
significant appreciation from a portfolio of foreign investments and securities
from various markets that offer different investment opportunities and are
affected by different economic trends. International diversification reduces the
effect that events in any one country will have on the Fund's entire investment
portfolio. On the other hand, a decline in the value of a Fund's investments in
one country may offset potential gains from investments in another country.
Investment in obligations of foreign issuers and in direct
obligations of foreign nations involves somewhat different investment risks from
those affecting obligations of United States domestic issuers. There may be
limited publicly available information with respect to foreign issuers and
foreign issuers are not generally subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to domestic
companies. There may also be less government supervision and regulation of
foreign securities exchanges, brokers and listed companies than in the United
States. Foreign securities settlements may in some instances be subject to
delays and related administrative uncertainties that could result in temporary
periods when assets of a Fund are uninvested and no return is earned thereon and
may involve a risk of loss to that Fund. Foreign securities markets have
substantially less volume than domestic securities exchanges and securities of
some foreign companies are less liquid and more volatile than securities of
comparable domestic companies. Brokerage commissions and other transaction costs
on foreign securities exchanges are generally higher than in the United States.
Dividends and interest paid by foreign issuers may be subject to withholding and
other foreign taxes, which may decrease the net return on foreign investments as
compared to dividends and interest paid to a Fund by domestic companies.
Additional risks include future political and economic developments, the
possibility that a foreign jurisdiction might impose or change withholding taxes
on income payable with respect to foreign securities, the possible seizure,
nationalization or expropriation of the foreign issuer or foreign deposits (in
which a Fund could lose its entire investment in a certain market) and the
possible adoption of foreign governmental restrictions such as exchange
controls. There can be no assurance that a Fund's foreign investments will
present less risk then a portfolio of domestic securities.
Foreign Currency. Investments in foreign securities will usually
be denominated in foreign currency, and a Fund may contemporarily hold funds in
foreign currencies. The value of a Fund's investments denominated in foreign
currencies may be affected, favorably or unfavorably, by the relative strength
of the U.S. dollar, changes in foreign currency and U.S. dollar exchange rates
and exchange control regulations. A Fund may incur costs in connection with
conversions between various currencies. A Fund's net asset value per share will
be affected by changes in currency exchange rates. Changes in foreign currency
exchange rates may also affect the value of dividends and interest earned, gains
and losses realized on the sale of securities and net investment income
915866.4
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<PAGE>
and gains, if any, to be distributed to shareholders by a Fund. The rate of
exchange between the U.S. dollar and other currencies is determined by the
forces of supply and demand in the foreign exchange markets (which in turn are
affected by interest rates, trade flow and numerous other factors, including, in
some countries, local governmental intervention).
4. U.S. Government Obligations. U.S. Government obligations are
obligations that are backed by the full faith and credit of the United States,
by the credit of the issuing or guaranteeing agency or by the agency's right to
borrow from the U.S. Treasury. They include (i) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance as
follows: U.S. Treasury bills (maturity of one year or less), U.S. Treasury notes
(maturity of one year or ten years), U.S. Treasury bonds (generally maturities
of more than ten years), and (ii) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities that are supported by the full faith
and credit of the United States (such as securities issued by the Government
National Mortgage Association, the Federal Housing Administration, the
Department of Housing and Urban Development, the Export-Import Bank, the General
Services Administration and the Maritime Administration, and certain securities
issued by the Farmers' Home Administration and the Small Business
Administration, most of which are explained below under the section entitled
"Mortgage-Backed Securities"). The maturities of U.S. Government obligations
usually range from three months to thirty years.
5. Repurchase Agreements. When a Fund purchases securities, it may
enter into a repurchase agreement with the seller wherein the seller agrees, at
the time of sale, to repurchase the security at a mutually agreed upon time and
price. A Fund may enter into repurchase agreements with member banks of the
Federal Reserve System and with broker-dealers who are recognized as primary
dealers in United States Government securities by the Federal Reserve Bank of
New York. Although the securities subject to the repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be more
than 397 days after the Fund's acquisition of the securities and normally would
be within a shorter period of time. The resale price will be in excess of the
purchase price, reflecting an agreed upon market rate effective for the period
of time the Fund's money will be invested in the security, and will not be
related to the coupon rate of the purchased security. At the time a Fund enters
into a repurchase agreement the value of the underlying security, including
accrued interest, will be equal to or exceed the value of the repurchase
agreement, and, in the case of a repurchase agreement exceeding one day, the
seller will agree that the value of the underlying security, including accrued
interest, will at all times be equal to or exceed the value of the repurchase
agreement. A Fund may engage in a repurchase agreement with respect to any
security in which it is authorized to invest, even though the underlying
security may mature in more than one year. The collateral securing the seller's
obligation must be of a credit quality at least equal to a Fund's investment
criteria for securities in which it invests and will be held by the Custodian or
in the Federal Reserve Book Entry System.
For purposes of the Investment Company Act of 1940, as amended
(the "1940 Act"), a repurchase agreement is deemed to be a loan from a Fund to
the seller subject to the repurchase agreement and is therefore subject to the
Fund's investment restriction applicable to loans. It is not clear whether a
court would consider the securities purchased by a Fund subject to a repurchase
agreement as being owned by the Fund or as being collateral for a loan by the
Fund to the seller. In the event of the commencement of bankruptcy or insolvency
proceedings with respect to the seller of the securities before repurchase of
the security under a repurchase agreement, a Fund may encounter a delay and
incur costs before being able to sell the security. Delays may involve loss of
interest or decline in price of the security. If the court characterized the
transaction as a loan and the Fund has not perfected a security interest in the
security, the Fund may be required to return the security to the seller's estate
and be treated as an unsecured creditor of the seller. As an unsecured creditor,
a Fund would be at the risk of losing some or all of the principal and income
involved in the transaction. As with any unsecured debt obligation purchased for
a Fund, the Adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller. Apart from the risk of bankruptcy or insolvency proceedings, there is
also the risk that the seller may fail to repurchase the security, in which case
the Fund may incur a loss if the proceeds of the sale to a third party are less
than the repurchase price. However, if the market value of the securities
subject to the
915866.4
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<PAGE>
repurchase agreement becomes less than the repurchase price (including
interest), the Fund involved will direct the seller of the security to deliver
additional securities so that the market value of all securities subject to the
repurchase agreement will equal or exceed the repurchase price. It is possible
that a Fund will be unsuccessful in seeking to impose on the seller a
contractual obligation to deliver additional securities.
6. Hedging Transactions. The Funds may, but do not currently
intend to, enter into hedging transactions. Hedging is a means of transferring
risk which an investor does not desire to assume during an uncertain market
environment. The Funds are permitted to enter into the transactions solely (a)
to hedge against changes in the market value of portfolio securities or (b) to
close out or offset existing positions. The transactions must be appropriate to
reduction of risk; they cannot be for speculation. In particular, the Funds may
write covered call options on securities or stock indices. By writing call
options, a Fund limits its profit to the amount of the premium received. By
writing a covered call option, a Fund assumes the risk that it may be required
to deliver the security having a market value higher than its market value at
the time the option was written. The Funds will not write options if immediately
after such sale the aggregate value of the obligations under the outstanding
options would exceed 25% of a Fund's net assets.
To the extent the Funds use hedging instruments which do not
involve specific portfolio securities, offsetting price changes between the
hedging instruments and the securities being hedged will not always be possible,
and market value fluctuations of the Fund may not be completely eliminated. When
using hedging instruments that do not specifically correlate with securities in
a Fund, the Adviser will attempt to create a very closely correlated hedge.
Short Sales. The Funds may make short sales of securities
"against-the-box." A short sale "against-the-box" is a sale of a security that a
Fund either owns an equal amount of or has the immediate and unconditional right
to acquire at no additional cost. The Funds will make short sales
"against-the-box" as a form of hedging to offset potential declines in long
positions in the same or similar securities.
7. Options Transactions. The Funds may, but do not currently
intend to, enter into options transactions. The Funds may purchase call and put
options on securities and on stock indices in an attempt to hedge its portfolio
and to increase its total return. Call options may be purchased when it is
believed that the market price of the underlying security or index will increase
above the exercise price. Put options may be purchased when the market price of
the underlying security or index is expected to decrease below the exercise
price. The Funds may also purchase all options to provide a hedge against an
increase in the price of a security sold short by it. When a Fund purchases a
call option, it will pay a premium to the party writing the option and a
commission to the broker selling the option. If the option is exercised by a
Fund, the amount of the premium and the commission paid may be greater than the
amount of the brokerage commission that would be charged if the security were
purchased directly.
In addition, the Funds may write covered call options on
securities or stock indices. By writing options, the Funds limit their profits
to the amount of the premium received. By writing a call option, a Fund assumes
the risk that it may be required to deliver the security at a market value
higher than its market value at the time the option was written plus the
difference between the original purchase price of the stock and the strike
price. By writing a put option, a Fund assumes the risk that it may be required
to purchase the underlying security at a price in excess of its current market
value.
8. Lending of Securities. The Funds may, but do not currently
intend to, lend their portfolio securities to qualified institutions as
determined by the Adviser. By lending its portfolio securities, a Fund attempts
to increase its income through the receipt of interest on the loan. Any gain or
loss in the market price of the securities loaned that may occur during the term
of the loan will be for the account of the Fund in such transaction. A Fund will
not lend portfolio securities if, as a result, the aggregate of such loans
exceeds 33% of the value of its total assets (including such loans). All
relevant facts and circumstances, including the creditworthiness of the
qualified institution, will be monitored by the Adviser, and will be considered
in making decisions with respect to
915866.4
-5-
<PAGE>
lending of securities, subject to review by the Company's Board of Directors.
The Funds may pay reasonable negotiated fees in connection with loaned
securities, so long as such fees are set forth in a written contract and their
reasonableness is determined by the Company's Board of Directors.
9. Variable-Amount Master Demand Notes. The Funds may purchase
variable amount master demand notes ("VANs"). VANs are debt obligations that
provide for a periodic adjustment in the interest rate paid on the instrument
and permit the holder to demand payment of the unpaid principal balance plus
accrued interest at specified intervals upon a specified number of days' notice
either from the issuer or by drawing on a bank letter of credit, a guarantee,
insurance or other credit facility issued with respect to such instrument.
The VANs in which the Funds may invest are payable on not more
than seven calendar days' notice either on demand or at specified intervals not
exceeding one year depending upon the terms of the instrument. The terms of the
instruments provide that interest rates are adjustable at intervals ranging from
daily to up to one year and their adjustments are based upon the prime rate of a
bank or other appropriate interest rate adjustment index as provided in the
respective instruments. Each Fund will decide which variable rate demand
instruments it will purchase in accordance with procedures prescribed by the
Company's Board of Directors to minimize credit risks.
The VANs that the Funds may invest in include participation
certificates purchased by a Fund from banks, insurance companies or other
financial institutions in fixed or variable rate, or taxable debt obligations
(VANs) owned by such institutions or affiliated organizations. A participation
certificate gives a Fund an undivided interest in the obligation in the
proportion that the Fund's participation interest bears to the total principal
amount of the obligation and provides the demand repurchase feature described
below. Where the institution issuing the participation does not meet a Fund's
high quality standards, the participation is backed by an irrevocable letter of
credit or guaranty of a bank (which may be a bank issuing a confirming letter of
credit, or a bank serving as agent of the issuing bank with respect to the
possible repurchase of the certificate of participation or a bank serving as
agent of the issuer with respect to the possible repurchase of the issue) or
insurance policy of an insurance company that the Board of Directors of the
Company has determined meets the prescribed quality standards for the Fund. A
Fund has the right to sell the participation certificate back to the institution
and, where applicable, draw on the letter of credit, guarantee or insurance
after no more than 30 days' notice either on demand or at specified intervals
not exceeding 397 days (depending on the terms of the participation), for all or
any part of the full principal amount of the Fund's participation interest in
the security, plus accrued interest. The Funds intend to exercise the demand
only (1) upon a default under the terms of the bond documents, (2) as needed to
provide liquidity to a Fund in order to make redemptions of a Fund's shares, or
(3) to maintain a high quality investment portfolio. The institutions issuing
the participation certificates will retain a service and letter of credit fee
(where applicable) and a fee for providing the demand repurchase feature, in an
amount equal to the excess of the interest paid on the instruments over the
negotiated yield at which the participations were purchased by a Fund. The total
fees generally range from 5% to 15% of the applicable prime rate* or other
interest rate index. With respect to insurance, the Funds will attempt to have
the issuer of the participation certificate bear the cost of the insurance,
although the Funds retain the option to purchase insurance if necessary, in
which case the cost of insurance will be an expense of the Funds subject to the
expense limitation on investment company expenses prescribed by any state in
which a Fund's shares are qualified for sale. The Adviser has been instructed by
the Company's Board of Directors to continually monitor the pricing, quality and
liquidity of the variable rate demand instruments held by the Fund, including
the participation certificates, on the basis of published financial information
and reports of the rating agencies and other bank
- -------------------------
* The "prime rate" is generally the rate charged by a bank to its most
creditworthy customers for short term loans. The prime rate of a particular
bank may differ from other banks and will be the rate announced by each
bank on a particular day. Changes in the prime rate may occur with great
frequency and generally become effective on the date announced.
915866.4
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<PAGE>
analytical services to which the Fund may subscribe. Although these instruments
may be sold by the Funds, the Funds intend to hold them until maturity, except
under the circumstances stated above.
While the value of the underlying variable rate demand instruments
may change with changes in interest rates generally, the variable rate nature of
the underlying variable rate demand instruments should minimize changes in value
of the instruments. Accordingly, as interest rates decrease or increase, the
potential for capital appreciation and the risk of potential capital
depreciation is less than would be the case with a portfolio of fixed income
securities. The Funds may contain VANs on which stated minimum or maximum rates,
or maximum rates set by state law, limit the degree to which interest on such
VANs may fluctuate. To the extent that a Fund holds VANs with these limits,
increases or decreases in value may be somewhat greater than would be the case
without such limits. In the event that interest rates increased so that the
variable rate exceeded the fixed-rate on the obligations, the obligations could
no longer be valued at par and this may cause a Fund to take corrective action,
including the elimination of the instruments. Because the adjustment of interest
rates on the VANs is made in relation to movements of the applicable banks'
"prime rate," or other interest rate adjustment index, the VANs are not
comparable to long-term fixed-rate securities. Accordingly, interest rates on
the VANs may be higher or lower than current market rates for fixed-rate
obligations or obligations of comparable quality with similar maturities.
For purposes of determining whether a VAN held by a Fund matures
within 397 days from the date of its acquisition, the maturity of the instrument
will be deemed to be the longer of (1) the period required before the Fund is
entitled to receive payment of the principal amount of the instrument or (2) the
period remaining until the instrument's next interest rate adjustment. If a
variable rate demand instrument ceases to meet the investment criteria of a
Fund, it will be sold in the market or through exercise of the repurchase
demand.
C. FUND POLICIES - INVESTMENT RESTRICTIONS
Each Fund has adopted the following fundamental investment
restrictions which may not be changed unless approved by a majority of a Fund's
outstanding shares. As used in this SAI, the term "majority of the outstanding
shares" of a Fund means, respectively, the vote of the lesser of (i) 67% or more
of the shares of the Fund present at the meeting, if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii) more
than 50% of the outstanding shares of the Fund.
Each Fund may not:
(1) Make portfolio investments other than as described herein or
any other form of investment, where applicable, which meets
the Fund's investment criteria, as determined by the Adviser
and the Board of Directors, and which is consistent with the
Fund's objective and policies.
(2) Borrow money. This restriction shall not apply to borrowing
from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests that
might otherwise require the untimely disposition of
securities, in an amount up to one-third of the value of the
Fund's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at
the time the borrowing was made. While borrowings exceed 5% of
the value of the Fund's total assets, the Fund will not
purchase additional securities. Interest paid on borrowings
will reduce net income. 300% asset coverage is maintained at
all times.
(3) Mortgage, pledge or hypothecate any assets except that the
Fund may pledge not more than one-third of its total assets
to secure borrowings made in accordance with paragraph (2)
above. However, although not a fundamental policy of the Fund,
as a matter of operating policy in order to comply with
certain state statutes, the Fund will not pledge its assets in
excess of an amount equal to 15% of net assets.
915866.4
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<PAGE>
(4) Sell securities short, except short sales "against-the-box,"
or purchase securities on margin, or engage in the purchase
and sale of put, call, straddle or spread options or in
writing such options, except to the extent permitted in the
Prospectus or this SAI or, to the extent that securities
subject to a demand obligation and stand-by commitments may be
purchased as set forth under "Description of the Funds and
Their Investments and Risks."
(5) Underwrite the securities of other issuers, except insofar as
the Fund may be deemed an underwriter under the Securities Act
of 1933 in disposing of a portfolio security.
(6) Invest more than an aggregate of 15% of its net assets in
repurchase agreements maturing in more than seven days,
variable rate demand instruments exercisable in more than
seven days, securities that are not readily marketable or are
illiquid investments. Such Securities include foreign
securities and bank participation interests for which a
readily available market does not exist, except as described
in the Fund's Prospectus.
(7) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas
interests, but this shall not prevent the Fund from investing
in Government obligations secured by real estate or interests
in real estate.
(8) Make loans to others, except through the purchase of portfolio
investments, including repurchase agreements, exceeding in the
aggregate one-third of the market value of the Fund's total
assets less liabilities other than obligations created by
these transactions as described under "Description of the
Funds and Their Investments and Risks."
(9) Invest more than 25% of its assets in the securities of
"issuers" in any single industry, except in the technology and
science areas as set forth under "Investment Objectives,
Principal Investment Strategies and Related Risks" in the
Prospectuses, provided also that there shall be no limitation
on the Fund to purchase obligations issued or guaranteed by
the United States Government, its agencies or
instrumentalities. When the assets and revenues of an agency,
authority, instrumentality or other political subdivision are
separate from those of the government creating the issuing
entity and a security is backed only by the assets and
revenues of the entity, the entity would be deemed to be the
sole issuer of the security. Similarly, in the case of an
industrial revenue bond, if that bond is backed only by the
assets and revenues of the non-governmental issuer, then such
non-governmental issuer would be deemed to be the sole issuer.
If, however, in either case, the creating government
guarantees a security, such a guarantee would be considered a
separate security and would be treated as an issue of such
government.
(10) Invest in securities of other investment companies, except (i)
the Fund may purchase unit investment trust securities where
such unit investment trusts meet the investment objective of
the Fund and then only up to 5% of the Fund's net assets,
except as they may be acquired as part of a merger,
consolidation or acquisition of assets and (ii) as permitted
by Section 12(d) of the 1940 Act.
(11) Issue senior securities except insofar as the Fund may be
deemed to have issued a senior security in connection with any
permitted borrowing.
A Fund will not be in violation of any maximum percentage
limitation when the change in the percentage of the Fund's held holdings is due
to a change in value of the Fund's securities. This qualification does not apply
to the restriction on a Fund's ability to purchase additional securities when
borrowings earn 5% of the value of the Fund's total assets. Investment
restrictions that involve a maximum percentage of securities or assets
915866.4
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<PAGE>
will be violated, however, if an excess over the percentage occurs immediately
after, and is caused by, an acquisition of securities or assets of, or
borrowings by, a Fund.
D. TEMPORARY DEFENSIVE POSITIONS
When the Adviser believes that market conditions warrant a
temporary defensive position, each Fund may invest up to 100% of its assets in
short-term instruments such as commercial paper, bank certificates of deposit,
bankers' acceptances, variable rate demand instruments or repurchase agreements
for such securities and securities of the U.S. Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. Investments in domestic bank certificates of deposit and bankers'
acceptances will be limited to banks that have total assets in excess of $500
million and are subject to regulatory supervision by the U.S. Government or
state governments. A Fund's investments in foreign short-term instruments will
be limited to those that, in the opinion of the Adviser, equate generally to the
standards established for U.S. short-term instruments.
E. PORTFOLIO TURNOVER
It is anticipated that the portfolio turnover for each Fund will
not exceed [to be provided].
III. MANAGEMENT OF THE FUNDS
The Company's Board of Directors is responsible for the overall
management and supervision of the Funds. Pursuant to the terms of an Investment
Advisory Agreement, Amerindo Investment Advisors, Inc. (the "Adviser" or
"Amerindo") serves as the investment adviser to the Funds. The Adviser
supervises all aspects of the Funds' operations and provides investment advice
and portfolio management services to the Funds. Subject to the Board's
supervision, the Adviser makes all of the day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages the
portfolio investments.
The directors and officers of the Company and their principal
occupations during the past five years are set forth below. Their titles may
have varied during this period. Asterisks indicate that those directors are
"interested persons" (as defined in the 1940 Act) of the Company.
OFFICERS AND DIRECTORS OF THE COMPANY
<TABLE>
<S> <C>
ALBERTO W. VILAR * Mr. Vilar has been Chairman of the Board of Directors and
Amerindo Investment Advisors Inc. Chief Executive Officer of the Company since its inception.
One Embarcadero He began his career with Citibank N.A. in New York in
Suite 2300 1964 and worked there as an International Credit Officer
San Francisco, CA 94111 until 1967. From 1967 to 1971, he served as Vice
399 Park Avenue President, Portfolio Manager and Manager of the
22nd Floor Investment Management Division of Drexel Burnham
New York, NY 10022 Lambert in New York. From 1971 to 1973, he served as
(59) Executive Vice President, Portfolio Manager and Director
of Equity Strategy at M.D. Sass Investor Services in New
York. In 1973, he became Vice President and Portfolio
Manager of Endowment Management & Research
Corporation in Boston. From 1977 to 1979, he served as
</TABLE>
- -----------------------
* "Interested person" of the Fund, as defined in the Investment Company Act.
915866.4
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<PAGE>
<TABLE>
<S> <C>
Senior Vice President, Director of Research, Chief
Investment Strategist and Partnership Manager of the
Boston Company in Boston. He founded the predecessors
of Amerindo Advisors (U.K.) Limited and Amerindo
Investment Advisors, Inc. (Panama) in 1979 and has served
since then as a Principal Portfolio Manager. He holds the
degrees of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from Iona College, and he
completed the Doctoral Studies Program in Economics at
New York University. Mr. Vilar was awarded an Honorary
Doctorate of Humanities Degree from Washington &
Jefferson College. He has been a Chartered Financial
Analyst since 1975.
DR. GARY A. TANAKA* Dr. Tanaka has been a Director and President of the
Amerindo Investment Advisors Inc. Company since its inception. He served as a Portfolio
43 Upper Grosvenor Street Manager for Crocker Bank in San Francisco from 1971 to
London, England W1X9PG 1977, and as a Partnership Manager for Crocker Investment
(56) Management Corp. in San Francisco from 1978 to 1980.
From 1975 to 1980, he also served as a Consultant to
Andron Cechettini & Associates in San Francisco. In 1980,
he joined the predecessors of Amerindo Advisors (U.K.)
Limited and Amerindo Investment Advisors, Inc. (Panama)
as a Principal Portfolio Manager and has served in this
position since that time. Dr. Tanaka holds the degrees of
B.S. in Mathematics from Massachusetts Institute of
Technology and Ph.D. in Applied Mathematics from
Imperial College, University of London.
DR. JOHN RUTLEDGE Dr. Rutledge has been a Director of the Company since its
Rutledge & Company, Inc. inception. He also has been Chairman of Rutledge &
One Greenwich Office Park Company, Inc., a merchant banking firm, since 1991 and
Greenwich, CT 06831 serves as a director of Earle M. Jorgensen Company,
(52) Lazard Freres Funds, Fluidrive, Inc., General Medical
Corporation, Medical Specialties Group, United
Refrigerated Services, Inc. and Utenduhl Capital
Partners and is a special advisor to Kelso &
Companies, Inc. He is the author of books and
investment publications, writes a monthly column in
Forbes Magazine and is a frequent contributor to
periodicals.
JUDE T. WANNISKI Mr. Wanniski has been a Director of the Company since its
Polyconomics, Inc. inception. He also has been president of Polyconomics,
86 Maple Avenue Inc. since 1978 and serves as a director for Repap
Morristown, NJ 07960 Enterprises Inc.
(63)
</TABLE>
- ---------------------
* "Interested person" of the Company, as defined in the 1940 Act.
915866.4
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<PAGE>
<TABLE>
<S> <C>
DANA E. SMITH Ms. Smith has been the Vice President of and Treasurer to
Amerindo Investment Advisors Inc. the Company since its inception. She has been the Chief
22nd Floor Compliance Officer of Amerindo Investment Advisors Inc.
399 Park Avenue since April 1993. From December 1991 to March 1993,
New York, NY 10022 she was a Mutual Fund Marketing Associate at Lazard
(40) Freres Asset Management and an officer of The Lazard
Funds, Inc.
ANTHONY CIULLA Mr. Ciulla has been Vice President of the Company since
Amerindo Investment Advisors Inc. its inception. He has been the Senior Trader of Amerindo
One Embarcadero Investment Advisers Inc. since October 1, 1990.
Suite 2300
San Francisco, CA 94111
(67)
</TABLE>
COMPENSATION TABLE
(For Fiscal Year Ended October 31, 1999)
<TABLE>
<CAPTION>
Aggregate Pension or Retirement
Name of Person and Compensation Benefits Accrued as Part Estimated Annual Benefit Total Compensation
Position with Company From Company of Company Expenses Upon Retirement From the Company
---------------------- ------------ ------------------- --------------- ----------------
<S> <C> <C> <C> <C>
Alberto W. Vilar $ 0 $ 0 $ 0 $ 0
Director
Dr. Gary A. Tanaka 0 0 0 0
Director
Dr. John Rutledge 30,000 0 0 30,000
Director
Jude T. Wanniski 30,000 0 0 30,000
Director
</TABLE>
Each Director who is not an interested person of the Company receives a base
annual fee of $25,000 which is paid by the Company, plus $1,250 for each meeting
attended.
Code of Ethics
The Company, the Adviser and the Distributor have each adopted a
Code of Ethics under Rule 17j-1 of the 1940 Act. The Code of Ethics for the
Company and the Adviser (the "Code") restricts the personal investing activities
of certain Access Persons and others, as defined in the Code. The primary
purpose of the Code is to ensure that these investing activities do not
disadvantage the Funds. Such Access Persons are generally required to preclear
security transactions with the Company's Compliance Officer or his designee and
to report all transactions on a regular basis. The Compliance Officer or
designee has the responsibility for interpreting the provisions of the Code, for
adopting and implementing Procedures for the enforcement of the provisions of
the Code, and for determining whether a violation has occurred. In the event of
a finding that a violation has occurred, the Compliance Officer or designee
shall take appropriate action. The Company and the Adviser have developed
procedures for administration of the Code. [Add in details of Distributor's Code
of Ethics]
915866.4
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<PAGE>
IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On April 30, 2000, there were no shares outstanding of any Class of the
Funds.
V. INVESTMENT ADVISORY AND OTHER SERVICES
A. INVESTMENT ADVISER
1. General Information. Amerindo Investment Advisors Inc., a
registered investment adviser, is a California corporation, with its principal
office located at One Embarcadero, Suite 2300, San Francisco, California 94111.
The Adviser serves as the investment adviser of the Funds pursuant to an
Investment Advisory Agreement entered into by each Fund on behalf of each Class.
The Adviser supervises all aspects of the Funds' operations and provides
investment advice and portfolio management services to the Funds. Pursuant to
the Advisory Agreement and subject to the supervision of the Company's Board of
Directors, the Adviser makes each Fund's day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages the
Funds' investments.
The Adviser provides persons satisfactory to the Board of
Directors of the Company to serve as officers of the Company. Such officers, as
well as certain other employees and directors of the Company, may be directors,
officers or employees of the Adviser or its affiliates.
The Adviser may also provide the Funds with supervisory personnel
who will be responsible for supervising the performance of administrative
services, accounting and related services, net asset value and yield
calculation, reports to and filings with regulatory authorities, and services
relating to such functions. However, the Administrator will provide personnel
who will be responsible for performing the operational components of such
services. The personnel rendering such supervisory services may be employees of
the Adviser, of its affiliates or of other organizations.
The Advisory Agreement was approved on May __, 2000 by the Board
of Directors, including a majority of the directors who are not interested
persons (as defined in the Investment Company Act of 1940, as amended) of the
Company or the Adviser. The Agreement, which currently extends to May __, 2002,
may be continued in force thereafter for successive twelve-month periods
beginning each May 30th, provided that such continuance is specifically approved
annually by majority vote of each Fund's outstanding voting securities or by the
Board of Directors, and in either case by a majority of the directors who are
not parties to the Advisory Agreement or interested persons of any such party,
by votes cast in person at a meeting called for the purpose of voting on such
matter.
The Advisory Agreement is terminable without penalty by a Fund on
sixty days' written notice when authorized either by majority vote of the
outstanding voting shares of a Fund or by a vote of a majority of the Company's
Board of Directors, or by the Adviser on sixty days' written notice, and will
automatically terminate in the event of its assignment. The Advisory Agreement
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or of reckless disregard of its
obligations thereunder, the Adviser shall not be liable for any action or
failure to act in accordance with its duties thereunder.
2. Adviser's Fees. Pursuant to the terms of the Advisory
Agreement, the Funds, on behalf of each Class, will pay an annual advisory fee
paid monthly equal to 1.50% of each Fund's average daily net assets. [Disclosure
re: Expense Limitation to come]
This fee is higher than the fee paid by most other mutual funds;
however, the Board of Directors believes that this fee is reasonable in light of
the advisory services performed by the Adviser for the Funds. Any
915866.4
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<PAGE>
portion of the advisory fees received by the Adviser may be used by the Adviser
to provide investor and administrative services and for distribution of a Fund's
shares.
Expense Limitation. From time to time, the Adviser may voluntarily
assume certain expenses of a Fund. This would have the effect of lowering the
overall expense ratio and of increasing yield to investors. Subject to any such
voluntary assumption of certain expenses by the Adviser, the Funds have, under
the Advisory Agreement, confirmed their obligation for payment of all other
expenses, including without limitation: (i) fees payable to the Adviser,
Administrator, Custodian, Transfer Agent and Dividend Agent; (ii) brokerage and
commission expenses; (iii) Federal, state or local taxes, including issuance and
transfer taxes incurred by or levied on it; (iv) commitment fees, certain
insurance premiums and membership fees and dues in investment company
organizations; (v) interest charges on borrowings; (vi) telecommunications
expenses; (vii) recurring and non-recurring legal and accounting expenses;
(viii) costs of organizing and maintaining the Company's existence as a
corporation; (ix) compensation, including directors' fees, of any directors,
officers or employees who are not also officers of the Adviser or its affiliates
and costs of other personnel providing administrative and clerical services; (x)
costs of stockholders' services and costs of stockholders' reports, proxy
solicitations, and corporate meetings; (xi) fees and expenses of registering its
shares under the appropriate Federal securities laws and of qualifying its
shares under applicable state securities laws, including expenses attendant upon
the initial registration and qualification of these shares and attendant upon
renewals of, or amendments to, those registrations and qualifications; and (xii)
expenses of preparing, printing and delivering the Prospectus to existing
shareholders and of printing shareholder application forms for shareholder
accounts.
The Funds may from time-to-time hire their own employees or
contract to have management services performed by third parties, and the
management of the Funds intends to do so whenever it appears advantageous to the
Funds. A Fund's expenses for employees and for such services are among the
expenses subject to the expense limitation described above.
B. THE DISTRIBUTION AND SERVICE PLAN
The Company, on behalf of each Class of each Fund, has adopted a
distribution and service plan (the "Plan"), pursuant to Rule 12b-1 under the
1940 Act (the "Rule"). The Rule provides that an investment company which bears
any direct or indirect expense of distributing its shares must do so only in
accordance with a plan permitted by the Rule. Pursuant to the Plan, the Company
and the Distributor have entered into a Distribution Agreement (with respect to
all classes), and the Company and the Adviser have entered into a Shareholder
Servicing Agreement.
The Plan provides that each Class of each Fund will compensate the
Distributor or the Adviser for certain expenses and costs incurred in connection
with providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of any Class of shares of the Funds for providing servicing to their
clients ("Shareholder Servicing Fee"). These fees are subject to a maximum of
0.25% per annum of each Class' average daily net assets. The Plan also provides
that the Distributor is paid a fee (an asset based sales charge) equal to 0.75%
of the Class C shares' average daily net assets on an annual basis to permit it
to make payments to broker-dealers and other financial institutions with which
it has written agreements and whose clients are Fund shareholders (each a
"broker-dealer") for providing distribution assistance and promotional support
to the Funds. Fees paid under the Plan may not be waived for individual
shareholders.
The Plan, the Shareholder Servicing Agreement and the Distribution
Agreement each provide that the Adviser and the Distributor may make payments
from time to time from their own resources which may include the advisory fee
and the asset based sales charges and past profits for the following purposes:
(i) to defray the costs of and to compensate others, including financial
intermediaries with whom the Distributor or the Adviser has entered into written
agreements, for performing shareholder servicing and related administrative
functions of each
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Class; to compensate certain financial intermediaries for providing assistance
in distributing Class shares; (ii) to pay the costs of printing and distributing
the Funds' Prospectuses to prospective investors; and (iii) to defray the cost
of the preparation and printing of brochures and other promotional materials,
mailings to prospective shareholders, advertising, and other promotional
activities, including the salaries and/or commissions of sales personnel in
connection with the distribution of the Funds' shares. Further, the Agreements
provide that the Adviser may use its service fee for the purposes enumerated in
(i) above and any asset based sales charges paid to the Distributor also may be
used for purposes of (ii) or (iii) above. The Distributor or the Adviser, as the
case may be, in their sole discretion, will determine the amount of such
payments made pursuant to the Plan with the shareholder servicing agents and
broker-dealers with whom they have contracted, provided that such payments made
pursuant to the Plan will not increase the amount which a Class is required to
pay the Distributor or the Adviser for any fiscal year under the shareholder
servicing agreements or otherwise.
Shareholder servicing agents and broker-dealers may charge
investors a fee in connection with their use of specialized purchase and
redemption procedures offered to investors by the shareholder servicing agents
and broker-dealers. In addition, shareholder servicing agents and broker-dealers
offering purchase and redemption procedures similar to those offered to
shareholders who invest in the Funds directly may impose charges, limitations,
minimums and restrictions in addition to or different from those applicable to
shareholders who invest in the Funds directly. Accordingly, the net yield to
investors who invest through shareholder servicing agents and broker-dealers may
be less than realized by investing in the Funds directly. An investor should
read the Prospectus in conjunction with the materials provided by the
shareholder servicing agent and broker-dealer describing the procedures under
which Fund shares may be purchased and redeemed through the shareholder
servicing agent and broker-dealer.
Under the Plan, each shareholder servicing agent and broker-dealer
will, as agent for its customers, among other things: (i) answer customer
inquiries regarding account status and history, the manner in which purchases
and redemptions of shares of each Class of the Fund may be effected and certain
other matters pertaining to the Fund; (ii) assist shareholders in designating
and changing dividend options, account designations and addresses; (iii) provide
necessary personnel and facilities to establish and maintain shareholder
accounts and records; assist in processing purchase and redemption transactions;
(iv) arrange for the wiring of funds; (v) transmit and receive funds in
connection with customer orders to purchase or redeem shares; (vi) verify and
guarantee shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts; (vii) furnish
quarterly and year-end statements and confirmations within five business days
after activity in the account; (viii) transmit to shareholders of each Class
proxy statements, annual reports, updated prospectuses and other communications;
(ix) receive, tabulate and transmit proxies executed by shareholders with
respect to meetings of shareholders of the Fund; and (x) provide such other
related services as the Funds or a shareholder may request.
In accordance with the Rule, the Plan provides that all written
agreements relating to the Plan entered into by the Company, on behalf of each
Class, the distributor or the Adviser, and the shareholder servicing agents,
broker-dealers, or other organizations, must be in a form satisfactory to the
Company's Board of Directors. In addition, the Plan requires the Funds and the
Distributor to prepare, at least quarterly, written reports setting forth all
amounts expended for distribution purposes by the Funds and the Distributor
pursuant to the Plan and identifying the distribution activities for which those
expenditures were made.
C. ADMINISTRATOR
1. General Information. The Company, on behalf of each Fund, and
SEI Investment Mutual Funds Services (the "Administrator") have entered into an
Administrative Agreement effective __________, 2000.
The Administrator, a Delaware business trust, has its principal
business offices at One Freedom Valley Drive, Oaks, Pennsylvania 19456. SEI
Investment Management Corporation ("SIMC"), a wholly-owned
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subsidiary of SEI Investment Company ("SEI Investments"), is the owner of all
beneficial interests in the Administrator. SEI Investments and its affiliates,
including the Administrator, are leading providers of funds evaluation services,
trust accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. The Administrator and
its affiliates also serve as administrator or sub- administrator to over 34
mutual funds.
Pursuant to the Administration Agreement, the Administrator
provides all administrative services necessary for the Funds, other than those
provided by the Adviser, subject to the supervision of the Company's Board of
Directors. The Administrator will provide persons to serve as officers of the
Company. Such officers may be directors, officers or employees of the
Administrator or its affiliates.
The Administration Agreement shall remain in effect for five years
commencing ______, 2000 (the "Initial Term") and each renewal term of two years
each (each, a "Renewal Term"), unless terminated (a) by the mutual written
agreement of the Company and the Administrator; (b) by either the Company or the
Administrator on 90 days' written notice, as of the end of the Initial Term or
the end of any Renewal Term; (c) by either the Company or the Administrator on
such date as is specified in written notice given by the terminating party, in
the event of a material breach of the Agreement by the other party, provided the
terminating party has notified the other party of such breach at least 45 days
prior to the specified date of termination and the breaching party has not
remedied such breach by the specified date; (d) effective upon the liquidation
of the Administrator; or (e) as to any Fund or the Company, effective upon the
liquidation of such Fund or the Company as the case may be. The Agreement shall
not be assignable by the Administrator, without the prior written consent of the
Company, except to an entity that is controlled by, or under common control,
with the Administrator. The Agreement also provides that the Administrator shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by a Fund in connection with the matters to which the Administration
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the Administrator in the performance of its
duties or from reckless disregard by it of its duties and obligations
thereunder.
Under the Administration Agreement, the Administrator performs or
supervises the performance by others of other administrative services in
connection with the operations of the Funds, and, on behalf of the Funds,
investigates, assists in the selection of and conducts relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Funds' operations. The
Administrator provides the Directors of the Company with such reports regarding
investment performance as they may reasonably request but shall have no
responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder.
The Administrator provides the Funds with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Directors' meetings) for handling
the affairs of the Funds and such other services as the Directors may, from time
to time, reasonably request and the Administrator shall, from time to time,
reasonably determine to be necessary to perform its obligations under the
Agreement. In addition, at the request of the Board of Directors, the
Administrator shall make reports to the Directors concerning the performance of
its obligations hereunder.
2. Administrator's Fees. For the services rendered to the Funds by
the Administrator, the Fund pays the Administrator a monthly fee based on each
Fund's average net assets.
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Calculation of Administrator's Monthly Fee
Fund's Net Assets Fee
- ------------------------------------------------------ ----------------------
Up to $250 million .125%
Next $250 million .09%
Next $500 million .07%
On assets over $1 Billion .05%
- ------------------------------------------------------ ----------------------
D. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
The Northern Trust Company, 50 S. Lasalle Street, Chicago,
Illinois 60675, serves as custodian for the Funds' cash and securities. Pursuant
to a Custodian Agreement with the Company, on behalf of the Funds, it is
responsible for maintaining the books and records of each Fund's portfolio
securities and cash. The Custodian does not assist in, and is not responsible
for, investment decisions involving assets of the Funds. Forum Shareholder
Services LLC also acts as the Funds' transfer and dividend agent. Forum
Shareholder Services LLC has its principal office at 2 Portland Square,
Portland, Maine 04101.
E. COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the issuance of shares of common
stock of the Company are passed upon by Battle Fowler LLP, 75 East 55th Street,
New York, NY 10022. Morrison, Brown, Argiz & Company, 1001 Brickel Bay Drive,
9th Floor, Miami, Florida 33131, have been selected as auditors for the Funds.
VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
The Adviser makes the Funds' portfolio decisions. In the
over-the-counter market, where a majority of the portfolio securities are
expected to be traded, orders are placed with responsible primary market-makers
unless a more favorable execution or price is believed to be obtainable.
Regarding exchange-traded securities, the Adviser determines the broker to be
used in each specific transaction with the objective of negotiating a
combination of the most favorable commission and the best price obtainable on
each transaction (generally defined as best execution). The Adviser will also
consider the reliability, integrity and financial condition of the
broker-dealer, the size of and difficulty in executing the order, the value of
the expected contribution of the broker- dealer to the investment performance of
the Funds on a continuing basis, as well as other factors such as the broker-
dealer's ability to engage in transactions in securities of issuers which are
thinly traded. The Adviser does not intend to employ a broker-dealer whose
commission rates fall outside of the prevailing ranges of execution costs
charged by other broker-dealers offering similar services. When consistent with
the objective of obtaining best execution, brokerage may be directed to persons
or firms supplying investment information to the Adviser, or portfolio
transactions may be effected by the Adviser. Neither the Funds nor the Adviser
has entered into agreements or understandings with any brokers regarding the
placement of securities transactions because of research services they provide.
To the extent that such persons or firms supply investment information to the
Adviser for use in rendering investment advice to the Funds, such information
may be supplied at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the Funds. While it
is impossible to place an actual dollar value on such investment information,
its receipt by the Adviser probably does not reduce the overall expenses of the
Adviser to any material extent. Consistent with the Conduct Rules of the NASD,
and
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subject to seeking best execution, the Adviser may consider sales of shares of a
Fund as a factor in the selection of brokers to execute portfolio transactions
for the Fund.
The investment information provided to the Adviser is of the type
described in Section 28(e) of the Securities Exchange Act of 1934 and is
designed to augment the Adviser's own internal research and investment strategy
capabilities. Research services furnished by brokers through which the Funds
effect securities transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its clients'
accounts. There may be occasions where the transaction cost charged by a broker
may be greater than that which another broker may charge if the Adviser
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of brokerage and research services provided by the
executing broker. The Adviser may consider the sale of shares of a Fund by
brokers including the Distributor as a factor in its selection of brokers of
Fund transactions.
A majority of the portfolio securities that the Funds purchase or
sell will be done as principal transactions. In addition, debt instruments are
normally purchased directly from the issuer, from banks and financial
institutions or from an underwriter or market maker for the securities.
Brokerage commissions are not usually paid for any such purchases. Any
transactions involving such securities for which the Funds pay a brokerage
commission will be effected at the best price and execution available. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and asked price. The Funds may
purchase Government Obligations with a demand feature from banks or other
financial institutions at a negotiated yield to the Fund based on the applicable
interest rate adjustment index for the security. The interest received by the
Funds is net of a fee charged by the issuing institution for servicing the
underlying obligation and issuing the participation certificate, letter of
credit, guarantee or insurance and providing the demand repurchase feature.
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner deemed
in the best interest of shareholders of the Funds rather than by a formula. The
primary consideration is prompt execution of orders in an effective manner at
the most favorable price.
Investment decisions for the Funds will be made independently from
those for any other investment companies or accounts that may become managed by
the Adviser or its affiliates. If, however, the Funds and other investment
companies or accounts managed by the Adviser are simultaneously engaged in the
purchase or sale of the same security, the transactions will 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 a Fund and for other investment companies managed by the Adviser
occur contemporaneously, the purchase or sale orders may be aggregated in order
to obtain any price advantage available to large denomination purchasers or
sellers.
In addition to managing the assets of the Funds, the Adviser
manages assets on a discretionary basis for other clients and, as a result, the
Adviser may effect transactions in such clients' accounts in securities in which
a Fund currently holds or, in the near future may hold, a position. The Adviser
makes the determination to purchase or sell a security based on numerous
factors, including those that may be particular to one or more of its clients.
Therefore, it is possible that the Adviser will effect transactions in certain
securities for select clients, which may or may not include the Fund, that it
may not deem, in its sole discretion, as being appropriate for other clients,
which may or may not include the Fund.
VII. CAPITAL STOCK AND OTHER SECURITIES
The authorized capital stock of the Company consists of one
billion shares of stock having a par value of one-tenth of one cent ($.001) per
share. The Company's Board of Directors is authorized to divide the
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unissued shares into separate classes and series of stock, each series
representing a separate, additional investment portfolio. The Board currently
has authorized the division of the unissued shares into four series (Amerindo
Technology Fund, Amerindo Technology Fund II, Amerindo Internet B2B Fund, and
Amerindo Health & Biotechnology Fund) and into three Classes -- Class A, Class C
and Class D. Shares of any class or series will have identical voting rights,
except where, by law, certain matters must be approved by a majority of the
shares of the affected class or series. Each share of any class or series of
shares when issued has equal dividend, distribution, liquidation and voting
rights within the class or series for which it was issued, and each fractional
share has those rights in proportion to the percentage that the fractional share
represents of a whole share. Shares will be voted in the aggregate.
There are no conversion or preemptive rights in connection with
any shares of the Funds. All shares, when issued in accordance with the terms of
the offering, will be fully paid and non-assessable. Shares are redeemable at
net asset value, at the option of the investor.
The shares of the Funds have non-cumulative voting rights, which
means that the holders of more than 50% of the shares outstanding voting for the
election of directors can elect 100% of the directors if the holders choose to
do so, and, in that event, the holders of the remaining shares will not be able
to elect any person or persons to the Board of Directors. Unless specifically
requested by an investor who is an investor of record, the Funds do not issue
certificates evidencing Fund shares.
As a general matter, the Funds will not hold annual or other
meetings of their shareholders. This is because the By-laws of the Company
provide for annual meetings only (a) for the election of directors, (b) for
approval of revisions to a Fund's investment advisory agreement, (c) for
approval of revisions to a Fund's distribution agreement with respect to a
particular class or series of stock, and (d) upon the written request of holders
of shares entitled to cast not less than twenty-five percent of all the votes
entitled to be cast at such meeting. Annual and other meetings may be required
with respect to such additional matters relating to the Funds as may be required
by the 1940 Act including the removal of Fund directors and communication among
shareholders, any registration of the Funds with the Securities and Exchange
Commission or any state, or as the Directors may consider necessary or
desirable. Each Director serves until the next meeting of shareholders called
for the purpose of considering the election or reelection of such Director or of
a successor to such Director, and until the election and qualification of his or
her successor, elected at such meeting, or until such Director sooner dies,
resigns, retires or is removed by the vote of the shareholders.
Rule 18f-2 under the 1940 Act provides that any matter required to
be submitted by the provisions of the 1940 Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an investment
company such as the Company shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each class or series affected by such matter, i.e., by a majority of a Fund's
outstanding shares. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless it is clear that the interests of each
class or series in the matter are substantially identical or that the matter
does not affect any interest of such class or series. However, the Rule exempts
the selection of independent public accountants, the approval of principal
distribution contracts and the election of directors from the separate voting
requirements of the Rule.
VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
The material relating to purchase, redemption and pricing of
shares is located in the Shareholder Information section of the Prospectus.
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IX. TAXATION OF THE FUND
Prospective investors should consult their tax advisors with
respect to the tax consequences of an investment in the Fund.
The Funds intend to qualify annually and elect to be treated as a
regulated investment company under the Internal Revenue Code of 1986. To qualify
as a regulated investment company, a Fund must distribute to shareholders at
least 90% of its investment company taxable income (which includes, among other
items, dividends, taxable interest and the excess of net short-term capital
gains over net long-term capital losses), and meet certain diversification of
assets, source of income, and other requirements discussed below. By meeting
these requirements, a Fund generally will not be subject to Federal income tax
on investment company taxable income, and on net capital gains (the excess of
net long-term capital gains over net short-term capital losses) designated by
the Fund as capital gain dividends, distributed to shareholders. In determining
the amount of net capital gains to be distributed, any capital loss carryover
from prior years will be applied against capital gains to reduce the amount of
distributions paid. If a Fund does not meet all of these requirements, it will
be taxed as an ordinary corporation and distributions will generally be taxed to
shareholders as ordinary income.
Each Fund's policy is to declare dividends annually and distribute
as dividends each year 100% (and in no event less than 90%) of its investment
company taxable income. Amounts, other than tax-exempt interest, not distributed
on a timely basis may be subject to a nondeductible 4% excise tax. To prevent
imposition of the excise tax, the Funds must distribute for the calendar year an
amount equal to the sum of (1) at least 98% of their ordinary income (excluding
any capital gains or losses) for the calendar year, (2) at least 98% of the
excess of their capital gains over capital losses (adjusted for certain losses)
for the one-year period ending October 31 of such year, and (3) all ordinary
income and capital gain net income (adjusted for certain ordinary losses) for
previous years that were not distributed during such years.
Distributions of investment company taxable income, including net
short term capital gains, generally are taxable to shareholders as ordinary
income. Distributions of net capital gains, if any, designated by the Funds as
capital gain dividends are taxable to shareholders as long-term capital gains,
regardless of the length of time the shareholder has held its shares of a Fund.
Shareholders will be notified annually as to the Federal tax status of
distributions. Distributions are taxable to shareholders whether received in
cash or reinvested in additional shares of the Fund. Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the amount of the cash dividend that
otherwise would have been distributable (where the additional shares are
purchased in the open market), or the fair market value of the shares received,
determined as of the reinvestment date. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the value of a
share on the reinvestment date. The Funds do not expect that any of their
distributions will qualify for the dividends-received deduction for
corporations.
In addition to satisfying the distribution requirement described
above, a regulated investment company must derive at least 90% of its gross
income from dividends, interest, certain payments with respect to securities
loans, gains from the sale or other disposition of stock or securities or
foreign currencies (to the extent such currency gains are directly related to
the regulated investment company's principal business of investing in stock or
securities) and 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.
The Funds must also satisfy an asset diversification test in order
to qualify as a regulated investment company. Under this test, at the close of
each quarter of a Fund's taxable year, at least 50% of the value of that Fund's
assets must consist of cash and cash items, U.S. Government securities,
securities of other regulated investment companies, and securities of other
issuers (as to which the Fund has not invested more than 5% of the
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value of the Fund's total assets in securities of such issuer and as to which
the Fund does not hold more than 10% of the outstanding voting securities of
such issuer), and no more than 25% of the value of its total assets may be
invested in the securities of any one issuer (other than U.S. Government
securities and securities of other regulated investment companies), or in two or
more issuers which that Fund controls and which are engaged in the same or
similar trades or businesses. Generally, an option (call or put) with respect to
a security is treated as issued by the issuer of the security not the issuer of
the option.
If for any taxable year a Fund did not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
would be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and any distributions would be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current or
accumulated earnings and profits. Such distributions generally would be eligible
for the dividends received deduction in the case of corporate shareholders.
Investors should carefully consider the tax implications of buying
shares prior to a distribution by the Funds. The price of shares purchased at
that time includes the amount of the forthcoming distributions. Distributions by
a Fund reduce the net asset value of the Fund's shares, and if a distribution
reduces the net asset value below a stockholder's cost basis, such distribution,
nevertheless, would be taxable to the shareholder as ordinary income or capital
gain as described above, even though, from an investment standpoint, it may
constitute a partial return of capital.
Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes, which may decrease the net return on
foreign investments as compared to dividends and interest paid by domestic
issuers. The Funds do not expect that they will qualify to elect to pass through
to its shareholders the right to take a foreign tax credit for foreign taxes
withheld from dividends and interest payments. Gains or losses attributable to
fluctuations in exchange rates that occur between the time the Funds accrue
interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Funds actually collect such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. These gains or losses, may increase, decrease, or eliminate the
amount of a Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
Upon the taxable disposition (including a sale or redemption) of
shares of a Fund, a shareholder may realize a gain or loss depending upon its
basis in the shares. Such gain or loss will be treated as capital gain or loss
if the shares are capital assets in the shareholder's hands, and will be
long-term or short-term, generally depending upon the shareholder's holding
period for the shares. Non-corporate shareholders are subject to tax at a
maximum rate of 20% on capital gains resulting from the disposition of shares
held for more than 12 months (10% if the taxpayer is, and would be after
accounting for such gains, subject to the 15% tax bracket for ordinary income).
However, a loss realized by a shareholder on the disposition of Fund shares with
respect to which capital gains dividends have been paid will, to the extent of
such capital gain dividends, also be treated as long-term capital loss if such
shares have been held by the shareholder for six months or less. Further, a loss
realized on a disposition will be disallowed to the extent the shares disposed
of are replaced (whether by reinvestment of distributions or otherwise) within a
period of 61 days beginning 30 days before and ending 30 days after the shares
are disposed of. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss. Shareholders receiving distributions in
the form of additional shares will have a cost basis for Federal income tax
purposes in each share received equal to the net asset value of a share of the
Fund on the reinvestment date. Capital losses in any year are deductible only to
the extent of capital gains plus, in the case of a noncorporate taxpayer, $3,000
of ordinary income ($1,500 for married individuals filing separately).
If any net capital gains are retained by the Funds for
reinvestment, requiring federal income taxes thereon to be paid by it, the Funds
can elect to treat such capital gains as having been distributed to
shareholders. In that event, shareholders will report such capital gains as net
capital gains, will be able to claim their share of federal income taxes paid by
a Fund on such gains as a credit against their own federal income tax
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liability, and will be entitled to increase the adjusted tax basis of their Fund
shares by 65% of their share of the undistributed gain.
The Funds will be required to report to the Internal Revenue
Service all distributions of taxable income and capital gains as well as gross
proceeds from the redemption or exchange of Fund shares, except in the case of
exempt shareholders, which include most corporations. Under the backup
withholding provisions, distributions of taxable income and capital gains and
proceeds from the redemption or exchange of the shares of a regulated investment
company may be subject to withholding of federal income tax at the rate of 31%
in the case of non-exempt shareholders who fail to furnish the investment
company with their taxpayer identification numbers and their required
certifications regarding their status under the federal income tax law. If the
withholding provisions are applicable, any such distributions and proceeds,
whether taken in cash or reinvested in additional shares, will be reduced by the
amounts required to be withheld. Corporate shareholders should provide the Funds
with their taxpayer identification numbers and should certify their exempt
status in order to avoid possible erroneous application of backup withholding.
The foregoing discussion of U.S. federal income tax law relates
solely to the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. domestic corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and foreign tax
consequences of ownership of Fund shares, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a
lower rate under an applicable income tax treaty) on amounts received by such
person.
The Funds may be subject to state or local tax in jurisdictions in
which a Fund is organized or may be deemed to be doing business. However,
Maryland taxes regulated investment companies in a manner that is generally
similar to the federal income tax rules described herein.
Distributions may be subject to state and local income taxes. In
addition, the treatment of the Fund and its shareholders in those states that
have income tax laws might differ from their treatment under the federal income
tax laws.
X. UNDERWRITERS
Each Fund sells and redeems its shares on a continuing basis at
their net asset value and imposes a sales charge. The Distributor receives an
underwriting commission of 0.25% on sales of Class A shares only. In effecting
sales of Fund shares under the Distribution Agreement, the Distributor, for
nominal consideration (i.e. $1.00) and as agent for the Funds, will solicit
orders for the purchase of a Fund's shares, provided that any subscriptions and
orders will not be binding on that Fund until accepted by the Fund as a
principal. In addition, as further described in "B. The Distribution and Service
Plan," the Distributor receives a fee equal to 0.25% of the Class A and Class D
shares' and 0.75% of the Class C shares' average daily net assets on an annual
basis to permit it to make payments to broker-dealers and other financial
institutions with which it has written agreements and whose clients are Fund
shareholders for providing distribution assistance and shareholder support to
that Fund.
The Glass-Steagall Act limits the ability of a depository
institution to become an underwriter or distributor of securities. It is the
Funds' position, however, that banks are not prohibited from acting in other
capacities for investment companies, such as providing administrative and
shareholder account maintenance services and receiving compensation from the
distributor for providing such services. This is an unsettled area of the law,
however, and if a determination contrary to a Fund's position concerning
shareholder servicing and administration payments to banks from the distributor
is made by a bank regulatory agency or court, any such payments will be
terminated and any shares registered in the banks' names, for their underlying
customers, will be re-registered in the names of the customers at no cost to
each Class or its shareholders. On November 16, 1999, President Clinton signed
the Gramm-Leach-Bliley Act, repealing certain provisions of the Glass-Steagall
Act which
915866.4
-21-
<PAGE>
have restricted affiliation between banks and securities firms and amending the
Bank Holding Company Act, thereby removing restrictions on banks and insurance
companies. The new legislation grants banks new authority to conduct certain
authorized activity through financial subsidiaries. In addition, state
securities laws on this issue may differ from the interpretation of Federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
XI. CALCULATION OF PERFORMANCE DATA
The Funds, on behalf of each Class, may from time to time include
yield, effective yield and total return information in advertisements or reports
to investors or prospective investors. Currently, the Funds intend to provide
these reports to investors and prospective investors semi-annually, but may from
time to time, in its sole discretion, provide reports on a more frequent basis,
such as quarterly. The "yield" refers to income generated by an investment in a
particular Class of a Fund over a thirty-day period. This income is then
"annualized." That is, the amount of income generated by the investment during
that month is assumed to be generated each month over a 12- month period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the monthly income earned by an investment in a
particular Class of a Fund is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment. The "total return" of the Fund is required to be
included in any advertisement containing each Class's yield. Total return is the
average annual total return for the period which began at the inception of a
particular Class of the Fund and ended on the date of the most recent balance
sheet, and is computed by finding the average annual compound rates of return
over the period that would equate the initial amount invested to the ending
redeemable value. Yield, effective yield and total return may fluctuate daily
and do not provide a basis for determining future yields, effective yields or
total returns. For Class A shares, the annual total rate of return and yield
figures will assume payment of the maximum initial sales load at the time of
purchase. One-, five- and ten- year periods will be shown, unless the Class of
that Fund has been in existence for a shorter period.
The yields and the net asset values of each Class of shares of the
Funds will vary based on the current market value of the securities held by the
Funds and changes in such Class's expenses. The Adviser, the Administrator or
the Distributor may voluntarily waive a portion of their fees on a
month-to-month basis. These actions would have the effect of increasing the net
income (and therefore the yield and total rate of return) of a Class of shares
of a Fund during the period such waivers are in effect. These factors and
possible differences in the methods used to calculate the yields and total rates
of return should be considered when comparing the yields or total rates of
return of a Class of the Funds to yields and total rates of return published for
other investment companies and other investment vehicles.
The Funds compute yield based on a 30-day (or one month) period
ended on the date of the most recent balance sheet included in the registration
statement, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding
during the period that were entitled to dividends.
915866.4
-22-
<PAGE>
d = the maximum offering price per share on the last day of the
period.
Actual future yields will depend on the type, quality, and
maturities of the investments held by the Funds, changes in interest rates on
investments, and a Fund's expenses during the period.
COMPUTATION OF TOTAL RETURN. The total return must be displayed in
any advertisement containing the Fund's yield. Total return is the average
annual total return for the 1-, 5- and 10-year period ended on the date of the
most recent balance sheet included in the SAI, computed by finding the average
annual compounded rates of return over 1-, 5- and 10-year periods that would
equate the initial amount invested to the ending redeemable value according to
the following formula:
P(1 + T)n = ERV
Where:
P = a hypothetical initial investment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1000 payment made at the beginning of the
1-, 5- or 10-year periods at the end of the
1-, 5-or 10-year periods (or fractions
thereof).
Because the Funds have not had a registration in effect for 1, 5
or 10 years, the period during which the registration has been effective shall
be substituted.
Yield information may be useful for reviewing the performance of
the Funds and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments which pay a
fixed yield for a stated period of time, the Fund's yield does fluctuate, and
this should be considered when reviewing performance or making comparisons.
From time to time evaluations of performance of the Funds made by
independent sources may be used in advertisements. These sources may include
Lipper Analytical Services, Wiesenberger Investment Company Service, Donoghue's
Money Fund Report, Barron's, Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Personal Investor, Bank Rate Monitor, and The Wall
Street Journal. From time to time evaluations of performance of the Adviser made
by independent sources may be used in advertisements of the Funds.
915866.4
-23-
<PAGE>
PART C - OTHER INFORMATION
Item 23. EXHIBITS
(1) (a) Articles of Incorporation of the Registrant.
(1) (b) By-Laws of the Registrant.
(c) Not applicable.
(d) Investment Advisory Agreement: Amerindo Technology Fund
(d.1) Form of Investment Advisory Agreement.
(e) Distribution Agreement for all Classes.
(f) Not applicable.
(1) (g) Form of Custody Agreement.
(h) Administration Agreement.
(1) (h.1) Transfer Agency and Service Agreement.
(3) (h.2) Fund Accounting Service Agreement.
(2) (h.3) Form of Expense Limitation Agreement.
(1) (i) Opinion of Battle Fowler LLP as to the legality of the
securities being registered and consent.
(3) (i.1) Consent of Battle Fowler LLP.
(j) Not applicable.
(4) (k) Audited Financial Statements, for fiscal year ended
December 31, 1999, including the Report of Independent
Accountants.
(1) (l) Subscription Letter.
(m) Amended and Restated Distribution and Service Plan for Class A
and D shares.
(m.1) Distribution and Service Plan for Class C shares.
(1) (m.2) Shareholder Servicing Agreement for Class A and D shares.
(2) (m.3) Form of Shareholder Servicing Agreement for the Class C shares.
(n) Amendment No. 1 to the Multi-Class Plan pursuant to Rule 18f-3
under the 1940 Act.
(1) (o) Reserved.
(p) Code of Ethics - Amerindo Technology Fund / Amerindo Investment
Advisors Inc.
(p.1) Code of Ethics - SEI Investments Distribution Co.
- --------------------------
(1) Filed as an exhibit to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement, 333-00767, filed on May 23, 1996 and incorporated
herein by reference
(2) Filed as an exhibit to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement, 333-00767, filed on October 15, 1999 and
incorporated herein by reference
(3) Filed as an exhibit to Post-Effective Amendment No. 1 to the Registrant's
Registration Statement, 333-00767, filed on May 6, 1997 and incorporated
herein by reference
(4) Filed with Annual Report in form N-30D on December 30, 2000 (accession
number 0000935069-99-000294) and incorporated herein by reference
922097.1
<PAGE>
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 25. INDEMNIFICATION
(a) In accordance with Section 2-418 of the General Corporation Law of
the State of Maryland, Article NINTH of the Registrant's Articles of
Incorporation provides as follows:
"NINTH: (1) The Corporation shall indemnify (i) its currently acting
and former directors and officers, whether serving the Corporation or
at its request any other entity, to the fullest extent required or
permitted by the General Laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the
procedures and to the fullest extent permitted by law, and (ii) other
employees and agents to such extent as shall be authorized by the
Board of Directors or the By-Laws and as permitted by law. Nothing
contained herein shall be construed to protect any director or officer
of the Corporation against any liability to the Corporation or its
security holders to which he 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 office. The
foregoing rights of indemnification shall not be exclusive of any
other rights to which those seeking indemnification may be entitled.
The Board of Directors may take such action as is necessary to carry
out these indemnification provisions and is expressly empowered to
adopt, approve and amend from time to time such by-laws, resolutions
or contracts implementing such provisions or such indemnification
arrangements as may be permitted by law. No amendment of the charter
of the Corporation or repeal of any of its provisions shall limit or
eliminate the right of indemnification provided hereunder with respect
to acts or omissions occurring prior to such amendment or repeal.
(2) To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment Company
Act of 1940, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money
damages; provided, however, that nothing herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he 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 office. No amendment of the charter of the Corporation
or repeal of any of its provisions shall limit or eliminate the
limitation of liability provided to directors and officers hereunder
with respect to any act or omission occurring prior to such amendment
or repeal."
(b) In the proposed Distribution Agreement relating to the securities
being offered hereby, the Registrant agrees to indemnify and hold
harmless any person who controls the Fund's distributor, SEI
Investments Distribution Co., within the meaning of the Securities Act
of 1933, against certain types of civil liabilities arising in
connection with the Registration Statement or Prospectus.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The description of the Registrant's adviser, Amerindo Investment
Advisors Inc., under the caption "Management, Organization and Capital
Structure" in the Prospectus and "Management of the Fund" in the Statement of
Additional Information constituting parts A and B, respectively, of the
Registration Statement are incorporated herein by reference.
Item 27. PRINCIPAL UNDERWRITERS
(d) SEI Investments Distribution Co., located at One Freedom Valley
Drive, Oaks, PA 19456, is the Registrant's Distributor.
(e) The following are the directors and officers of SEI Investments
Distribution Co. The principal business address of each of these persons is One
Freedom Valley Drive, Oaks, PA 19456:
922097.1
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name With the Distributor With the Registrant
- ---- --------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors None
Richard B. Lieb Director, Executive Vice President None
Carmen V. Romeo Director None
Mark J. Held President & Chief Operating Officer None
Gilbert L. Beebower Executive Vice President None
Dennis J. McGonigle Executive Vice President None
Robert M. Silvestri Chief Financial Officer & Treasurer None
Leo J. Dolan, Jr. Senior Vice President None
Carl A. Guarino Senior Vice President None
Larry Hutchison Senior Vice President None
Jack May Senior Vice President None
Hartland J. McKeown Senior Vice President None
Kevin P. Robins Senior Vice President & General Counsel None
Patrick K. Walsh Senior Vice President None
Robert Aller Vice President None
Gordon W. Carpenter Vice President None
Todd Cipperman Vice President & Assistant Secretary None
S. Courtney Vice President & Assistant Secretary None
E. Collier Vice President & Assistant Secretary None
Robert Crudup Vice President & Managing Director None
Richard A. Deak Vice President & Assistant Secretary None
Barbara Doyne Vice President None
Jeff Drennen Vice President None
James R. Foggo Vice President & Assistant Secretary None
Vic Galef Vice President & Managing Director None
Lydia A. Gavalis Vice President & Assistant Secretary None
Greg Gettinger Vice President & Assistant Secretary None
Kathy Heilig Vice President None
Jeff Jacobs Vice President None
Samuel King Vice President None
Kim Kirk Vice President & Managing Director None
John Krzeminski Vice President & Managing Director None
Carolyn McLaurin Vice President & Managing Director None
Mark Nagle Vice President None
Joanne Nelson Vice President None
Cynthia M. Parrish Vice President & Secretary None
Kim Rainey Vice President None
Rob Redican Vice President None
Maria Rinehart Vice President None
Edward T. Searle Vice President & Assistant Secretary None
Steve Smith Vice President None
Daniel Spaventa Vice President None
Kathryn L. Stanton Vice President None
Lynda J. Striegel Vice President & Assistant Secretary None
Lori L. White Vice President & Assistant Secretary None
Wayne M. Withrow Vice President & Managing Director None
</TABLE>
(f) There are no affiliated persons of the Underwriter who are not
affiliated with the Registrant.
922097.1
<PAGE>
Item 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder, in general, are maintained in the physical possession of Registrant
at Amerindo Funds Inc., 399 Park Avenue, New York, New York 10022; SEI
Investments Mutual Funds Services, One Freedom Valley Drive, Oaks, PA 19456, the
Registrant's transfer and accounting agent will maintain physical possession of
Registrant's shareholder and fund accounting records; and The Northern Trust
Company, the custodian will maintain physical possession of the Registrant's
custodial records.
Item 29. MANAGEMENT SERVICES
Not Applicable.
Item 30. UNDERTAKINGS
Not Applicable.
922097.1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on the 10th day of March 2000.
AMERINDO FUNDS INC.
By: /s/ Albert W. Vilar
---------------------------------------
Alberto W. Vilar, Chairman,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated below on March 10, 2000.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C> <C>
By: /s/Alberto W. Vilar Chairman, March 10, 2000
----------------------------------- Chief Executive
Alberto W. Vilar Officer and Director
By: /s/Dana E. Smith Vice President March 10, 2000
----------------------------------- and Treasurer
Dana E. Smith
(2) Majority of Directors
John Rutledge Director March 10, 2000
Gary A. Tanaka Director
Jude T. Wanniski Director
By: /s/Dana E. Smith
--------------------
Dana E. Smith*
</TABLE>
- -----------------------
* Pursuant to Powers of Attorney, filed as an exhibit with Pre-Effective
Amendment No. 1 to Registration Statement No. 333-00767, filed on May 23,
1996 and incorporated herewith
922097.1
<PAGE>
EXHIBIT INDEX
Exhibit Description
(d) Investment Advisory Agreement: Amerindo Technology Fund
(d.1) Form of Investment Advisory Agreement
(e) Distribution Agreement for all Classes
(h) Administration Agreement
(m) Amended and Restated Distribution and Service Plan for Class A and
D Shares
(m.1) Distribution and Service Plan for Class C Shares
(n) Amendment No. 1 to the Multi-Class Plan pursuant to Rule 18f-3
under the 1940 Act
(p) Code of Ethics - Amerindo Technology Fund/Amerindo Investment
Advisors Inc.
(p.1) Code of Ethics - SEI Investments Distribution Co.
922097.1
INVESTMENT ADVISORY AGREEMENT
AMERINDO TECHNOLOGY FUND
A SERIES OF
AMERINDO FUNDS INC.
One Embarcadero
Suite 2300
San Francisco, CA 94111
July 31, 1996
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting the assets of Amerindo Technology Fund (the "Fund"), a series of
Amerindo Funds Inc. (the "Company"), in securities of the type, and in
accordance with the limitations, specified in our Articles of Incorporation,
By-Laws and Registration Statement filed with the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933, including the Prospectus forming a part thereof (the
"Registration Statement"), all as from time to time in effect, and in such
manner and to such extent as may from time to time be authorized by the
Company's Board of Directors. We enclose copies of the documents listed above
and will furnish you such amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of the Company's Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are
340822.2
<PAGE>
authorized to exercise full discretion and act for us in the same manner and
with the same force and effect as our corporation itself might or could do with
respect tosuch purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions. In furtherance of such and subject
to applicable law and procedures adopted by the Company's Board of Directors,
you may (i) pay commissions to brokers other than yourself which are higher than
such that might be charged by another qualified broker to obtain brokerage
and/or research services considered by you to be useful or desirable for your
investment management of the Fund and/or other advisory accounts of yours and
any investment advisor affiliated with you; and (ii) consider the sales of
shares of the Fund by brokers including your affiliates as a factor in your
selection of brokers for portfolio transactions.
(c) You will report to the Company's Board of Directors at
each meeting thereof all changes in the Fund since your prior report, and will
also keep us in touch with important developments affecting the Fund and, on
your own initiative, will furnish us from time to time with such information as
you may believe appropriate for this purpose, whether concerning the individual
entities whose securities are included in the Fund the activities in which such
entities engage, Federal income tax policies applicable to our investments, or
the conditions prevailing in the economy generally. You will also furnish us
with such statistical and analytical information with respect to our portfolio
securities as you may believe appropriate or as we may reasonably request. In
making such purchases and sales of our portfolio securities, you will comply
with the policies set from time to time by the Company's Board of Directors as
well as the limitations imposed by our Articles of Incorporation, the provisions
of the Internal Revenue Code relating to regulated investment companies and the
1940 Act, and the limitations contained in our Registration Statement.
(d) It is understood that you may from time to time employ,
subcontract with or otherwise associate yourself with, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder.
(e) You or your affiliates will also provide supervisory
personnel who will be responsible for supervising and monitoring the performance
of our Administrator in connection with its duties under our Administrative
Services Agreement. Such personnel may be your employees or employees of your
affiliates or of other organizations. It is understood that we have retained, at
our expense, the Administrator to perform the operational components of the
functions and services listed herein.
(f) You or your affiliates will also furnish us such
additional administrative supervision and such office facilities as you may
believe appropriate subject to the requirements of any regulatory authority to
which you may be subject. We will reimburse you for all of our operating costs
incurred by you, including rent, depreciation of equipment and facilities,
interest and amortization of loans financing equipment used by us and all the
expenses incurred to conduct our affairs. The amounts of such reimbursements
shall from time-to-time be agreed upon between us.
-2-
340822.2
<PAGE>
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) foreign, federal,
state or local taxes, including issuance and transfer taxes incurred by or
levied on us; (c) commitment fees, certain insurance premiums and membership
fees and dues in investment company organizations; (d) interest charges on
borrowings; (e) charges and expenses of our custodian; (f) charges and expenses
relating to the issuance, redemption, transfer and dividend disbursing functions
for us; (g) telecommunications expenses; (h) recurring and non-recurring legal,
accounting and recordkeeping expenses; (i) costs of organizing and maintaining
the Company's existence as a corporation; (j) compensation, including directors'
fees, of any of our directors, officers or employees who are not your officers
or employees or those of the Administrator or their affiliates, and costs of
other personnel providing administrative and clerical services to us; (k) costs
of providing shareholders' services, including charges and expenses of persons
providing confirmations of transactions in the Fund's shares, periodic
statements to shareholders and recordkeeping services, and costs of
shareholders' reports, proxy solicitations, and corporate meetings; (l) fees and
expenses of registering our shares under the appropriate federal securities laws
and of qualifying our shares under applicable state securities laws, including
expenses attendant upon the initial registration and qualification of these
shares and attendant upon renewals of, or amendment to, those registrations and
qualifications; (m) expenses of preparing, printing and delivering the initial
registration statement and of preparing, printing and delivering the Prospectus
to existing shareholders and of printing shareholder application forms for
shareholder accounts; (n) fees and expenses payable to the Adviser, Distributor,
Administrator, custodian, transfer agent and dividend agent; and (o) any other
distribution or promotional expenses contemplated by an effective plan adopted
by us pursuant to Rule 12b-1 under the 1940 Act. Our obligation for the
foregoing expenses is limited by your agreement to be responsible, while this
Agreement is in effect, for any amount by which our annual operating expenses,
including distribution expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed the limits on investment company expenses
prescribed by any state in which the Fund's shares are qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. (a) In consideration of the foregoing we will pay you an
annual fee equal to 1.50% of the Fund's annual average daily net assets. Your
fee will be accrued by us daily, and will be payable on the last day of each
calendar month for services performed hereunder during that month or on such
other schedules as you shall request of us in writing. You may waive your right
to any fee to which you are entitled hereunder, provided such waiver is
delivered to us in writing. Any reimbursement of our expenses, to which we may
become entitled pursuant to the last sentence of paragraph 3 hereof, will be
paid to us at the end of the month for which those expenses are accrued, at the
same time as we pay you your fee.
-3-
340822.2
<PAGE>
(b) Pursuant to the Fund's Distribution and Service Plan and
the Shareholder Servicing Agreement, you will also act as a shareholder
servicing agent for the Fund pursuant to which the Fund is permitted to pay you
a maximum of 0.25% per annum of the Fund's average daily net assets to
compensate you for providing shareholder services and to permit you to
compensate banks, savings and loans and other financial institutions (the
Adviser, with such other institutions, each a "Shareholder Servicing Agent")
whose clients are Fund shareholders for providing shareholder services. In
addition, you may use the advisory fee for distribution of our shares and for
servicing purposes including defraying the costs of performing shareholder
servicing functions on behalf of the Fund and to compensate others with whom you
may have entered into a written agreement for performing shareholder servicing
functions on behalf of the Fund. To the extent that you or your affiliates
directly may make payments to other third parties who render shareholder support
services and that such payments may be deemed indirect financing of an activity
primarily intended to result in the sale of shares of the Fund within the
context of Rule 12b-1 under the 1940 Act (the "Rule"), then such payments by you
shall be deemed to be authorized under the Fund's Distribution and Service Plan
adopted pursuant to the Rule. You will, in your sole discretion, determine the
amount of such payments and may from time to time in your sole discretion
increase or decrease the amount of such payments; provided, however, that no
such payment will increase the amount the Fund is required to pay you or any
person under this Agreement or any agreement. Any payments made by you for such
purposes are subject to compliance with the terms of written agreements in a
form satisfactory to the Fund's Board of Directors to be entered into by you and
the participating organization.
6. This Agreement will become effective on July 31, 1996 and
shall continue in effect until July 30, 1998 and thereafter for successive
twelve-month periods (computed from each July 31), provided that such
continuation is specifically approved at least annually by the Company's Board
of Directors or by a majority vote of the holders of the Fund's outstanding
voting securities, as defined in the 1940 Act, and, in either case, by a
majority of those of the Company's Directors who are neither party to this
Agreement nor, other than by their service as Directors of the Company,
interested persons, as defined in the 1940 Act, of any such person who is party
to this Agreement. Upon the effectiveness of this Agreement, it shall supersede
all previous Agreements between us covering the subject matter hereof. This
Agreement may be terminated at any time, without the payment of any penalty, by
vote of a majority of the Fund's outstanding voting securities, as defined in
the 1940 Act, or by a vote of a majority of the entire Board of Directors, on
sixty days' written notice to you, or by you on sixty days' written notice to
us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict your
right, or the right of any of your
-4-
340822.2
<PAGE>
officers, directors or employees who may also be a director, officer or employee
of ours, or of a person affiliated with us, as defined in the 1940 Act, to
engage in any other business or to devote time and attention to the management
or other aspects of any other business, whether of a similar or dissimilar
nature, or to render services of any kind to any other corporation, firm,
individual or association.
(b) The Company understands that you and your affiliates and
employees, as well as their agents privy to the transactions made in the
Company's account, may, subject to the Fund's and to your Code of Ethics,
purchase and sell investments for either your or their own account, which
investments may include the same investments that the Company's account is
purchasing or selling; provided, however, that no purchase or sale by you, or
any of your affiliates, agents or employees, or any of their agents privy to the
transactions made in the Company's account, will be made in a manner which would
result in any detriment to the Company, and such persons shall always keep the
interests of the Company first in effecting any such transaction.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
AMERINDO FUNDS INC.,
AMERINDO TECHNOLOGY FUND
By: /s/
-------------------------------
Name:
Title:
ACCEPTED: July 31, 1996
AMERINDO INVESTMENT ADVISORS INC.
By: /s/
-------------------------------
Name:
Title:
-5-
340822.2
INVESTMENT ADVISORY AGREEMENT
AMERINDO FUNDS INC.
One Embarcadero
Suite 2300
San Francisco, CA 94111
May __, 2000
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting the assets of the series of Amerindo Funds Inc. (the "Company")
listed on Schedule A hereto, as amended from time to time, (each, a "Fund", and
collectively, the "Funds") in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By- Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectuses forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by the Company's Board of
Directors. We enclose copies of the documents listed above and will furnish you
such amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of the Company's Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our corporation itself might
or could do with respect to such purchases,
929049.1
<PAGE>
sales or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such purchases, sales
or other transactions. In furtherance of such and subject to applicable law and
procedures adopted by the Company's Board of Directors, you may (i) pay
commissions to brokers other than yourself which are higher than such that might
be charged by another qualified broker to obtain brokerage and/or research
services considered by you to be useful or desirable for your investment
management of the Funds and/or other advisory accounts of yours and any
investment advisor affiliated with you; and (ii) consider the sales of shares of
the Funds by brokers including your affiliates as a factor in your selection of
brokers for portfolio transactions.
(c) You will report to the Company's Board of Directors at
each meeting thereof all changes in the Funds since your prior report, and will
also keep us in touch with important developments affecting the Funds and, on
your own initiative, will furnish us from time to time with such information as
you may believe appropriate for this purpose, whether concerning the individual
entities whose securities are included in the Funds the activities in which such
entities engage, Federal income tax policies applicable to our investments, or
the conditions prevailing in the economy generally. You will also furnish us
with such statistical and analytical information with respect to our portfolio
securities as you may believe appropriate or as we may reasonably request. In
making such purchases and sales of our portfolio securities, you will comply
with the policies set from time to time by the Company's Board of Directors as
well as the limitations imposed by our Articles of Incorporation, the provisions
of the Internal Revenue Code relating to regulated investment companies and the
1940 Act, and the limitations contained in our Registration Statement.
(d) It is understood that you may from time to time employ,
subcontract with or otherwise associate yourself with, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder.
(e) You or your affiliates will also provide supervisory
personnel who will be responsible for supervising and monitoring the performance
of our administrator (the "Administrator") in connection with its duties under
our Administrative Services Agreement. Such personnel may be your employees or
employees of your affiliates or of other organizations. It is understood that we
have retained, at our expense, the Administrator to perform the operational
components of the functions and services listed herein.
(f) You or your affiliates will also furnish us such
additional administrative supervision and such office facilities as you may
believe appropriate subject to the requirements of any regulatory authority to
which you may be subject. We will reimburse you for all of our operating costs
incurred by you, including rent, depreciation of equipment and facilities,
interest and amortization of loans financing equipment used by us and all the
expenses incurred to conduct our affairs. The amounts of such reimbursements
shall from time-to-time be agreed upon between us.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) foreign, federal,
state or local taxes, including issuance and
929049.1
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<PAGE>
transfer taxes incurred by or levied on us; (c) commitment fees, certain
insurance premiums and membership fees and dues in investment company
organizations; (d) interest charges on borrowings; (e) charges and expenses of
our custodian; (f) charges and expenses relating to the issuance, redemption,
transfer and dividend disbursing functions for us; (g) telecommunications
expenses; (h) recurring and non-recurring legal, accounting and recordkeeping
expenses; (i) costs of organizing and maintaining the Company's existence as a
corporation; (j) compensation, including directors' fees, of any of our
directors, officers or employees who are not your officers or employees or those
of the Administrator or their affiliates, and costs of other personnel providing
administrative and clerical services to us; (k) costs of providing shareholders'
services, including charges and expenses of persons providing confirmations of
transactions in a Fund's shares, periodic statements to shareholders and
recordkeeping services, and costs of shareholders' reports, proxy solicitations,
and corporate meetings; (l) fees and expenses of registering our shares under
the appropriate federal securities laws and of qualifying our shares under
applicable state securities laws, including expenses attendant upon the initial
registration and qualification of these shares and attendant upon renewals of,
or amendment to, those registrations and qualifications; (m) expenses of
preparing, printing and delivering the initial registration statement and of
preparing, printing and delivering the Prospectuses to existing shareholders and
of printing shareholder application forms for shareholder accounts; (n) fees and
expenses payable to the Adviser, distributor, Administrator, custodian, transfer
agent and dividend agent; and (o) any other distribution or promotional expenses
contemplated by an effective plan adopted by us pursuant to Rule 12b-1 under the
1940 Act. Our obligation for the foregoing expenses is limited by your agreement
to be responsible, while this Agreement is in effect, for any amount by which
our annual operating expenses, including distribution expenses (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which each Fund's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. (a) In consideration of the foregoing we will pay you an
annual fee as set forth on Schedule A. Your fee will be accrued by us daily, and
will be payable on the last day of each calendar month for services performed
hereunder during that month or on such other schedules as you shall request of
us in writing. You may waive your right to any fee to which you are entitled
hereunder, provided such waiver is delivered to us in writing. Any reimbursement
of our expenses, to which we may become entitled pursuant to the last sentence
of paragraph 3 hereof, will be paid to us at the end of the month for which
those expenses are accrued, at the same time as we pay you your fee.
(b) Pursuant to each Fund's Distribution and Service Plan and
the Shareholder Servicing Agreement, you will also act as a shareholder
servicing agent for each Fund
929049.1
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<PAGE>
pursuant to which each Fund is permitted to pay you a maximum of 0.25% per annum
of its average daily net assets to compensate you for providing shareholder
services and to permit you to compensate banks, savings and loans and other
financial institutions (the Adviser, with such other institutions, each a
"Shareholder Servicing Agent") whose clients are Fund shareholders for providing
shareholder services. In addition, you may use the advisory fee for distribution
of our shares and for servicing purposes including defraying the costs of
performing shareholder servicing functions on behalf of the Funds and to
compensate others with whom you may have entered into a written agreement for
performing shareholder servicing functions on behalf of the Funds. To the extent
that you or your affiliates directly may make payments to other third parties
who render shareholder support services and that such payments may be deemed
indirect financing of an activity primarily intended to result in the sale of
shares of a Fund within the context of Rule 12b-1 under the 1940 Act (the
"Rule"), then such payments by you shall be deemed to be authorized under the
Fund's Distribution and Service Plan adopted pursuant to the Rule. You will, in
your sole discretion, determine the amount of such payments and may from time to
time in your sole discretion increase or decrease the amount of such payments;
provided, however, that no such payment will increase the amount a Fund is
required to pay you or any person under this Agreement or any agreement. Any
payments made by you for such purposes are subject to compliance with the terms
of written agreements in a form satisfactory to the Fund's Board of Directors to
be entered into by you and the participating organization.
6. This Agreement will become effective on May ___, 2000 and
shall continue in effect until May __, 2002 and thereafter for successive
twelve-month periods (computed from each May 31), provided that such
continuation is specifically approved at least annually by the Company's Board
of Directors or by a majority vote of the holders of a Fund's outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of the Company's Directors who are neither party to this Agreement nor,
other than by their service as Directors of the Company, interested persons, as
defined in the 1940 Act, of any such person who is party to this Agreement. Upon
the effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of a
Fund's outstanding voting securities, as defined in the 1940 Act, or by a vote
of a majority of the entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict your
right, or the right of any of your officers, directors or employees who may also
be a director, officer or employee of ours, or of a person affiliated with us,
as defined in the 1940 Act, to engage in any other business or to
929049.1
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<PAGE>
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
(b) The Company understands that you and your affiliates and
employees, as well as their agents privy to the transactions made in the
Company's account, may, subject to the Company's and to your Code of Ethics,
purchase and sell investments for either your or their own account, which
investments may include the same investments that the Company's account is
purchasing or selling; provided, however, that no purchase or sale by you, or
any of your affiliates, agents or employees, or any of their agents privy to the
transactions made in the Company's account, will be made in a manner which would
result in any detriment to the Company, and such persons shall always keep the
interests of the Company first in effecting any such transaction.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
AMERINDO FUNDS INC.
By: /s/
----------------------------------
Name:
Title:
ACCEPTED: May __, 2000
AMERINDO INVESTMENT ADVISORS INC.
By: /s/
----------------------------------
Name:
Title:
929049.1
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Schedule A
Fund Name Fee* Date
Amerindo Technology Fund II 1.50% May __, 2000
Amerindo Internet B2B Fund 1.50% May __, 2000
Amerindo Health & Biotechnology Fund 1.50% May __, 2000
* of annual average daily net assets.
929049.1
-6-
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 13th day of July, 1999, between
AMERINDO FUNDS, INC., a Maryland corporation (the "Fund"), and SEI Investments
Distribution Co. (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Fund is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended ("1940 Act"), and its Shares are registered with the SEC under
the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
WHEREAS, the Fund desires to appoint the Distributor to act as
distributor and shareholder servicing agent for the shares of the Fund's
portfolios, as now in existence or hereinafter created from time to time
(collectively, the "Shares"), in accordance with the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Fund and Distributor hereby agree as follows:
ARTICLE 1. Sale of Shares. The Fund grants to the Distributor the
exclusive right to sell units (the "Shares") of the portfolios (the
"Portfolios") of the Fund at the net asset value per Share plus, any applicable
sales charge, in accordance with the current prospectus, as agent and on behalf
of the Fund, during the term of this Agreement and subject to the registration
requirements of the 1933 Act, the rules and regulations of the SEC and the laws
governing the sale of securities in the various states ("Blue Sky Laws").
ARTICLE 2. Solicitation of Sales. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Fund; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares, so long as the Distributor provides the Fund
1
<PAGE>
with not less than sixty days prior written notice of its intention to neither
register nor maintain a current registration and/or to sell any particular
number of shares.
ARTICLE 3. Authorized Representations. The Distributor is not
authorized by the Fund to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Fund filed with the SEC or contained in Shareholder reports
or other material that may be prepared by or on behalf of the Fund for the
Distributor's use. The Distributor may prepare and distribute sales literature
and other material, as it may deem appropriate, provided that such literature
and materials have been prepared in accordance with applicable rules and
regulations.
ARTICLE 4. Registration of Shares. The Fund agrees that it will take
all action necessary to register Shares under the federal and state securities
laws so that there will be available for sale the number of Shares the
Distributor may reasonably be expected to sell and to pay all fees associated
with said registration. The Fund shall make available to the Distributor such
number of copies of its currently effective prospectus and statement of
additional information as the Distributor may reasonably request. The Fund shall
furnish to the Distributor copies of all information, financial statements and
other papers, which the Distributor may reasonably request for use in connection
with the distribution of Shares of the Fund.
ARTICLE 5. Compensation. As compensation for providing the services
under this Agreement: ------------
(a) The Distributor shall receive from the Trust:
(1) all distribution and service fees, as applicable, at the
rate and under the terms and conditions set forth in each
Distribution and Shareholder Services Plan adopted by the
appropriate class of shares of each of the Portfolios, as such
Plans may be amended from time to time, and subject to any
further limitations on such fees as the Board of Trustees of
the Trust may impose;
(2) if applicable, all contingent deferred sales charges
("CDSCs") applied on redemptions of CDSC Class Shares of each
Portfolio on the terms and subject to such waivers as are
described in the Trust's Registration Statement and current
prospectuses, as amended from time to time, or as otherwise
required pursuant to applicable law; and
(3) all front-end sales charges, if any, on purchases of Class
A Shares of each Portfolio sold subject to such charges as
described in the Trust's Registration Statement and current
prospectuses, as amended from time to time. The Distributor,
or brokers, dealers and other financial institutions and
intermediaries that have entered into sub-distribution
agreements with the Distributor, may collect the gross
2
<PAGE>
proceeds derived from the sale of such Class A Shares, remit
the net asset value thereof to the Trust upon receipt of the
proceeds and retain the applicable sales charge.
(b) The Distributor may reallow any or all of the distribution or
service fees, contingent deferred sales charges (if applicable) and
front-end sales charges which it is paid by the Trust to such brokers,
dealers and other financial institutions and intermediaries as the
Distributor may from time to time determine.
ARTICLE 6. Indemnification of Distributor. The Fund agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Fund (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Fund does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Fund to be deemed to protect the
Distributor against any liability to the Fund or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Fund of any claim shall not relieve the Fund from any liability which
it may have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph.
The Fund shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Fund elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Fund and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Fund
elects to
3
<PAGE>
assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Fund does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Fund agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers or Directors
in connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Fund. The Distributor covenants and
agrees that it will indemnify and hold harmless the Fund and each of its
Directors and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Fund (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the Fund
or any other person indemnified to be deemed to protect the Fund or any other
person against any liability to which the Fund or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Fund or upon any person (or after the
Fund or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Fund or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably
4
<PAGE>
withheld. In the event that the Distributor elects to assume the defense of any
suit and retain counsel, the defendants in the suit shall bear the fees and
expenses of any additional counsel retained by them. If the Distributor does not
elect to assume the defense of any suit, it will reimburse the indemnified
defendants in the suit for the reasonable fees and expenses of any counsel
retained by them.
The Distributor agrees to notify the Fund promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Fund's Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for two
year(s) from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Directors of the Fund, or the vote of a majority of the outstanding voting
securities of the Fund, and (ii) the vote of a majority of those Directors of
the Fund who are not parties to this Agreement or the Fund's Distribution Plan
or interested persons of any such party ("Qualified Directors"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by the Distributor, by a vote of a majority of
Qualified Directors or by vote of a majority of the outstanding voting
securities of the Fund upon not less than sixty days prior written notice to the
other party.
ARTICLE 9. Year 2000 Compliant. The Distributor warrants that all
software code owned or under control by it, used in the performance of its
obligations hereunder will be Year 2000 Compliant. For purposes of this
paragraph, "Year 2000 Compliant" means that the software will continue to
operate beyond December 31, 1999 without creating any logical or mathematical
inconsistencies concerning any date after December 31, 1999 and without
decreasing the functionality of the system applicable to dates prior to January
1, 2000 including, but not limited to, making changes to (a) date and data
century recognition; (b) calculations which accommodate same- and multi- century
formulas and date values; and (c) input/output of date values which reflect
century dates. All changes described in this paragraph will be made at no
additional cost to the Fund.
ARTICLE 10. Notices. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Fund, at 339 Park Avenue, New York, New York 100022,
attention: Dana E. Smith; and if to the Distributor, One Freedom Valley Drive,
Oaks, Pennsylvania 19456.
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<PAGE>
ARTICLE 11. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of Maryland
or any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 12. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS, the Fund and Distributor have each duly executed this
Agreement, as of the day and year above written.
AMERINDO FUNDS, INC.
By: /s/ Alberto Vilar
----------------------------------
Attest: /s/ Dana E. Smith
-------------------------
SEI INVESTMENTS DISTRIBUTION CO.
By: /s/ Kevin P. Robins
----------------------------------
Attest: /s/ Donna M. Rafa
-------------------------
#929438 v1 - Distribution Agreement
6
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 15th day of September, 1999, by and
between AMERINDO FUNDS, INC. (the "Fund"), a Maryland corporation, and SEI
Investments Mutual Funds Services (the "Administrator"), a Delaware business
trust.
WHEREAS, the Fund is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Fund desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Fund as the Fund and the Administrator may agree on
("Portfolios") and as listed on the schedules attached hereto ("Schedules") and
made a part of this Agreement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Fund hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way and shall
not be deemed an agent of the Fund.
ARTICLE 2. Administrative and Accounting Services. The Administrator
shall perform or supervise the performance by others of other administrative
services in connection with the operations of the Portfolios, and, on behalf of
the Fund, will investigate, assist in the selection of and conduct relations
with custodians, depositories, accountants, legal counsel, underwriters, brokers
and dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Directors of the Fund with such reports
regarding investment performance as they may reasonably request but shall have
no responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder.
The Administrator shall provide the Fund with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Directors' meetings) for handling
the affairs of the Portfolios and such other services as the Directors may, from
time to time, reasonably request and the Administrator shall, from time to time,
reasonably
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determine to be necessary to perform its obligations under this Agreement. In
addition, at the request of the Board of Directors (the "Directors"), the
Administrator shall make reports to the Directors concerning the performance of
its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Fund expenses and control all
disbursements for the Fund, and as appropriate compute the
Fund's yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighed maturity;
(b) assist Fund counsel with the preparation of prospectuses,
statements of additional information, registration statements,
proxy materials;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Fund's
shares with state securities authorities, monitor sale of Fund
shares for compliance with state securities laws, and file
with the appropriate state securities authorities the
registration statements and reports for the Fund and the
Fund's shares and all amendments thereto, as may be necessary
or convenient to register and keep effective the Fund and the
Fund's shares with state securities authorities to enable the
Fund to make a continuous offering of its shares;
(d) develop and prepare communications to shareholders, including
the annual report to shareholders, coordinate mailing
prospectuses, notices, proxy statements, proxies and other
reports to Fund shareholders, and supervise and facilitate the
solicitation of proxies solicited by the Fund for all
shareholder meetings, including tabulation process for
shareholder meetings;
(e) coordinate with Fund counsel the preparation and negotiation
of, and administer contracts on behalf of the Fund with, among
others, the Fund's investment adviser, distributor, custodian,
and transfer agent;
(f) maintain the Fund's general ledger and prepare the Fund's
financial statements, including expense accruals and payments,
determine the net asset value of the Fund's assets and of the
Fund's shares, and supervise the Fund's transfer agent with
respect to the payment of dividends and other distributions to
shareholders;
(g) calculate performance data of the Fund and its portfolios for
dissemination to information services covering the investment
company industry;
(h) coordinate and supervise the preparation and filing of the
Fund's tax returns;
(i) examine and review the operations and performance of the
various organizations
-2-
<PAGE>
providing services to the Fund or any Portfolio of the Fund,
including, without limitation, the Fund's investment adviser,
distributor, custodian, transfer agent, outside legal counsel
and independent public accountants, and at the request of the
Board of Directors, report to the Directors on the performance
of organizations;
(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and
printing of the Fund's semi-annual and annual reports to
shareholders;
(k) provide internal legal and administrative services as
requested by the Fund from time to time, including but not
limited to preparation of materials for the quarterly meetings
of the Board of Directors;
(l) assist with the design, development, and operation of the
Fund, including new portfolio and class investment objectives,
policies and structure;
(m) provide individuals acceptable to the Directors for
nomination, appointment, or election as officers of the Fund,
who will be responsible for the management of certain of the
Fund's affairs as determined by the Directors;
(n) advise the Fund and its Directors on matters concerning the
Fund and its affairs;
(o) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Fund
in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Fund's Board of Directors;
(p) monitor and advise the Fund and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
(q) perform all administrative services and functions of the Fund
and each Portfolio to the extent administrative services and
functions are not provided to the Fund or such Portfolio
pursuant to the Fund's or such Portfolio's investment advisory
agreement, distribution agreement, custodian agreement and
transfer agent agreement;
(r) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Fund and the Administrator shall determine desirable; and
(s) prepare and file with the SEC the semi-annual report for the
Fund on Form N-SAR and all required notices pursuant to Rule
24f-2.
Also, the Administrator will perform other services for the Fund as agreed from
time to time, including, but not limited to performing internal audit
examinations; mailing the annual reports of
-3-
<PAGE>
the Portfolios; preparing an annual list of shareholders; and mailing notices of
shareholders' meetings, proxies and proxy statements, for all of which the Fund
will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own expense
the executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Administrator shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Fund as well as all Directors of the
Fund who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Fund retained by the Directors of the Fund
to perform services on behalf of the Fund.
(B) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of pricing
services, the costs of custodial services, the cost of initial and ongoing
registration of the Shares under Federal and state securities laws, fees and
out-of-pocket expenses of Directors who are not affiliated persons of the
Administrator or the investment adviser to the Fund or any affiliated
corporation of the Administrator or the investment Adviser, the costs of
Directors' meetings, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Fund.
ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Fund shall pay to the Administrator compensation at an annual
rate specified in the Schedule. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly. The Fund shall also
reimburse the Administrator for its reasonable out-of-pocket expenses, including
the travel and lodging expenses incurred by officers and employees of the
Administrator in connection with attendance at meetings of the Fund's Board of
Directors.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
-4-
<PAGE>
(B) Compensation from Transactions. The Fund hereby authorizes any entity
or person associated with the Administrator which is a member of a national
securities exchange to effect any transaction on the exchange for the account of
the Fund which is permitted by Section 11 (a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Fund hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T) (a) (2) (iv).
(C) Survival of Compensation Rates. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
law which cannot be waived or modified hereby. (As used in this Article 5, the
term "Administrator" shall include directors, officers, employees and other
agents of the Administrator as well as that corporation itself.)
So long as the Administrator acts in good faith and with due diligence
the Fund assumes full responsibility and shall indemnify the Administrator and
hold it harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and all losses, damages,
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of said administration, transfer agency, and dividend
disbursing relationships to the Fund or any other service rendered to the Fund
hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Fund may be asked to indemnify or hold the
Administrator harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Fund, but failure to do so in good faith shall not affect the rights
hereunder.
The Fund shall be entitled to participate at its own expense or, if it so
elects, to assume the defense of any suit brought to enforce any claims subject
to this indemnity provision. If the Fund elects to assume the defense of any
such claim, the defense shall be conducted by counsel chosen by the Fund and
satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Fund elects to assume the defense of any suit
and retain counsel, the
-5-
<PAGE>
Administrator shall bear the fees and expenses of any additional counsel
retained by it. If the Fund does not elect to assume the defense of a suit, it
will reimburse the Administrator for the reasonable fees and expenses of any
counsel retained by the Administrator.
The Administrator may apply to the Fund at any time for instructions and
may consult counsel for the Fund or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the Fund
until receipt of written notice thereof from the Fund.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Fund are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Directors, officers, employees
and Shareholders of the Fund are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Fund, and
that the Administrator may be or become interested in the Fund as a Shareholder
or otherwise.
ARTICLE 7. Confidentiality. The Administrator agrees on behalf of itself
and its employees to treat confidentially all records and other information
relative to the Fund and its prior, present or potential Shareholders and
relative to the Adviser and its prior, present or potential customers, except,
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld and may not be withheld where the
Administrator may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
ARTICLE 8. Equipment Failures. In the event of equipment failures beyond
the Administrator's control, the Administrator shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The Administrator shall develop and
maintain a plan for recovery from equipment failures which may include
contractual arrangements with appropriate parties making reasonable provision
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
ARTICLE 9. Year 2000 Compliant. The Administrator warrants that all
software code owned or under control by it, used in the performance of its
obligations hereunder will be Year 2000 Compliant. For purposes of this
paragraph, "Year 2000 Compliant" means that the software will continue to
operate beyond December 31, 1999 without creating any logical or
-6-
<PAGE>
mathematical inconsistencies concerning any date after December 31, 1999 and
without decreasing the functionality of the system applicable to dates prior to
January 1, 2000 including, but not limited to, making changes to (a) date and
data century recognition; (b) calculations which accommodate same- and multi-
century formulas and date values; and (c) input/output of date values which
reflect century dates. All changes described in this paragraph will be made at
no additional cost to the Fund.
ARTICLE 10. Compliance With Governmental Rules and Regulations. The
Administrator undertakes to comply with all applicable requirements of the 1933
Act, the 1934 Act, the 1940 Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Administrator hereunder.
ARTICLE 11. Duration and Termination of this Agreement. This Agreement
shall become effective on the date set forth in the Schedules and shall remain
in effect for the initial term of the Agreement (the "Initial Term") and each
renewal term thereof (each, a "Renewal Term"), each as set forth in the
Schedules, unless terminated in accordance with the provisions of this Article
10. This Agreement may be terminated only: (a) by the mutual written agreement
of the parties; (b) by either party hereto on 90 days' written notice, as of the
end of the Initial Term or the end of any Renewal Term; (c) by either party
hereto on such date as is specified in written notice given by the terminating
party, in the event of a material breach of this Agreement by the other party,
provided the terminating party has notified the other party of such breach at
least 45 days prior to the specified date of termination and the breaching party
has not remedied such breach by the specified date; (d) effective upon the
liquidation of the Administrator; or (e) as to any Portfolio or the Fund,
effective upon the liquidation of such Portfolio or the Fund, as the case may
be. For purposes of this Article 10, the term "liquidation" shall mean a
transaction in which the assets of the Administrator, the Fund or a Portfolio
are sold or otherwise disposed of and proceeds therefrom are distributed in cash
to the shareholders in complete liquidation of the interests of such
shareholders in the entity.
This Agreement shall not be assignable by the Administrator, without the
prior written consent of the Fund, except to an entity that is controlled by, or
under common control, with, the Administrator.
ARTICLE 12. Amendments. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
ARTICLE 13. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Fund shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Fund and will be made available
to or surrendered promptly to the Fund on request.
-7-
<PAGE>
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Fund and follow the Fund's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Fund has
agreed to indemnify the Administrator against such liability.
ARTICLE 14. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 15. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Fund, 339 Park Avenue, New York, New York 10022, attention:
Dana E. Smith; and if to the Administrator at One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
ARTICLE 16. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Maryland, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 17. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
-8-
<PAGE>
ARTICLE 18. Binding Agreement. This Agreement, and the rights and
obligations of the parties and the Portfolios hereunder, shall be binding on,
and inure to the benefit of, the parties and the Portfolios and the respective
successors and assigns of each of them.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
AMERINDO FUNDS, INC.
By: /s/ Alberto Vilar
-------------------------
Attest: /s/ Dana E. Smith
---------------------
SEI INVESTMENTS MUTUAL FUNDS SERVICES
By: /s/ Kevin P. Robins
-------------------------
Attest: /s/ Donna M. Rafa
---------------------
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<PAGE>
SCHEDULE
TO THE ADMINISTRATION AGREEMENT
DATED AS OF SEPTEMBER 15, 1999
BETWEEN
AMERINDO FUNDS, INC.
AND
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Portfolios: This Agreement shall apply to all Portfolios of Amerindo
Funds, Inc. (the "Fund"), either now or hereafter created. The
current portfolios of the Fund are set forth below: Technology
Fund (collectively, the "Portfolios").
Fees: Pursuant to Article 4, Section A, the Fund shall pay the
Administrator compensation for services rendered to the
Portfolios at an annual rate, which is calculated daily and
paid monthly according to the following schedule:
<TABLE>
<CAPTION>
-------------------------------------------- -------------------------------------------
Fee (on average annual assets) Assets in Fund
-------------------------------------------- -------------------------------------------
-------------------------------------------- -------------------------------------------
<S> <C>
.125% to $250 Million
-------------------------------------------- -------------------------------------------
-------------------------------------------- -------------------------------------------
.09% Next $250 Million
-------------------------------------------- -------------------------------------------
-------------------------------------------- -------------------------------------------
.07% Next $500 Million
-------------------------------------------- -------------------------------------------
-------------------------------------------- -------------------------------------------
.05% On assets over $1 Billion
-------------------------------------------- -------------------------------------------
</TABLE>
The annual minimum fee for each domestic Portfolio will be
$85,000 and the annual minimum fee for each international
Portfolio will be $100,000, payable monthly. The annual fee
for each additional class of shares is $15,000.
Term: This Agreement shall become effective on September 15, 1999
and shall remain in effect for an Initial Term of five (5)
years from such date and, thereafter, for successive Renewal
Terms of two (2) years each, unless and until this Agreement
is terminated in accordance with the provisions of Article 10
hereof.
#929435 v1 - Administration Agreement
-10-
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN FOR
CLASS A SHARES AND CLASS D SHARES
AMERINDO FUNDS INC.
WHEREAS, AMERINDO FUNDS INC. (the "Fund") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Fund and the prinicipal underwriter of the Fund's Class A
shares and Class D shares (the "Distributor") have entered into a distribution
agreement, in a form satisfactory to the Fund's Board of Directors, to provide
distribution and distribution-related services; and
WHEREAS, the Board of Directors of the Fund has approved a distribution and
service plan for Class A shares and Class D shares of the Fund (the "Current
Plan"); and
WHEREAS, it is considered desirable to make certain amendments to and to
restate the Current Plan; and
WHEREAS, the Board of Directors of the Fund has determined that there is a
reasonable likelihood that this Amended and Restated Distribution and Service
Plan for Class A Shares and Class D Shares (the "Plan") will benefit the Fund
and the holders of Class A shares and Class D shares (collectively, "Shares") of
the Fund's common stock ("Shareholders");
NOW, THEREFORE, the Board of Directors of the Fund hereby adopts this Plan
pursuant to Rule 12b-1 under the 1940 Act.
Section 1. Pursuant to this Plan, the Fund may directly or indirectly bear
expenses relating to distribution and Shareholder servicing with respect to
Shares of the portfolios of the Fund, as now in existence or hereinafter created
from time to time (each, a "Portfolio").
Section 2. Each Portfolio is authorized to pay the Distributor a total fee
in connection with the servicing of Shareholder accounts and in connection with
distribution-related activities with respect to a class of Shares of such
Portfolio, calculated and payable monthly, at the annual rate of 0.25% of the
value of the average daily net assets of the respective class of such
Portfolio's Shares. All or any portion of such total fee may be payable as a
Shareholder Servicing Fee.
<PAGE>
Section 3.
(a) In its discretion, the Distributor may use any or all of the
Shareholder Servicing Fee to provide compensation for ongoing servicing
and/or maintenance of Shareholder accounts with respect to the
respective class of Shares of the applicable Portfolios. Compensation
may be paid by the Distributor to persons, including employees of the
Distributor, and institutions who respond to inquiries of Shareholders
regarding their ownership of Shares or their accounts with the Fund or
who provide other administrative or accounting services not otherwise
required to be provided by the Fund's investment adviser, transfer
agent or other agent of the Fund.
(b) In its discretion, the Distributor may use any or all of the
Distribution Fee to provide initial and ongoing sales compensation to
its investment executives and to other broker-dealers in respect of
sales of the respective class of Shares of the applicable Portfolios
and to pay for other advertising and promotional expenses in connection
with the distribution of such Shares. Such advertising and promotional
expenses may include, by way of example but not by way of limitation,
costs of printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors;
preparation and distribution of sales literature; advertising of any
type; an allocation of overhead and other expenses of the Distributor
related to the distribution of Shares; and payments to, and expenses
of, officers, employees or representatives of the Distributor, of other
broker-dealers, banks or other financial institutions, and of any other
persons who provide support services in connection with the
distribution of Shares, including travel, entertainment, and telephone
expenses, to the extent permitted by applicable law.
(c) Payments under this Plan are not limited to the expenses for
Shareholder servicing and distribution-related activities actually
incurred by the Distributor, so that such payments may exceed expenses
actually incurred by the Distributor; provided, however, that such
payments will not increase the amount which the Fund is required to pay
the Distributor. The Fund's Board of Directors will evaluate the
appropriateness of this Plan and its payment terms on a periodic basis
and in doing so will consider all relevant factors, including expenses
borne by the Distributor and amounts it receives under this Plan.
(d) The Fund's investment adviser and the Distributor may, at their option
and in their sole discretion, make payments from their own resources
(which may include the advisory fee and past profits) to cover costs of
additional distribution and Shareholder servicing activities.
Section 4. This Plan shall become effective with respect to a class of
Shares of a new Portfolio upon approval (a) by a vote of a majority of the
respective class of outstanding voting
<PAGE>
Shares of such Portfolio; and (b) by a majority of both (i) the Board Directors
of the Fund and (ii) the Directors who are not interested persons of the Fund
who have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Qualified Directors"), cast in person at a
meeting of the Board of Directors called for the purpose of voting on this Plan
or any such agreement.
Section 5. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in clause (b) of Section 4
herein for the approval of the Plan.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Board of Directors of the Fund, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
Section 7. This Plan may be terminated at any time with respect to a class
of Shares of any Portfolio by the vote of a majority of the Qualified Directors
or by vote of a majority of the respective class of such Portfolio's outstanding
voting Shares.
Section 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any class of any Portfolio, without payment of any penalty, by the vote of a
majority of the Qualified Directors or by the vote of Shareholders holding a
majority of the respective class of such Portfolio's outstanding voting Shares,
on not more than 60 days' written notice to any other party to the agreement;
and (b) that such agreement shall terminate automatically in the event of its
assignment.
Section 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the respective class of
outstanding voting Shares of the applicable Portfolio, and all material
amendments to this Plan shall be approved in the manner provided in clause (b)
of Section 4 herein for the approval of this Plan.
Section 10. As used in this Plan, the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
Section 11. While this Plan is in effect, the selection and nomination of
those Directors who are not interested persons of the Fund within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
<PAGE>
Section 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
Approved: November 2, 1999
DISTRIBUTION AND SERVICE PLAN
FOR CLASS C SHARES
AMERINDO FUNDS INC.
WHEREAS, AMERINDO FUNDS INC. (the "Fund") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Fund and the prinicipal underwriter of the Fund's Class C
shares (the "Distributor") have entered into a distribution agreement, in a form
satisfactory to the Fund's Board of Directors, to provide distribution and
distribution-related services; and
WHEREAS, the Board of Directors of the Fund has determined that there is a
reasonable likelihood that this Distribution and Service Plan for Class C Shares
(the "Plan") will benefit the Fund and the holders of Class C shares ("Shares")
of the Fund's common stock ("Shareholders");
NOW, THEREFORE, the Board of Directors of the Fund hereby adopts this Plan
pursuant to Rule 12b-1 under the 1940 Act.
Section 1. Pursuant to this Plan, the Fund may directly or indirectly bear
expenses relating to distribution and Shareholder servicing with respect to
Shares of the portfolios of the Fund, as now in existence or hereinafter created
from time to time (each, a "Portfolio").
Section 2.
(a) Each Portfolio is authorized to pay the Distributor a fee in connection
with distribution-related activities with respect to the Shares of such
Portfolio, calculated and payable monthly, at the annual rate of 0.75%
of the value of the average daily net assets of such Portfolio's Shares
("Distribution Fee").
(b) Each Portfolio is authorized to pay the Distributor a fee in connection
with the servicing of Shareholder accounts with respect to the Shares
of such Portfolio, calculated and payable monthly, at the annual rate
of 0.25% of the value of the average daily net assets of such
Portfolio's Shares ("Shareholder Servicing Fee").
Section 3.
(a) In its discretion, the Distributor may use any or all of the
Distribution Fee to provide initial and ongoing sales compensation to
its investment executives and to other broker-dealers in respect of
sales of Shares of the applicable Portfolios and to pay for other
advertising and promotional expenses in connection with the
<PAGE>
distribution of such Shares. Such advertising and promotional expenses
may include, by way of example but not by way of limitation, costs of
printing and mailing prospectuses, statements of additional information
and shareholder reports to prospective investors; preparation and
distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor related to
the distribution of Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other
broker-dealers, banks or other financial institutions, and of any other
persons who provide support services in connection with the
distribution of Shares, including travel, entertainment, and telephone
expenses, to the extent permitted by applicable law.
(b) In its discretion, the Distributor may use any or all of the
Shareholder Servicing Fee to provide compensation for ongoing servicing
and/or maintenance of Shareholder accounts with respect to Shares of
the applicable Portfolios. Compensation may be paid by the Distributor
to persons, including employees of the Distributor, and institutions
who respond to inquiries of Shareholders regarding their ownership of
Shares or their accounts with the Fund or who provide other
administrative or accounting services not otherwise required to be
provided by the Fund's investment adviser, transfer agent or other
agent of the Fund.
(c) Payments under this Plan are not limited to the expenses for
Shareholder servicing and distribution-related activities actually
incurred by the Distributor, so that such payments may exceed expenses
actually incurred by the Distributor; provided, however, that such
payments will not increase the amount which the Fund is required to pay
the Distributor. The Fund's Board of Directors will evaluate the
appropriateness of this Plan and its payment terms on a periodic basis
and in doing so will consider all relevant factors, including expenses
borne by the Distributor and amounts it receives under this Plan.
(d) The Fund's investment adviser and the Distributor may, at their option
and in their sole discretion, make payments from their own resources
(which may include the advisory fee and past profits) to cover costs of
additional distribution and Shareholder servicing activities.
Section 4. This Plan shall become effective with respect to Shares of a new
Portfolio upon approval (a) by a vote of a majority of the outstanding voting
Shares of such Portfolio; and (b) by a majority of both (i) the Board Directors
of the Fund and (ii) the Directors who are not interested persons of the Fund
who have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Qualified Directors"), cast in person at a
meeting of the Board of Directors called for the purpose of voting on this Plan
or any such agreement.
Section 5. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the
<PAGE>
manner provided in clause (b) of Section 4 herein for the approval of the Plan.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Board of Directors of the Fund, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
Section 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Directors or by vote of a
majority of such Portfolio's outstanding voting Shares.
Section 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of Shareholders holding a majority of such
Portfolio's outstanding voting Shares, on not more than 60 days' written notice
to any other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
Section 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of Shareholders holding a majority of the outstanding voting Shares of
the applicable Portfolio, and all material amendments to this Plan shall be
approved in the manner provided in clause (b) of Section 4 herein for the
approval of this Plan.
Section 10. As used in this Plan, the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
Section 11. While this Plan is in effect, the selection and nomination of
those Directors who are not interested persons of the Fund within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
Section 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
Approved: November 2, 1999
AMERINDO TECHNOLOGY FUND
a series of
AMERINDO FUNDS INC.
AMENDMENT NO. 1 TO RULE 18f-3 MULTI-CLASS PLAN
----------------------------------------------
November 2, 1999
I. Introduction.
------------
Pursuant to Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), the following sets forth the method for
allocating fees and expenses between the Class A, Class C and Class D shares of
Amerindo Technology Fund, a series of Amerindo Funds Inc. (the "Fund"). In
addition, this Rule 18f-3 Multi-Class Plan (the "Plan") sets forth the
shareholder servicing and distribution arrangements between the Class A, Class C
and Class D shares of the Fund.
The Fund is a non-diversified, open-end, management investment
company registered under the 1940 Act and the shares of which are registered on
Form N-1A under the Securities Act of 1933, as amended and the 1940 Act. Upon
the initial effective date of this Plan, the Fund had elected to offer multiple
classes of shares pursuant to the provisions of Rule 18f-3 and this Plan. This
Amendment No. 1 serves to create an additional class of shares that will be
offered by the Fund - Class C shares. This new class of shares is being offered
in addition to the multiple classes of shares already offered pursuant to the
provisions of Rule 18f-3 and this Plan.
II. Allocation of Expenses.
----------------------
Pursuant to Rule 18f-3 under the 1940 Act, the Fund shall
allocate to each of the Class A, Class C and Class D shares of the Fund (i) any
fees and expenses incurred by the Fund in connection with the distribution of
each class of shares under a distribution and service plan adopted for such
class of shares pursuant to Rule 12b-1, and (ii) any fees and expenses incurred
by the Fund under a shareholder servicing plan in connection with the provision
of shareholder services to the holders of each class of shares. In addition,
pursuant to Rule 18f-3, the Fund may allocate the following fees and expenses to
a particular class of shares:
(i) transfer agent fees identified by the
transfer agent as being attributable to such
class of shares;
(ii) printing and postage expenses related to
preparing and distributing materials such as
shareholder reports, prospectuses, reports,
and proxies to current shareholder of such
class of shares or to regulatory agencies
with respect to such class of shares;
867266.2
<PAGE>
(iii) blue sky registration or qualification fees
incurred by such class of shares;
(iv) Securities and Exchange Commission
registration fees incurred by such class of
shares;
(v) the expense of administrative personnel and
services (including, but not limited to,
those of a fund accountant, [custodian]1 or
divided paying agent charged with
calculating net asset values or determining
or paying dividends) as required to support
the shareholders of such class of shares;
(vi) litigation or other legal expenses relating
solely to such class of shares;
(vii) fees of the Fund's Directors incurred as a
result of issues relating to such class of
shares; and
(viii) independent accountants' fees relating
solely to such class of shares.
The initial determination of the class expenses that will be
allocated by the Fund to a particular class of shares and any subsequent changes
thereto will be reviewed by the Board of Directors and approved by a vote of the
Directors of the Fund, including a majority of the Directors who are not
interested persons of the Fund.
Income, realized and unrealized capital gains and losses, and
any expenses of the Fund not allocated to a particular class pursuant to this
Plan shall be allocated to each class of the Fund on the basis of the net assets
of that class in relation to the total net assets of the Fund.
III. Class Arrangements.
------------------
The following summarizes the Rule 12b-1 distribution and
shareholder servicing fees applicable to each class of shares of the Fund.
Additional details regarding such fees and services, as well as any other
services offered to shareholders, are set forth in the Fund's current
Prospectuses and Statement of Additional Information.
- --------
1. Rule 18f-3 requires that services related to the management of the
portfolio's assets, such as custodial fees, be borne by the fund and not by
class.
867266.2
-2-
<PAGE>
A. Class A Shares -
1. Initial Maximum Sales Load: 5.75%.
2. Contingent Deferred Sales Charge: None.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: None.
5. Rule 12b-1 Shareholder Servicing Fees: 0.25%
per annum of the average daily net assets of
the Class to be paid to Distributor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
B. Class C Shares -
1. Initial Maximum Sales Load: None.
2. Contingent Deferred Sales Charge: 1.00% for
shares held less than 1 year.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: 0.75% per
annum of the average daily net assets of the
Class to be paid to the Distributor.
5. Rule 12b-1 Shareholder Servicing Fees: 0.25%
per annum of the average daily net assets of
the Class to be paid to the Distributor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
867266.2
-3-
<PAGE>
C. Class D Shares -
1. Initial Maximum Sales Load: None.
2. Contingent Deferred Sales Charge: None.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: None.
5. 12b-1 Shareholder Servicing Fees: 0.25% per
annum of the average daily net assets of the
Class to be paid to the Advisor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
IV. Board Review.
------------
The Board of Directors of the Fund shall review this Plan as
frequently as they deem necessary. Prior to any material amendments to this
Plan, the Fund's Board of Directors, including a majority of the Directors that
are not interested persons of the Fund, shall find that the Plan, as proposed to
be amended (including any proposed amendments to the method of allocating class
and/or fund expenses, is in the best interest of each class of shares of the
Fund individually and the Fund as a whole. In considering whether to approve any
proposed amendments(s) to the Plan, the Directors of the Fund shall request and
evaluate such information as they consider reasonably necessary to evaluate the
proposed amendments(s) to the Plan.
In making its determination to amend this Plan, the Board has
focused on, among other things, the relationship between or among the classes
and has examined potential conflicts of interest among classes regarding the
allocation of fees, services, waivers and reimbursement of expenses, and voting
rights. The Board has evaluated the level of services provided to each class and
the cost of those services to ensure that the services are appropriate and the
allocation of expenses is reasonable. In approving any subsequent amendments to
this Plan, the Board shall focus on and evaluate such factors as well as any
others deemed necessary by the Board.
867266.2
-4-
CODE OF ETHICS FOR
AMERINDO TECHNOLOGY FUND
AMERINDO INVESTMENT ADVISORS INC.
Amerindo Technology Fund, a series of Amerindo Funds Inc. (the "Fund") and
Amerindo Investment Advisors Inc. have determined to adopt this Code of Ethics
(the "Code") as of May 14, 1996, to specify and prohibit certain types of
personal securities transactions deemed to create a conflict of interest and to
establish reporting requirements and preventive procedures pursuant to the
provisions of Rule 17j-1(b)(1) under the Investment Company Act of 1940 (the
"1940 Act").
I. DEFINITIONS
A. An "Access Person" means (i) any Trustee, Director, officer or Advisory
Person (as defined below) of the Fund or any investment adviser
thereof, or (ii) any director or officer of a principal underwriter of
the Fund who, in the ordinary course of his or her business, makes,
participates in or obtains information regarding the purchase or sale
of securities for the Fund for which the principal underwriter so acts
or whose functions or duties as part of the ordinary course of his or
her business relate to the making of any recommendation to the Fund
regarding the purchase or sale of securities or (iii) notwithstanding
the provisions of clause (i) above, where the investment adviser is
primarily engaged in a business or businesses other than advising
registered investment companies or other advisory clients, any trustee,
director, officer or Advisory Person of the investment adviser who,
with respect to the Fund, makes any recommendation or participates in
the determination of which recommendation shall be made, or whose
principal function or duties relate to the determination of which
recommendation shall be made to the Fund or who, in connection with his
or her duties, obtains any information concerning securities
recommendations being made by such investment adviser to the Fund.
B. An "Advisory Person" means any employee of the Fund or any investment
adviser thereof (or of any company in a control relationship to the
Fund or such investment adviser), who, in connection with his or her
regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of securities by the Fund or
whose functions relate to any recommendations with respect to such
purchases or sales and any natural person in a control relationship
with the Fund or adviser who obtains information regarding the purchase
or sale of securities.
C. A "Portfolio Manager" means any person or persons with the direct
responsibility and authority to make investment decisions affecting the
Fund.
D. "Access Persons," "Advisory Persons" and "Portfolio Managers" shall not
include any individual who is required to and does file quarterly
reports with
364574.1
<PAGE>
Code of Ethics - Page 2
any investment adviser, sub-adviser, administrator or the principal
underwriter substantially in conformity with Rule 17j-1 of the 1940 Act
or Rule 204-2 of the Investment Advisers Act of 1940, provided however,
that the compliance officer of any investment adviser, sub-adviser,
administrator, or the principal underwriter shall (i) file an annual
certification with the Fund stating that such entity has adopted or
approved the continuation of its Code of Ethics, substantially in the
form that was provided to the Fund's Board of Directors at the time
when the Fund's Code of Ethics was adopted; and (ii) notify the Fund's
compliance officer of any violation of such entity's Code of Ethics
upon actual knowledge by such compliance officer that a violation had
occurred. The Fund's compliance officer shall report any such
violations to the Fund's Board of Directors in accordance with the
provisions of the Fund's Code of Ethics as if the report of the
violation had been made under the Fund's Code of Ethics.
E. "Beneficial Ownership" shall be interpreted subject to the provisions
of Rule 16a-l(a) (exclusive of Section (a)(1) of such Rule) of the
Securities Exchange Act of 1934.
F. "Control" shall have the same meaning as set forth in Section 2(a)(9)
of the 1940 Act.
G. "Disinterested Director" means a Director who is not an "interested
person" within the meaning of Section 2(a)(19) of the 1940 Act. An
"interested person" includes any person who is a trustee, director,
officer, employee or owner of 5% or more of the outstanding stock of
the Adviser. Affiliates of brokers or dealers are also "interested
persons", except as provided in Rule 2(a)(19)(1) under the 1940 Act.
H. The "Review Officer" is the person designated by the Fund's Board of
Directors to monitor the overall compliance with this Code. In the
absence of any such designation the Review Officer shall be the
Treasurer or any Assistant Treasurer of the Fund.
I. The "Preclearance Officer" is the person designated by the Fund's Board
of Directors to provide preclearance of any personal security
transaction as required by this Code of Ethics.
J. "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security or the purchase or
sale of a future or index on a security or option thereon.
364574.1
<PAGE>
Code of Ethics - Page 3
K. "Security" shall have the meaning as set forth in Section 2(a)(36) of
the 1940 Act (in effect, all securities), except that it shall not
include securities issued by the U.S. Government (or any other
"government security" as that term is defined in the 1940 Act),
bankers' acceptances, bank certificates of deposit, commercial paper
and such other money market instruments as may be designated by the
Directors of the Fund and shares of registered open-end investment
companies.
L. A security is "being considered for purchase or sale" when a
recommendation to purchase or sell the security has been made and
communicated and, with respect to the person making the recommendation,
when such person seriously considers making such a recommendation.
II. STATEMENT OF GENERAL PRINCIPLES
The following general fiduciary principles shall govern the personal
investment activities of all Access Persons.
Each Access Person shall adhere to the highest ethical standards and
shall:
A. at all times, place the interests of the Fund before his personal
interests;
B. conduct all personal securities transactions in a manner consistent
with this Code, so as to avoid any actual or potential conflicts of
interest, or an abuse of position of trust and responsibility; and
C. not take any inappropriate advantage of his position with or on behalf
of the Fund.
III. RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES.
A. Blackout Periods
1. No Access Person (other than a Disinterested Director) shall
purchase or sell, directly or indirectly, any security in which he
has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership on a day during which he knows or
should have known the Fund has a pending "buy" and "sell" order in
that same security until that order is executed or withdrawn.
364574.1
<PAGE>
Code of Ethics - Page 4
2. No Advisory Person or Portfolio Manager shall purchase or sell,
directly or indirectly, any security in which he has, or by reason
of such transaction acquires, any direct or indirect beneficial
ownership within at least seven calendar days before and after the
Fund trades (or has traded) in that security.
B. Initial Public Offerings
No Advisory Person shall acquire any security in an initial public
offering for his or her personal account.
C. Private Placements
With regard to private placements, each Advisory Person shall:
1. obtain express prior written approval from the Review Officer
(who, in making such determination, shall consider among other
factors, whether the investment opportunity should be reserved for
the Fund, and whether such opportunity is being offered to such
Advisory Person by virtue of his position with the Fund) for any
acquisition of securities in a private placement; and
2. after authorization to acquire securities in a private placement
has been obtained, disclose such personal investment with respect
to any subsequent consideration by the Fund (or any other
investment company for which he acts in a capacity as an Advisory
Person) for investment in that issuer.
Any express prior written approval received from the Review
Officer shall be valid only on the day on which it was issued. If
the Fund decides to purchase securities of an issuer the shares of
which have been previously obtained for personal investment by an
Advisory Person, that decision shall be subject to an independent
review by Advisory Persons with no personal interest in the
issuer.
D. Short-Term Trading Profits
No Advisory Person shall profit from the purchase and sale, or
sale and purchase, of the same (or equivalent) securities of which
such Advisory Person has beneficial ownership within 60 calendar
days. Any profit so
364574.1
<PAGE>
Code of Ethics - Page 5
realized shall, unless the Fund's Board of Directors approves
otherwise, be disgorged as directed by the Fund's Board of
Directors.
E. Gifts
No Advisory Person shall receive any gift or other things of value from
any person or entity that does business with or on behalf of the Fund
that poses a potential conflict of interest.
F. Service as a Director
1. No Advisory Person shall serve on a board of directors of a
publicly traded company without prior authorization from the Board
of Directors of the Fund, based upon a determination that such
board service would be consistent with the interests of the Fund
and its investors.
2. If board service of an Advisory Person is authorized by the Board
of Directors of the Fund such Advisory Person shall be isolated
from the investment making decisions of the Fund with respect to
the company of which he is a director.
G. Exempted Transactions
The prohibition of Section III shall not apply to:
1. purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control;
2. purchases or sales that are non-volitional on the part of the
Access Person or the Fund, including mergers, recapitalizations or
similar transactions;
3. purchases which are part of an automatic dividend reinvestment
plan;
4. purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the
extent such rights were acquired from such issuer, and sales of
such rights so acquired; and
5. purchases and sales that receive prior approval in writing by the
Preclearance Officer as (a) only remotely potentially harmful to
the Fund because they would be very unlikely to affect a highly
institutional
364574.1
<PAGE>
Code of Ethics - Page 6
market, (b) clearly not economically related to the securities to
be purchased or sold or held by the Fund or client or (c) not
representing any danger of the abuses prescribed by Rule 17j-l,
but only if in each case the prospective purchaser has identified
to the Review Officer all factors of which he or she is aware
which are potentially relevant to a conflict of interest analysis,
including the existence of any substantial economic relationship
between his or her transaction and securities held or to be held
by the Fund.
IV. COMPLIANCE PROCEDURES
A. Preclearance
An Access Person (other than a Disinterested Director) may not,
directly or indirectly, acquire or dispose of beneficial ownership of a
security except as provided below unless:
1. such purchase or sale has been approved by the Preclearance
Officer;
2. the approved transaction is completed on the same day approval is
received; and
3. the Preclearance Officer has not rescinded such approval prior to
execution of the transaction.
Each Access Person may effect total purchases and sales of up to
$25,000 of securities listed on a national securities exchange
within any six month period without preclearance from the Board of
Directors or the Preclearance Officer.
1) The six month period is a "rolling" period, i.e., the
limit is applicable between any two dates which are six months
apart.
2) Transactions in options and futures, other than options or
futures on commodities, will be included for purposes of
calculating whether the $25,000 limit has been exceeded. Such
transactions will be measured by the value of the securities
underlying the options and futures.
3) Although preclearance is not required for personal
transactions in securities which fall into this "de minimis"
exception,
364574.1
<PAGE>
Code of Ethics - Page 7
these trades must still be reported on a quarterly basis pursuant
to Section IV.B, if such transactions are reportable.
B. 1. Reporting
2. Coverage: Each Access Person (other than Disinterested Directors)
shall file with the Review Officer confidential quarterly reports
containing the information required in Section IV.B.l.b of this
Code with respect to all transactions during the preceding quarter
in any securities in which such person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership,
provided that no Access Person shall be required to report
transactions effected for any account over which such Access
Person has no direct or indirect influence or control (except that
such an Access Person must file a written certification stating
that he or she has no direct or indirect influence or control over
the account in question). All such Access Persons shall file
reports, even when no transactions have been effected,
representing that no transactions subject to reporting
requirements were effected.
3. Filings: Every report shall be made no later than 10 days after
the end of the calendar quarter in which the transaction to which
the report relates was effected, and shall contain the following
information:
a. the date of the transaction, the title and the number of
shares and the principal amount of each security involved;
b. the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
c. the price at which the transaction was effected; and
d. the name of the broker, dealer or bank with or through whom
the transaction was effected.
4. Any report may contain a statement that it shall not be construed
as an admission by the person making the report that he or she has
any direct or indirect beneficial ownership in the security to
which the report relates.
5. Confirmations: All Access Persons (other than Disinterested
Directors) shall direct their brokers to supply the Fund's Review
Officer on a
364574.1
<PAGE>
Code of Ethics - Page 8
timely basis, duplicate copies of confirmations of all personal
securities transactions.
C. Review
In reviewing transactions, the Review Officer shall take into account
the exemptions allowed under Section III.G. Before making a
determination that a violation has been committed by an Access Person,
the Review Officer shall give such person an opportunity to supply
additional information regarding the transaction in question.
D. Disclosure of Personal Holdings
All Advisory Persons shall disclose all personal securities holdings
upon commencement of employment and thereafter on an annual basis.
E. Certification of Compliance
Each Access Person is required to certify annually that he or she has
read and understood the Fund's Code and recognizes that he or she is
subject to such Code. Further, each Access Person is required to
certify annually that he or she has complied with all the requirements
of the Code and that he or she has disclosed or reported all personal
securities transactions pursuant to the requirements of the Code.
V. REQUIREMENTS FOR DISINTERESTED DIRECTORS
A. Every Disinterested Director shall file with the Review Officer a
quarterly report indicating that he or she had no reportable
transactions or a report containing the information required in Section
IV.B. of this Code with respect to transactions (other than exempted
transactions listed under Section III.G.) in any securities in which
such person has, or by reason of such transactions acquires, any direct
or indirect beneficial ownership, if such Director, at the time of that
transaction, knew or should have known, in the ordinary course of
pursuing his or her official duties as Director, that during the 15-day
period immediately preceding or after the transaction by the Director:
1. such security was being purchased or sold by the Fund; or
2. such security was being considered for purchase or sale by the
Fund.
364574.1
<PAGE>
Code of Ethics - Page 9
All Disinterested Directors shall file reports, even when no
transactions have been effected, representing that no transactions
subject to reporting requirement were effected.
B. Notwithstanding the preceding section, any Disinterested Director may,
at his or her option, report the information described in section
IV.B.2 with respect to any one or more transactions and may include a
statement that the report shall not be construed as an admission that
the person knew or should have known of portfolio transactions by the
Fund in such securities.
VI. REVIEW BY THE BOARD OF DIRECTORS
At least annually, the Review Officer shall report to the Board of
Directors regarding:
A. All existing procedures concerning Access Persons' personal trading
activities and any procedural changes made during the past year;
B. Any recommended changes to the Funds' Code or procedures; and
C. A summary of any violations which occurred during the past year with
respect to which significant remedial action was taken.
VII. SANCTIONS
A. Sanctions for Violations by Access Persons
If the Review Officer determines that a violation of this Code has
occurred, he or she shall so advise the Board of Directors and the
Board may impose such sanctions as it deems appropriate, including,
inter alia, disgorgement of profits, censure, suspension or termination
of the employment of the violator. All material violations of the Code
and any sanctions imposed as a result thereto shall be reported
periodically to the Board of Directors.
B. Sanctions for Violations by Disinterested Directors
If the Review Officer determines that any Disinterested Director has
violated this Code, he or she shall so advise the President of the Fund
and also a committee consisting of the Disinterested Directors (other
than the person whose transaction is at issue) and shall provide the
committee with a report, including the record of pertinent actual or
contemplated portfolio transactions of the Fund and any additional
information supplied by the person whose transaction is at
364574.1
<PAGE>
Code of Ethics - Page 10
issue. The committee, at its option, shall either impose such sanctions
as it deems appropriate or refer the matter to the full Board of
Directors of the Fund, which shall impose such sanctions as it deems
appropriate.
VIII. MISCELLANEOUS
A. Access Persons
The Review Officer of the Fund will identify all Access Persons who are
under a duty to make reports to the Fund and will inform such persons
of such duty. Any failure by the Review Officer to notify any person of
his or her duties under this Code shall not relieve such person of his
or her obligations hereunder.
B. Records
The Fund's Administrator shall maintain records in the manner and to
the extent set forth below, which records may be maintained on
microfilm under the conditions described in Rule 31a-2(f) under the
1940 Act, and shall be available for examination by representatives of
the Securities and Exchange Commission ("SEC"):
1. a copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved
in an easily accessible place;
2. a record of any violation of this Code and of any action taken as
a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
3. a copy of each report made pursuant to this Code shall be
preserved for a period of not less than five years from the end of
the fiscal year in which it is made, the first two years in an
easily accessible place; and
4. a list of all persons who are required, or within the past five
years have been required, to make reports pursuant to this Code
shall be maintained in an easily accessible place.
C. Confidentiality
364574.1
<PAGE>
Code of Ethics - Page 11
All reports of securities transactions and any other information filed
pursuant to this Code shall be treated as confidential, except to the
extent required by law.
D. Interpretation of Provisions
The Board of Directors of the Fund may from time to time adopt such
interpretations of this Code as it deems appropriate.
364574.1
<PAGE>
AMERINDO TECHNOLOGY FUND
AMERINDO INVESTMENT ADVISORS INC.
TRANSACTIONS REPORT
To: _________________________, Review Officer
From: _______________________________________________
(Your Name)
This Transaction Report (the "Report") is submitted pursuant to Section IV
of the Code of Ethics of Amerindo Technology Fund, a series of Amerindo Funds
Inc. (the "Fund") and Amerindo Investment Advisors Inc. and supplies (below)
information with respect to transactions in any security in which I may be
deemed to have, or by reason of such transaction acquire, any direct or indirect
beneficial ownership interest (whether or not such security is a security held
or to be acquired by a Fund) for the calendar quarter ended
- ----------------------------.
Unless the context otherwise requires, all terms used in the Report shall
have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-l(a) (exclusive of
Section (a)(1) of such Rule) of the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Nature of
Transaction Name of the
(whether Principal Broker, Dealer
Purchase, Sale Amount of Price At Or Bank With
or Other Type Securities Which the Whom The Nature Of
Title of Date of of Disposition Acquired or Transaction Transaction Ownership of
Securities Transaction Or Acquisition) Disposed Of Was Effected Was Effected Securities*
---------- ----------- --------------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- ---------------
* If appropriate, you may disclaim beneficial ownership of any security listed
in this report.
364574.1
<PAGE>
Transactions Report - Page 2
I HEREBY CERTIFY THAT I (1) HAVE READ AND UNDERSTAND THE CODE OF ETHICS
OF THE FUND, DATED [__________], 1996, (2) RECOGNIZE THAT I AM SUBJECT TO THE
CODE OF ETHICS, (3) HAVE COMPLIED WITH THE REQUIREMENTS OF THE CODE OF ETHICS
OVER THE PAST YEAR, (4) HAVE DISCLOSED ALL PERSONAL SECURITIES TRANSACTIONS,
OVER THE PAST YEAR, REQUIRED TO BE DISCLOSED BY THE CODE OF ETHICS, (5) HAVE
SOUGHT AND OBTAINED PRECLEARANCE WHENEVER REQUIRED BY THE CODE OF ETHICS AND (6)
CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THE INFORMATION FURNISHED IN THIS
REPORT IS TRUE AND CORRECT.
Name (Print) _____________________________________________
Signature _____________________________________________
Date _____________________________________________
364574.1
<PAGE>
AMERINDO TECHNOLOGY FUND
AMERINDO INVESTMENT ADVISORS INC.
PERSONAL TRADING REQUEST AND AUTHORIZATION
Personal Trading Request (to be completed by access person prior to any personal
trade):
Name:___________________________________________________________________________
Date For Which You Seek Approval:_______________________________________________
Name of the issuer and dollar amount or number of securities of the issuer to be
purchased or sold:______________________________________________________________
Nature of the transaction (i.e., purchase, sale):1 _____________________________
________________________________________________________________________________
________________________________________________________________________________
Are you or is a member of your immediate family an officer or director of the
issuer of the securities or any affiliate2 of the issuer? Yes __ No __
If yes, please describe:________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Describe the nature of any direct or indirect professional or business
relationship that you may have with the issuer of the securities.3
________________________________________________________________________________
________________________________________________________________________________
- --------
1 If other than market order, please describe any proposed limits.
2 For purposes of this question, "affiliate" includes (i) any entity
that directly or indirectly owns, controls or holds with power to vote 5% or
more of the outstanding voting securities of the issuer and (ii) any entity
under common control with the issuer.
3 A "professional relationship" includes, for example, the provision
of legal counsel or accounting services. A "business relationship" includes,
for example, the provision of consulting services or insurance coverage.
364574.1
<PAGE>
Personal Trading Request and Authorization Form - Page 2
Do you have any material nonpublic information concerning the issuer?
Yes ___ No___
Do you beneficially own more than 1/2 of 1% of the outstanding equity securities
of the issuer?
Yes___ No___
If yes, please report the name of the issuer and the total number of shares
"beneficially owned":___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Are you aware of any facts regarding the proposed transaction, including the
existence of any substantial economic relationship, between the proposed
transaction and any securities held or to be acquired by a Fund that may be
relevant to a determination as to the existence of a potential conflict of
interest?4
Yes___ No___
If yes, please describe:___________________________________________________
________________________________________________________________________________
________________________________________________________________________________
To the best of your knowledge and belief, the answers that you have
provided above are true and correct.
______________________________
Signature
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4 Facts that would be responsive to this question include, for example,
the receipt of "special favors" from a stock promoter, such as participation in
a private placement or initial public offering, as an inducement to purchase
other securities of the Fund. Another example would be investment in securities
of a limited partnership that in turn owned warrants of a company formed for the
purpose of effecting a leveraged buy-out in circumstances where the Fund might
invest in securities related to the leveraged buy-out. The foregoing are only
examples of pertinent facts and in no way limit the types of facts that may be
responsive to this question.
364574.1
<PAGE>
Personal Trading Request and Authorization - Page 3
Approval or Disapproval of Personal Trading Request (to be completed by
Preclearance Officer):
_____ I confirm that the above-described proposed transaction appears to be
consistent with the policies described in the Code and that the
conditions necessary5 for approval of the proposed transaction have
been satisfied.
_____ I do not believe the above-described proposed transaction is consistent
with the policies described in the Code or that the conditions
necessary for approval of the proposed transaction have been satisfied.
Dated: Signed:
----------------------------- ----------------------------
Title:
-----------------------------
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5 In the case of a personal securities transaction by an Access Person
of the Fund (other than Disinterested Directors of the Fund), the Code of Ethics
of the Fund requires that the Fund's Preclearance Officer determine that the
proposed personal securities transaction (i) is not potentially harmful to the
Fund, (ii) would be unlikely to affect the market in which the Fund's portfolio
securities are traded, or (iii) is not related economically to securities to be
purchased, sold, or held by the Fund. In addition, the Code requires that the
Fund's Preclearance Officer determine that the decision to purchase or sell the
security at issue is not the result of information obtained in the course of the
Access Person's relationship with the Fund.
364574.1
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND
INSIDER TRADING POLICY
January, 2000
<PAGE>
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY
TABLE OF CONTENTS
I. General Policy
II. Code of Ethics
A. Purpose of Code
B. Employee Categories
C. Restrictions on Personal Securities Transactions
D. Pre-clearance of Personal Securities Transactions
E. Reporting Requirements
F. Detection and Reporting of Code Violations
G. Violations of the Code of Ethics
H. Confidential Treatment
I. Definitions Applicable to the Code of Ethics
III. Insider Trading Policy
A. What is "Material" Information?
B. What is "Nonpublic Information"?
C. Who is an Insider?
D. What is Misappropriation?
E. What is Tipping?
F. Identifying Inside Information?
G. Trading in SEI Investments Company Securities
H. Violations of the Insider Trading Policy
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I. GENERAL POLICY
SEI Investments Company, through various subsidiaries (jointly "SEI"), is an
investment adviser, administrator, distributor, and/or trustee of investment
companies, collective investment trusts, investment partnerships, and asset
management accounts (jointly "Investment Vehicles"). As an investment adviser,
SEI is subject to various U.S. securities laws and regulations governing the use
of confidential information and personal securities transactions. This Code of
Ethics and Insider Trading Policy (jointly "Policy") was developed based on
those laws and regulations, and sets forth the procedures and restrictions
governing the personal securities transactions of all SEI employees.
SEI has a highly ethical business culture and expects that all employees will
conduct any personal securities transactions consistent with this Policy and in
such a manner as to avoid any actual or potential conflict of interest or abuse
of a position of trust and responsibility. When an employee invests for his or
her own account, conflicts of interest may arise between a client's and the
employee's interest. Such conflicts may include using an employee's advisory
position to take advantage of available investment opportunities, taking an
investment opportunity from a client for an employee's own portfolio, or
frontrunning, which occurs when an employee trades in his or her personal
account before making client transactions. As a fiduciary, SEI owes a duty of
loyalty to clients which requires that an employee must always place the
interests of clients first and foremost and shall not take inappropriate
advantage of his or her position. Thus, SEI employees must conduct themselves
and their personal securities transactions in a manner that does not create
conflicts of interest with the firm's clients.
Pursuant to this Policy, employees will be subject to various pre-clearance and
reporting standards, based on their responsibilities within SEI. As a result, it
is important that all employees pay special attention to the employee category
section within this Policy to determine what provisions of the Policy applies to
them, as well as to the sections on restrictions, pre-clearance, and reporting
of personal securities transactions.
Employees outside the United States are subject to this Policy and the
applicable laws of the jurisdictions in which they are located. These laws may
differ substantially from U.S. law and may subject employees to additional
requirements. To the extent any particular portion of the Policy is inconsistent
with foreign law not included herein or within the firm's Compliance Manual,
employees should consult their designated Compliance Officer or the Compliance
Department at SEI's Oaks facility.
Each employee subject to this Policy must read and retain a copy and agree to
abide by its terms. Failure to comply with the provisions of this Policy may
result in the imposition of serious sanctions, including, but not limited to
disgorgement of profits, dismissal, substantial personal liability and/or
referral to regulatory or law enforcement agencies.
Any questions regarding SEI's policy or procedures should be referred to the
Compliance Department, which currently includes Cyndi Parrish, the Compliance
Director. (x2807).
II. CODE OF ETHICS
A. Purpose of Code
This Code of Ethics ("Code") was adopted pursuant to the provisions of Section
17(j) of the Investment Company Act of 1940, as amended, and Rule 17j-1
thereunder, as amended. Those provisions of the
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U.S. securities laws were adopted to prevent persons who are actively engaged in
the management, portfolio selection or underwriting of registered investment
companies from participating in fraudulent, deceptive or manipulative acts,
practices or courses of conduct in connection with the purchase or sale of
securities held or to be acquired by such companies. Employees (including
contract employees) will be subject to various pre-clearance and reporting
standards based on their responsibilities within SEI and accessibility to
certain information. Those functions are set forth in the categories listed
below.
B. Employee Categories
1. Access Person - any director, officer or employee of SEI Investments Mutual
Fund Services who, in connection with his or her regular functions or
duties, makes, participates in, or obtains prior or contemporaneous
information regarding the purchase or sale of an Investment Vehicle's
portfolio securities for which SEI acts as distributor and/or
administrator.
2. Investment Person - any director, officer or employee of the Asset
Management Group who (1) directly oversees the performance of one or more
sub-advisers for any Investment Vehicle for which SEI acts as investment
adviser, (2) executes or helps execute portfolio transactions for any such
Investment Vehicle, or (3) obtains or is able to obtain prior or
contemporaneous information regarding the purchase or sale of an Investment
Vehicle's portfolio securities.
3. Portfolio Persons - any director, officer or employee entrusted with direct
responsibility and authority to make investment decisions affecting one or
more client portfolios.
4. Registered Representative - any director, officer or employee who is
registered with the National Association of Securities Dealers as a
registered representative (Series 6, 7 or 63), a registered principal
(Series 24 or 26) or an investment representative (Series 65), regardless
of job title or responsibilities.
5. Associate - any director, officer or employee who does not fall within
definitions 1, 2, 3 or 4 above.
C. Restrictions on Personal Securities Transactions
When buying or selling securities, SEI employees may not employ any device,
scheme or artifice to defraud, mislead, or manipulate any fund or investment
client. The following restrictions are applicable to an employee's personal
securities transactions.
1. Access Persons:
o may not purchase or sell, directly or indirectly, any Security
within 24 hours before or after the time that the same (or a
related) Security is being purchased or sold by any Investment
Vehicle for which SEI acts as advisor, distributor and/or
administrator.
o may not acquire Securities as part of an Initial Public
Offering("IPO") without obtaining the written approval of the
designated Compliance Officer at Mutual Fund Services before
directly or indirectly acquiring a beneficial ownership in such
securities.
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<PAGE>
o may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining prior
written approval from the designated Compliance Officer at Mutual
Fund Services.
2. Investment Persons:
o may not purchase or sell, directly or indirectly, any Security
within 24 hours before or after the time that the same (or a
related) Security is being purchased or sold by any Investment
Vehicle for which SEI or one of its sub-advisers acts as
investment adviser or sub-adviser to the Investment Vehicle.
o may not profit from the purchase and sale or sale and purchase of
a Security within 60 days of acquiring or disposing of Beneficial
Ownership of that Security. This prohibition does not apply to
transactions resulting in a loss, or to futures or options on
futures on broad-based securities indexes or U.S. government
securities.
o may not acquire Securities as part of an Initial Public Offering
without obtaining the written approval of the Compliance
Department before directly or indirectly acquiring a beneficial
ownership in such securities.
o may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining prior
written approval from the Compliance Department.
o may not receive any gift of more than de minimus value (currently
$100.00 per year) from any person or entity that does business
with or on behalf of any Investment Vehicle.
o may not serve on the board of directors of any publicly traded
company.
3. Portfolio Persons:
o may not purchase or sell, directly or indirectly, any Security
within 7 days before or after a client portfolio has executed a
trade in that same (or an equivalent) Security, unless the order
is withdrawn.
o may not acquire Securities as part of an Initial Public Offering
without obtaining the written approval of the designated
Compliance Officer before directly or indirectly acquiring a
beneficial ownership in such securities.
o may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining prior
written approval from the Compliance Department.
o may not profit from the purchase and sale or sale and purchase of
a Security within 60 days of acquiring or disposing of Beneficial
Ownership of that Security. This prohibition does not apply to
transactions resulting in a loss, or to futures or options on
futures on broad-based securities indexes or U.S. government
securities.
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<PAGE>
o may not receive any gift of more than de minimus value (currently
$100.00 per year) from any person or entity that does business
with or on behalf of any Investment Vehicle.
o may not serve on the board of directors of any publicly traded
company.
4. Registered Representatives:
o may not acquire Securities as part of an Initial Public Offering.
D. Pre-clearance of Personal Securities Transactions
1. Access, Investment and Portfolio Persons:
o must pre-clear each proposed securities transaction with the
Compliance Department or the designated Compliance Officer for
Accounts held in their names or in the names of others in which
they hold a Beneficial Ownership interest. No transaction in
Securities may be effected without the prior written approval of
the Compliance Department or the designated Compliance Officer,
except as set forth below in Section D.4 which sets forth the
securities transactions that do not require pre-clearance.
o the Compliance Department or the designated Compliance Officer
will keep a record of the approvals, and the rationale
supporting, investments in IPO and private placement
transactions.
2. Registered Representatives/Associates:
o must pre-clear transactions with the Compliance Department or
designated Compliance Officer only if the Registered
Representative or Associate knew or should have known at the time
of the transaction that, during the 24 hour period immediately
preceding or following the transaction, the Security was
purchased or sold or was being considered for purchase or sale by
any Investment Vehicle.
3. Transactions that do not have to be pre-cleared:
o Purchases or sales over which the employee pre-clearing the
transaction ( the "Pre-clearing Person") has no direct or
indirect influence or control;
o Purchases, sales or other acquisitions of Securities which are
non-volitional on the part of the Pre-clearing Person or any
Investment Vehicle, such as purchases or sales upon exercise of
puts or calls written by the Pre-clearing Person, sales from a
margin account pursuant to a bona fide margin call, stock
dividends, stock splits, mergers, consolidations, spin-offs, or
other similar corporate reorganizations or distributions;
o Purchases which are part of an automatic dividend reinvestment
plan or automatic employee stock purchase plans;
o Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its Securities, to
the extent such rights were acquired from such issuer;
o Acquisitions of Securities through gifts or bequests; and
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<PAGE>
o Transactions in open-end mutual funds.
4. Pre-clearance procedures:
o All requests for pre-clearance of securities transactions must be
submitted to the Compliance Department or the designated
Compliance Officer by completing a Pre-clearance Request Form
(attached as Exhibit 1). SEI Employees located in the U.S. with
access to the I drive may also complete an electronic version of
the form located at I:\register\preform.doc.
o The following information must be provided on the Form:
a. Name, date, extension, title;
b. Transaction detail, i.e., whether the transaction is a
buy or sell; the security name and security type; number
of shares; price; date acquired if a sale; and whether the
security is held in a portfolio or Investment Vehicle,
part of an initial public offering, or part of a private
placement transaction; and
c. Signature and date; if electronically submitted,
initial and date.
o The Compliance Department or the designated Compliance Officer
will notify the employee whether the request is approved or
denied by telephone or email, and by sending a copy of the signed
form to the employee. An employee is not officially notified that
the transaction has been pre-cleared until he or she receives a
copy of the signed form. Employees should retain copies of the
signed form.
o Employees may not submit a Pre-clearance Request Form for a
transaction that he or she does not intend to execute.
o Pre-clearance authorization is valid for 3 business days only.
Transactions, which are not completed within this period, must be
resubmitted with an explanation why the previous pre-cleared
transaction was not completed.
o Investment persons must submit to the Compliance Department or
the designated Compliance Officer transaction reports showing the
transactions in all the Investment Vehicles for which SEI or a
sub-adviser serves as an investment adviser for the 24 hour
period before and after the date on which their securities
transactions were effected. Transaction reports need only be
submitted for the portfolios that hold or are eligible to
purchase and sell the types of securities proposed to be bought
or sold by the Investment Person. For example, if the Investment
Person seeks to obtain approval for a proposed equity trade, only
the transaction reports for the portfolios effecting transactions
in equity securities are required.
o The Compliance Department or the designated Compliance Officer
will maintain pre-clearance records for 5 years.
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<PAGE>
E. Reporting Requirements
1. Duplicate Brokerage Statements [All Employees]
o All SEI Employees are required to instruct their brokers/dealers
to file duplicate brokerage statements with the Compliance
Department at SEI Oaks. Employees in SEI's global offices are
required to have their duplicate statements sent to the offices
in which they are located. Statements must be filed for all
Accounts (including those in which employees have a Beneficial
Ownership interest), except those that trade exclusively in
open-end mutual funds, government securities, or SEI stock
through the employee stock/stock option plan. Failure of a
broker-dealer to send duplicate statements will not excuse an
Employee's violation of this Section, unless the Employee
demonstrates that he or she took every reasonable step to monitor
the broker's or dealer's compliance.
o Sample letters instructing the brokers/dealers to send the
statements to SEI are attached as Exhibit 2, and may be found at
I:\register\407pers.doc and I:\register\permltr.doc. If the
broker or dealer requires a letter authorizing a SEI employee to
open an account, the permission letter may used and may be found
at I:\register\permltr.doc. Please complete the necessary
information in the letter and forward a signature ready copy to
the Compliance Department.
o If no such duplicate statement can be supplied, the Employee
should contact the Compliance Department or the designated
Compliance Officer.
2. Initial Holdings Report [Access, Investment and Portfolio Persons]
o Access, Investment and Portfolio Persons must submit an Initial
Holdings Report to the Compliance Department or designated
Compliance Officer disclosing every security beneficially owned
directly or indirectly by such person within 10 days of becoming
an Access, Investment or Portfolio Person.
o The Initial Holdings Report must include the following
information: (1) the title of the security; (2) the number of
shares held; (3) the principal amount of the security; and (4)
the name of the broker, dealer or bank where the security is
held. The information disclosed in the report must be current as
of a date no more than 30 days before the report is submitted.
o The Initial Holdings Report is attached as Exhibit 3 to this Code
and can be found on the I drive at I:register\inhold.doc.
3. Quarterly Report of Securities Transactions [Access, Investment and
Portfolio Persons]
o Access, Investment and Portfolio Persons must submit quarterly
transaction reports of the purchases and/or sales of securities
in which such persons have a direct or indirect Beneficial
Ownership interest (See Exhibit 4- Quarterly Transaction Report).
The report will be provided to all Investment Persons before the
end of each quarter by the
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Compliance Department or the designated Compliance Officer and
must be completed and returned no later than 10 days after the
end of each calendar quarter. Quarterly Transaction Reports that
are not returned by the date they are due will be considered late
and will be reported as violations of the Code of Ethics.
Investment and Portfolio Persons who repeatedly return the
reports late (5 late filings) will be subject to a monetary fine
for their Code of Ethics violations.
o The following information must be provided on the report:
a. The date of the transaction, the description and number of
shares, and the principal amount of each security involved;
b. Whether the transaction is a purchase, sale or other
acquisition or disposition;
c. The transaction price; and
d. The name of the broker, dealer or bank through whom the
transaction was effected.
4. Annual Report of Securities Holdings [Access, Investment and Portfolio
Persons]
o On an annual basis, Investment and Portfolio Persons must submit
to the Compliance Department or the designated Compliance Officer
an Annual Report of Securities Holdings that contains a list of
all securities subject to this Code in which they have any direct
or indirect Beneficial Ownership interest (See Exhibit 5 - Annual
Securities Holdings Report). The information disclosed in the
report must be current as of a date no more than 30 days before
the report is submitted.
o Annual reports must be returned to the Compliance Department or
the designated Compliance Officer within 30 days after the end of
the calendar year-end.
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4. Annual Certification of Compliance [All Employees]
o All employees will be required to certify annually that they:
- have read the Code of Ethics;
- understand the Code of Ethics; and
- have complied with the provisions of the Code of Ethics.
o The Compliance Department or the designated Compliance Officer
will send out annual forms (attached as Exhibit 6) to all
employees that must be completed and returned no later than 30
days after the end of the calendar year.
F. Detection and Reporting of Code Violations
The Compliance Department or the designated Compliance Officer will:
o review the trading activity reports or duplicate statements filed
by Employees, focusing on patterns of personal trading;
o review the trading activity of Investment Vehicles;
o review the holdings reports submitted by Access, Investment and
Portfolio Persons;
o prepare an Annual Issues and Certification Report to the Board of
Trustees or Directors of the Investment Vehicles that, (1)
describes the issues that arose during the year under this Code,
including, but not limited to, material violations of and
sanctions under the Code, and (2) certifies that SEI has adopted
procedures reasonably necessary to prevent its access, investment
and portfolio personnel from violating this Code; and
o prepare a written report to SEI management personnel outlining
any violations of the Code together with recommendations for the
appropriate penalties.
G. Violations of the Code of Ethics
1. Penalties:
o Employees who violate the Code of Ethics may be subject to
serious penalties which may include:
- written warning;
- reversal of securities transaction;
- restriction on trading privileges;
- disgorgement of trading profits;
- fine;
- suspension or termination of employment; and/or
- referral to regulatory or law enforcement agencies.
2. Penalty Factors:
o Factors which may be considered in determining an appropriate
penalty include, but are not limited to:
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- the harm to clients;
- the frequency of occurrence;
- the degree of personal benefit to the employee;
- the degree of conflict of interest;
- the extent of unjust enrichment;
- evidence of fraud, violation of law, or reckless disregard of
a regulatory requirement; and/or
- the level of accurate, honest and timely cooperation from the
employee.
H. Confidential Treatment
o The Compliance Department or the designated Compliance Officer
will use their best efforts to assure that all requests for
pre-clearance, all personal securities transaction reports and
all reports for securities holding are treated as "Personal and
Confidential." However, such documents will be available for
inspection by appropriate regulatory agencies and other parties
within and outside SEI as are necessary to evaluate compliance
with or sanctions under this Code.
I. Definitions Applicable to the Code of Ethics
1. Account - a securities trading account held by an Employee and by any such
person's spouse, minor children and adults residing in his or her household
(each such person, an "immediate family member"); any trust for which the person
is a trustee or from which the Employee benefits directly or indirectly; any
partnership (general, limited or otherwise) of which the Employee is a general
partner or a principal of the general partner; and any other account over which
the Employee exercises investment discretion.
2. Beneficial Ownership - Security ownership in which a person has a direct or
indirect financial interest. Generally, an employee will be regarded as a
beneficial owner of Securities that are held in the name of:
a. a spouse or domestic partner;
b. a minor child;
c. a relative who resides in the employee's household; or
d. any other person IF: (a) the employee obtains from the
securities benefits substantially similar to those of ownership
(for example, income from securities that are held by a
spouse); or (b) the employee can obtain title to the securities
now or in the future.
3. Initial Public Offering - an offering of securities for which a registration
statement has not been previously filed with the U.S. SEC and for which there is
no active public market in the shares.
4. Purchase or sale of a Security - includes the writing of an option to
purchase or sell a security.
5. Security - includes notes, bonds, stocks (including closed-end funds),
convertibles, preferred stock, options on securities, futures on broad-based
market indices, warrants and rights. A "Security" does not include direct
obligations of the U.S. Government ; bankers' acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments,
including repurchase agreements; and, shares issued by open-end mutual funds.
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III. INSIDER TRADING POLICY
All Employees are required to refrain from investing in Securities based on
material nonpublic inside information. This policy is based on the U.S. federal
securities laws that prohibit any person from:
1. trading on the basis of material, nonpublic information;
2. tipping such information to others;
3. recommending the purchase or sale of securities on the basis of such
information;
4. assisting someone who is engaged in any of the above activities; and
5. trading a security, which is the subject of an actual or impending
tender offer when in possession of material nonpublic information
relating to the offer.
This includes any confidential information that may be obtained by Access,
Investment and Portfolio Persons regarding the advisability of purchasing or
selling specific securities for any Investment Vehicles or on behalf of clients.
Additionally, this policy includes any confidential information that may be
obtained about SEI Investments Company or any of its affiliated entities. This
Section outlines basic definitions and provides guidance to Employees with
respect to this Policy.
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<PAGE>
A. What is "Material" Information?
Information is material when there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions.
Generally, if disclosing certain information will have a substantial effect on
the price of a company's securities, or on the perceived value of the company or
of a controlling interest in the company, the information is material, but
information may be material even if it does not have any immediate direct effect
on price or value. There is no simple "bright line" test to determine when
information is material; assessments of materiality involve a highly
fact-specific inquiry. For this reason, any question as to whether information
is material should be directed to the Compliance Department.
B. What is "Nonpublic" Information?
Information about a publicly traded security or issuer is "public" when it has
been disseminated broadly to investors in the marketplace. Tangible evidence of
such dissemination is the best indication that the information is public. For
example, information is public after it has become available to the general
public through a public filing with the SEC or some other governmental agency,
the Dow Jones "tape" or the Wall Street Journal or some other publication of
general circulation, and after sufficient time has passed so that the
information has been disseminated widely.
Information about securities that are not publicly traded, or about the issuers
of such securities, is not ordinarily disseminated broadly to the public.
However, for purposes of this Policy, such private information may be considered
"public" private information to the extent that the information has been
disclosed generally to the issuer's security holders and creditors. For example,
information contained in a private placement memorandum to potential investors
may be considered "public" private information with respect to the class of
persons who received the memorandum, but may still be considered "nonpublic"
information with respect to creditors who were not entitled to receive the
memorandum. As another example, a controlling shareholder may have access to
internal projections that are not disclosed to minority shareholders; such
information would be considered "nonpublic" information.
C. Who Is an Insider?
Unlawful insider trading occurs when a person, who is considered an insider,
with a duty not to take advantage of material nonpublic information violates
that duty. Whether a duty exists is a complex legal question. This portion of
the Policy is intended to provide an overview only, and should not be read as an
exhaustive discussion of ways in which persons may become subject to insider
trading prohibitions.
Insiders of a company include its officers, directors (or partners), and
employees, and may also include a controlling shareholder or other controlling
person. A person who has access to information about the company because of some
special position of trust or has some other confidential relationship with a
company is considered a temporary insider of that company. Investment advisers,
lawyers, auditors, financial institutions, and certain consultants and all of
their officers, directors or partners, and employees are all likely to be
temporary insiders of their clients.
Officers, directors or partners, and employees of a controlling shareholder may
be temporary insiders of the controlled company, or may otherwise be subject to
a duty not to take advantage of inside information.
D. What is Misappropriation?
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Misappropriation usually occurs when a person acquires inside information about
Company A in violation of a duty owed to Company B. For example, an employee of
Company B may know that Company B is negotiating a merger with Company A; the
employee has material nonpublic information about Company A and must not trade
in Company A's shares.
For another example, Employees who, because of their association with SEI,
receive inside information as to the identity of the companies being considered
for investment by SEI Investment Vehicles or by other clients, have a duty not
to take advantage of that information and must refrain from trading in the
securities of those companies.
E. What is Tipping?
Tipping is passing along inside information; the recipient of a tip (the
"tippee") becomes subject to a duty not to trade while in possession of that
information. A tip occurs when an insider or misappropriator (the "tipper")
discloses inside information to another person, who knows or should know that
the tipper was breaching a duty by disclosing the information and that the
tipper was providing the information for an improper purpose. Both tippees and
tippers are subject to liability for insider trading.
F. Identifying Inside Information
Before executing any securities transaction for your personal account or for
others, you must consider and determine whether you have access to material,
nonpublic information. If you think that you might have access to material,
nonpublic information, you must take the following steps:
1. Report the information and proposed trade immediately to the Compliance
Department or designated Compliance Officer;
2. Do not purchase or sell the securities on behalf of yourself or others; and
3. Do not communicate the information inside or outside SEI, other than to the
Compliance Department or designated Compliance Officer.
These prohibitions remain in effect until the information becomes public.
Employees managing the work of consultants and temporary employees who have
access to material nonpublic information are responsible for ensuring that
consultants and temporary employees are aware of this Policy and the
consequences of non-compliance.
G. Trading in SEI Investments Company Securities
This Policy applies to all employees with respect to trading in the securities
of SEI Investments Company, including shares held directly or indirectly in the
Company's 401(k) plan. Employees, particularly "officers" (as defined in Rule
16(a)-1(f) in the Securities Exchange Act of 1934, as amended), of the company
should be aware of their fiduciary duties to SEI and should be sensitive to the
appearance of impropriety with respect to any of their personal transactions in
SEI's publicly traded securities. Thus, the following restrictions apply to all
transactions in SEI's publicly traded securities occurring in an employee's
Account and in all other accounts in which the employee benefits directly or
indirectly, or over which the employee exercises investment discretion.
o Blackout Period - Directors and Officers are prohibited from buying or
selling SEI's publicly traded securities during the blackout period. The
blackout periods are as follows:
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<PAGE>
o for the first, second and third quarterly financial reports - begins at
the close of the prior quarter and ends after SEI publicly announces
the financial results for that quarter.
o for the annual and fourth quarter financial reports - begins on the 6th
business day of the first month following the end of the calendar
year-end and ends after SEI publicly announces its financial results.
All securities trading during this period may only be conducted with the
approval of SEI's General Counsel or the Compliance Director. In no event
may securities trading in SEI's stock be conducted while an Director or
Officer of the company is in possession of material nonpublic information
regarding SEI.
o Major Events - Employees who have knowledge of any SEI events or
developments that may have a "material" impact on SEI's stock that have not
been publicly announced are prohibited from buying or selling SEI's publicly
traded securities before such announcements. (See definition of "material
information" contained in III. A. above.)
o Short Selling and Derivatives Trading Prohibition - All employees are
prohibited from engaging in short sales and options trading of SEI's common
stock.
Section 16(a) directors and officers are subject to the following additional
trading restriction.
o Short Swing Profits - Directors and Officers may not profit from the
purchase and sale or sale and purchase of SEI's securities within 6 months
of acquiring or disposing of Beneficial Ownership of that Security.
H. Violations of the Insider Trading Policy
Unlawful trading of securities while in possession of material nonpublic
information, or improperly communicating that information to others, is a
violation of the federal securities laws and may expose violators to stringent
penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten
years imprisonment. The SEC can recover the profits gained or losses avoided
through the violative trading, a penalty of up to three times the illicit
windfall or loss avoided, and an order permanently enjoining violators from such
activities. Violators may be sued by investors seeking to recover damages for
insider trading violations. In addition, violations by an employee of SEI may
expose SEI to liability. SEI views seriously any violation of this Policy, even
if the conduct does not, by itself, constitute a violation of the federal
securities laws. Violations of this Policy constitute grounds for disciplinary
sanctions, including dismissal.
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<PAGE>
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY
EXHIBITS
Exhibit 1 Pre-clearance Request Form
Exhibit 2 Account Opening Letters to Brokers/Dealers
Exhibit 3 Initial Holdings Report
Exhibit 4 Quarterly Transaction Report
Exhibit 5 Annual Securities Holdings Report
Exhibit 6 Annual Compliance Certification
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<PAGE>
EXHIBIT 1
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<PAGE>
PRECLEARANCE REQUEST FORM
Name: Date:
Ext #: Title/Position:
- ------------------------------------------------------------------------------
Transaction Detail: I request prior written approval to execute the following
trade:
- ------------------------------------------------------------------------------
Buy: Sell: Security Name: Security type:
No. of Shares: Price: If sale, date acquired:
Held in an SEI Portfolio: Yes No If yes, provide: (a) the Portfolio's name:
(b) the date Portfolio bought or sold the security:
Initial Public Offering: Private Placement:
Yes No Yes No
- -------------------------------------------------------------------------------
Disclosure Statements
- -------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge, neither I nor the
registered account holder: (1) have knowledge of a possible or pending purchase
or sale of the above security in any of the portfolios for which SEI acts as an
investment adviser, distributor, administrator, or for which SEI oversees the
performance of one or more it sub-advisers; (2) is in possession of any material
nonpublic information concerning the security to which this request relates; and
(3) is engaging in any manipulative or deceptive trading activity.
I acknowledge that if the Compliance Officer to whom I submit this written
request determines that the above trade would contravene SEI Investments
Company's Code of Ethics and Insider Trading Policy ("the Policy"), the
Compliance Officer in his or her sole discretion has the right not to approve
the trade, and I undertake to abide by his or her decision.
I acknowledge that this authorization is valid for a period of three (3)
business days.
- -------------------------------------------------------------------------------
Signature: Date:
- -------------------------------------------------------------------------------
Compliance Officer's Use Only
- -------------------------------------------------------------------------------
Approved: Disapproved: Date:
By: Comments:
Transaction Report Received: Yes No
- -------------------------------------------------------------------------------
Note: This preclearance will lapse at the end of the day on , 20 .
If you decidenot to effect the trade, please notify the Compliance Department or
designated Compliance Officer immediately.
- -------------------------------------------------------------------------------
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<PAGE>
EXHIBIT 2
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<PAGE>
Date:
Your Broker
street address
city, state zip code
Re: Your Name
your S.S. number or account number
Dear Sir or Madam:
Please be advised that I am an employee of SEI Investments Distribution, Co., a
registered broker/dealer an/or SEI Investments Management Corporation, a
registered investment adviser. Please send duplicate statements only of this
brokerage account to the attention of:
SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456
This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.
Thank you for your cooperation.
Sincerely,
Your name
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<PAGE>
Date:
[Address]
Re: Employee Name
Account #
SS#
Dear Sir or Madam:
Please be advised that the above referenced person is an employee of SEI
Investments Distribution, Co., a registered broker/dealer and/or SEI Investments
Management Corporation, a registered investment adviser. We grant permission for
him/her to open a brokerage account with your firm and request that you send
duplicate statements only of this employee's brokerage account to:
SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456
This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.
Thank you for your cooperation.
Sincerely,
Cynthia M. Parrish
Compliance Director
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<PAGE>
EXHIBIT 3
<PAGE>
SEI INVESTMENTS MANAGEMENT CORPORATION
INITIAL HOLDINGS REPORT
Name:_____________________________________________________________
Signature:__________________
Submission Date:_____________________
Number of Name of Broker, Dealer or
Title of Security Shares Held Principal Amount Bank Where Security is Held
================================================================================
================================================================================
This report must be submitted within 10 days of becoming an Access, Investment
or Portfolio Person under SEI Investments Company's Code of Ethics. All
securities holdings must be reported on this form.
I confirm that the above list is an accurate and complete listing of all
securities in which I have a direct or indirect beneficial interest.
- -----------------
Signature
- ---------
Date
- -----------------
Received by:
<PAGE>
EXHIBIT 4
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<PAGE>
SEI INVESTMENTS MANAGEMENT CORPORATION
QUARTERLY TRANSACTION REPORT
Transaction Record of Securities Directly or Indirectly Beneficially Owned
________________, 2000 to ____________, 2000
Name:__________________________________________________________________________
Signature:_____________________________________________________________________
Submission Date:_______________________________________________________________
<TABLE>
<CAPTION>
Number of Shares and Issuer & Broker/Dealer
Type of Title of Principal or
Date Transaction Security Price Amount Bank
==========================================================================================================
<S> <C> <C> <C> <C> <C>
==========================================================================================================
</TABLE>
This report is required of all officers, directors and certain other persons
under Section 204 of the Investment Advisers Act of 1940 and Rule 17j-1 of the
Investment Company Act of 1940 and is subject to examination. Transactions in
direct obligations of the U.S. Government need not be reported. In addition,
persons need not report transactions in bankers' acceptances, certificates of
deposit, commercial paper or open-end investment companies. The report must be
returned within 10 days of the applicable calendar quarter end. The reporting of
transactions on this record shall not be construed as an admission that the
reporting person has any direct or indirect beneficial ownership in the security
listed.
By signing this document, I represent that all reported transactions were
pre-cleared through the Compliance Department or the designated Compliance
Officer in compliance with the SEI Investments Company Code of Ethics and
Insider Trading Policy.
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<PAGE>
EXHIBIT 5
-4-
<PAGE>
SEI INVESTMENTS
ANNUAL SECURITIES HOLDINGS REPORT
As of December 31, 19__
Employee Name: __________________
<TABLE>
<CAPTION>
- ----------------- ------------------------- ---------------------------------- -----------------------------------
0 Security 1 Number of Shares Type of Ownership (direct or Account Number and Name of
- ------------- -------------------- indirect) Brokerage Firm Where Securities
are Held
- ----------------- ------------------------- ---------------------------------- -----------------------------------
<S> <C> <C> <C>
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ----------------- ------------------------- ---------------------------------- -----------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
I confirm that the above list is an accurate and complete listing of all
securities in which I have a direct or indirect beneficial interest.
- ------------------------ -------------------------
Name Received by
- ---------
Date
Note: Do not report holdings of U.S. Government securities, bankers'
acceptances, certificates of deposit, commercial paper and mutual funds.
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<PAGE>
7
EXHIBIT 6
<PAGE>
SEI INVESTMENTS
CODE OF ETHICS
ANNUAL COMPLIANCE CERTIFICATION
TO: Compliance Department
FROM:
DATE:
1. I hereby acknowledge receipt of a copy of the Code of Ethics and
Insider Trading Policy.
2. I have read and understand the Code of Ethics and Insider Trading
Policy and recognize that I am subject thereto.
3. I hereby declare that I have complied with the terms of the Code of
Ethics and Insider Trading Policy.
Signature: __________________
Date:_________
Received by: ________________
#929478 v1 - SEI Distributor's Code of Ethics
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