UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
and
THE INVESTMENT COMPANY ACT OF 1940 X
Molter Series Funds, Inc. Exact Name of Registrant as Specified in Charter)
6720 East Camino Principal, Suite 100, Tucson AZ. 85715
(Address of Principal Executive Offices)
520-298-7000 (Registrants Telephone Number)
Daniel A Molter 6720 East Camino Principal, Suite 100,
Tucson AZ. 85715
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this registration.
It is proposed that this filing will become effective
[x] 60 days after filing pursuant to paragraph (a)
Calculation of Registration Fee Under the Securities Act of 1933
Title of Securities Amount Being Proposed Max Proposed Max Amount of
being Registered Registered Offering Aggregate
Registration
Price Offering Price Fee
Molter Series Funds, Inc. *
Common Stock $.01 1,500,000 $5.00 $7,500,000 $2,586.20
par value
* Estimated for the purpose of determining the amount of the registration fee.
This is the actual Net Asset value per share as of the starting date.
The Registrant hereby amends this Registration Statement on such date or dates
that may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(A) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission acting to section 8(A)may determine.
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Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Fund Expenses
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and other Securities Capitalization
Item 7. Purchase of Securities being Offered Purchase of Shares- Reinvestment
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objectives and Policies
Item 14. Management of the Registrant Officers & Directors of the Fund
Item 15. Control Persons & Principal Holders Not Applicable of Securities
Item 16. Investment Advisory and Other Services- Investment Adviser
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock & Other Securities Capitalization
Item 19. Purchase, Redemption & Pricing of Purchase of Shares
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Quotations of Not Applicable
Money Market Funds
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements & Exhibits To be Supplied
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business & Other Connections of Activities of Investment Advisor
Advisor
Item 29 Principal Underwriters Principal Underwriter
Item 30. Location of Accounnts & Records Location of Accounts & Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Not Applicable
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MOLTER SERIES FUNDS, INC.
TUCSON, AZ. 85715
520-298-7000
PROSPECTUS
XXXXXX XX, 1998
The Fund & Investment Objective
Molter Series Funds, Inc. ("the Fund") is an open-end non-diversified
management investment company that seeks capital appreciation through
investment in the common stocks and/or securities convertible into common
stocks. Criteria used by the Adviser will be based on the Business Economics,
Management Quality, Financial Condition and Stock Price of each business.
Current income from these investments will be a subordinate consideration.
Fund Share Purchase
Capital shares of the Fund may only be purchased directly from the Fund at net
asset value as next determined after receipt of order. The Board of Directors
has established $1,000 as the minimum initial purchase and $500 for subsequent
purchases.
Additional Information
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the Fund
has been filed with the Securities and Exchange Commission. Such Statement is
dated XXXXX XX, 1998 and has been incorporated by reference into the Prospectus.
A copy of the Statement may be obtained without charge, by writing to the Fund
or by calling the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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FUND EXPENSES
The following illustrates all expenses and fees that a shareholder of the
Molter Series Funds, Inc. Fund will incur. The expenses and fees set forth
below are for the 1998 fiscal year.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
IRA Trustee Fees None
Annualized Fund Operating Expenses:
Management Fees 1.0%
12b-1 Fees None
Other Expenses 1.0%
Total Operating Expenses 2.0%
The following table is given to assist investors in understanding the various
costs and expenses that an investor in the Fund will bear directly and in-
directly. It illustrates the expenses paid on a $1,000 investment over vari-
ous time periods assuming a) 5% annual rate of return and b)redemption at the
end of each time period. This example should not be considered a representa-
tion of past or future expenses or performance. Actual expenses may be greater
or less than those shown.
1 Year 3 Years 5 Years 10 Years
$20 $63 $111 $252
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THE FUND MOLTER SERIES FUNDS, INC. (also referred to as the "Fund") was
incorporated in Arizona on June 25, 1997. The Fund's registered office is in
Tucson, AZ: mail may be addressed to 6720 East Camino Principal, Suite 100,
Tucson AZ. 85715
OBJECTIVES AND POLICIES
Objective: Molter Series Funds, Inc. ("the Fund") is an open-end, non-
diversified management investment company that seeks capital appreciation
through investment in the common stocks and/or securities convertible into
common stocks. Criteria used by the Adviser will be based on the Business
Economics, Management Quality, Financial Condition and Stock Price of each
business. Current income from these investments will be a subordinate
consideration.
Risk Assessment: Risks associated with the Fund's performance will be those due
to broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio. It must be realized, as is
true of almost all securities, there can be no assurance that the Fund will ob-
tain its ongoing objective of capital appreciation.
Security Selection Criteria: Criteria used by the Adviser in recommending
purchases of securities will be based on the Business Economics, Management
Quality, Financial Condition and Security Price of each business.
Portfolio Turnover Policy: The Fund does not propose to purchase securities for
short term trading in the ordinary course of operations. Accordingly, it is ex-
pected that the annual turnover rate will not exceed 50%, wherein turnover is
computed by dividing the lesser of the Fund's total purchases or sales of secu-
rities within the period by the average monthly portfolio value of the Fund dur-
ing such period. There may be times when management deems it advisable to sub-
stantially alter the composition of the portfolio, in which event, the portfolio
turnover rate might substantially exceed 50%; this would only result from spe-
cial circumstances and not from the Fund's normal operations.
Non-diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single economic, politi-
cal, or regulatory occurrence. The policy of the Fund, in the hope of achiev-
ing its objective as stated above, is, therefore, one of selective
investments rather than broad diversification. The Fund seeks only enough
diversification for adequate representation among what it considers to be
the best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code (see next paragraph).
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund, intends to pay out substantially all of its investment income
and realized capital gains, and intends to be relieved of federal income tax on
the amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income
must be derived from dividends, interest, and gains from securities tran-
sactions, no more than 30% of the Fund's profits may be derived from
securities held less than three months, and no more than 50% of the Fund
assets may be held in security holdings that exceed 5% of the total assets of
the Fund at time of purchase.
Distribution of any net long term capital gains realized by the Fund in 1998
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Fund shares have been held by the investor. All income realized
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by the Fund, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemption) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. 1) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or 2) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a mer-
ger, consolidation , or purchase of assets approved by the Fund's share-
holders.
(e) Invest over 25% of its assets at the time of purchase in any one industry.
(f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(n) Issue senior securities.
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INVESTMENT As officers and directors. For these services the Fund has
Investment Adviser would forgo suf-
ficient fees to hold the total expenses of the Fund to less than 2.0% of the
first $10 million in averaged assets and 1.5% of the next $20 million.
These ratios were selected by the Board of Directors beMr. Molter has an
M.B.A. from the Wharton Graduate School of Business and a C.P.A. Mr. Molter
has held staff and management positions with Mobil Oil, Union Pacific, and
was the Chief Financial Officer of Botany 500 McGegor Sportswear. On
June 25, 1997 shareholders of the Fund approved a managementand Advisory
contract with Investment Research Associates, Inc., which was unanimously
approved by the Board of Directors June 25, 1997. This Agreement will
continue on a year to year basis provided that approval is voted at least
annually by specific approval of the Board of Directors of the Fund or by
vote of the holders of a majority of the outstanding voting securities of the
Fund, but, in either event, it must also be approved by a majority of the
directors of the Fund who are neither parties to the agreement nor
interested persons as defined in the Investment Company Act of 1940 at a
meeting called for the purpose of voting on such approval. Under the Agree-
ment, Investment Research Associates, Inc. will furnish investment advice to
the Directors of the Fund on the basis of a continuous review of the port-
folio and recommend to the Fund when & to what extent securities should be
purchased or disposed. The Agreement may be terminated at any time, with-
out the payment of any penalty, by the Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund on not more than
60 days written notice to Investment Research Associates, Inc. In the
event of its assignment, the Agreement will terminate automatically.
Ultimate decisions as to the investment policy and as to individual pur-
chases and sales of securities are made by the Fund's officer or directors
or employees of the Investment Adviser. Excepting these items, the Fund pays
all other fees and expenses incurred in conducting its business affairs. The
Investment Adviser has paid the initial organizational costs of the Fund and
will reimburse the Fund for any and all losses incurred because of purchases
reneges.
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, age prinici-
pal occupations and percent of shares outstanding held during the past five
years are:
Occupation Percent
Name and Address Age Position Past 5 years of Class
Daniel A. Molter* 56 President Investment Advisor 100%
6720 E Camino Principal Interested Investment Research
Suite 100 Director Associates, Inc.
Tucson, AZ 85715
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Occupation Percent
Name and Address Age Position Past 5 Years of Class
Hester Molter* 45 Interested Self-Proprietor
6720 E Camino Principal Director
Suite 100 Wife of President
Tucson, AZ 85715
Jane Justus Non-Interested Investor 0.00%
Tucson, AZ 85718 Director
Cliff Altfeld 40 Non-Interested Attorney at Law 0.00%
6273 La Yerba Director Tucson, AZ
Tucson, AZ 85750
Mary Anne Finlay 55 Secretary Self-Proprietor 0.00%
5248 Pinehurst Drive Non-Interested
Boulder Co. 80301-3791 Director
* Directors of the Fund who are considered "Interested Directors" as defined by
the Investment Company act of 1940. Mr. Molter is President and joint owner of
the Fund and Mrs. Molter is secretary and joint owner of the Fund.
The Fund does not compensate its officers and directors affiliated with the In-
vestment Adviser except as they may benefit through payment of the Advisory fee.
The Fund does not intend to compensate its officers and directors until assets
exceed $2,500,000 although they will be reimbursed for their expenses.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights with no conversion or
pre-emptive rights. All shares issued are fully paid and non-accessible.
Voting Rights: Each shareholder has one vote for each share held. Voting
rights are non-cumulative, which means that holders of a majority of shares can
elect all directors of the Fund if they so choose.
Major Shareholders: Daniel and Hester Molter, as of the date of this Pros-
pectus, own all outstanding shares of the Fund.
PURCHASE OF SHARES -REINVESTMENTS
The offering price of the shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and
is computed in the manner described under the caption "PRICING OF SHARES"
in this Prospectus. The Fund reserves the right at its sole discretion to
terminate the offering of its shares made by this Prospectus at any time
and to reject pur
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chase applications when, in the judgment of management such termination or re-
jection is in the best interests of the Fund.
Initial Investments: Initial purchase of shares of the Fund may be made only by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The minimum initial
purchase of shares is $1,000 which is due and payable 3 business days after the
purchase date. Less may be accepted under especial circumstances. The Fund
will be initially registered in Arizona and therefore restricted to Arizona
residents at the time of purchase. There will be no solicitation of out
of the state of Arizona potential shareholders until registration under the
Blue Sky laws of the state of residence have been met.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable five business days after the purchase date. The minimum is
$500, but less may be accepted under special circumstances.
Reinvestments: The Fund will automatically retain and reinvest dividends & cap-
ital gains distributions and use same for the purchase of additional shares for
the shareholder at net asset value as of the close of business on the distribu-
tion date. A Shareholder may at any time by letter or forms supplied by the
Fund direct the Fund to pay dividends and/or capital gains distributions, if
any, to such shareholder in cash.
Fractional Shares: Shares will be issued to three decimal places as purchased
from the fund. The fund will maintain an account for each shareholder of shares
for which no certificates have been issued.
RETIREMENT PLANS
Individual Retirement Account: Persons who earn compensation and are not active
participants (and who do not have a spouse who is an active participant) in an
employee maintained retirement plan may establish Individual Retirement Accounts
(IRA) using Fund shares. Annual contributions, limited to the lesser of $2,000
or 100% of compensation, are tax deductible from gross income. This IRA
deduction is also retained for individual taxpayers and married couples with
adjusted gross incomes within certain specified limits. All individuals may
make nondeductible IRA contributions to separate accounts to the extent that
they are not eligible for a deductible contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals be-
gin. The maximum annual contribution may be increased to $4,000 if you have a
spouse during the taxable year. A separate and independent Spousal IRA must
be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as late
as age 70 1/2. In the event of death or disability, withdrawals may be made be-
fore age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This Statement
describes the general provisions of the IRA and is forwarded to all
prospective IRA's. There is no charge to open and maintain a Molter
Series Fund, Inc. Fund IRA. This policy may be changed by the Board of
Directors if they deem it to be in the best interests of all shareholders.
All IRA's may be revoked within 7 days of their establishment with no penalty.
IRA Enhancements - Taxpayer Relief Act Changes to the Traditional IRA The
1997 Act restores deductible IRA contributions for individuals at higher
income levels. Currently, deductions for IRA contributions are phased out as
income increases beyond $40,000 for married taxpayers filing jointly and
$25,000 for single taxpayers. Under the Act, these income levels will
gradually increase to $80,000 for married taxpayers filing joint by the year
2007 and $50,000 for single taxpayers by the year 2005. Effective Non-
deductible Tax-Free Roth IRA. The new Roth IRA is funded solely with after-tax
(nondeductible) contributions, but offers the possibility of tax-free
earnings which are not taxed as income when later withdrawn as part of
qualified distributions. The principal features of the new Roth IRA are:
* Tax deductions are not allowed for contributions to the account, but
earnings accumulate tax-free and are not taxed as income when withdrawn as
qualified distributions.
* Income limitations for contributions begin at $150,000 for married tax-
payers filing jointly and $95,000 for single taxpayers.
* The maximum contribution is combined with the deductible IRA and is limited
annually to the maximum IRA contribution allowed for that individual.
* Transfers from Traditional IRAs to Roth IRAs are allowed for single or mar-
ried taxpayers with adjusted gross incomes of $100,000 or less.
* Contributions can be made beyond age 70 1/2, while distributions are not
required to begin at age 70 1/2. Distributions are only required upon death.
Effective Date: Taxable years beginning January 1, 1998.
Nondeductible Education IRA
The Education IRA is a trust or custodial account established to help pay the
higher-education expenses of your child, grandchild or other designated
beneficiary. Like the Roth IRA, this account is funded with after-tax (non-
deductible) contributions. The Education IRA has the following principal
features:
* Contributions of up to $500 annually are allowed per student (in addition to
the $2,000 limit for a separate IRA).
* Qualified distributions are not taxed as income unless they exceed qual-
ified higher education expensed, in which case amounts in excess of qualified
expenses will be taxable as income and subject to the 10% penalty.
* Contributions may be made regardless of whether the beneficiary has gross
income, but may not be made after the beneficiary reaches age 18.
* Income limitations for contributions begin for taxpayers whose adjusted
gross income is between $150,000 to $160,000 for married taxpayers filing
jointly and $95,000 and $110,000 for single taxpayers.
Effective Date: Taxable years beginning January 1, 1998. For further infor-
mation contact your tax adviser.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of busi-
ness of the New York Stock Exchange on each business day of which that Exchange
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is open (presently 4:00 p.m.) Monday through Friday exclusive of Washington's
Birthday, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving, Christ-
mas & New Year's Day. The price is determined by dividing the value of its se-
curities, plus any cash and other assets less all liabilities, excluding capital
surplus, by the number of shares outstanding. The market value of securities
listed on a national exchange is determined to be the last recent sales price on
such exchange. Listed securities that have not recently traded and over-the-
counter securities are valued at the last bid price in such market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair market value. Other assets are valued at fair value as determined in good
faith by the Board of Directors.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who ten-
ders a request for redemption (if certificates have not been issued) or certifi-
cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required unless the shareholder is
personally known to management.
The redemption price is the net asset value per share next de-
termined after notice is received by the Fund for redemption of shares. The
proceeds received by the shareholder may be more or less than his cost of such
shares, depending upon the net asset value per share at the time of re-
demption and the difference should be treated by the shareholder as a
capital gain or loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within three business days after
tender. The Fund may suspend the right of redemption or postpone the date of
payment if: The New York Stock Exchange is closed for other than customary week-
end or holiday closings, or when trading on the New York Stock Exchange is re-
stricted as determined by the Securities and Exchange Commission or when
the Securities and Exchange Commission has determined that an emergency
exists, making disposal of fund securities or valuation of net assets not
reasonably practicable. The Fund intends to make payments in cash, however,
the Fund reserves the right to make payments in kind.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities in
such a manner as to get prompt execution of the orders at the most favorable
price. The Fund will place all orders for purchases and sales of its portfolio
securities through the Fund's President who is answerable to the Fund's Board of
Directors. In accordance with rule 17e-1 of the Investment Company Act of 1940,
If the Fund's President is also a registered representative of a New York Stock
Exchange or NASDAQ Member Firm he may place orders through his concern at as low
commission rates as possible & never to exceed rates that are higher than would
be available through any other national brokerage firm. The Directors will re-
view each transaction at least quarterly made with affiliated firms to determine
the reasonableness of commissions paid. Any unreasonable charge will be deduct-
ed from the fees paid to the Adviser. The Fund's President may select other
brokers who meet the primary requirements of execution and price, and also have
furnished statistical or other factual information and services which appear
helpful or necessary to the Fund's normal operations. No effort will be made
in any given circumstance to determine the value of these services or the
amount they might have reduced Adviser expenses.
Other than as set forth above, the Fund has no fixed policy, formula, method or
criteria which it uses in allocating brokerage business to firms furnishing
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these materials and services. The Board of Directors will evaluate and review
the reasonableness of brokerage commissions paid to brokers not affiliated with
Fund officers or the Adviser on a monthly basis initially and, after the first
year of operation at least semiannually.
MANAGEMENT OF THE FUND
Shareholders meet annually to elect all members of the Board of Directors, se-
lect an independent auditor, and vote on any other items deemed pertinent by the
incumbent Board. The Directors are in turn responsible for determining that the
Fund operates in accordance with its stated objectives, policies, and investment
restrictions. The Board appoints officers to run the Fund and selects an In-
vestment Adviser to provide investment advice. (See Investment Adviser, pg. 5).
It meets four times a year to review Fund progress and status. In addition,
a non-interested Director performs an independent audit whenever requested by
the Board.
CUSTODIAN & TRANSFER AGENT
The Fund acts as its own custodian and transfer agent.
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing certified financial
statements and other periodic reports, at least semiannually, containing unau-
dited financial statements.
AUDITORS
Landsburg, Platt, Reschiatore & Dalton, Certified Public Accountants, Philadel-
phia, PA. have been selected as the independent accountant and auditor of the
Fund. Landsburg, Platt, Reschiatore and Dalton has no direct or indirect finan-
cial interest in the Fund or the Adviser.
LITIGATION
As of the date of this prospectus, there was no pending or threatened litigation
involving the Fund in any capacity whatsoever.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration state-
ment on file with the Securities & Exchange Commission. The registration state-
ment may be inspected without charge at the principal office of the Commission
in Washington, D.C. and copies of all or part thereof may be obtained upon pay-
ment of the fee prescribed by the Commission. Shareholders may also direct in-
quiries to the Fund by phone or at the address given on pg 1 of this Prospectus.
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SHARE PURCHASE APPLICATION
A) Please fill out one of the following four types of accounts:
1) ** Individual Accounts **
______________________ __ _____________________ ______________________
First Name MI Last Name Social Security Number
2) ** Joint Accounts **
______________________ __ _____________________ ______________________
First Name MI Last Name Social Security Number
______________________ __ _____________________ ______________________
First Name MI Last Name Social Security Number
3) ** Custodial Accounts **
______________________ __ ______________________
Custodian's First Name MI Custodian's Last Name
______________________ __ ______________________ ______________________
Minor's First Name MI Minor's Last Name Minor's Social Sec Num
4) ** All Other Accounts **
__________________________________________________ ______________________
Name of Account Tax Identification Num
__________________________________________________
(Use this second line if you need it)
B) Biographical and other information about the new account:
Number & Street
_____________________________________________________________
City_______________________________ St_____ Zip__________________________
Citizen of__________________ Home Phone____________ Bus Phone____________
Dividend Direction: Reinvest all distributions_________ Pay in Cash__________
Signature of Owner, Trustee or Custodian:
___________________________________
Signature of Joint Owner (if joint account):
___________________________________
Please make check payable to: Molter SERIES FUNDS, INC.
Amount of Investment Attached $______________ (Minimum initial purchase $1,000)
All applications are accepted in Arizona and under Arizona laws.
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FORM W-9
(March 1994)
Department of Treasury
Internal Revenue Service
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER
Name as shown on account (if joint account, give name corresponding to TIN)
_________________________________________________
Street Address
_________________________________________________
City, State & Zip Code
_________________________________________________
Part 1.- Taxpayer Identification Number Part 2. -Backup Withholding
Social Security Number ______________________ Check if you are NOT subject
to backup withholding under
or the provisions of section
3406(a) (1)(C) of the In-
Employer ID Number ______________________ ternal Revenue Code ________
Certification - Under the penalty of perjury, I certify that the information
provided on this form is true, correct and complete.
Signature ___________________________________ Date _______________________
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INVESTMENT ADVISER PROSPECTUS
INVESTMENT RESEARCH ASSOCIATES, INC. MOLTER SERIES FUNDS, INC.
6720 E CAMINO PRINCIPAL, SUITE 100 6720 E CAMINO PRINCIPAL, SUITE 100
Tucson, AZ. 85715 Tucson, AZ. 85715
520-298-7000
XXXXXXX XX, 1998
TABLE OF CONTENTS
Fund Expenses ...................... 2 The Fund seeks capital appreciation
The Fund ........................... 3 through investment in common stocks
Objective & Policies ............... 3 & securities convertible into com-
Objective ........................ 3 mon stocks in the pursuit of capi-
Risk Assessment .................. 3 tal gains. Current income from in-
Security Selection Criteria ...... 3 vestments is a subordinate consi-
Portfolio Turnover Policy ........ 3 deration.
Nondiversification Policy ........ 3
Tax Status ......................... 3
Investment Restrictions ............ 4
Investment Adviser ................. 5
Officers & Directors of the FUND ... 5
Capitalization ..................... 6
Description of Common Stock ...... 6
Voting Rights .................... 6
Major Shareholders ............... 6
Purchase of Shares - Reinvestments . 6
Initial Investments .............. 7
Subsequent Purchases ............. 7
Reinvestments .................... 7
Fractional Shares ................ 7
Retirement Plans ................... 7
IRA .............................. 7
Pricing of Shares .................. 7
Redemption of Shares ............... 8
Brokerage .......................... 8
Management of the Fund ............. 9
Custodian & Transfer Agent ......... 9
Reports to Shareholders ............ 9
Auditors ........................... 9
Litigation ......................... 9
Additional Information ............. 9
Share Purchase Application ........ 10
W-9 Application Form .............. 11
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MOLTER SERIES FUNDS, INC.
6720 E Camino Principal, Suite 100
Tucson, AZ 85715
520-298-7000
Part B
STATEMENT OF ADDITIONAL INFORMATION
____________________, 1998
This Statement is not a prospectus, but should be read in conjunction with the
Fund's current prospectus dated , 1998. To obtain the Prospectus,
please write the Fund or call either of the telephone numbers that are shown
above.
TABLE OF CONTENTS
The Fund ................................ 2
Objectives & Policies ................... 2
Objectives ......................... 2
Security Selection Criteria ........ 2
Portfolio Turnover Policy .......... 2
Nondiversification Policy .......... 2
Tax Status .............................. 2
Investment Restrictions ................. 3
Investment Adviser ...................... 4
Officers and Directors of the Fund ...... 4
Capitalization .......................... 5
Description of Common Stock ........ 5
Voting Rights ...................... 5
Major Shareholders ................. 5
Purchase of Shares - Reinvestment ....... 5
Initial Investments ................ 6
Subsequent Purchases ............... 6
Reinvestments ...................... 6
Fractional Shares .................. 6
Retirement Plans ........................ 6
IRA ................................ 6
Redemption of Shares .................... 6
Brokerage ............................... 7
Auditor's Report ........................ 8
Statement of Assets & Liabilities ....... 9
Statement of Investments in Securities .. 9
Statement of Operations .................10
Statement of Changes in Net Assets ......10
Notes to Financial Statements ...........10
Supplemental Data .......................12
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THE FUND
MOLTER SERIES FUNDS, INC. (also referred to as the "Fund") was incorporated in
Arizona on June 25, 1997. The Fund's registered office is in Tucson, AZ: mail
may be addressed to 6720 E Camino Principal, Suite 100, Tucson AZ.
OBJECTIVES AND POLICIES
Objective: Molter Series Funds, Inc. ("the Fund") is an open-end, non-
diversified management investment company that seeks capital appreciation
through investment in the common stocks and/or securities convertible into
common stocks. Criteria used by the Adviser will be based on the Business
Economics, Management Quality, Financial Condition and Stock Price of each
business. Current income from these investments will be a subordinate
consideration.
Risk Assessment: Risks associated with the Fund's performance will be those due
to broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio. It must be realized, as is
true of almost all securities, there can be no assurance that the Fund will ob-
tain its ongoing objective of capital appreciation.
Security Selection Criteria: Criteria used by the Adviser in recommending pur-
chases of securities will be based on the Business Economics, Management Quali-
ty, Financial Condition and Security Price of each business.
Portfolio Turnover Policy: The Fund does not propose to purchase securities for
short term trading in the ordinary course of operations. Accordingly, it is ex-
pected that the annual turnover rate will not exceed 50%, herein turnover is
computed by dividing the lesser of the Fund's total purchases or sales of secu-
rities within the period by the average monthly portfolio value of the Fund dur-
ing such period. There may be times when management deems it advisable to sub-
stantially alter the composition of the portfolio, in which event, the portfolio
turnover rate might substantially exceed 50%; this would only result from spe-
cial circumstances and not from the Fund's normal operations.
Non-diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single economic,
political, or regulatory occurrence. The policy of the Fund, in the hope
of achieving its objective as stated above, is, therefore, one of selective
investments rather than broad diversification. The Fund seeks only enough
diversification for adequate representation among what it considers to be
the best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code (see next paragraph).
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund, intends to pay out substantially all of its investment income
and realized capital gains, and intends to be relieved of federal income tax on
the amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest, and gains from securities transactions, no
more than 30% of the Fund's profits may be derived from securities held less
than three months, and no more than 50% of the Fund assets may be held in secur-
ity holdings that exceed 5% of the total assets of the Fund at time of pur-
chase. Distribution of any net long term capital gains realized by the
Fund in 1998 will be taxable to the shareholder as long term capital gains,
regardless of the length of time Fund shares have been held by the investor.
All income realized
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by the Fund, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided
is correct and that you are not currently subject to back-up withholding,
or that you are exempt from back-up withholding.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. a) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or b) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a mer-
ger, consolidation , or purchase of assets approved by the Fund's share-
holders.
(e) Invest over 25% of its assets at the time of purchase in any one industry.
(f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(n) Issue senior securities.
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INVESTMENT ADVISER
Investment Research Associates, Inc. is an Arizona corporation that acts as
an Investment Adviser, to the Fund. Investment Research Associates has no
previous experience in advising registered investment companies. Daniel A.
and Hester Molter established the company in April 1997 and are the sole
owners, directors and officers of the Investment Adviser of the Fund. Mr.
Molter has an M.B.A. from the Wharton Graduate School of Business and a
C.P.A. Mr. Molter has held staff and management positions with Mobil Oil,
and worked his way up to being Chief Financial Officer of Botany 500 McGegor
Sportswear. On June 25, 1997 shareholders of the Fund approved a management
and Advisory contract with the Investment Research Associates, Inc., which
was unanimously approved by the Board of Directors June 25, 1997. This
Agreement will continue on a year to year basis provided that approval is
voted at least annually by specific approval of the Board of Directors of the
Fund or by vote of the holders of a majority of the outstanding voting
securities of the Fund, but, in either event, it must also be approved by a
majority of the directors of the Fund who are neither parties to the agree-
ment nor interested persons as defined in the Investment Company Act of 1940
at a meeting called for the purpose of voting on such approval. Under the
Agreement, Investment Research Associates, Inc. will furnish investment
advice to the Directors of the Fund on the basis of a continuous review of
the portfolio and recommend to the Fund when & to what extent securities
should be purchased or disposed. The Agreement may be terminated at any
time, without the payment of any penalty, by the Board of Directors or by
vote of a majority of the outstanding voting securities of the Fund on not
more than 60 days written notice to Investment Research Associates, Inc.
In the event of its assignment, the Agreement will terminate automatically.
Ultimate decisions as to the investment policy and as to individual purchases
and sales of securities are made by the Fund's officers and directors. For
these services the Fund has agreed to pay to Investment Research Associates,
Inc. a fee of 1% per year on the net assets of the Fund. All fees are
computed on the average daily closing net asset value of the Fund and are
payable monthly. The fee is higher than the fee paid by most other funds.
Not withstanding, the Investment Adviser would forgo sufficient fees to
hold the total expenses of the Fund to less than 2.0% of the first 10
million in averaged assets and 1.5% of the next 20 million. These ratios
were selected by the Board of Directors because they are believed to meet
the most restrictive state requirements.
Pursuant to its contract with the Fund, the Investment Adviser is required to
render research, statistical and advisory services to the Fund; to make specific
recommendations based on the Fund's investment requirements; and to pay salaries
of the Funds employees who may be officers or directors or employees of the In-
vestment Adviser. Excepting these items, the Fund pays all other fees and ex-
penses incurred in conducting its business affairs. The Investment Adviser has
paid the initial organizational costs of the Fund and will reimburse the Fund
for any and all losses incurred because of purchase reneges.
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, age, princi-
pal occupations and percent of shares outstanding held during the past five
years are:
Occupation Percent
Name and Address Age Position Past 5 Years of Class
Daniel A. Molter* 56 President Investment Advisor 100.00%
6720 E Camino Principal Interested Investment Research
Suite 100 Director Associates, Inc.
Tucson, AZ 85715
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Occupation Percent
Name and Address Age Position Past 5 Years of Class
Hester Molter* 45 Interested
6720 E Camino Principal Director Self-Proprietor
Suite 100 Wife of President
Tucson, AZ 85715
Lane Justus Non-interested Investor 0.00%
Tucson, AZ 85718 Director
Cliff Altfeld 40 Non-Interested Attorney at Law 0.00%
6273 La Yerba Director Tucson, AZ
Tucson, AZ 85750
Maranne Finley 55 Secretary Self-Proprietor 0.00%
5248 Pinehurst Drive Non-Interested
Boulder Co 80301-3791 Director
* Directors of the Fund who are considered "Interested Directors" as defined
by the Investment Company act of 1940. Mr. Molter is President and joint owner
of the Fund and Mrs. Molter is secretary and joint owner of the Fund.
The Fund does not compensate its officers and directors affiliated with the In-
vestment Adviser except as they may benefit through payment of the Advisory fee.
The Fund does not intend to compensate its officers and directors until assets
exceed $2,500,000 although they will be reimbursed for their expenses.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights with no conversion or
pre-emptive rights. All shares issued are fully paid and non-accessible.
Voting Rights: Each shareholder has one vote for each share held. Voting
rights are non-cumulative, which means that holders of a majority of shares can
elect all directors of the Fund if they so choose.
Major Shareholders: Dan Molter, as of the date of this Prospectus, owns
all outstanding shares of the Fund.
PURCHASE OF SHARES -REINVESTMENTS
The offering price of the shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and is
computed in the manner described under the caption "PRICING OF SHARES" in this
Prospectus. The Fund reserves the right at its sole descretion to terminate the
offering of its shares made by this Prospectus at any time and to reject pur-
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chase applications when, in the judgment of management such termination or re-
jection is in the best interests of the Fund.
Initial Investments: Initial purchase of shares of the Fund may be made only by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The minimum initial
purchase of shares is $1,000 which is due and payable 3 business days after the
purchase date. Less may be accepted under especial circumstances. The Fund
will be initially registered in Arizona and therefore restricted to Arizona
residents at the time of purchase. There will be no solicitation of
out of the state of Arizona potential shareholders until registration under
the Blue Sky laws of the state of residence have been met.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable five business days after the purchase date. The minimum is
$100, but less may be accepted under especial circumstances.
Reinvestments: The Fund will automatically retain and reinvest dividends & cap-
ital gains distributions and use same for the purchase of additional shares for
the shareholder at net asset value as of the close of business on the distribu-
tion date. A Shareholder may at any time by letter or forms supplied by the
Fund direct the Fund to pay dividends and/or capital gains distributions, if
any, to such shareholder in cash.
Fractional Shares: Shares will be issued to three decimal places as purchased
from the fund. The fund will maintain an account for each shareholder of shares
for which no certificates have been issued.
RETIREMENT PLANS
Individual Retirement Account: Persons who earn compensation and are not active
participants (and who do not have a spouse who is an active participant) in an
employee maintained retirement plan may establish Individual Retirement Accounts
(IRA) using Fund shares. Annual contributions, limited to the lesser of $2,000
or 100% of compensation, are tax deductible from gross income. This IRA deduc-
tion is also retained for individual taxpayers and married couples with adjusted
gross incomes within certain specified limits. All individuals may make nonde-
ductible IRA contributions to separate accounts to the extent that they are not
eligible for a deductible contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals be-
gin. The maximum annual contribution may be increased to $4,000 if you have a
spouse during the taxable year. A separate and independent Spousal IRA must
be maintained.
You may begin to make non-penalty withdrawals as early as age 59 1/2 or as late
as age 70 1/2. In the event of death or disability, withdrawals may be made be-
fore age 59 1/2 without penalty.
IRA Enhancements - Taxpayer Relief Act Changes to the Traditional IRA The
1997 Act restores deductible IRA contributions for individuals at higher
income levels. Currently, deductions for IRA contributions are phased out as
income increases beyond $40,000 for married taxpayers filing jointly and
$25,000 for single taxpayers. Under the Act, these income levels will
gradually increase to $80,000 for married taxpayers filing joint by the year
2007 and $50,000 for single taxpayers by the year 2005. Effective Date:
Taxable years beginning January 1, 1998.
Nondeductible Tax-Free Roth IRA
The new Roth IRA is funded solely with after-tax (nondeductible) contribu-
tions, but offers the possibility of tax-free earnings which are not taxed as
income when later withdrawn as part of qualified distributions. The prin-
cipal features of the new Roth IRA are:
* Tax deductions are not allowed for contributions to the account, but
earnings accumulate tax-free and are not taxed as income when withdrawn as
qualified distributions.
* Income limitations for contributions begin at $150,000 for married
taxpayers filing jointly and $95,000 for single taxpayers.
* The maximum contribution is combined with the deductible IRA and is limited
annually to the maximum IRA contribution allowed for that individual.
* Transfers from Traditional IRAs to Roth IRAs are allowed for single or
married taxpayers with adjusted gross incomes of $100,000 or less.
* Contributions can be made beyond age 70 1/2, while distributions are not
required to begin at age 70 1/2. Distributions are only required upon death.
Effective Date: Taxable years beginning January 1, 1998.
Nondeductible Education IRA
The Education IRA is a trust or custodial account established to help pay the
higher-education expenses of your child, grandchild or other designated
beneficiary. Like the Roth IRA, this account is funded with after-tax (non-
deductible) contributions. The Education IRA has the following principal
features:
* Contributions of up to $500 annually are allowed per student (in addition
to the $2,000 limit for a separate IRA).
* Qualified distributions are not taxed as income unless they exceed
qualified higher education expensed, in which case amounts in excess of
qualified expenses will be taxable as income and subject to the 10% penalty.
* Contributions may be made regardless of whether the beneficiary has gross
income, but may not be made after the beneficiary reaches age 18.
* Income limitations for contributions begin for taxpayers whose adjusted
gross income is between $150,000 to $160,000 for married taxpayers filing
jointly and $95,000 and $110,000 for single taxpayers.
A Disclosure Statement is required by U.S. Treasury Regulations. This Statement
describes the general provisions of the IRA and is forwarded to all prospective
IRA's. There is no charge to open and maintain a Molter Series Funds,
Inc. IRA. This policy may be changed by the Board of Directors if they
deem it to be in the best interests of all shareholders. All IRA's may
be revoked within 7 days of their establishment with no penalty.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who ten-
ders a request for redemption (if certificates have not been issued) or certifi-
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cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required unless the shareholder is
personally known to management. The redemption price is the net asset
value per share next determined after notice is received by the Fund for
redemption of shares. The proceeds received by the shareholder may be more
or less than his cost of such shares, depending upon the net asset value
per share at the time of redemption and the difference should be treated by
the shareholder as a capital gain or loss for federal Payment by the Fund
will ordinarily be made within three business days after tender. The Fund
may suspend the right of redemption or postpone the date of payment if:
The New York Stock Exchange is closed for other than customary weekend or
holiday closings, or when trading on the New York Stock Exchange is re-
stricted as determined by the Securities and Exchange Commission or when the
Securities and Exchange Commission has determined that an emergency exists, mak-
ing disposal of fund securities or valuation of net assets not reasonably prac-
ticable. The Fund intends to make payments in cash, however, the Fund reserves
the right to make payments in kind.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities in
such a manner as to get prompt execution of the orders at the most favorable
price. The Fund will place all orders for purchases and sales of its portfolio
securities through the Fund's President who is answerable to the Fund's Board of
Directors. In accordance with rule 17e-1 of the Investment Company Act of 1940,
If the Fund's President is also a registered representative of a New York Stock
Exchange or NASDAQ Member Firm he may place orders through his concern at as low
commission rates as possible & never to exceed rates that are higher than would
be available through any other national brokerage firm. The Directors will re-
view each transaction at least quarterly made with affiliated firms to determine
the reasonableness of commissions paid. Any unreasonable charge will be
deducted from the fees paid to the Adviser. The Fund's President may
select other brokers who meet the primary requirements of execution and
price, and also have furnished statistical or other factual information and
services which appear helpful or necessary to the Fund's normal operations.
No effort will be made in any given circumstance to determine the value of
these services or the amount they might have reduced Adviser expenses.
Other than as set forth above, the Fund has no fixed policy, formula, method or
criteria which it uses in allocating brokerage business to firms furnishing
these materials and services. The Board of Directors will evaluate and review
the reasonableness of brokerage commissions paid to brokers not affiliated with
Fund officers or the Adviser on a monthly basis initially and, after the first
year of operation at least semiannually.
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Independent Auditor's Report To Be Supplied
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Financial Statements to be supplied with audit
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The financial statements will be supplied with audit.
Organization: Molter Series Funds, Inc. (the "Fund") was incorporated on
June 25, 1997 and commenced operations on XXXXXX, 1998. The Fund has no
operations prior to the commencement of operations other than matters relating
to its
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organization and registration as an open-end non-diversified management
investment company under the Investment Company Act of 1940 and its securities
under the Securities Act of 1933, the sale and issuance of 20,000 shares of
common stock ("initial shares") to its initial investors on XXXXXX, 1998.
Significant Accounting Policies: Accounting policies consistently followed by
the Fund in the preparation of its financial statements are in conformity with
generally accepted accounting principles and include:
Security valuations - The Fund values investment secuities, where market quo-
tations are available, at market value based on the last recorded sales prices
as reported by the principal securities exchange on which the security is
traded, or if the security is not traded on an exchange, market value is based
on the latest bid price. Short term investments are valued at cost, pproximat-
ing market value.
Federal income taxes - The Fund's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Distribution to shareholders - The Fund intends to distrbute to shareholders
substantially all of its net investment income, if any, and net realized capi-
tal gains, if any, at year end.
Organizational costs and Registration fees - Organizational costs and Regis-
tration fees were all borne by the Fund's Investment Advisor.
Other - The Fund records security transactions on the trade date. Specific
identification is used for determining gains or losses for financial state-
ments & income tax purposes. Dividend income is recorded on the ex-dividend
date and interest income is recorded on an accrual basis.
NOTE 2 INVESTMENT ADVISORY AGREEMENT & OTHER RELATED
TRANSACTIONS: The Fund has an investment advisory agreement
with Investment Research Associates, Inc., whereby Investment
Research Associates, Inc. receives a fee of 1% per year on
the net assets of the Fund. All fees are computed on the
average daily closing net asset value of the Fund and are
payable monthly. In accordance with State Regulations,
Investment Research Associates, Inc. has agreed to reimburse the
Fund to hold the Fund's aggregate annual operating expenses to
2.0% of the first $10,000,000 and 1.5% of the average net assets
over $10,000,000. Mr. Daniel Molter is the President and joint owner
of the Fund and Mrs. Hester Molter is the secretary and joint owner of the Fund.
NOTE 3 INVESTMENTS: Not Applicable
NOTE 4 CAPITAL SHARE TRANSACTIONS: As of August 1, 1997 there were 1,000,000
shares of $.10 par value capital stock authorized and capital paid in
aggregating $100,000.
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FORM N-1A
PART C - OTHER INFORMATION
a. Contents Page #
1. Financial Statements & Exhibits 1
2. Control Persons 1
3. Number of Shareholders 1
4. Indemnification 1
5. Activities of Investment Adviser 1
6. Principal Underwriters 1
7. Location of Accounts & Records 2
8. Management Services 2
9. Distribution Expenses 2
10. Undertakings 2
11. Auditor's Consent 3
12. Signatures 4
b. Exhibits
1. Articles of Incorporation 3 i
2. By-Laws 3 ii
3. Investment Advisory Contract 10 i
4. Reimbursement Agreements - Officers/Directors 10 ii
5. Opinion of Counsel Concerning Fund Securities 99.1
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1. a. Financial Statements - Will be supplied with audit.
A post-effective amendment containing reasonably current financial statements
which will not be certified will be filed with the Securities and Exchange
Commission within 4 to 6 months of the effective date of this filing.
b. Exhibits - All exhibits believed to be applicable to this filing include:
(3.i) Articles of Incorporation
(3.ii) By-Laws
(10.1) Investment Advisory Contract
(10.2) Reimbursement Agreements with Officers and/or Directors
(99.1) Opinion of Counsel Concerning Fund Securities
2. Control Persons - Not applicable
3. Number of Shareholders - There is 1 shareholder of the Molter Series
Funds, Inc. Fund, as of this filing.
4. Indemnification - Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, the registrant has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnificaion is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or pro-
ceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, un-
less in the opinion of its counsel the matter has been settled by con-
trolling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnificaion by it is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issue.
Indemnification of Officers, Directors, Employees and Agents: Subject
to the further provisions hereof, the Corporation shall indemnify any
and of its existing and former directors, officers, employees, and
agents against all expenses incurred by them and each of them, includ-
ing but not imited to legal fees, judgment, penalties and amounts paid in
settlement or compromise, which may arise or be incurred, rendered, or
levied in any legal action brought or threatened against any of them
for or on alleged to have been committed while acting within the scope
of employment as director, officer, employee, or agent of the Corporation,
whether or not any action is or has been filed against them and whether or
not any settlement or compromise is approved by a court. No such
indemnification shall be available with respect to liabilities under the
Securities Act of 1933, and the Corporation shall have the right to
refuse indemnification in any instance in which the person to whom
indemnification would otherwise have been applicable shall have un-
reasonably refused to the Corporation, at its own expense through counsel
of its own choosing, to defend him or her in the action.
5. Activities of Investment Adviser - The Molter Series Funds, Inc.'s
activity at the present time is performance on its Investment
Advisory Contract currently effective with Investment Research
Associates, Inc. Mr. Dan Molter, owner, officer and director if
Investment Research Associates, Inc., is also President of the
Bookkeeper Corporation.
6. Principal Underwriter - The Fund acts as its own underwriter.
7. Location of Accounts & Records - All fund records are held at corporate
Headquarters - 6720 E Camino Principal, Suite 100, Tucson, AZ 85715
with the exception of security certifications which are in a safe
deposit box at the Bank of America, 7077 E Tanque Verde Rd., Tucson,
AZ. 85750
8. Not applicable
9. Distribution Expenses - The fund currently bears no distribution
Expenses.
10. Not Applicable
- 2 -
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO
BE SUPPLIED
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Invest-
ment company Act of 1940, the MOLTER SERIES FUNDS, INC. ceritifies that it
meets all of the requirements for effectiveness of this Registration State-
ment and has duly caused this amendment to the Registration Statement
to be signed on its behalf by the undersigned therunto duly authorized, in
the City of Tucson and State of Arizona, on the last day of August 1997.
MOLTER SERIES FUNDS, INC.
Dan Molter
President
Pursuant to the requirement of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
Dan Molter President, CEO and Director XXXXXX
Hester Molter Director XXXXXX
Lane Justus Director XXXXXX
Mary Ann Finlay Secretary, Director XXXXXX
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<PAGE>
EXHIBIT - 3 i
Filed with the Arizona Corporation Commission on June 25, 1997
ARTICLES OF INCORPORATION-
OF
MOLTER SERIES FUNDS, INC.
A Business-stock Corporation
DSCB:15-1306/2102/2303/2702/2903/3101/7102A(Rev 91)
1. Name: The name of the corporation (hereafter called Corporation) shall be:
Molter Series Funds, Inc.
2. Purpose: The purpose for which this Corporation is organized
are the transaction of any and all lawful business for which
corporations may be incorporated under the laws of the State of
Arizona, as they may be amended from time to time, and
specifically but in limitation thereof, the purpose of acting as
an open-ended non diversified investment company.
3. Business: The corporation initially intends to conduct the
business of acting as an open-end non diversified investment
company.
4. Authorized Capital: The authorized capital of the
Corporation shall be One Hundred Thousand Dollars ($100,000)
divided into One Million (1,000,000) shares of the par value of
Ten Cents ($0.10) each. The stock shall be issued when paid for
in cash services or property and shall be issued as fully paid
and shall be forever nonassessable. The judgment of the Board
of Directors as to the value of property taken or services
rendered in exchange for stock shall be conclusive in absence of
fraud
5. Statutory Agent: The name and business address of initial
statutory agent of the Corporation is:
Nathalie Watsek, Treasurer
Investment Research Associates, Inc.
6720 East Camino Principal, suite 100
Tucson, AZ 85715
6. Known Place of Business: The known place of business of the
Corporation shall be: 6720 East Camino Principal, Tucson Arizona
85715, but a different and other offices and places for
conducting business, both within and without the State of
Arizona, may be established from time to time by the Board of
Directors.
7. Board of Directors: The initial Board of Directors shall
consist of two (2) directors. The persons who are to serve as
directors until the first annual meeting of shareholders or
until their successors are elected and qualified are:
Daniel Alan Molter
6720 East Camino Principal, Suite 100
Tucson, Arizona 85715
Hester Molter
6720 East Camino Principal, Suite 100
Tucson, Arizona 85715
Otherwise, the number of persons to serve on the Board of
Directors shall be fixed by the Bylaws of the Corporation.
8. Quorum: A quorum at the meeting of the Board of Directors
shall consist of two-thirds of the number of directors then
serving; provided that when a Board comprised of one member is
authorized, the one director shall constitute a quorum.
9. Incorporators: The names and addresses of the incorporators
of the Corporation are:
Daniel Alan Molter
6720 East Camino Principal, Suite 100
Tucson, Arizona 85715
Hester Molter
6720 East Camino Principal, Suite 100
Tucson, Arizona 85715
all powers, duties and responsibilities of the incorporators
shall cease at the time of delivery of these Articles of
Incorporation to the Arizona Corporation Commission for filing.
10. Distribution From Capital Surplus: The Board of Directors of
the Corporation may, from time to time, distribute on a pro rata
basis to its shareholders out of the capital surplus of the
Corporation a portion of its assets, in cash or in property.
11. Indemnification of Officers, Directors, Employees and
Agents: Subject to the further provisions hereof, the
Corporation shall indemnify any and all of its existing and
former directors, officers, employees, and agents against all
expenses incurred by them and each of them, including but not
limited to legal fees, judgment, penalties and amounts paid in
settlement or compromise, which may arise or be incurred,
rendered, or levied in any legal action brought or threatened
against any of them for or on account or omission alleged to
have been committed while acting within the scope of employment
as director, officer, employee, or agent of the Corporation,
whether or not any action is or has been filed against them and
whether or not any settlement or compromise is approved by a
court. No such indemnification shall be available with respect
to liabilities under the Securities Act of 1933, and the
Corporation shall have the right to refuse indemnification in
any instance in which the person to whom indemnification would
otherwise have been applicable shall have unreasonably refused
to permit the Corporation, at its own expense through counsel of
its own choosing, to defend him or her in the action.
12. Repurchase Of Shares: the Board of Directors of the
Corporation may, from time to time, cause the Corporation to
purchase its own shares to the extent of the unreserved and
unrestricted earned and capital surplus of the Corporation.
IN TESTIMONY WHEREOF the incorporator has signed these Articles of Incorpora-
tion this 1st day of August, 1997.
Daniel Molter Hester Molter
_______________ _____________
Signature Signature
<PAGE>
EXHIBIT 3 ii
MOLTER SERIES FUNDS, INC. BY-LAWS
ARTICLE I - OFFICES
Section I. The principal office of the Corporation shall be in the City of
Tucson, County of Pima, State of Arizona. The Corporation shall also
have offices at such other places as the Board of Directors may from time to
time determine and the business of the Corporation may require.
ARTICLE II - STOCKHOLDERS AND STOCK CERTIFICATES
Section 1. Every stockholder of record shall be entitled to a stock certificate
representing the shares owned by him. Stock certificates shall be in such form
as may be required by law and as the Board of Directors shall prescribe. Every
stock certificate shall be signed by the President or a Vice President and by
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secre-
tary, and sealed with the corporate seal, which may be a facsimile, either en-
graved or printed. Whenever permitted by law, the Board of Directors may au-
thorize the issuance of stock certificates bearing the facsimile signatures of
the officers authorized to sign such certificates.
Section 2. Shares of the capital stock of the Corporation shall be transferable
only on the books of the Corporation by the person in whose name such shares are
registered, or by his duly authorized transfer agent. In case of transfers by
executors, administrators, guardians or other legal representatives, duly au-
thenticated evidence of their authority shall be produced, and may be required
to be deposited and remain with the corporation or its duly authorized transfer
agent. No transfer shall be made unless and until the certificate issued to the
transferor shall be delivered to the Corporation, or its duly authorized trans-
fer agent, properly endorsed.
Section 3. Any person desiring a certificate for shares of the capital stock
of the Corporation to be issued in lieu of one lost or destroyed shall make an
affidavit or affirmation setting forth the loss or destruction of such stock
certificate, and shall advertise such loss or destruction in such manner as the
Board of Directors may require, and shall, if the Board of Directors shall so
require, give the Corporation a bond of indemnity, in such form and with such
security as may be satisfactory to the Board, indemnifying the Corporation a-
gainst any loss that may result upon the issuance of a new stock certificate.
Upon receipt of such affidavit and proof of publication of the advertisement of
such loss or destruction, and the bond, if any, required by the Board of Direct-
ors, a new stock certificate may be issued of the same tenor and for the same
number of shares as the one alleged to have been lost or destroyed.
Section 4. The Corporation shall be entitled to treat the holder of record
any share or shares of its capital stock as the owner thereof, & accordingly,
shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not the Corporation shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Arizona.
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<PAGE>
ARTICLE III - MEETING OF STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the Corporation for the
election of directors and for the transaction of general business shall be held
at the principal office of the Corporation, or at such other place within or
without the State of Arizona as the Board of Directors may from time to
time prescribe, on the third Tuesday in November at 8:00 PM in each year,
unless that day shall be duly designated as a legal holiday, in which event
the annual meeting of the stockholders shall be held on the first day
following which is not a holiday. The place of the annual meeting of the
stockholders of the Corporation shall not be changed within sixty days next
before the day on which such meeting is to be held. A notice of any change
in the place of the annual meeting shall be given to each stockholder twenty
days before the election is held.
Section 2. Special meetings of the stockholders may be called at any time by
the President, and shall be called at any time by the President, or by the Sec-
retary, upon the written request of a majority of the members of the Board of
Directors, or upon the written request of the holders of a majority of the
shares of the capital stock of the Corporation issued and outstanding and en-
titled to vote at such meeting. Upon receipt of a written request from any per-
son or persons entitled to call a special meeting, which shall state the object
of the meeting, it shall be the duty of the President; or, in his absence, the
Secretary, to call such meeting to be held not less than ten days nor more than
sixty days after the receipt of such request. Special meetings of the stock-
holders shall be held at the principal office of the Corporation, or at such
other place within or without the State of Arizona as the Board of Direct-
ors may from time to time direct, or at such place within or without the State
of Arizona as shall be specified in the notice of such meeting.
Section 3. Notice of the time and place of the annual or any special meeting of
the stockholders shall be given to each stockholder entitled to notice of such
meeting at least ten days prior to the date of such meeting. In the case of
special meetings of the stockholders, the notice shall specify the object or ob-
jects of such meeting, and no business shall be transacted at such meeting other
than that mentioned in the call.
Section 4. The Board of Directors may close the stock transfer books of the
corporation for a period not exceeding sixty days preceding the date of any
meeting of stockholders, or the date for payment of any dividends, or the date
for the allotment of rights, or the date when any change or conversion or ex-
change of capital stock shall go into effect, or for a period of not exceeding
sixty days in connection with the obtaining of the consent of stockholders for
any purpose; provided, however, that in lieu of closing the stock transfer books
as aforesaid, the Board of Directors may fix in advance a date, not exceeding
sixty days preceding the date of any meeting of stockholders, or the date for
the payment of any dividend, or the date for the allotment of rights of the date
when any change or conversion or exchange of capital stock shall go into effect,
or a date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give
such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date as aforesaid.
Section 5. At least ten days before every election of directors of the Corpor-
ation, the Secretary shall prepare and file in the office where the election is
to be held a complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the residence of each stockholder
and the number of voting shares held by him, and such list shall at all times,
during the usual hours for business and during the whole time of said election,
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<PAGE>
be open to the examination of any stockholder.
Section 6. At all meetings of the stockholders, a quorum shall consist of the
persons representing a majority of the outstanding shares of the capital stock
of the Corporation entitled to vote at such meeting. In the absence of a quorum
no business shall be transacted except that the stockholders present in person
or by proxy and entitled to vote at such meeting shall have power to adjourn the
meeting from time to time without notice other than announcement at the meeting
until a quorum shall be present. At any such adjourned meeting at which a quor-
um shall be present, any business may be transacted which might have been trans-
acted at the meeting on the date specified in the original notice. If a quorum
is present at any meeting the holders of the majority of the shares of the Corp-
oration issued and outstanding and entitled to vote at the meeting who shall be
present in person or by proxy at the meeting shall have power to act upon all
matters properly before the meeting, and shall also have power to adjourn the
meeting to any specific time or times, and no notice of any such adjourned meet-
ing need be given to stockholders absent or otherwise.
Section 7. At all meetings of the stockholders the following order of business
shall be substantially observed, as far as it is consistent with the purpose of
the meeting:
Election of Directors
Ratification of Elections of Auditors
New Business
Section 8. At any meeting of the stockholders of the Corporation every stock
holder having the right to vote shall be entitled in person or by proxy appoint-
ed by an instrument in writing subscribed by such stockholder and bearing a date
not more than three years prior to said meeting unless such instrument provides
for a longer period, to one vote for each share of stock having voting power re-
gistered in his name on the books of the corporation.
ARTICLE IV - DIRECTORS
Section 1. The Board of Directors shall consist of not less than three nor more
than twelve members, who may be any persons, whether or not they hold any shares
of the capital stock of the corporation.
Section 2. The directors shall be elected annually by the stockholders of the
Corporation at their annual meeting, and shall hold office for the term of one
year and until their successors shall be duly elected and shall qualify.
Section 3. The Board of Directors shall have the control and management of the
business of the Corporation, and in addition to the powers and authority by
these by-laws expressly conferred upon them, may, subject to the provisions of
the laws of the State of Pennsylvania and of the Certificate of Incorporation,
exercise all such powers of the Corporation and do all such acts and things as
are not required by law or by the Certificate of Incorporation to be exercised
or done by the stockholders.
Section 4. If the office of any director becomes or is vacant by reason of
death, resignation, removal, disqualification or otherwise, the remaining di-
rectors may by vote of a majority of said directors choose a successor or suc-
cessors who shall hold office for the unexpired term; provided that vacancies on
the Board of Directors may be so filled only if, after the filling of the same,
at least two-thirds of the directors then holding office would be directors
elected to such office by the stockholders at a meeting or meetings called for
the purpose. In the event that at any time less than a majority of the direct-
ors were so elected promptly as possible and in any event within sixty days for
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<PAGE>
the purpose of electing directors to fill any vacancy which has not been
filled by the directors in office. Any other vacancies in the Board of
Directors not filled by the directors may also be filled for an unexpired
term by the stockholders at a meeting called for that purpose.
Section 5. The Board of Directors shall have power to appoint, and at its dis-
cretion to remove or suspend, any officer, officers, managers, superintendents,
subordinates, assistants, clerks, agents & employees, permanently or temporari-
ly, as the Board may think fit, and to determine their duties and to fix, & from
time to time change, their salaries or emoluments, & to require security in such
instances and in such amounts as it may deem proper. No contract of employment
for services to be rendered to the Corporation shall be of longer duration than
two weeks, unless such contract of employment shall be in writing, signed by the
officers of the Corporation and approved by the Board of Directors.
Section 6. In case of the absence of an officer of the Corporation, or for any
other reason which may seem sufficient to the Board of Directors, the Board may
delegate his powers and duties for the time being to any other officer of the
Corporation or to any director.
Section 7. The Board of Directors may, be resolution or resolutions passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of two or more of the directors of the Corporation, which to the extent
provided in such resolution or resolutions, shall have and may exercise the pow-
ers of the Board of Directors in the management of the business and affairs of
the Corporation, and may have power to authorize the seal of the Corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by resolu-
tion adopted by the Board of Directors. Any such committee shall keep regular
minutes of its proceedings, and shall report the same to the Board when requir-
ed.
Section 8. The Board of Directors may hold their meetings and keep the books of
the Corporation, except the original or duplicate stock ledger, outside of the
State of Arizona at such place or places as they may from time to time de-
termine.
Section 9. The Board of Directors shall have power to fix, and from time to
time to change the compensation, if any, of the directors of the Corporation.
Section 10. The Board of Directors shall present at each annual meeting of the
shareholders, and, when called for by vote of the stockholders, at any special
meeting of the stockholders, a full and clear statement of the business and con-
condition of the Corporation.
ARTICLE V - DIRECTORS MEETINGS
Section 1. Regular meetings of the Board of Directors shall be held without no-
tice at such times and places as may be free from time to time prescribed by the
Board.
Section 2. Special meetings of the Board of Directors may be called at any time
by the President, and shall be called by the President upon the written request
of a majority of the members of the Board of Directors. Unless notice is waived
by all the members of the Board of Directors, notice of any special meeting
shall be sent to each director at least twenty-four hours prior to the date of
such meeting, and such notice shall state the time, place and object or objects
of such special meeting.
- 4 -
<PAGE>
Section 3. Three member of the Board of Directors shall constitute a quorum
for the transaction of business at any meeting. The act of a majority of
the directors present at any meeting where there is a quorum shall be the
act of the Board of Directors, except as may be otherwise specifically
provided by statue or by the Certificate of Incorporation or by these by-laws.
Section 4. The order of business at meetings of the Board of Directors shall be
described from time to time by the Board.
ARTICLE VI - OFFICERS AND AGENTS
Section 1. At the first meeting of the Board of Directors after the election of
directors in each year, the Board shall elect a President, a Secretary and a
Treasurer, and may elect or appoint one or more Vice Presidents, Assistant Sec-
retaries, Assistant Treasurers, and such other officers and agents as the Board
may deem necessary and as the business of the Corporation may require.
Section 2. The President and the Chairman of the Board shall be elected from
the membership of the Board of Directors, but other officers need not be members
of the Board of Directors. Any two or more offices may be held by the same per-
son. All officers of the Corporation shall serve for one year and until their
successors shall have been duly elected and shall have qualified; provided, how-
ever, that any officer may be removed at any time, either with or without cause,
by action of the Board of Directors.
Section 3. The salaries of all officers and agents of the Corporation shall be
fixed by the Board of Directors.
ARTICLE VII - DUTIES OF OFFICERS
PRESIDENT
Section 1. The President shall be the Chief Executive Officer and head of the
Corporation, and in the recess of the Board of Directors shall have the general
control and management of its business and affairs, subject, however, to the re-
gulations of the Board of Directors. He shall preside at all meetings of the
stockholders and shall be a member exofficio of all standing committees.
Section 2. The President shall call all special or other meetings of the stock-
holders and Board of Directors. In case the President shall at any time neglect
or refuse to call a special meeting of the stockholders when requested so to do
by a majority of the directors, or by the stockholder representing a majority of
the stock of the Corporation, as is elsewhere in these by-laws provided,
then and in such case, such special meeting shall be called by the
Secretary, or in the event of his neglect or refusal to call such meeting,
may be called by a majority of the directors or by the stockholders
representing a majority of the stock of the Corporation, who desire such
special meeting, as the case may be, upon notice as hereinbefore provided.
In case the President shall at any time neglect or refuse to call a special
meeting of the Board of Directors when requested to do so by a majority of
the Directors, as is elsewhere in these by-laws provided, then and in such
case, such special meeting may be called by the majority of the directors
desiring such special meeting, upon notice as hereinbefore provided.
VICE PRESIDENTS
Section 3. In case of the absence of the President, the Vice President, or, if
there be more than one Vice President, then the Vice Presidents, according to
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their seniority, shall preside at the meetings of the stockholders of the Corp-
oration. In the event of the absence, resignation, disability or death of the
President, such Vice President shall exercise all the powers and perform all the
duties of the President until the return of the President or until such disabil-
ity shall have been removed or until a new President shall have been elected.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 4. The Secretary shall attend all meetings of the stockholders and
shall record all the proceedings thereof in a book to be kept for that purpose
and he shall record all the proceedings thereof in a book to be kept for that
purpose and he shall be the custodian of the corporate seal of the Corporation.
In the absence of the Secretary, an Assistant Secretary or any other person
appointed or elected by the Board of Directors, as is elsewhere in these by-laws
provided, may exercise the rights and perform the duties of the Secretary.
Section 5. The Assistant Secretary, or, if there be more than one Assistant
Secretary, then the Assistant Secretaries in the order of their seniority shall,
in the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary. Any Assistant Secretary elected by the Board shall
also perform such other duties and exercise such other powers as the Board of
Directors shall from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 6. The Treasurer shall keep full and correct accounts of the receipts
and expenditures of the Corporation in books belonging to the Corporation, and
shall deposit all moneys and valuable effects in the name and to the credit of
the Corporation and in such depositories as may be designated by the Board of
irectors, and shall, if the Board shall so direct, give bond with sufficient
security and in such amount as may be required by the Board of Directors for the
faithful performance of his duties. He shall disburse funds of the Corporation
as may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and Board of Directors at the
regular meetings of the Board, or whenever they may require it, an account of
all his transactions as the chief fiscal officer of the corporation, and of the
financial condition of the Corporation.
Section 7. The Assistant Treasurer, or if there be more than one Assistant
Treasurer, then the Assistant Treasurers in the order of their seniority, shall,
in the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer. Any Assistant Treasurer elected by the Board shall
also perform such duties and exercise such powers as the Board of Directors
shall from time to time prescribe.
ARTICLE VIII - CHECKS, DRAFTS, NOTES, ETC.
Section 1. All checks shall bear the signature of such person or persons as the
Board of Directors may from time to time direct.
Section 2. All notes and other similar obligations and acceptances of drafts by
the Corporation shall be signed by such person or persons as the Board of Di-
rectors may from time to time direct.
Section 3. Any officer of the Corporation or any other employee, as the Board of
Directors may from time to time direct, shall have full power to endorse for
deposit all checks and all negotiable paper drawn payable to his or their order
or to the order of the Corporation.
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<PAGE>
ARTICLE IX - CORPORATE SEAL
Section 1. The corporate seal of the Corporation shall have inscribed thereon
the name of the Corporation, the year of its organization, and the words Corpor-
ate Seal, Arizona. Such seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE X - DIVIDENDS
Section 1. Dividends upon the shares of the capital stock of the Corporation
may, subject to the provisions of the Certificate of Incorporation, if any, be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock of the Corporation.
Section 2. Before payment of any dividend there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors may, from time to time, in their absolute discretion, think proper
as a reserve fund to meet contingencies, or for equalizing dividends, or for re-
pairing or maintaining any property of the Corporation, or for such other pur-
pose as the Board of Directors shall deem to be for the best interests of the
Corporation, and the Board of Directors may abolish any such reserve in the man-
ner in which it was created.
ARTICLE XI - FISCAL YEAR
Section 1. The fiscal year of the Corporation shall begin on January 1 of each
year, and end on December 31 of each year.
ARTICLE XII - NOTICES
Section 1. Whenever under the provisions of these by-laws notice is required to
be given to any director or stockholder, it shall not be construed to mean per-
sonal notice, and such notice may be given in writing, by mail, by depositing
the same in the post office or letter box, in a postpaid sealed wrapper, add-
ressed to such director or stockholder at such address as shall appear on the
books of the Corporation, or, if the address of such director or stockholder
does not appear on the books of the Corporation, to such director or stockholder
at the General Post Office in the City of Tucson, Arizona and such notice
shall be deemed to be given at the time it shall be so deposited in the post
office or letter box. In the case of directors, such notice may also be given
by telephone, telegraph or cable.
Section 2. Any notice required to be given under these by-laws may be waived in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein.
Section 3. Each director and officer (and his heirs, executors, and adminis-
trators) shall be indemnified by the Corporation against reasonable costs and
expenses incurred by him in connection with any action, suit or proceeding to
which he may be made a party by reason of his being or having been a director or
officer of the Corporation, except in relation to any action, suits or proceed-
ings in which he has been adjudged liable because of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the con-
duct of his office. In the absence of any adjudication which expressly finds
that the director or officer is so liable or which expressly absolves him
of liability for willful misfeasance, bad faith, gross negligence or reck-
less dis
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<PAGE>
regard of the duties involved in the conduct of his office, or in the event of a
settlement, each director and officer (and his heirs, executors and administrat-
ors) shall be indemnified by the Corporation against payments made, including
reasonable costs determination by a written opinion of independent counsel.
Amounts paid in settlement shall not exceed costs, fees and expenses which would
have been reasonably incurred if the action, suit or proceeding had been liti-
gated to a conclusion. Such a determination by independent counsel, and the
payments of amounts by the Corporation on the basis thereof shall not prevent a
stockholder from challenging such indemnification by appropriate legal proceed-
ings on the grounds that the person indemnified was liable to the Corporation or
its security holders by reason of the conduct as used herein. The foregoing
provisions shall be exclusive of any other rights of indemnification to which
the officers and directors might otherwise be entitled.
ARTICLE XIII - AMENDMENTS
Section 1. These by-laws may be amended, altered, repealed or added to at the
annual meeting of the stockholders of the Corporation or of the Board of Direct-
ors, or at any special meeting of the stockholders or of the Board of Directors
called for that purpose, by the affirmative vote of the holders of a majority of
the shares of capital stock of the Corporation then issued and outstanding and
entitled to vote, or by a majority of the Whole Board of Directors, as the case
may be.
ARTICLE XIV - INVESTMENT RESTRICTIONS
The by-laws of the Fund provide the following fundamental investment restric-
tions; the Fund may not, except by approval of a majority of the voting securi-
ties present at a duly called meeting, if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy, or (b) of
more than 50% of the outstanding voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a mer-
ger, consolidation, or purchase of assets approved by the Funds
shareholders or by purchases with no more than 10% of the Fund's assets in
the open market involving only customary broker's commissions.
(e) Invest more than 25% of its assets at the time of purchase in any one ind-
ustry.
(f) Make investments in commodities, commodity contracts or real estate al-
though the Fund may purchase and sell securities of companies which deal in
real estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issue,
treating all preferred securities of an issuer as a single class and all
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debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(I) Invest in companies for the purpose of acquiring control.
(j) The fund may not purchase or retain securities of any issuer if those off-
icers and directors of the Fund or its Investment Adviser owning
individually more than 1/2 of 1% of any class of security collectively own
more than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time
of purchase readily saleable.
(m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three year's
continuing operation, including the operation of any predecessor.
(n) Issue senior securities.
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Exhibit - 10 i
INVESTMENT ADVISORY CONTRACT
AGREEMENT, made by and between Molter Series Funds, Inc., an Arizona
Corporation, (hereinafter called "Fund") and Investment Research Associates,
Inc., an Arizona Corporation (hereinafter called "Investment Adviser")
WITNESSETH: WHEREAS, Fund engages in the business of investing and reinvesting
its assets and property in various stocks and securities and Investment Adviser
engages in the business of providing investment advisory services.
1. The Fund hereby employs the Investment Adviser, for the period set forth
in Paragraph 6 hereof, and on the terms set forth herein, to render invest-
ment advisory services to the Fund, subject to the supervision and direction
of the Board of Directors of the Fund. The Investment Adviser hereby ac-
cepts such employment and agrees, during such period, to render the services
and assume the obligations herein set forth, for the compensation provided.
The Investment Adviser shall, for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way,
or in any way be deemed an agent of the Fund.
2. As a compensation for the services to be rendered to the Fund by the Invest-
ment Adviser under the provisions of this Agreement, the Fund shall pay to
the Investment Adviser monthly a fee equal to one-twelfth of one percent per
month, (the equivalent of 1% per annum) of the daily average net assets of
the Fund during the month. The first payment of fee hereunder shall be
prorated on a daily basis from the date this Agreement takes effect.
3. It is expressly understood and agreed that the services to be rendered by
the Investment Adviser to the Fund under the provisions of this Agreement
are not to be deemed to be exclusive, and the Investment Adviser shall be
free to render similar or different services to others so long as its abil-
ity to render the services provided for in this Agreement shall not be im-
paired thereby.
4. It is understood and agreed that directors, officers, employees, agents and
shareholders of the Fund may be interested in the Investment Adviser as dir-
ectors, officers, employees, agents and shareholders, and that directors,
officers, employees, agents and shareholders of the Investment Adviser may
be interested in the Fund, as directors, officers, employees, agents and
shareholders or otherwise, and that the investment Adviser, itself, may be
interested in the Fund as a shareholder or otherwise, specifically, it is
understood and agreed that directors, officers, employees, agents and share-
holders of the Investment Adviser may continue as directors, officers, emp-
loyees, agents and shareholders of the Fund; that the Investment Adviser,
its directors, officers, employees, agents and shareholders may engage in
other business, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, may
render underwriting services to the Fund, or to any other investment compa-
ny, corporation, association, form or individual. The Fund shall bear ex-
penses and salaries necessary and incidental to the conduct of its business,
including but not in limitation of the foregoing, the costs incurred in the
maintenance of its own books, records, and procedures; dealing with its own
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shareholders; the payment of dividends; transfers of stock (including issu-
ance & redemption of shares); reports and notices to shareholders; expenses
of annual stockholders; meetings; miscellaneous office expenses; brokerage
commissions; taxes; and custodian, legal, accounting and registration fees.
Employees, officers and agents of the Investment Adviser who are, or may in
the future be, directors and/or senior officers of the Fund shall receive no
remuneration from the Fund or acting in such capacities for the Fund. In
the conduct of the respective businesses of the parties hereto and in the
performance of this agreement, the Fund & Investment Adviser may share com-
mon facilities and personnel common to each, with appropriate proration of
expenses.
5. Investment Adviser shall give the Fund the benefit of its best judgment and
efforts in rendering these services, and Fund agrees as an inducement to the
undertaking of these services that Investment Adviser shall not be liable
hereunder for any mistake of judgment or any event whatsoever, provided that
nothing herein shall be deemed to protect, or purport to protect, Investment
Adviser against any liability to Fund or to its security holders to which
Investment Adviser would otherwise be subject by reason of willful misfeas-
ance, bad faith or gross negligence in the performance of duties hereunder,
or by reason of reckless disregard of obligations and duties hereunder.
6. This agreement shall continue in effect until December 31, 1998, and, there-
after, only so long as such continuance is approved at least annually by
votes of the Fund's Board of Directors, cast in person at a meeting called
for the purpose of voting on such approval, including the votes of a majori-
ty of the Directors who are not parties to such agreement or nterested per-
sons of any such party. This agreement may be terminated at any time upon
60 days prior written notice, without the payment of any penalty, by the
Fund's Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund. The contract will automatically terminate in the
event of its assignment by the Investment Adviser (within the meaning of the
Investment Company Act of 1940), which shall be deemed to include a transfer
of control of the Investment Adviser. Upon the termination of this agree-
ment, the obligations of all the parties hereunder shall cease and terminate
as of the date of such termination, except for any obligation to respond for
a breach of this Agreement committed prior to such termination and except
for the obligation of the Fund to pay to the Investment Adviser the fee pro-
vided in Paragraph 2 hereof, prorated to the date of termination.
7. This Agreement shall not be assigned by the Fund without prior written con-
sent thereto of the Investment Adviser. This Agreement shall terminate au-
tomatically in the event of its assignment by the Investment Adviser unless
an exemption from such automatic termination is granted by order or rule of
the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presence to be signed by their
duly authorized officers this 1st day of XXXXXXXXt, 1998.
Molter Series Funds, Inc. By__________________________
Dan Molter, President
Attest: ________________
Hester Molter,
Investment Research Associates, Inc. By____________________________
Dan Molter,
President
Attest: ________________
Hester Molter
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<PAGE>
Exhibit - 10 ii
Reimbursement Agreements
The Fund will reimburse officers and directors not affiliated with the Invest-
ment Adviser to compensate for travel expenses associated with performance of
their duties.
The Fund has no plans to, compensate officers and directors who are affiliated
with the Investment Adviser except indirectly through payment of the management
fee.
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<PAGE>
Exhibit - 99.1
XXXXXXXXXXXXXX
Attorneys at Law
1107 S Church St.
West Chester, PA 19382
Molter Series Funds, Inc.
Gentlemen:
I have been asked to provide this opinion in connection with the registration
under the Securities Act of 1933 ("Securities Act") of 1,500,000 shares of the
Common Capital Stock (par value $0.01 per share) of Molter Series
Funds, Inc.("Fund").
I have examined the Articles of Incorporation of the Fund; the By-Laws of the
Fund; various pertinent corporate proceedings; and such other items considered
to be material to determine the legality of the authorized but unissued shares
of the Fund's common stock.
Based upon the foregoing, it is my opinion that upon effectiveness of the Secur-
ties Act Registration Statement of the Fund, filed pursuant to the provisions
of Section 24(e) of the Investment Company Act of 1940, to register 1,500,000
shares of the Fund's common stock ($0.01 per share par value) and during such
time as such Registration Statement continues to be in effect, the Fund will be
authorized to solicit, and cause to be solicited share purchase orders and to
issue its shares for a cash consideration, as described in the Fund's proposed
Prospectus and Statement of Additional Information, which shares so issued will
be validly issued, fully paid and non-assessable.
I offer no opinion with respect to the offer and sales of the Fund's securities
under the security laws of the several states, the District of Columbia, any
territory of the United States or any foreign country.
I consent to the inclusion of this opinion as an exhibit to the Securities Act
Registration Statement of the Fund and to the reference in the Fund's Prospectus
and/or Statement of Additional Information to the fact that this opinion con-
cerning the legality of the issue on behalf of the Fund, as issuer, has been
rendered by me.
Very Truly Yours;
__________________
XXXXXXXXXXXXX
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