1940 Act File No. 811-3056
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 19
TRIDAN CORP.
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(Exact name of Registrant as Specified in Charter)
477 Madison Avenue
New York, New York 10022
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number
Including Area Code (212) 371-2100
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I. Robert Harris, Esq.
c/o Kantor, Davidoff, Wolfe,
Mandelker & Kass, P.C.
51 East 42nd Street
New York, New York 10017
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(Name and Address of Agent for Service)
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PART A - INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Outside Front Cover.
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Not applicable
Item 2. Inside Front and Outside Back Cover Page.
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Not applicable
Item 3. Fee Table and Synopsis.
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Not applicable
Item 4. Financial Highlights.
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Not applicable
Item 5. Plan of Distribution.
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Not applicable
Item 6. Selling Shareholders.
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Not applicable
Item 7. Use of Proceeds.
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Not applicable
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Item 8. General Description of the Registrant.
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1. GENERAL: Registrant is a corporation organized under the laws of the
State of New York. It was incorporated on January 7, 1929 under the name Triumph
Hosiery Mills, Inc., and its corporate name was changed to Tridan Corp. on
January 29, 1973. Prior to April 29, 1980, Registrant, through its subsidiaries,
was engaged in the business of manufacturing and selling women's and children's
apparel, principally under the trademark "Danskin". On April 28, 1980, the
Registrant sold its assets and business to International Playtex, Inc.,
effective as of January 1, 1980, and since then has conducted business as an
investment company, specifically a closed-end, non-diversified management
company.
2. INVESTMENT OBJECTIVES AND POLICIES:
RECITAL OF INVESTMENT OBJECTIVES
The Registrant's investment objective is to achieve a high level of
current income through investment primarily in fixed income securities which are
exempt from federal income tax and which investments are consistent with
flexible maturity and investment grade quality standards. Registrant intends to
invest at least 50% of its invested assets in fixed income obligations of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies, authorities and
instrumentalities, which will constitute Registrant's major portfolio emphasis,
including industrial revenue bonds and other bonds, leases, tax anticipation
notes, bond anticipation notes, revenue anticipation notes, project notes and
other notes. Registrant may also invest in nonmunicipal fixed income securities
including obligations of the U.S. government and its agencies and
instrumentalities, bank
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obligations, debt securities of corporate issuers, asset backed and mortgaged
related securities and repurchase agreements. Registrant will invest only in
securities of the type described above which have at the time of purchase (i)
for municipal securities on a rating of Baa or higher by Moody's Investors
Service, Inc., or BBB or higher by Standard & Poor's Corporation, (ii) for
non-municipal securities B a rating of A1 or higher by Moody's, or A+ or higher
by Standard & Poor's, or (iii) a credit quality which, in the opinion of the
investment adviser, is equivalent to such ratings although the rating agencies
may ascribe lower ratings or in the case of unrated securities. Such objective
may be changed without the vote of the holders of a majority of the Registrant's
outstanding voting securities.
RECITAL OF FUNDAMENTAL POLICIES
Registrant has the following policy with respect to each of the
activities described below, which may not be changed without the approval of a
majority of Registrant's outstanding voting securities.
Registrant will not issue any senior securities.
Registrant will not make short sales of securities, purchase any
securities on margin (except for such short-term credits as are necessary for
the clearance of transactions) or write, purchase or sell puts, calls or
combinations thereof, except that Registrant may purchase securities which have
an attached put, i.e., the right to resell to the seller at an agreed-upon price
or yield on a specified date or within a specified period (which will be prior
to the maturity date of such security).
Registrant will not borrow money, except for temporary or emergency
purposes (but not for investment purposes) in an amount up to 5 percent of
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the value of its assets (including the amount borrowed) less liabilities (not
including the amount borrowed) at the time the borrowing is made.
Registrant will not underwrite securities issued by others. Registrant
will not invest in restricted securities (securities which must be registered
under the Securities Act of 1933 before they may be offered or sold to the
public). Registrant may participate in bidding for the purchase of certain
securities directly from an issuer for its own portfolio in order to take
advantage of the lower purchase price available to members of a bidding group.
Registrant will invest at least 50% of its invested assets in debt
obligations issued by or on behalf of states, territories and possessions of the
United States and the District of Columbia and their political subdivisions,
agencies and instrumentalities, or multi-state agencies or authorities, the
interest from which is exempt from federal income tax. Registrant may also
invest up to 50% of its invested assets in nonmunicipal fixed income securities
including obligations of the U.S. government and its agencies and
instrumentalities, bank obligations, debt securities of corporate issuers, asset
backed and mortgage related securities and repurchase agreements.
Registrant will not purchase or sell real estate or real estate
mortgage loans, except that Registrant reserves the freedom to invest in leases
and in securities which are secured by, or have their revenues derived from,
real estate or interests therein, provided that such investments are consistent
with Registrant's investment objective and fundamental policies.
Registrant will not purchase or sell commodities or commodity
contracts, including futures contracts in a contract market or other futures
market.
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Registrant will not lend money or securities, except that Registrant
may purchase debt securities in private placement transactions or public
offerings in accordance with its investment objective and fundamental policies.
In addition to the policies listed above, Registrant deems the
following to be fundamental policies:
Registrant will not purchase securities of other investment companies,
except to the extent permitted by Section 12(d) of the Investment Company
Act of 1940 and consistent with Registrant's investment objective and
fundamental policies, or as they may be acquired in connection with a
merger, consolidation, reorganization or acquisition of assets.
Registrant will not invest for the purpose of exercising control or
management of another company.
Registrant will not invest in interests in oil, gas or mineral
exploration or development programs.
Registrant will not participate on a joint or a joint and several
basis in any trading account in securities. The "bunching" of orders for
the sale or purchase of marketable portfolio securities with other accounts
under the management of the adviser or affiliates to save commissions or to
average prices among them is not deemed to result in a securities trading
account.
RECITAL OF INVESTMENT POLICIES
Registrant has the following investment policies which, although
significant, are not deemed fundamental and may be changed without shareholder
approval:
At the close of each fiscal quarter, at least 50% of the value of
Registrant's total assets will be represented by:
cash and cash items (including receivables) and securities which are
issued or guaranteed as to principal or interest by the United States, and
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other securities limited in respect of any one issuer to an amount not
greater in value than 5% of the value of Registrant's total assets, and
At the close of each fiscal quarter, not more than 25% of the value of
Registrant's total assets will be invested in the securities of any one
issuer, other than securities which are issued or guaranteed as to
principal or interest by the Untied States.
PORTFOLIO TURNOVER
Changes in portfolio composition will be made in an effort to
accomplish the Registrant's objective. Registrant does not intend to seek
short-term trading profits, although securities may be sold whenever management
believes it advisable, regardless of the time any particular asset may have been
held. Registrant anticipates that its annual portfolio turnover rate will
generally not exceed 100%. A 100% turnover rate would occur if all of
Registrant's portfolio investments were sold and either repurchased or replaced
within one year. High turnover may result in increased transaction costs to
Registrant; however, the rate of turnover will not be a limiting factor when
Registrant deems it desirable to purchase or sell portfolio investments.
Therefore, depending on market conditions, Registrant's annual portfolio
turnover rate may exceed 100% in a particular year.
3. RISK FACTORS:
Not applicable
4. OTHER POLICIES:
Not applicable
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5. SHARE PRICE DATA:
Not applicable
6. BUSINESS DEVELOPMENT COMPANIES:
Not applicable
Item 9. MANAGEMENT.
1. GENERAL:
a) BOARD OF DIRECTORS:
Under the laws of the State of New York, the directors of the
Registrant are responsible for management of the business of the corporation,
including the administration of its internal affairs and management of its
assets. Directors have the duty to act for the corporation according to their
best business judgment.
b) INVESTMENT ADVISERS:
Morgan Guaranty Trust Company of New York, 522 Fifth Avenue, New York,
New York 10036, is the Registrant's investment adviser ("Morgan").
The Investment Management Division of Morgan exercises investment
management responsibilities with respect to three types of accounts: as executor
and as trustee of Personal Trust Accounts; as trustee or investment manager of
Employee Benefit Plan Accounts; and as investment manager or investment adviser
for individuals and institutions. Morgan had under the management of its Trust
and Investment Division $257 billion of clients' assets as of December 31, 1997.
Morgan and its predecessors have been engaged in serving as fiduciary or as
investment manager since the early 1900's.
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Morgan is a wholly-owned subsidiary of J. P. Morgan & Co.
Incorporated.
No affiliated person of the Registrant is also an affiliated person of
Morgan.
The investment advisory fee payable to Morgan is .28 percent of the
net assets of the Registrant under its management. The fee is computed and
payable quarterly, based on the market value of net assets held by Morgan on the
last day of each fiscal quarter.
Morgan received investment advisory fees aggregating $110,023,
$109,177 and $111,188 applicable to the fiscal years ended April 30, 1998, 1997
and 1996, respectively.
Services provided and paid for by Morgan include clerical and
bookkeeping, preparation and issuance of reports and statements, assistance in
determining valuations, trading and custody of securities, review of and
recommendations on investments, and making of distributions to shareholders of
the Registrant.
(a) Registrant has no expense limitation provision. No fees, expenses
or costs of the Registrant are to be paid by persons other than
Morgan or the Registrant.
Registrant has no management-related service contract.
No person (other than the directors, officers or employees of the
Registrant, as such, or Morgan), pursuant to any understanding, whether formal
or informal, regularly furnishes advice to the Registrant or to Morgan with
respect to the
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desirability of the Registrant's investing in, purchasing or selling securities
or other property, or is empowered to determine what securities or other
property should be purchased or sold by the Registrant, and receives direct or
indirect remuneration.
c) PORTFOLIO MANAGEMENT:
The portfolio manager who is primarily responsible for the day-to-day
management of the Registrant's portfolio is Robert W. Meiselas, Vice President
of the Registrant's investment adviser, Morgan Guaranty Trust Company of New
York. Mr. Meiselas has been the Registrant's portfolio manager since January,
1996 and has been employed by the J.P. Morgan companies for more than the past
five years.
d) ADMINISTRATORS:
The Registrant has no employees. The accounting firm of Yohalem
Gillman & Company LLP, 477 Madison Avenue, New York, New York 10022, provides
administrative management services to the Registrant, including general and
investment bookkeeping, bill paying, corporate correspondence including
shareholder communications, maintenance of books, ledgers, statements and other
records, preparation of internal financial statements and cash flow analysis,
reports to the Board of Directors, and the like. Said accounting firm is
compensated on a time basis and received $89,200 for the Registrant's fiscal
year ended April 30, 1998.
e) CUSTODIANS:
Morgan Guaranty Trust Company of New York, 522 Fifth Avenue, New York,
New York 10036, holds all of the portfolio securities of the Registrant as
custodian. The Registrant acts as its own transfer agent, at the offices of its
general counsel, Kantor, Davidoff, Wolfe, Mandelker & Kass, P.C., 51 East 42nd
Street,
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New York, New York 10017. Morgan Guaranty Trust Company of New York acts as the
Registrant's dividend paying agent.
f) EXPENSES:
Not applicable
g) AFFILIATED BROKERAGE:
Not applicable
2. NON-RESIDENT MANAGERS:
Not applicable
3. CONTROL PERSONS:
Incorporated by reference from the Registrant's Proxy Statement, dated
May 26, 1998, filed electronically on June 2, 1998 with the Securities and
Exchange Commission. See Section entitled "Principal and Management
Shareholders". Item 10. CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES.
1. CAPITAL STOCK:
Registrant has a single class of capital stock, $.02 par value per
share, as to which the following information applies:
(1) Each outstanding share entitles the holder to one vote and to
participate equally in dividends, distributions of capital and net assets on
liquidation. The shares carry no cumulative voting rights. Fractional shares
entitle the holder to the same voting, dividend, distribution and other rights
as whole shares on a pro-rata basis. The shares are fully paid and
non-assessable when issued.
(2) The shares carry no pre-emptive or conversion rights, and there
are no redemption or sinking fund provisions.
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(3) The rights of holders of such stock may not be modified otherwise
than by a vote of a majority of the shares outstanding, voting as a class.
(4) The Registrant has in effect a plan for the repurchase of its
shares as follows. The Registrant shall repurchase shares from time to time,
upon specific request from non-affiliated shareholders who were employees of its
former operating subsidiary, Danskin, Inc., (i) at or after age 65, or (ii) upon
death, at a purchase price in each case equal to the net asset value of the
Registrant's shares as of the end of the fiscal quarter in which the Registrant
receives a shareholder's request for repurchase. All such repurchases shall be
made in compliance with all of the provisions of SEC Rule 23c-1. (a) Registrant
has a single class of capital stock, $.02 par value per share, as to which the
following information applies:
2. LONG-TERM DEBT:
Not applicable
3. GENERAL:
Not applicable
4 TAXES:
(a) Registrant intends to continue to qualify for and maintain its
election of the special tax treatment afforded regulated investment companies
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). Qualification as a regulated investment company under the Code is
necessary to insure that (a) shareholders will be entitled to treat as tax
exempt income amounts distributed to them which are designated "exempt-interest
dividends" by the Registrant and (b) Registrant will not be subject to income
tax with respect to non-exempt income which
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it distributes to shareholders. In order to so qualify, Registrant must (i)
annually derive at least 90% of its gross income from interest, payments with
respect to securities loans, and sale or other disposition of securities, (ii)
annually derive less than 30% of its gross income from the sale or disposition
of securities held for less than three months, and (iii) at the close of each
fiscal quarter meet certain asset diversification requirements.
(b) TAX TREATMENT OF INCOME DIVIDENDS AND CAPITAL GAINS
DISTRIBUTIONS.
Registrant will distribute to shareholders substantially all of its
net investment income each year in the form of dividends. As previously stated,
Registrant intends to maintain at least 50% of its invested assets in tax exempt
securities, so that it will qualify to pay "exempt-interest dividends" (as
defined by Section 852 (b) (5) of the Code) to its shareholders. A portion of
the income dividends to shareholders would qualify as exempt-interest dividends
if, at the close of each quarter of the fiscal year, as little as 50% of the
value of Registrant's total assets consisted of tax exempt securities. The
remainder of the income dividends would be taxable as ordinary income. The
Registrant will give notice annually to shareholders regarding the character of
the dividends distributed.
Exempt-interest dividends distributed to shareholders are not
includable in the shareholders' gross income for federal income tax purposes.
However, distributions of ordinary income dividends and capital gains realized
by Registrant upon the sale or redemption of securities will subject its
shareholders to federal income taxation. The short-term or long-term character
of capital gains distributed to shareholders will be determined by the length of
time during which the particular securities were held by the Registrant, not the
length of time during which a shareholder held shares of the Registrant.
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(c) DIVIDEND POLICY
Registrant's distribution policy is to pay cash dividends to
shareholders at least quarterly. The timing of such distributions by the
Registrant is consistent with the distributions received by it from its
investment portfolio, to the extent practicable.
The Registrant also distributes, on a semi-annual basis, all or
substantially all of its net accumulated capital gains. To the extent that any
of such net capital gains is not so distributed, the undistributed portion will
be subject to federal income tax. In addition, if 98% of the Registrant's
capital gain net income for the 12 month period ending on October 31st of each
calendar year is not distributed, an excise tax of 4% will be imposed on the
excess of the required distribution over the distributed amount for that
calendar year. The Registrant intends to structure its distributions to avoid
liability for this excise tax, to the extent possible. Since the Registrant is a
closed-end management investment company, it has not provided for the
reinvestment of distributions in additional shares.
(d) SPECIAL OR UNUSUAL TAX ASPECTS
There are no special or unusual tax aspects of the Registrant, other
than those described above.
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5. OUTSTANDING SECURITIES:
The following table sets forth certain information as to the
Registrant's capital stock as of May 15, 1998:
(4)
(1) (2) (3) Amount
Amount Held Outstanding
by Registrant Exclusive of
Amount or for its Amount Shown
Title Of Class Authorized Account Under (3)
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Capital stock, $.02 6,000,000 61,038.3195 3,138,061.6805
par value per share shares shares shares
6. SECURITIES RATINGS:
Not applicable
Item 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES.
(1) Registrant has not issued and does not have outstanding any senior
securities.
(2) Registrant has not issued and does not have outstanding any
capital stock on which there exists any accumulated dividend.
Item 12. PENDING LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal
proceeding. There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the investment adviser
of the Registrant is a party. The Registrant has no subsidiaries and no
underwriters.
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Item 13. TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION.
PAGE NUMBER
General Information and History 2
Investment Objectives and Policies 2
Management 16
Control Persons and Principal Holders
of Securities 10
Investment Advisory and Other Services 7
Brokerage Allocation 17
Tax Status 11
Financial Statements 19
PART B - INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 14. COVER PAGE.
Not applicable
Item 15. TABLE OF CONTENTS.
Incorporated by reference to Item 13 hereof.
Item 16. GENERAL INFORMATION AND HISTORY.
Incorporated by reference to Item 8 hereof.
Item 17. INVESTMENT OBJECTIVES AND POLICIES.
Incorporated by reference to Item 8 hereof.
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Item 18. MANAGEMENT.
The table below provides certain information regarding all officers,
directors and advisory board members (none) of the Registrant:
(1) (2) (3)
Positions Held Principal Occupations
NAME AND ADDRESS WITH REGISTRANT DURING PAST 5 YEARS
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Peter Goodman1 President and Director President, Tridan Corp.
Wendover Road
Rye, NY 10580
Warren Fred Pelton1 Vice President, Treasurer President, National
12651 Hunters and Director Association on Drug
Lakes Ct. Abuse Problems, Inc.
Bonita Springs, prior to 1996; currently
FL 33923 Director of
Development,
International College
Thomas David Flynn Director Trustee Emeritus of
35 Cornwells Columbia University ;
Beach Road Director Emeritus of
Sands Point, NY National Bureau of
11050 Economic Research
Jay Stanley Negin Director Attorney; Investor
6 Demarest Court
Englewood Cliffs, NJ
07632
Russell Jude Stoever1 Director Vice President, Stoever
15 Rockleigh Road Glass & Co., Inc.
Rockleigh, NJ 07647
I. Robert Harris Secretary Of counsel to the law
425 East 58th Street firm of Kantor,
New York, NY 10022 Davidoff, Wolfe,
Mandelker & Kass, P.C.
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1 A director of Registrant who is an "interested person" or deemed an
"interested person" as defined by Section 2(a)(19) of the 1940 Act.
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None of the persons listed above hold any position with any affiliated
person of the Registrant. The Registrant does not have any underwriters.
Each director of the Registrant receives an annual fee of $9,000 for
directorial services rendered by him. No executive officer receives cash
compensation exceeding $60,000. All executive officers of the Registrant as a
group (two persons) received compensation (comprised solely of directors' fees
described above) aggregating $18,000 applicable to fiscal 1998 (which excludes
professional fees paid to the law firm of which I. Robert Harris, secretary of
the Registrant, is a member).
Item 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
Incorporated by reference to subdivision 3 of Item 9 hereof.
Item 20. INVESTMENT ADVISORY AND OTHER SERVICES.
Incorporated by reference to subdivision 1 of Item 9 hereof.
Item 21. BROKERAGE ALLOCATION.
Registrant paid no brokerage commissions during its three most recent
fiscal years.
The overall objective of Morgan Guaranty Trust Company of New York,
the investment adviser, is to obtain the best possible execution of orders for
its clients. Subject to this, the investment adviser makes allocations, where
possible, of commissions among broker/dealers who have provided investment
research services. Quarterly reviews of such services are made including an
evaluation of information, materials or services of a research nature which are
provided to investment research analysts and portfolio managers on behalf of the
investment adviser and J.P. Morgan Investment Management Inc., which acts as
agent for the investment adviser. Semi-annual
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instructions are given to the security traders as to those broker/dealers whose
services have been considered useful.
The adviser seeks to obtain the best price and execution of orders
placed for Registrant's assets considering all of the circumstances. If
transactions are executed in the over-the-counter market, the adviser will deal
with the principal market makers, unless more favorable prices and executions
are otherwise obtainable. There is no agreement by the adviser with any broker
or dealer to place orders with it. When circumstances relating to a proposed
transaction indicate that a particular broker or dealer is in a position to
provide the best execution, considering all factors including price, the order
is placed with that broker or dealer. This may or may not be a broker or dealer
which has provided statistical or other factual information to the adviser.
Subject to the requirement of seeking the best price and execution, the adviser
may, in circumstances in which two or more brokers or dealers are in a position
to offer comparable prices and execution, give preference to a broker or dealer
which has provided statistical and other factual information to the adviser. The
adviser is of the opinion that while such information is useful in varying
degrees, it is of indeterminable value and does not reduce the expenses of the
adviser. In recognition of the brokerage execution services the adviser may pay
a brokerage commission in excess of that which another broker might have charged
for the same transaction. The adviser periodically evaluates the overall
reasonableness of brokerage commissions. The factors considered in these
evaluations include the competitive negotiated rate structure at the time the
commission is charged and the effectiveness of the broker's execution.
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Item 22. TAX STATUS.
Incorporated by reference to subdivision 4 of Item 10 hereof.
Item 23. FINANCIAL STATEMENTS.
Furnished herewith are the Registrant's financial statements listed in
Item 24 of Part C hereof. All other schedules have been omitted since the
required information is not present or not present in amounts sufficient to
require submission of the schedule, or because the required information is
included in the financial statements or the notes thereto.
PART C - OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
Listed below are all financial statements and exhibits of the
Registrant filed as a part of this Amendment to the Registration Statement.
1. Financial Statements:
(a) Independent Auditor's Report
(b) Statements of Assets and Liabilities at April 30, 1998 and 1997;
(c) Schedules of Investments in Municipal Obligations at April 30,
1998 and 1997;
(d) Statements of Operations for the years ended April 30, 1998 and
1997;
(e) Statements of Changes in Net Assets for the years ended April 30,
1998, 1997 and 1996.
(f) Notes to the April 30, 1998 and 1997 financial statements
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2. Exhibits
(a) Copy of Restated Certificate of Incorporation, as amended
(b) Copy of By-Laws, as amended
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g) Copy of Investment Advisory Agreement between Registrant and
Morgan Guaranty Trust Company of New York, as amended
(h) Not applicable
(i) Not applicable
(j) Copy of Custodian Agreement between Registrant and Morgan
Guaranty Trust Company of New York
(k) Not applicable
(l) Not applicable
(m) Not applicable
(n) Not applicable
(o) Not applicable
(p) Not applicable
(q) Not applicable
(r) Financial Data Schedule
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Item 25. MARKETING ARRANGEMENTS.
Not applicable
Item 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Not applicable
Item 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL.
There are no persons directly or indirectly controlled by or under
common control with the Registrant.
Item 28. NUMBER OF HOLDERS OF SECURITIES.
The following table indicates the number of record holders of the
Registrant's capital stock as of May 15, 1998:
(1) (2)
Title of Class Number of Record Holders
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Capital Stock $.02 par
value per share 75*
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* There were 190 direct, beneficial owners of the Registrant's capital stock.
Of that number, all of the shares owned by 116 individuals and some of the
shares owned by 3 individuals are held, of record only, by the Tridan Corp.
Employees Stock Ownership Trust.
Item 29. INDEMNIFICATION.
The Registrant's Restated Certificate of Incorporation, as amended,
contains provisions for indemnification of directors and officers, as permitted
by Sections 722 and 723 of the New York Business Corporation Law ("NYBCL"),
against certain
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liabilities and expenses which may be incurred in their capacities as directors
and officers, and also eliminates the personal liability of directors of the
Registrant to the Registrant and its shareholders for damages for any failure on
the part of the directors to exercise the requisite degree of care in fulfilling
their duties and responsibilities in their capacity as directors. The Restated
Certificate of Incorporation, as amended, further provides that nothing therein
contained shall be construed to protect any director of officer against any
liability to which he would otherwise be subject by reason or willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
The Registrant's By-laws permit the advancement of expenses incurred
in defending an action or proceeding to a director or officer made a party to an
action by reason of the fact that he is a director or officer. The By-laws,
however, also provide that nothing therein contained shall be construed to
protect any director or officer against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
Item 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The Registrant's investment adviser, Morgan Guaranty Trust Company of
New York ("Morgan Guaranty") is a New York trust company which is a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated. Morgan Guaranty conducts a general
banking and trust business. At December 31, 1997, Morgan Guaranty had total
deposits of approximately $60.7 billion.
Morgan Guaranty serves as investment adviser to open-end companies
registered under the Investment Company Act of 1940.
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To the knowledge of the Registrant, none of the directors, except
those set forth in the chart below, or officers of Morgan Guaranty is engaged in
any other business, profession, vocation or employment of a substantial nature,
except that certain officers and directors of Morgan Guaranty also hold various
positions with, and are engaged in business for, J.P. Morgan & Co. Incorporated,
which owns all the outstanding stock of Morgan Guaranty. Set forth below is the
name and principal business of each director of Morgan Guaranty who is engaged
in another business, profession, vocation or employment of a substantial nature.
(1) (2) (3)
Name Principal Business Type of Business
---- ------------------ ----------------
Paul A. Allaire Chairman of the Board Office automation and
and Chief Executive Officer equipment
Xerox Corporation
Riley P. Bechtel Chairman and Chief Construction and
Executive Officer engineering
Bechtel Group, Inc.
Lawrence A. Bossidy Chairman of the Board Aerospace/Defense
and Chief Executive Officer
Allied Signal Inc.
Martin Feldstein President and Chief Private non-profit
Executive Officer organization
National Bureau of
Economic Research, Inc.
Ellen V. Futter President Private non-profit
American Museum of organization
Natural History
Hanna H. Gray President Emeritus and Academic institution
Harry Pratt Judson
Distinguished Service
Professor of History
The University of Chicago
-23-
<PAGE>
James R. Houghton Retired Chairman Glass
Corning Incorporated
James L. Ketelsen Retired Chairman and Oil, pipelines and
Chief Executive Officer manufacturing
Tenneco Inc.
John A. Krol Chairman of the Board Chemicals
E.I. duPont deNemours
and Company
Lee R. Raymond Chairman of the Board and Oil and gas
Chief Executive Officer
Exxon Corp.
Richard D. Simmons Retired President Newspaper
Washington Post Company
and International Herald
Tribune
Douglas C. Yearley Chairman of the Board and Copper
Chief Executive Officer
Phelps Dodge Corporation
Item 31. LOCATION OF ACCOUNTS AND RECORDS.
Physical possession of all accounts, books and other documents
required to be maintained by Section 31(a) of the 1940 Act and the Rules
promulgated thereunder is maintained as follows:
(a) Those relating to purchases and sales of securities, interest
received and accrued thereon, receipts and disbursements of cash and all other
debits and credits relating thereto, money balances and the like are maintained
by the Registrant's investment adviser and custodian, Morgan Guaranty Trust
Company of New York, 522 Fifth Avenue, New York, New York 10036.
(b) Those which constitute the record forming the basis for
-24-
<PAGE>
financial statements required to be filed pursuant to Section 30 of the 1940 Act
and of the auditor's certificates relating thereto (other than those described
in subdivision (a) above) are maintained by the Registrant itself at its
principal office, 477 Madison Avenue, New York, New York 10022.
(c) Registrant's charter documents, by-laws, minute books and capital
stock records are maintained by the Registrant's general counsel, I. Robert
Harris, Esq., c/o Kantor, Davidoff, Wolfe, Mandelker & Kass, P.C., 51 East 42nd
Street, New York, New York 10017.
Item 32. MANAGEMENT SERVICES.
Registrant does not have, and has not had during the last three fiscal
years, any management-related service contract.
Item 33. UNDERTAKINGS.
Not applicable
SIGNATURES
Pursuant to the requirements the Investment company Act of 1940, the
Registrant has duly caused this amendment to the registration statement to be
signed on its behalf of the undersigned, thereunto duly authorized, in the City
of New York, and State of New York on the 28th day of August, 1998.
TRIDAN CORP.
--------------------
Registrant
/s/ Peter Goodman
By: Peter Goodman
--------------------
President
-25-
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
TRIDAN CORP.
ANNUAL REPORT
YEARS ENDED APRIL 30, 1998 AND 1997
WITH
INDEPENDENT AUDITOR'S REPORT
<PAGE>
TRIDAN CORP.
TABLE OF CONTENTS
ANNUAL REPORT
Form N-2
Item 24/1
REFERENCE PAGE
INDEPENDENT AUDITOR'S REPORT 1(a) 1-3
FINANCIAL STATEMENTS
Statements of Assets and Liabilities at
April 30, 1998 and 1997 1(b) 1
Schedules of Investments in Municipal Obligations at
April 30, 1998 and 1997 1(c) 1-4
Statements of Operations for the
Years Ended April 30, 1998 and 1997 1(d) 1
Statements of Changes in Net Assets for the
Years Ended April 30, 1998, 1997 and 1996 1(e) 1
Notes to Financial Statements 1(f) 1-4
<PAGE>
1(a)
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
Tridan Corp.
We have audited the accompanying statements of assets and liabilities of Tridan
Corp., including the schedules of investments in municipal obligations, at April
30, 1998 and 1997 and the related statements of operations for the years then
ended, the statements of changes in net assets for each of the three years in
the period then ended and the selected per share data and ratios for each of the
five years in the period then ended. These financial statements and selected per
share data and ratios are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and per
share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at April
30, 1998 and 1997 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the elected per share data and
ratios referred to above present fairly, in all material respects, the financial
position of Tridan Corp. at April 30, 1998 and 1997, the results of its
operations for the years then ended, the changes in its net assets for each of
the three years in the period then ended and the selected per share data and
ratios for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/ Leslie Sufrin & Company, P.C.
May 19, 1998
-1-
<PAGE>
CONSENT OF INDEPENDENT AUDITOR'S
We consent to the use of our report, dated May 19, 1998, covering Tridan Corp.'s
financial statements for the years ended April 30, 1998 and 1997 in Amendment
No. 19 to the Registration Statement (Form N-2) of Tridan Corp.
/s/ Leslie Sufrin & Company, P.C.
New York, NY
June 16, 1998
-2-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
of Tridan Corp.
In planning and performing our audit of the financial statements of Tridan Corp.
for the year ended April 30, 1998, we considered its internal control, including
controls over safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide assurance on
the internal control.
The management of Tridan Corp. is responsible for establishing and maintaining
an internal control. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and may not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of any
specific internal control component does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving internal control,
including controls over safeguarding securities, that we consider to be material
weaknesses as defined above as of April 30, 1998.
This report is intended soley for the information and use of management and the
Securities and Exchange Commission.
/s/ Leslie Sufrin & Company, P.C.
New York, NY
May 19, 1998
-3-
<PAGE>
1(b)
TRIDAN CORP.
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1998 and 1997
ASSETS 1998 1997
------ ----- ----
Investments in municipal obligations, at
market value (amortized cost - $36,164,626
and $34,729,443, respectively) $37,749,270 $35,832,542
Cash and cash equivalents 512,173 2,189,569
Accrued interest receivable 623,430 607,284
Prepaid insurance 4,023 4,023
----------- -----------
Total assets 38,888,896 38,633,418
----------- -----------
LIABILITIES
Accrued liabilities 82,246 67,415
Common stock redemption payable (Note 4) - 89,685
----------- -----------
Total liabilities 82,246 157,100
----------- -----------
Contingency (Note 6)
NET ASSETS
Netassets (equivalent to $12.37 and $12.25
per share, respectively, based on
3,138,061.6805 shares and 3,140,716.616
shares of common stock outstanding,
respectively (Note 4)) $38,806,650 $38,476,318
=========== ===========
The accompanying notes are in integral part of these
financial statements.
-1-
<PAGE>
1(c)
TRIDAN CORP.
SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS
April 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------------------------------ ------------------------------------
Principal Amortized Market Principal Amortized Market
Amount Cost Value Amount Cost Value
---------- ---------- ---------- ---------- ---------- ----------
REVENUE BACKED
- --------------
<S> <C> <C> <C> <C> <C> <C>
Metropolitan Transportation Authority
Service Contract Commuter Facilities
5-3/4% due July 1, 2008 $1,000,000 $ 967,737 $1,059,460 $1,000,000 $ 965,655 $1,004,370
6-5/8% due July 1, 2002 1,000,000 1,000,853 1,077,210 1,000,000 1,001,026 1,060,990
Metropolitan Transportation Authority
Commuter Facilities Revenue, 3rd Series
7-1/4% due July 1, 1998 -- -- -- 1,000,000 999,477 1,031,300
Municipal Assistance Corp. for N.Y.C
N.Y. Public Imp Unlimited Tax
6% due July 1, 2006 1,000,000 1,059,309 1,088,010 1,000,000 1,065,029 1,059,590
Municipal Assistance Corp. for N.Y.C
N.Y. Resolution:
6-5/8% due July 1, 2003 250,000 248,158 270,405 250,000 247,890 268,398
6-5/8% due July 1, 2002 750,000 746,689 814,695 750,000 746,073 807,428
The Trust for Cultural Resources of
N.Y.C. Rev Ref Bonds Series
Adjusted rate due April 1, 2005 1,000,000 1,000,000 1,014,120 1,000,000 1,000,000 979,520
N.Y.S. Dormitory Authority - State
University Educational Facilities:
7-1/2% due May 15, 2011 590,000 577,590 726,650 590,000 577,096 685,863
5-1/4% due May 15, 2004 1,000,000 1,024,905 1,035,800 -- -- --
7.30% due May 15, 2000 735,000 735,000 779,423 735,000 735,000 780,239
N.Y.S. Environmental Facilities
Pollution Control - Revolving Fund
7.15% due March 15, 2002 400,000 400,000 416,768 400,000 400,000 423,340
N.Y.S. Local Government Assistance Corp.:
5.70% due April 1, 2003 1,000,000 995,677 1,051,890 1,000,000 994,986 1,030,280
5.60% due April 1, 2002 1,000,000 998,196 1,039,660 1,000,000 997,822 1,027,630
6-3/4% due April 1, 2001 250,000 249,351 266,195 250,000 249,173 265,785
</TABLE>
The accompanying notes are in integral part of these
financial statements.
-1-
<PAGE>
TRIDAN CORP.
SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS
(Continued)
April 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------------------------------ ------------------------------------
Principal Amortized Market Principal Amortized Market
Amount Cost Value Amount Cost Value
---------- ---------- ---------- ---------- ---------- ----------
REVENUE BACKED (CONTINUED)
- --------------------------
<S> <C> <C> <C> <C> <C> <C>
N.Y.S. Medical Care Facilities
Finance Agency - (FHA) Hospital
Revenue Insured Mortgages
7. 10% due February 15, 2000 $ 50,000 $ 50,000 $ 52,498 $ 95,000 $ 95,000 $ 100,659
N.Y.S. Thruway Authority - Local
Highway and Bridge
6% due April 1, 2002 1,000,000 1,022,154 1,048,370 1,000,000 1,027,106 1,032,050
N.Y.S. Urban Development Corp.
Purp Rev Sub Lien
6% due July 1, 2005 1,500,000 1,579,760 1,619,115 1,500,000 1,588,762 1,581,150
Power Authority of N.Y.S
General Purpose Revenue:
6-1/2% due January 1, 2008 1,675,000 1,733,127 1,906,719 1,675,000 1,737,445 1,852,064
6-5/8% due January 1, 2003 1,000,000 1,025,051 1,090,470 1,000,000 1,029,569 1,086,570
6.40% due January 1, 2000 -- -- -- 1,000,000 1,000,352 1,042,390
---------- ---------- ---------- ---------- ---------- ----------
15,200,000 15,413,557 16,357,458 16,245,000 16,457,461 17,119,616
---------- ---------- ---------- ---------- ---------- ----------
INSURED
- -------
Mt. Sinai, N.Y. Union Free School District
6.20% due February 15, 2011 1,070,000 1,065,240 1,195,169 1,070,000 1,065,018 1,162,116
Municipal Assistance Corp. for N.Y.C
5-1/4% due July 1, 2002 500,000 509,260 516,475 1,500,000 1,533,671 1,536,975
N.Y.C. General Purpose
Unlimited Tax Series
6-3/4% due February 1, 2009 1,000,000 1,162,140 1,154,410 -- -- --
N.Y.C. Municipal Water Authority
6.0% due June 15, 2009 2,000,000 2,232,077 2,207,620 -- -- --
N.Y.C. Ref Unlimited
6-3/4% due August 15, 2003 500,000 547,494 553,840 500,000 555,227 547,605
N.Y.S. Dormitory Authority - Ref
City University
5-3/4% due July 1, 2012 1,000,000 1,024,272 1,077,280 1,000,000 1,025,379 1,029,550
</TABLE>
The accompanying notes are in integral part of these
financial statements.
-2-
<PAGE>
TRIDAN CORP.
SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS
(Continued)
April 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------------------------------ ------------------------------------
Principal Amortized Market Principal Amortized Market
Amount Cost Value Amount Cost Value
---------- ---------- ---------- ---------- ---------- ----------
INSURED (CONTINUED)
- -------------------
<S> <C> <C> <C> <C> <C> <C>
N.Y.S. Dormitory Authority - Pace University
6-1/2% due July 1, 2009 $1,000,000 $1,131,579 $1,146,050 $ -- $ -- $ --
N.Y.S. Dormitory Authority - City
University Sys Cons
6-1/4% due July 1, 2005 500,000 537,016 549,795 500,000 541,210 538,750
N.Y.S. Medical Care Facilities Finance Agency
- Beth Israel Medical Center Project
7.20% due November 1, 1998 -- -- -- 1,000,000 1,000,000 1,055,650
N.Y.S. Thruway Authority - Highway
and Bridge Trust Fund
6.40% due April 1, 2004 500,000 518,603 548,945 500,000 521,181 541,290
City of Oswego, N.Y. Public Improvement:
6.40% due May 15, 2002 500,000 500,889 538,280 500,000 501,077 538,120
6.40% due May 15, 2001 500,000 501,978 531,210 500,000 502,551 533,060
Commonwealth of Puerto Rico
General Obligation
5-1/2% due July 1, 2006 600,000 637,208 637,266 600,000 640,886 618,942
Puerto Rico Electric Power Authority
Rev Ref Perin Link Stars & Stripes
5.80% due July 1, 2005 500,000 529,974 540,645 500,000 533,400 525,690
Puerto Rico Highway &
Transportation Authority
6-1/4% due July 1, 2004 -- -- -- 1,000,000 1,074,342 1,079,950
Puerto Rico Municipal Finance Agency
6.0% due July 1, 2005 1,000,000 1,051,764 1,095,340 -- -- --
University of Puerto Rico Revs Ref
6-1/4% due June 1, 2008 1,000,000 1,061,306 1,133,970 1,000,000 1,065,759 1,097,370
City of Yonkers, NY General Purposes
Unlimited Tax
5.50% due August 1, 2005 1,000,000 1,032,951 1,050,400 1,000,000 1,036,641 1,021,330
---------- ---------- ---------- ---------- ---------- ----------
13,170,000 14,043,751 14,476,695 11,170,000 11,596,342 11,826,398
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are in integral part of these
financial statements.
-3-
<PAGE>
TRIDAN CORP.
SCHEDULES OF INVESTMENTS IN MUNICIPAL OBLIGATIONS
(Continued)
April 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------------------------------ ------------------------------------
Principal Amortized Market Principal Amortized Market
Amount Cost Value Amount Cost Value
---------- ---------- ---------- ---------- ---------- ----------
GENERAL OBLIGATIONS
- -------------------
<S> <C> <C> <C> <C> <C> <C>
N.Y.C. General Purpose
Unlimited Tax Series
5.4% due August 1, 2000 $ 835,000 $ 827,968 $ 853,787 $ 850,000 $ 842,738 $ 864,552
N.Y.C. Ref Unlimited:
5-7/8% due August 1, 2003 2,000,000 2,107,198 2,109,120 -- -- --
5-3/4% due August 1, 2002 1,000,000 991,770 1,044,050 1,000,000 990,229 1,027,280
State of New York Ref Unlimited Tax
6.5% due July 15, 2005 1,700,000 1,857,999 1,890,366 1,700,000 1,875,832 1,853,357
---------- ---------- ---------- ---------- ---------- ----------
5,535,000 5,784,935 5,897,323 3,550,000 3,708,779 3,745,189
---------- ---------- ---------- ---------- ---------- ----------
U.S. - GOVERNMENT BACKED
- ------------------------
N.Y.C. General Purpose
5.4% due August 1, 2000 15,000 14,770 15,338 -- -- --
Monroe County N.Y. Pub Imp Unlimited Tax
6% due June 1, 2010 900,000 907,613 1,002,456 900,000 908,034 965,079
Triborough Bridge & Tunnel
Authority - Revenue Refunding
7% due January 1, 2020 -- -- -- 1,000,000 1,063,964 1,091,450
6.80% due January 1, 2004 -- -- -- 1,000,000 994,843 1,084,810
---------- ---------- ---------- ---------- ---------- ----------
915,000 922,383 1,017,794 2,900,000 2,966,841 3,141,339
---------- ---------- ---------- ---------- ---------- ----------
$34,820,000 $36,164,626 $37,749,270 $33,865,000 $34,729,443 $35,832,542
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are in integral part of these
financial statements.
-4-
<PAGE>
1(d)
TRIDAN CORP.
STATEMENTS OF OPERATIONS
Years Ended April 30, 1998 and 1997
1998 1997
---- ----
Investment income:
Interest $ 2,212,247 $ 2,230,860
Amortization of bond premium
and discount - net (118,003) (116,036)
----------- -----------
Total investment income 2,094,244 2,114,824
----------- -----------
Expenses:
Investment advisory fee (Note 2) 110,023 109,177
Professional fees 86,965 84,603
Directors' fees 45,000 45,000
Administrative fee 89,200 88,630
Insurance and administrative expenses 10,681 6,695
----------- -----------
Total expenses 341,869 334,105
----------- -----------
Investment income - net 1,752,375 1,780,719
----------- -----------
Realized and unrealized gain (loss) on investments:
Net realized gain on investments 327,896 460,541
Change in unrealized appreciation
of investments for the year 481,545 (594,075)
----------- -----------
Net gain (loss) on investments 809,441 (133,534)
----------- -----------
Net increase in net assets
resulting from operations $ 2,561,816 $ 1,647,185
=========== ===========
The accompanying notes are in integral part of these
financial statements.
-1-
<PAGE>
1(e)
TRIDAN CORP.
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended April 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
Increase (decrease) in net assets
resulting from operations:
<S> <C> <C> <C>
Investment income - net $ 1,752,375 $ 1,780,719 $ 2,059,838
Net realized gain on investments 327,896 460,541 217,296
Change in unrealized appreciation 481,545 (594,075) (184,655)
------------ ------------ ------------
Net increase in net assets
resulting from operations 2,561,816 1,647,185 2,092,479
Distributions to shareholders from:
Investment income - net (1,952,849) (1,683,398) (2,008,864)
Capital gains - net (245,269) (522,977) (200,890)
Redemptions of 2,654.9355 shares,
13,393.5815 shares and
2,993.5065 shares, respectively (33,366) (165,145) (37,777)
------------ ------------ ------------
Total increase (decrease) 330,332 (724,335) (155,052)
Net assets:
Beginning of year 38,476,318 39,200,653 39,355,705
------------ ------------ ------------
End of year, including
o Net undistributed investment income
of $5,505, $205,979 and $108,658,
respectively, and
o Net undistributed (over distributed)
capital gains of $36,560, $(46,067)
and $16,369, respectively $ 38,806,650 $ 38,476,318 $ 39,200,653
============ ============ ============
</TABLE>
The accompanying notes are in integral part of these
financial statements.
-1-
<PAGE>
1(f)
TRIDAN CORP.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 and 1997
Note 1 - Significant Accounting Policies
- ----------------------------------------
The following is a summary of the significant accounting policies followed by
Tridan Corp. (the "Company"), a closed-end, non-diversified management
investment company registered under the Investment Company Act of 1940, in the
preparation of its financial statements.
Acquisition and Valuation of Investments
- ----------------------------------------
Investment transactions are accounted for on the date the securities are
purchased/sold (trade date) and interest on securities acquired/sold is included
in income from/to the settlement date. Investments are carried at amortized cost
in the Company's accounting records but are shown at market value in the
accompanying financial statements. Short-term investments are stated at cost,
which is equivalent to market value.
Market values for the Company's investments in municipal obligations have been
determined based on the bid price of the obligation, if available; if not
available, such value is based on a yield matrix for similarly traded municipal
obligations.
Amortization of Bond Premium or Discount
- ----------------------------------------
In determining investment income, bond premium or discount is amortized on a
straight-line basis over the remaining term of the obligation.
Income Taxes
- ------------
It is the Company's policy to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no income tax provision is required.
Cash and Cash Equivalents
- -------------------------
The Company considers all investments that can be liquidated on demand to be
cash equivalents. The Company maintains all of its cash and cash equivalents in
one financial institution. At times, such balances may be in excess of amounts
insured by the Federal Deposit Insurance Corporation.
Concentration of Credit Risk
- ----------------------------
The value of the Company's investments may be subject to possible risks
involving, among other things, the continued credit worthiness of the various
state and local government agencies and public financing authorities underlying
its investments. The Company and its investment adviser periodically consider
the credit quality of the Company's investments, and the Company adheres to its
investment objective of investing only in investment grade securities.
-1-
<PAGE>
TRIDAN CORP.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 and 1997
Note 2 - Investment Advisory Fee
- --------------------------------
The Company utilizes the services of Morgan Guaranty Trust Company of New York
("Morgan") as its investment adviser and custodian for its investments. The
annual advisory fee is .28 of one percent of the net assets under management.
The fee is computed and payable quarterly, based on the market value of net
assets held by Morgan on the last day of each fiscal quarter.
Note 3 - Investment Transactions
- --------------------------------
Purchases and sales of investments in municipal obligations (excluding
short-term and demand investments) amounted to approximately $8,740,000 and
$7,513,000, respectively, for the year ended April 30, 1998 and $7,637,000 and
$8,763,000, respectively, for the year ended April 30, 1997.
At April 30, 1998 and 1997, the net unrealized appreciation on investments in
municipal obligations was $1,584,644 and $1,103,099, respectively.
Note 4 - Common Stock, Net Asset Values and Share Redemption Plan
- -----------------------------------------------------------------
At April 30, 1998 and 1997, there were 6,000,000 shares of $0.02 par value
common stock authorized of which 3,199,100 had been issued aggregating $63,982,
and additional paid-in capital aggregating $312,787.
The net asset value per share is calculated by dividing the value of all assets
less total liabilities by the number of common shares outstanding at the end of
the period.
The net asset value per share and the shares outstanding were as follows:
April 30,
-------------------
1998 1997
------ ------
Net asset value:
- at market value of the underlying investments $12.37 $12.25
- at amortized cost $11.86 $11.90
Shares outstanding at:
April 30, 1998 3,138,061.6805
April 30, 1997 3,140,716.6160
-2-
<PAGE>
TRIDAN CORP.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 and 1997
Note 4 - Common Stock, Net Asset Values and Share Redemption Plan (Continued)
- -----------------------------------------------------------------------------
The Company's share redemption plan permits "eligible shareholders" or their
estates to have their shares redeemed upon reaching age 65 or upon death. Shares
are redeemed at the net asset value per share as of the end of the Company's
fiscal quarter in which the request for redemption is received. At April 30,
1998 and 1997, $700,355 (61,038.3195 shares) and $666,989 (58,383.384 shares),
respectively, had been redeemed under this plan.
Note 5 - Distributions
- ----------------------
During the years ended April 30, 1998 and 1997, distributions, which except for
capital gains were exempt from federal income tax, of $2,198,118 ($.70 per
share) and $2,206,375 ($.70 per share), respectively, were declared and paid to
shareholders.
Note 6 - Contingency
- --------------------
Prior to becoming a management investment company in April 1980, the Company,
through its subsidiaries, was engaged in the business of manufacturing and
selling women's and children's apparel, principally under the trademark
"Danskin". In April 1980, the Company sold this business to International
Playtex, Inc. ("Playtex"). The item outlined below relates to these prior
operations of the Company.
On May 25, 1982, the Company was notified by Playtex of certain counterclaims
asserted by a former customer of the Company in an action instituted by Playtex
to recover amounts allegedly due for goods sold and delivered to this former
customer. This former customer seeks damages of approximately $800,000 for the
Company's and Playtex's alleged refusal to sell merchandise to them. In
management's opinion, it is unlikely that the resolution of this contingency
will result in a liability which would materially affect the Company's financial
position.
-3-
<PAGE>
TRIDAN CORP.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 and 1997
Note 7 - Supplementary Information
- ----------------------------------
Selected per share data and ratios.
<TABLE>
<CAPTION>
For the Fiscal Years Ended April 30,
-----------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per share data:
Investment income $ .67 $ .68 $ .75 $ .80 $ .82
Expenses (.11) (.11) (.10) (.10) (.10)
--------- --------- --------- --------- ---------
Investment income - net .56 .57 .65 .70 .72
Net realized and unrealized gain
(loss) on investments .26 (.04) .01 (.02) (.35)
Distributions:
Investment income - net (.62) (.54) (.64) (.67) (.77)
Capital gains - net (.08) (.17) (.06) (.03) (.08)
--------- --------- --------- --------- ---------
Net increase (decrease)
in net asset value .12 (.18) (.04) (.02) (.48)
Net asset value:
Beginning of year 12.25 12.43 12.47 12.49 12.97
--------- --------- --------- --------- ---------
End of year $ 12.37 $ 12.25 $ 12.43 $ 12.47 $ 12.49
========= ========= ========= ========= =========
Ratios:
Expenses to average net assets .88% .86% .77% .77% .78%
Investment income - net
to average net assets 4.53 4.58% 5.24% 5.60% 5.62%
Average number of shares out-
standing (in thousands) 3,139 3,147 3,156 3,159 3,162
</TABLE>
-4-
<PAGE>
EXHIBITS
<PAGE>
EXHIBITS
TABLE OF CONTENTS
Form N-2
Item 24/2
Reference Page
--------- ----
RESTATED CERTIFICATE OF INCORPORATION 2(a) 1-5
BY-LAWS 2(b) 1-11
ADVISORY AGREEMENT 2(g) 1-7
Exhibit 8
CUSTODIAN AGREEMENT 2(j) 1-6
Exhibit 7
FINANCIAL DATA SCHEDULE 2(r) 1
2(a)
RESTATED CERTIFICATE OF INCORPORATION
of
TRIDAN CORP.
Under Section 807 of the
Business Corporation Law
We, PETER GOODMAN and THOMAS GOODMAN, being respectively the President and
Secretary of TRIDAN CORP., hereby certify:
(1) The name of the Corporation is TRIDAN CORP. The name under which it was
formed was TRIUMPH HOSIERY MILLS, INC.
(2) The Certificate of Incorporation was filed by the Department of State
on January 7, 1929.
(3) The Certificate of Incorporation is amended to effect the following
changes authorized in Section 801 of the Business Corporation Law:
(a) To change the corporate purposes.
(b) To remove from authorized shares 18,733 shares previously issued
and reacquired by the Corporation, and 1,267 unissued shares, of Preferred
Capital Stock, $50 par value per share.
(c) To abolish the designation of the previously authorized shares,
$50 par value per share, of Class B Common Capital Stock, Class C Common Capital
Stock and Class D Common Capital Stock, and their relative rights, preferences
and limitations.
(d) To increase the aggregate number of shares of common stock which
the Corporation shall have the authority to issue from 12,000 to 6,000,000
shares
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<PAGE>
and to reduce the par value of said shares from $10 per share to $.02 per share.
(e) To change the presently issued and outstanding 6,398.2 shares of
Common Capital Stock, $10 par value per share, into 3,199,100 shares of common
stock, $.02 par value per share.
(f) To change the post office address to which the Secretary of State
shall mail a copy of any process against the Corporation served upon him.
(g) To strike out paragraph SIXTH which establishes the duration of
the Corporation, Paragraph SEVENTH which fixes the number of directors,
Paragraph EIGHTH which lists the initial directors, Paragraph NINTH and TENTH
which list and describe the subscribers, Paragraph ELEVENTH which establishes
quorum requirements for stockholders meetings, Paragraph TWELFTH which provides
for stockholder inspection of books and records, Paragraph THIRTEENTH which
deals with repurchase and reissuance of the Corporation's capital stock,
Paragraph FOURTEENTH which provides for change in the number of directors and
Paragraph FIFTEENTH which provides for removal of directors.
(h) To add provisions for indemnification of directors and officers.
(i) To add a provision denying preemptive rights to shareholders.
(4) The Certificate of Incorporation, as heretofore amended and as herein
further amended, is hereby restated to set forth its entire text as follows:
CERTIFICATE OF INCORPORATION
of
TRIDAN CORP.
Under Section 402 of the
Business Corporation Law
* * * * * * * * * * * * * *
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<PAGE>
1. The name of the Corporation is TRIDAN CORP.
2. The purposes for which this Corporation is formed are as follows:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or otherwise
acquire, hold for investment or otherwise sell, assign, negotiate, transfer,
exchange or otherwise dispose of or turn to account or realize upon, full or
part paid securities created or issued by any persons, firms, associations,
corporations, syndicates, combinations, organizations, governments or
subdivisions thereof, and generally deal in any such securities; and to
exercise, as owner or holder of any securities, all rights, powers and
privileges in respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of any and all
such securities and, in general, to conduct the business of a closed-end
investment company as that term is defined in the Act of Congress entitled
Investment Company Act of 1940.
The term "securities" shall for the purposes of this article, without
limitation to the generality thereof, be deemed to include any stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
(b) In general, to carry on any other similar business in connection
with the foregoing, and to have and exercise all the powers conferred by the
laws of New York upon corporations formed under the Act hereinbefore set forth,
to the same extent as natural persons might or could do.
3. The office of the Corporation is to be located in the City, County and
State of New York.
4. The aggregate number of shares which the Corporation shall have
authority to issue is six million (6,000,000) shares, all of which shall be
common stock of one class, having a par value of $.02 per share.
5. The Secretary of State is designated as the agent of the Corporation
upon whom process against the Corporation may be served. The post office address
to which the Secretary of State shall mail a copy of any process against the
Corporation served upon him is c/o LIPKOWITZ & PLAUT, 1290 Avenue of the
Americas, New York, New York 10019.
6. Subject to conditions and qualifications set forth in the Business
Corporation Law of the State of New York and in the Act of Congress entitled
Investment Company Act of 1940, the Corporation may indemnify any person, made a
party to an action by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he or his testator or intestate is or
was a director or
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<PAGE>
officer of the Corporation, against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in connection with the
defense of such action, or in connection with an appeal therein, except in
relation to matters as to which such director or officer is adjudged to have
breached his duty to the Corporation, as such duty is defined in Section 717 or
Section 715(h) of the Business Corporation Law. Subject to the conditions and
qualifications set forth in the Business Corporation Law of the State of New
York and in the Act of Congress entitled Investment Company Act of 1940, the
Corporation may also indemnify any person, made, or threatened to be made, a
party to an action or proceeding other than one by or in the right of the
Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation, domestic or
foreign, which he served in any capacity at the request of the Corporation by
reason of the fact that he or his testator or intestate was a director or
officer of the Corporation or served it in any capacity against judgments,
fines, amounts paid in settlement, and reasonable expenses, including attorney's
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in the best interests of the
Corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
Notwithstanding the foregoing provisions, nothing herein contained
shall be construed to protect any director or officer against any liability to
the Corporation or to its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
7. No holder of any of the shares of any class of the Corporation shall be
entitled as of right to subscribe for, purchase or otherwise acquire any shares
of any class of the Corporation which the Corporation proposes to issue or any
rights or options which the Corporation proposes to grant for the purchase of
shares, bonds, securities or obligations of the Corporation which are
convertible into or exchangeable for, or which carry any rights to subscribe
for, purchase or otherwise acquire shares of any class of the Corporation, and
any and all such shares, bonds, securities or obligations of the Corporation,
whether now or hereafter authorized or created, may be issued, or may be
reissued or transferred if the same have been reacquired and have treasury
status, and any and all of such rights and options may be granted by the Board
of Directors to such persons, firms, corporations and associations, for such
lawful consideration and on such terms as the Board of Directors in its
discretion may determine, without first offering the same, or any thereof, to
any said holder. Without limiting the generality of the foregoing stated denial
of any and all preemptive rights, no holder of shares of any class of the
Corporation shall have any preemptive rights in respect of the matters,
proceedings or transactions specified in subparagraphs (1) to (6), inclusive, of
paragraph (e) of Section 622 of the Business Corporation Law.
(5) The 6,398.2 shares of Common Capital Stock, $10 par value per share
presently issued and outstanding are hereby changed into 3,199,100 share of
common
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<PAGE>
stock, $.02 par value per share, the terms of said change being 500 shares of
common stock, $.02 par value per share for each share of Common Capital Stock
$10 par value.
(6) Since this amendment and Restated Certificate of Incorporation remove
from authorized shares 18,733 shares of Preferred Capital Stock, $50 par value
per share, which shares were previously issued and reacquired by the
Corporation, there is a reduction of capital hereby effected in the sum of
$936,650, from $1,000,632 to $63,982.
(7) This amendment was authorized by vote of the holders of a majority of
the outstanding shares entitled to vote thereon, at a meeting of shareholders.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
subscribed this 28th day of April, 1980 by the undersigned, who affirm the truth
of the Statements made herein under penalties of perjury.
/s/ Peter Goodman
----------------------------------
PETER GOODMAN, President
/s/ Thomas Goodman
----------------------------------
THOMAS GOODMAN, Secretary
-5-
2(b)
BY-LAWS
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TRIDAN CORP.
BY-LAW ONE: OFFICES
ARTICLE 1.1. PRINCIPAL OFFICE. The principal office of the Company shall be
in the City of New York, County of New York, State of New York.
ARTICLE 1.2. OTHER OFFICES. The Company may also have offices at such other
places within or outside the State of New York as the Board of Directors may
from time to time determine.
BY-LAW TWO: STOCKHOLDERS
ARTICLE 2.1. PLACE OF MEETINGS. All meetings of the Stockholders shall be
held at the principal office of the Company in the State of New York or at such
other place within or outside the State of New York as the Directors shall
determine, which shall be stated in the notice of the meeting, or in a duly
executed waiver of notice thereof.
ARTICLE 2.2. ANNUAL MEETING. The annual meeting of the Stockholders of the
Company shall be held on a date not later than four (4) months from the end of
the Company's fiscal year to be fixed from time to time by the Board of
Directors, at which time the Stockholders shall elect a Board of Directors by a
plurality vote, and transact such other business as may properly come before the
meeting.
ARTICLE 2.3. SPECIAL MEETINGS. Special meetings, of the Stockholders for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by resolution of the Board of
Directors or by the President, and shall be called by the President or Secretary
at the request in writing of a majority of the Board of Directors or at the
request in writing by Stockholders owning a majority in amount of the entire
capital stock of the Company issued and outstanding. Such request shall state
the purpose or purposes of the proposed meeting. Business transacted at special
meetings shall be confined to the objects stated in the call.
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<PAGE>
ARTICLE 2.4. NOTICE. Written notice of every meeting of Stockholders,
stating the purpose or purposes for which the meeting is called, the time when
and the place where it is to be held, shall be served, either personally or by
mail, upon each Stockholder entitled to vote at such meeting not less than ten
nor more than sixty days before the meeting. If mailed, such notice shall be
directed to a Stockholder at his address as it shall appear on the books of the
Company unless he shall have filed with the Secretary of the Company a written
request that notices intended for him be mailed to some other address, in which
case it shall be mailed to the address designated in such request.
Irregularities in the notice or in the giving thereof, as well as the accidental
omission to give notice of any meeting to, or the non-receipt of any such notice
by, any of the Stockholders shall not invalidate any action otherwise properly
taken by or at any such meeting.
ARTICLE 2.5. QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
Stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation or by these By-Laws. If a quorum
shall not be present or represented, the Stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the meeting
until a quorum shall be presented or represented. At such adjourned meeting at
which a quorum shall be present or represented any business may be transacted
which might have been transacted at the meeting as originally notified.
ARTICLE 2.6. VOTE TO THE MEETING. When a quorum is present or represented
at any meeting, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of statute or of the Certificate of Incorporation or of these By-Laws,
a different vote is required in which case such express provisions shall govern
and control the decision of such question.
ARTICLE 2.7. VOTING RIGHTS OF STOCKHOLDERS. Each Stockholder of record
having the right to vote shall be entitled at every meeting of the Stockholders
of the Company to one vote for each share of stock having voting power standing
in the name
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<PAGE>
of such Stockholder on the books of the Company with pro-rata voting rights for
any fractional shares, and such votes may be cast either in person or by written
proxy.
ARTICLE 2.8. PROXIES. Every proxy must be executed in writing by the
Stockholder or by his duly authorized attorney. No proxy shall be valid after
the expiration of eleven months from the date of its execution unless it shall
have specified therein its duration. Every proxy shall be revocable at the
pleasure of the person executing it or of his personal representatives or
assigns.
ARTICLE 2.9. INSPECTORS OF ELECTION. The annual election of Directors shall
be conducted by two inspectors of election, neither of whom shall be a candidate
for the office of Director. The inspectors shall be chosen at each annual
meeting of Stockholders to serve for the ensuing year and if such inspectors
shall not be present at any election, the Stockholders present at the meeting
may, by a per capita vote, choose others in their place. The inspectors, before
entering on the discharge of their duties, shall be sworn faithfully to execute
the duties of inspectors with strict impartiality, and according to the best of
their ability, and shall make a written certificate of the result of the
election.
BY-LAW THREE: DIRECTORS
ARTICLE 3.1. BOARD OF 3 TO 15 DIRECTORS. The Board of Directors shall
consist of not less than three (3) nor more than fifteen (15) Directors, all of
whom shall be of full age. The first Board shall consist of five (5) Directors.
Directors shall be elected at the annual meeting of the Stockholders and each
Director shall be elected to serve for one year and until his successor shall be
elected and shall qualify. Directors need not be Stockholders. The Directors
shall have power from time to time, and at any time when the Stockholders as
such are not assembled in a meeting, regular or special, to increase their own
number. If the number of Directors be increased, the additional Directors may be
elected by a majority of the Directors in office at the time of the increase (if
immediately after filling any such vacancy at least two-thirds of the Directors
then holding office shall have been elected by the Stockholders), or, if not so
elected prior to the next annual meeting of the Stockholders, they shall be
elected by the Stockholders.
The number of Directors may also be increased or decreased by vote
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<PAGE>
of the Stockholders at any regular or special meeting called for that purpose.
In the event of the Stockholders voting a decrease in the number of Directors,
they shall determine by a majority vote at such meeting which of the Directors
shall be removed and which of the then existing vacancies on the Board shall be
eliminated. If the Stockholders vote an increase in the Board they shall by
plurality vote elect Directors to the newly created places as well as fill any
then existing vacancies on the Board.
ARTICLE 3.2. VACANCIES. If the office of any Director or Directors becomes
vacant for any reason, the Directors in office, although less than a quorum, by
a majority vote, may choose a successor or successors, who shall hold office for
the unexpired term in respect to which such vacancy occurred or until the next
election of Directors (if immediately after filling any such vacancy at least
two-thirds of the Directors then holding office shall have been elected by the
Stockholders), or any vacancy may be filled by the Stockholders at any meeting
thereof.
ARTICLE 3.3. MAJORITY TO BE ELECTED BY STOCKHOLDERS. If at any time, less
than a majority of the Directors in office shall consist of Directors elected by
Stockholders, or if a majority of the Directors holding office at the beginning
of any twelve month period shall have died, resigned or otherwise vacated their
office, a meeting of the Stockholders shall be called within sixty days for the
purpose of electing an entire new Board of Directors (unless the Securities and
Exchange Commission shall by order extend such period), and the terms of office
of the Directors then in office shall terminate upon the election and
qualification of such new Board of Directors.
ARTICLE 3.4. POWERS OF THE BOARD. The business of this Company shall be
managed by its Board of Directors which may exercise all such powers of the
Company and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws required to be exercised or
done by the Stockholders.
ARTICLE 3.5. PLACE OF MEETINGS. The Directors may hold their meetings at
the principal office of the Company, or at such other places, either within or
without the State of New York, as they may from time to time determine.
ARTICLE 3.6. REGULAR MEETINGS. Regular meetings of the Board may be held
without notice at such time and place as shall from time to time be determined
by resolution of the Board.
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<PAGE>
ARTICLE 3.7. SPECIAL MEETINGS. Special meetings of the Board may be called
by the President on one day's notice to each Director either personally or by
mail or by wire; special meetings shall be called by the President or Secretary
in a like manner on the written request of two Directors.
ARTICLE 3.8. QUORUM OF ONE-THIRD. At all meetings of the Board the presence
of one-third of the entire number of Directors (but not less than two Directors)
shall be necessary to constitute a quorum and sufficient for the transaction of
business, and any act of a majority present at a meeting, at which there is a
quorum, shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of Incorporation or by
these By-Laws. If a quorum shall not be present at any meeting of Directors, the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Members of the Board of Directors may participate in a meeting of the Board
by means of conference telephone or similar communications equipment which
enable all persons participating in the meeting to hear each other; and
participation in a meeting in this manner shall constitute presence in person at
such meeting for every purpose, except for the purpose of an act or approval
that is required by any provision of the Investment Company Act to be taken or
given by the votes cast in person of a majority of those Directors who are not
"interested persons" within the meaning of Section 2(a)(19) of said Act.
ARTICLE 3.9. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken pursuant to authorization voted at a meeting of the Board of Directors
or any Committee thereof, may be taken without a meeting if, prior or subsequent
to such action, all Members of the Board or of such Committee, as the case may
be, consent thereto in writing and such written consents are filed with the
minutes of the proceedings of the Board or Committee. Such consent shall have
the same effect as a unanimous vote of the Board or Committee for all purposes.
ARTICLE 3.10. EXECUTIVE COMMITTEE. There may be an Executive Committee of
two or more Directors appointed by the Board who may meet at stated times or on
notice to all by any of their own number. They shall consult with and advise the
Officers of the Company in the management of its business and exercise such
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<PAGE>
powers of the Board of Directors as may be lawfully delegated by the Board of
Directors. Vacancies shall be filled by the Board of Directors at any regular or
special meeting. The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board when required.
ARTICLE 3.11. COMPENSATION OF DIRECTORS. Directors may be compensated for
their services rendered and expenses incurred in that capacity, in such amounts
as may be determined by resolution of the Board from time to time. Nothing
herein contained shall be construed to preclude any Director form serving the
Company in any other capacity and receiving compensation thereof. BY-LAW FOUR:
OFFICERS
ARTICLE 4.1. OFFICERS. The Officers of the Company shall be a President, a
Vice-President, a Secretary and a Treasurer. Any two of the aforesaid offices,
except those of President and Vice-President, may be held by the same person.
ARTICLE 4.2. APPOINTMENT OF OFFICERS. The Directors, immediately after each
annual meeting of Stockholders, shall appoint from their number a President, and
shall also choose the other Officers, who need not be members of the Board.
ARTICLE 4.3. SALARIES OF OFFICERS. The salaries of all Officers of the
Company shall be fixed by the Board of Directors.
ARTICLE 4.4. ADDITIONAL OFFICERS. The Officers of the Company shall be
fixed by the Board of Directors. The Board, at any regular or special meeting,
may appoint such other Officers and agents as it shall deem necessary, who shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
ARTICLES 4.5. TERM, REMOVAL, VACANCIES. The Officers of the Company shall
hold office for one year and until their successors are chosen and qualify in
their stead. Any Officer elected or appointed by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Directors. If
the office of any Officer becomes vacant for any reason, the vacancy shall be
filled by the Board of Directors.
ARTICLE 4.6. PRESIDENT. The President shall be the Executive Officer of the
Company; he shall preside at all meetings of the Stockholders and Directors; he
shall have the management of the business of the Company and shall see that all
orders and
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<PAGE>
resolutions of the Board are carried into effect.
ARTICLE 4.7. VICE-PRESIDENT. The Vice-President (senior in service) in the
absence or disability of the President shall perform the duties and exercise the
powers of the President and shall perform such other duties as the Board of
Directors shall prescribe.
ARTICLE 4.8. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board of Directors. He
shall disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
Directors at the regular meetings of the Board, or whenever they may require it,
an account of all his transactions as Treasurer and of the financial condition
of the Company.
ARTICLE 4.9. SECRETARY. The Secretary shall attend all sessions of the
Board and all meetings of the Stockholders and record all votes and the minutes
of all proceedings in a book to be kept for that purpose, and shall perform like
duties for the Executive Committee of the Board when required. He shall give or
cause to be given notice of all meetings of Stockholders and special meetings of
the Board of Directors and shall perform such other duties as may be prescribed
by the Board of Directors. He shall keep in safe custody the seal of the Company
and affix it to any instrument when authorized by the Board of Directors.
BY-LAW FIVE: GENERAL PROVISIONS
ARTICLE 5.1. WAIVER OF NOTICE. Whenever by statute, the provisions of the
Certificate of Incorporation or these By-Laws, the Stockholders or the Board of
Directors are authorized to take any action after notice, such notice may be
waived, in writing, before or after the holding of the meeting, by the person or
persons entitled to such notice, or, in the case of a Stockholder, by his
attorney thereunto authorized.
ARTICLE 5.2. CONTRACTS OR TRANSACTIONS IN WHICH DIRECTORS OR OFFICERS ARE
INTERESTED. Subject to the provisions of Section 17 of the Investment Company
Act of 1940 and Regulations thereunder, and any other applicable laws, no
contract or other
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<PAGE>
transaction between the Company and any other corporation shall be affected or
invalidated by the fact that any one or more of the Directors and/or Officers of
this Company is or are interested in, or is a director or officer, or are
directors or officers of such other corporation; and any Director or Directors,
Officer or Officers, of this Company individually or jointly may be a party or
parties to or may be interested in any contract or transaction of this Company
or in which this Company is interested; and no contract, act or transaction of
this Company with any person or persons, firm or association, shall be affected
or invalidated by the fact that any Director or Directors, Officer or Officers,
of this Company is a party, or are parties to, or interested in, such contract,
act or transaction, or in any way connected with such person or persons, firm or
association, and each and every person who may become a Director and/or Officer
of this Company is hereby relieved from any liability that might otherwise exist
from contracting with the Company for the benefit of himself or any firm or
corporation in which he may be in any wise interested.
ARTICLE 5.3. CHECKS. All checks or demands for money and notes of the
Company shall be signed by such Officer or Officers or such other person or
persons as the Board of Directors may from time to time designate.
ARTICLE 5.4. FISCAL YEAR. The fiscal year of the Company shall be
determined by resolution of the Board of Directors.
ARTICLE 5.5. SEAL. The seal of the Company shall be circular in form and
contain the name of the Company, the year of its organization and the words
"Corporate Seal, New York". The seal may be used by causing it to be impressed
directly on the instrument or writing to be sealed, or upon adhesive substance
affixed thereto. The seal on any corporate obligation for the payment of money
may be a facsimile, engraved or printed.
BY-LAW SIX: CERTIFICATES OF STOCK
ARTICLE 6.1 CERTIFICATES OF STOCK. The certificates of stock of the Company
shall be numbered and entered in the books of the Company as they are issued.
They shall exhibit the holder's name and the number of shares and shall be
signed by the President or a Vice-President and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary and shall bear the
corporate seal. Such seal
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<PAGE>
may be a facsimile, engraved or printed. Where any such certificate is signed by
a Transfer Agent or by a Registrar, the signatures of any such officer may be
facsimile, engraved or printed. In case any of the Officers of the Company whose
manual or facsimile signature appears on any stock certificate delivered to a
Transfer Agent of the Company shall cease to be such Officer prior to the
issuance of such certificate, the Transfer Agent may nevertheless countersign
and deliver such certificate as though the person signing the same or whose
facsimile signature appears thereon had not ceased to be such Officer, unless
written instructions of the Company to the contrary are delivered to the
Transfer Agent.
ARTICLE 6.2 LOST CERTIFICATES. The Board of Directors or the President and
Treasurer may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Company, alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors or the President and Treasurer may, in its or their discretion and as
a condition precedent to the issuance thereof, require the owner of such lost or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it or they shall require and/or give the Company a
bond in such sum and with such surety or sureties as it or they may direct as
indemnity against any claim that may be made against the Company with respect to
the certificate alleged to have been lost or destroyed.
ARTICLE 6.3 TRANSFER OF STOCK. Upon surrender to the Company or the
Transfer Agent of the Company of a certificate of stock duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Company to issue a new certificate to the
person entitled thereto, and cancel the old certificate; every such transfer of
stock shall be entered on the stock book of the Company.
ARTICLE 6.4. REGISTERED HOLDER. The Company shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, 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 it shall have express or other notice thereof, except as expressly
provided by statute.
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<PAGE>
ARTICLE 6.5. RECORD DATE. The Board of Directors may fix a time not more
than sixty (60) days nor less than ten (10) days prior to the date of any
meeting of Stockholders, or prior to the last day on which the consent or
dissent of Stockholders may be effectively expressed for any purpose without a
meeting, as the time as of which Stockholders entitled to notice of and to vote
at such a meeting or whose consent or dissent is required or may be expressed
for any purpose, as the case may be, shall be determined; and all persons who
were holders of record of voting stock at such time and no other shall be
entitled to notice of and to vote at such meeting or to express their consent or
dissent, as the case may be. The Board of Directors may also fix a time not
exceeding sixty (60) days nor less than ten (10) days preceding the date fixed
for the payment of any dividend or the making of any distribution, or for the
delivery of evidences of rights, or evidences of interests arising out of any
change, conversion or exchange of capital stock, as a record time for the
determination of the Stockholders entitled to receive any such dividend,
distribution, rights or interests.
BY-LAW SEVEN: CAPITAL STOCK
ARTICLE 7.1. DIVIDENDS. Dividends upon the capital stock of the Company,
subject to any provisions of the Certificate of Incorporation relating thereto,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law.
ARTICLE 7.2. RESERVE BEFORE DIVIDENDS. Before payment of any dividend,
there may be set aside out of the net profits of the Company available for
dividends such sum or sums as the Directors from time to time in their absolute
discretion think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Company, or for such other purpose as the Directors shall think conducive to the
interests of the Company, and the Directors may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE 7.3. FRACTIONAL SHARES. Fractional shares entitle the holder to the
same voting and other rights and privileges as whole shares on a pro-rata basis.
-10-
<PAGE>
BY-LAW EIGHT: AMENDMENTS
ARTICLE 8.1 BY STOCKHOLDERS. The By-Laws may be amended by vote of the
holders of a majority of the Company's stock, as defined by the Investment
Company Act of 1940, at any annual or special meeting of the Stockholders at
which a quorum is present or represented, provided notice of the proposed
amendment shall have been contained in the notice of the meeting.
ARTICLE 8.2. BY DIRECTORS. The Directors may adopt, amend or repeal any
supplementary By-Law not inconsistent with the By-Laws adopted by the
Stockholders, by the affirmative vote of two-thirds of the Board of Directors,
at any regular or special meeting of the Board, if notice of the proposed
By-Law, amendment or repeal shall have been given. The Directors may not amend
or repeal the By-Laws adopted by the Stockholders.
-11-
2(g)
ADVISORY AGREEMENT
Between
TRIDAN CORP.
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Dated: April 28, 1980
-1-
<PAGE>
ADVISORY AGREEMENT
Agreement, made this 28 day of April, 1980 between TRIDAN CORP., INC. a New
York corporation (the "Company"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
a New York trust company authorized to conduct a general banking business,
acting through its Trust and Investment Division (the "Advisor"),
WHEREAS, the Company is a closed-end non-diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company desires to retain the Advisor to render Custody and
Investment Advisory services to the Company and the Advisor is willing to render
such services;
NOW, THEREFORE, the Agreement
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Company hereby appoints the Advisor to act as investment advisor to
the Company for the period and on the terms set forth in this Agreement. The
Advisor accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of Directors of the
Company (the "Board"), the Advisor shall manage and have custody of, through its
Trust and Investment Division, the investment operations of the Company and the
composition of the Company's portfolio of securities and investments, including
cash, the purchase, retention and disposition thereof and agreements relating
thereto, in accordance with the Company's investment objectives and policies as
stated in Exhibit
-2-
<PAGE>
A, annexed hereto and the Registration Statement to be filed and subject to the
following understandings:
(a) The Advisor shall furnish a continuous investment program for the
Company's portfolio and determine, from time to time, what investments or
securities will be purchased, retained, sold or lent by the Company and what
portion of the assets will be invested or held uninvested as cash;
(b) The Advisor shall use the same skill and care in the management of
the Company's portfolio as it uses in the administration of other accounts for
which it has investment responsibility as agent;
(c) The Advisor, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, ByLaws and Registration Statement of the Company and with the
instructions and directions of the Board to the extent not inconsistent with the
foregoing documents and will conform to and comply with the requirements of (i)
the 1940 Act and all of the applicable Federal and New York State laws and
regulations including, without limitation, the regulations and rulings of the
Federal Reserve Board and the New York State Banking Department and (ii) such
applicable State laws and regulations of other states to the extent that the
Advisor is informed thereof in writing by the Company or its counsel;
(d) The Advisor shall determined the securities to be purchased, sold
or lent by the Company and, as agent for the Company, will effect portfolio
transactions pursuant to its determinations either directly with the issuer or
with a broker and/or dealer in such securities; in placing order with brokers
and/or dealers, the Advisor intends to seek best price and execution for
purchases and sales; the foregoing understanding, however, being subject in all
respects to the following matters:
(i) On occasions when the Advisor deems the purchase or sale of
a security to be in the best interest of the Company as well
as other customers, the Advisor, may, to the extent
permitted by applicable laws and regulations, but shall not
be obliged to, aggregate the securities to be sold or
purchased in order
-3-
<PAGE>
to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Advisor in
the manner it reasonably considers to be the most equitable
and consistent with its fiduciary obligations to the Company
and to such other customers. It is understood that, in some
instances, this procedure may adversely affect the size of
the position or yield obtainable for the Company;
(e) The Officers of the Company shall review the transactions in the
Company's portfolio of securities periodically in order to determine the
conformity of such transactions with the Company's investment objectives,
policies and restrictions as stated in Exhibit "A" and the Registration
Statement to be filed and, if said Officers or the Board determine that any such
transactions are not in conformity with said investment objective, policies and
restrictions, they shall promptly issue appropriate instructions or directions
to the Advisor;
(f) The Advisor shall maintain books and records with respect to the
Company's securities transactions including but not limited to a continuous
record of all investments and assets which shall comprise the Company's
portfolio and shall also render to the Board at its regularly scheduled meetings
and at such other times as the Board may reasonably request a resume of the
portfolio and report on all matters pertaining to the advisor's services
hereunder together with such periodic and special reports as the Board may
reasonably request including but not limited to statistical data, analyses of
individual investments and proposed investments and such other information as
may keep the Board properly informed on developments relating to the Company's
portfolio and
(g) The investment management services of the Advisor to the Company
under this Agreement are not to be deemed exclusive, and the Advisor shall be
free to render similar services to others.
3. The Company has delivered copies of each of the following documents
-4-
<PAGE>
to the Advisor and will promptly notify and deliver to it all future amendments
and supplements thereto, if any:
(a) Restated Certificate of Incorporation of the Company, about to be
filed with the Secretary of State of New York, (such Certificate of
Incorporation, as presently in effect and as amended from time to time, are
herein called the "Articles of Incorporation");
(b) By-Laws of the Company (such By-Laws, as presently in effect and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Directors of the Company
authorizing the appointment of the Advisor and approving the form of this
Agreement;
4. The Advisor shall keep the Company's books and records required to be
maintained by it pursuant to paragraph 2(f). The Advisor agrees that all records
which it maintains for the Company are the property of the Company and it will
promptly surrender any of such records to the Company upon the Company's
request. The Advisor further agrees to preserve for the periods prescribed by
Rule 31a-2 of the Commission under the 1940 Act any such records as are required
to be maintained by the Advisor with respect to the Company by Rule 31a-1 of the
Commission under the 1940 Act. The Advisor shall furnish to the Company any and
all information in the Advisor's records which may be necessary to enable the
Company to complete and file any reports required by the Commission.
5. During the term of this Agreement, the Advisor will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Company (including
taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Company will pay to the Advisor as full compensation therefor a
fee at an annual rate equal to .25 of 1% on the first $20,000,000 and .20 of 1%
on the balance of the Company's net assets. This fee will be computed based on
net assets on the last business day of each calendar quarter and will be paid to
the Advisor quarterly during the succeeding calendar month.
7. The Advisor shall not be liable to the Company or any shareholders
thereof, for any error of judgment or for any loss suffered by the Company in
connection
-5-
<PAGE>
with the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services (in which case, any award of damages shall be limited to the period and
the amount set forth in Section 36(b)3) of the 1940 Act) or a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
8. This Agreement, unless sooner terminated as provided herein, shall
continue until the earlier of one year from date hereof or the date of the next
annual or special meeting of the shareholders of the Company, and, if approved
by a majority of the outstanding voting securities of the Company (as defined in
the 1940 Act), thereafter shall continue automatically for periods of one
calendar year so long as such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the Board who are not
parties to this Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board or by vote of a majority of the outstanding
voting securities of the Company; provided, however, that this Agreement may be
terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board or by vote of the holders of the lesser
of (i) 67% of the Company's voting shares present at a meeting if the holders of
more than 50% of the Company's outstanding voting shares are present in person
or by proxy or, (ii) a majority of the outstanding voting securities of the
Company on 60 days written notice to the Advisor, or by the Advisor at any time,
without the payment of any penalty, on 90 days written notice to the Company.
This Agreement will automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
9. The Advisor shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board from time to time, have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
10. This Agreement may be amended by mutual consent, but the consent of the
Company must be approved (a) by vote of a majority of those members of the Board
who are not parties to this Agreement or interested persons (as defined under
the 1940 Act) of any such party, cast in person at a meeting called for the
purpose of voting
-6-
<PAGE>
on such amendments and (b) by vote of a majority of the outstanding voting
securities of the Company.
11. Notices of any kind to be given to the Advisor by the Company shall be
in writing and shall be duly given if mailed or delivered to the Advisor at 9
West 57th Street, New York, New York 10019, Attention: Executive Vice President,
Trust and Investment Division, or at such other address or to such other
individual as shall be specified by the Advisor to the Company. Notices of any
kind to be given to the Company by the Advisor shall be in writing and shall be
duly given if mailed or delivered to the Company at 136 East 57th Street - Suite
1500, New York, New York 10022, or at such other address or to such other
individual as shall be specified by the Company to the Advisor.
12. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
Tridan Corp.
ATTEST: BY:
- ---------------------------------- -----------------------------------
Morgan Guaranty Trust Co.
of New York
ATTEST: /s/ Edward D. Higgins By: /s/ Hiram I. Moody, Jr.
- ---------------------------------- -----------------------------------
Edward D. Higgins Hiram I. Moody, Jr.
Assistant Vice President Senior Vice President
-7-
<PAGE>
EXHIBIT
INVESTMENT GUIDELINES
1. The portfolio should be invested only in securities which are exempt from
Federal Income Taxes. Moreover, there should be an emphasis on securities
which are also exempt from New York State Income Taxes to the extent that
credit considerations make this feasible.
2. There are no constraints with respect to maturity structure in order to
allow for maximum flexibility to take advantage of changes in the
environment for interest rates. However, it is understood that the
portfolio will always maintain some maturity balance.
3. A significant portion of the portfolio may be invested in tax exempt
private placements.
4. Only securities which are considered to be of "investment grade" by Morgan
Guaranty Trust Company should be purchased or held for this account.
-8-
2(j)
AGREEMENT
THIS AGREEMENT made as of APRIL 28, 19 80, between Tridan Corp., a New York
Corporation (hereinafter called the "Corporation"), and Morgan Guaranty Trust
Company of New York, a Corporation organized under the laws of the State of New
York (hereinafter called "Custodian"),
WITNESSETH:
WHEREAS, the Corporation desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement:
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Corporation and Custodian agree as follows:
Sec. 1. Definitions
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations and any certificates,
receipts, warrants, or other instruments representing rights to receive,
purchase, or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officer's certificate" shall mean a request or direction or
certification in writing signed in the name of the Corporation by the Chairman,
the President, a Vice-President, the Secretary and the Treasurer of the
Corporation, or any other persons duly authorized to sign by the Board of
Directors of the Corporation.
Sec. 2. Names, Titles and Signatures of Corporation's Officers
An officer of the Corporation will certify to the Custodian the names and
signatures of those persons authorized to sign the Officers' Certificates
described in Sec. 1 hereof, and the names of the members of the Board of
Directors thereof, together with any changes which may occur from time to time.
Sec. 3. Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or accounts in the
name of the Corporation, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the
-1-
<PAGE>
Corporation. Custodian shall make payments of cash to, or for the account of,
the Corporation from such cash only (a) for the purchase of securities for the
portfolio of the Corporation upon the delivery of such securities to Custodian,
registered in the name of the Corporation or of the nominee of Custodian
referred to in Sec. 7 or in proper form for transfer, (b) for the purchase or
redemption of shares of the capital stock of the Corporation upon delivery
thereof to Custodian, (c) for the payment of interest, dividends, taxes,
management or supervisory fees or operating expenses (including, without
limitation thereto, fees for legal, accounting and auditing services), (d) for
payments in connection with the conversion, exchange or surrender of securities
owned or subscribed to by the Corporation held by or to be delivered to
Custodian; or (e) for other proper corporate purposes. Before making any such
payment Custodian shall receive (and may rely upon) and officers' certificate
requesting such payment and stating that it is for a purpose permitted under the
terms of items (a), (c) or (d) of this subsection A, and also, in respect of
Item (e), upon receipt of an officers' certificate and a certified copy of a
resolution of the Board of Directors of the Corporation signed by an Officer of
the Corporation and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom such payment is to be made.
B. Custodian is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received by Custodian for the account
of the Corporation.
Sec. 4. Receipt of Securities
Custodian shall hold in a separate account, and physically segregated at
all times from those of any other persons, firms or corporations, pursuant to
the provisions hereof, all securities received by it for the account of the
Corporation. All such securities are to be held or disposed of by Custodian for,
and subject at all times to the instructions of, the Corporation pursuant to the
terms of this Agreement. The Custodian shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any such securities and
investments, except pursuant to the directive of the Corporation and only for
the account of the Corporation as set forth in Sec. 5 of this Agreement.
Sec. 5. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have sole power to release or deliver any securities of the
Corporation held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange, or deliver securities held by it hereunder only (a) for sales of such
securities for the account of the Corporation upon receipt by Custodian of
payment therefor, (b) when such securities are called, redeemed or retired or
otherwise become payable, (c) for examination by any broker selling any such
securities in accordance with "street delivery" custom, (d) in exchange for or
upon conversion into other securities alone or other securities and cash whether
pursuant to any plan or merger, consolidation, reorganization, recapitalization
or readjustment, or otherwise, (e) upon conversion of such securities pursuant
to their terms into other securities, (f) upon exercise of
-2-
<PAGE>
subscription, purchase or other similar rights represented by such securities,
(g) for the purpose of exchanging interim receipts or temporary securities for
definitive securities, or (h) for other proper corporate purposes. As to any
deliveries made by Custodian pursuant to items (b), (d), (e), (f), and (g),
securities or cash receivable in exchange therefor shall be deliverable to
Custodian.
Sec. 6. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall:
(a) Present for payment all coupons and other income items held by it
for the account of the Corporation which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the
Corporation; (b) Collect interest and cash dividends received, with notice to
the Corporation, to the account of the Corporation; (c) Hold for the account of
the Corporation hereunder all stock dividends, rights and similar securities
issued with respect to any securities held by it hereunder; (d) execute as agent
on behalf of the Corporation all necessary ownership certificates required by
the Internal Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any State now or hereunder in effect,
inserting the Corporation's name on such certificate as the owner of the
securities covered thereby, to the extent it may lawfully do so.
Sec. 7. Registration of Securities
Except as otherwise directed by an officers' certificate Custodian shall
register all securities, except such as are in bearer form, in the name of a
registered nominee of Custodian as defined in the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder or in any provision of
any subsequent Federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or Regulations or under the
laws of any State. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all time identifiable in
its records.
The Corporation shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Corporation and which may from time to time be
registered in the name of the Corporation.
-3-
<PAGE>
Sec. 8. Voting and other Action
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Corporation, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall promptly deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Corporation), but
without indicating the manner in which such proxies are to be voted.
Sec. 9. Transfer Tax and Other Disbursements
The Corporation shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection with
securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State, to exempt
from taxation any exemptible transfers and/or deliveries of any such securities.
Sec. 10. Concerning Custodian
Custodian shall be paid as compensation for its services pursuant to this
Agreement such compensation as may from time to time be agreed upon in writing
between the two parties. The schedule of fees charged by the Custodian are
attached hereto as Exhibit 1.
Custodian shall not be liable for any action taken in good faith upon any
certificate herein described or certified copy of any resolution of the Board of
Directors, and may rely on the genuineness of any such document which it may in
good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the Corporation for
such items. In the event of any advance of cash for any purpose made by the
Custodian resulting from orders or instructions of the Corporation, or in the
event that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property or any time
-4-
<PAGE>
held for the account of the Corporation shall be security therefor.
Sec. 11. Reports by Custodian
Custodian shall furnish the Corporation monthly with a statement
summarizing all transactions and entries for the account of the Corporation.
Custodian shall furnish the Corporation at the end of every calendar quarter
with a list of the portfolio securities showing the adjusted average cost of
each issue and the market value at the end of such quarter. Custodian shall
furnish the Corporation, at the close of each quarter of the Corporation's
fiscal year, with a list showing cost and market values of the securities held
by it for the Corporation hereunder, adjusted for all commitments confirmed by
the Corporation as of such close, certified by a duly authorized officer of
Custodian. The books and records of Custodian pertaining to its actions under
this Agreement shall be open to inspection and audit at reasonable times by
officers of and auditors employed by the Corporation.
Sec. 12. Termination or Assignment
This Agreement may be terminated by the Corporation, or by Custodian, on
sixty days' notice, given in writing and sent by registered mail to Custodian at
9 West 57th Street, New York, New York 10019 or to the Corporation at 136 East
57th Street, Suite 1500, New York, New York 10022 as the case may be. Upon any
termination of this Agreement, pending appointment of a successor to Custodian
or a vote of the shareholders of the Corporation to dissolve or to function
without a Custodian of its cash, securities and other property, Custodian shall
retain all cash, securities or other property of the Corporation until further
advised by the Corporation in writing; provided, however, that Custodian shall
not be required to make any delivery of such property to a successor custodian
or to the Corporation until full payment shall have been made by the Corporation
of all liabilities constituting a charge on or against the properties then held
by Custodian, or on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs and expenses, subject to
the provisions of Sec. 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of the
Corporation, authorized or approved by a resolution of its Board of Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above written by their respective officers thereunto duly authorized.
-5-
<PAGE>
Executed in several counterparts, each of which is an original.
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
-------------------
(Custodian)
By /s/ Edward D. Higgins
--------------------------------
Attest: Edward D. Higgins
Asst. Vice President
/s/ Arthur C. Stever
- ----------------------------------
Arthur C. Stever
Assistant Trust Officer
(Corporate Seal) TRIDAN CORP.
------------
(Corporation)
By /s/ Peter Goodman
--------------------------------
Attest: Peter Goodman, President
/s/ I. Robert Harris
- ----------------------------------
I. Robert Harris, Secretary
(Corporate Seal)
-6-
<PAGE>
EXHIBIT
There shall be no fee charged by the Custodian for services provided under
this Custodian Agreement so long as the Custodian continues to serve as the
Corporation's investment advisor.
-7-
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 36,164,626
<INVESTMENTS-AT-VALUE> 37,749,270
<RECEIVABLES> 623,430
<ASSETS-OTHER> 516,196
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38,888,896
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,952,849
<DISTRIBUTIONS-OF-GAINS> 245,269
<DISTRIBUTIONS-OTHER> 33,366
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<GROSS-ADVISORY-FEES> 110,023
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 341,869
<AVERAGE-NET-ASSETS> 38,641,484
<PER-SHARE-NAV-BEGIN> 12.25
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.26
<PER-SHARE-DIVIDEND> 0.62
<PER-SHARE-DISTRIBUTIONS> 0.08
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.37
<EXPENSE-RATIO> 0.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
