<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of
the Commission Only (as
permitted by Rule
14c-6(e)(2)
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Asset Management Fund, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- ---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.)
- ---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ---------------------------------------------------------------------------
(5) Total fee paid:
- ---------------------------------------------------------------------------
( ) Fee paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
PRELIMINARY MATERIALS
ASSET MANAGEMENT FUND, INC.
111 EAST WACKER DRIVE, CHICAGO, ILLINOIS 60601
TELEPHONE 1-800-527-3713
September ____,1997
Dear Asset Management Fund Stockholder:
Your Asset Management Fund Board of Directors has reviewed a
transaction under which Shay Assets Management, Inc. will purchase the fifty
percent partnership interest that ACB Assets Management Inc. owns in Shay
Assets Management Co., the Fund's investment adviser. As a result, your Board
of Directors unanimously approved an investment advisory agreement with Shay
Assets Managements, Inc. We are pleased to report that ACB will continue to
provide an exclusive endorsement of AMF to their membership.
Importantly, there are no changes planned in the advisory fees, in the
senior personnel of your investment adviser, in the portfolio managers of the
Fund, or in the investment objectives and policies of the Fund. Operating
procedures will remain the same, and you will continue to receive the high
quality investment advisory and stockholder services that you have come to
expect from AMF.
Along with your vote on the investment advisory agreement, you are also being
asked to elect the existing directors and ratify the selection of auditors. We
encourage you to vote in favor of each of the proposals. PLEASE VOTE NOW TO
HELP SAVE THE COST OF ADDITIONAL SOLICITATIONS.
As always, we thank you for your confidence and support.
Sincerely,
Rodger D. Shay
President
<PAGE> 3
ASSET MANAGEMENT FUND, INC.
111 East Wacker Drive, Chicago, Illinois 60601
(800) 527-3713
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 31, 1997
AND PROXY STATEMENT
To Our Stockholders:
Notice is hereby given that a Special Meeting of the stockholders of Asset
Management Fund, Inc. (the "Fund") will be held at __:__ p.m. Central standard
time, on October 31, 1997 in the 26th floor conference room in the offices of
Shay Assets Management Co., 111 East Wacker Drive, Chicago, IL 60601, for the
following purposes:
1. To elect six directors to the Board of Directors;
2. To approve or disapprove the new Investment
Advisory Agreement between the Fund and Shay Assets
Management, Inc. on the same terms as the current
agreement;
3. To ratify the selection of Coopers & Lybrand
L.L.P. as independent accountants for the Fund for the
current fiscal year; and
4. To consider and act upon any other business as
may properly come before the meeting or any adjournment
thereof.
Only stockholders of record at the close of business on August 4, 1997 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
Stockholders are entitled to one vote for each share held.
By order of the Board of Directors,
Edward E. Sammons, Jr.
Secretary
Dated: September ____, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE SELF-ADDRESSED ENVELOPE PROVIDED. TO AVOID
THE ADDITIONAL EXPENSES OF FURTHER SOLICITATIONS, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY PROMPTLY.
<PAGE> 4
This proxy is solicited by the Board of Directors of the Fund for voting
at a Special Meeting of the stockholders of the Fund to be held on October 31,
1997 and at any adjournments thereof (the "Meeting").
The Fund is a "series" fund that issues various series of shares. Each
series has its own investment objectives and policies and operates
independently for purposes of investments, dividends, purchases and
redemptions. The series of the Fund, referred to herein as "Portfolios," are:
Money Market Portfolio, Short U.S. Government Securities Portfolio, Adjustable
Rate Mortgage (ARM) Portfolio, Intermediate Mortgage Securities Portfolio and
U.S. Government Mortgage Securities Portfolio. As of August 4, 1997, shares of
the Portfolios were issued and outstanding as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES
--------- ------
<S> <C>
Money Market Portfolio....................... 63,392,301
Short U.S. Government Securities Portfolio... 11,055,312
Adjustable Rate Mortgage (ARM) Portfolio..... 67,588,730
Intermediate Mortgage Securities Portfolio... 8,432,515
U.S. Government Mortgage Securities Portfolio 5,086,619
</TABLE>
Each share is entitled to one vote for each of the six directors to be
elected and on each of the other matters submitted to a vote at the Meeting.
The shares of all the Portfolios shall vote together as a single class on all
proposals, except on the proposal to approve the proposed Investment Advisory
Agreement, on which each Portfolio will vote separately.
The expenses of solicitation will be borne by Shay Assets Management Co.
The solicitation of proxies will be primarily by mail but may include, without
cost to the Fund, telephonic, telegraphic or oral communications by employees
of Shay Financial Services Co., the Fund's distributor. It is expected that
the notice and proxy statement and form of proxy will first be mailed to
stockholders on or about September ____, 1997.
ITEM 1. ELECTION OF DIRECTORS
At the Meeting, six (6) directors of the Fund will be elected to
constitute the Board of Directors and will hold office until the next meeting
of stockholders and until their respective successors have been elected and
qualified, or until their earlier resignation or removal. Since the Fund is
not required to hold annual meetings of stockholders, directors elected at the
Meeting will hold office for an indefinite period of time.
All nominees have consented to serve as directors of the Fund if elected
by a majority of the Fund's outstanding shares entitled to vote. Messrs. De
Russo, Holland, Kendall and Levy were last elected at the 1993 special meeting
of stockholders. Mr. Shay was appointed to the Board in 1993. Mr. Amis was
appointed to the Board in 1997.
It is the intention of the persons named in the accompanying form of Proxy
to vote FOR the election of the nominees listed below unless instructed to the
contrary. The Board of Directors has no reason to believe that any of the
nominees named below will become unavailable for election as a director, but
should that occur before the Meeting, proxies will be voted for such persons as
the Board of Directors may recommend.
1
<PAGE> 5
INFORMATION REGARDING DIRECTORS.
<TABLE>
<CAPTION>
NAME, (AGE),
POSITION WITH FUND,
ADDRESS LENGTH OF SERVICE PRINCIPAL OCCUPATION
- ---------------------- ----------------- --------------------
<S> <C> <C>
RICHARD M. AMIS (46) Since 1997 President, First Federal Savings & Loan Association since 1984;
Director Chairman of Texas Savings & Community Bankers Association
since June 1997; and Director of First Financial Trust Company.
630 Clarksville Street Also, serves as a Director of various civic affiliations.
Paris, TX 75460-5934
ARTHUR G. DE RUSSO (76) Since 1993 Chief Executive Officer, Eastern Financial Federal Credit Union
Director from 1969 to 1992; Chairman and Director, First Credit Union
Trust Company, Inc. from 1988 to 1992; Director, Item Processing
5397 S.E. Major Way of America (IPA) from 1989 to 1992; President, Airline Credit
Stuart, FL 34997 Union Conference in 1991; Director, Honor ATM Network, Florida
from 1985 to 1990; President, Florida North Dade County Credit
Union Chapter from 1962 to 1967; and Director, Florida Credit
Union League from 1963 to 1968.
DAVID F. HOLLAND (55)* 1988-1989 Chairman of the Board, President and Chief Executive Officer of
Director and since 1993 BostonFed Bancorp, Inc. since 1995; Chairman of the Board since
17 New England Executive 1989 and, since 1986, President and Chief Executive Officer,
Park Boston Federal Savings Bank; Chairman, Broadway National Bank
Burlington, MA 01803 since February 1997; Chairman of America's Community Banking
Partners, Inc.; Director of ACB Investment Services, Inc.;
President of Thrift Industry Advisory Council; Chairman of Center
for Financial Studies at Fairfield University; Director of NYCE
Corporation; Director of M.S.B. Fund, Inc.; and Incorporator of
Beverly Hospital.
LEON T. KENDALL (69) Since 1989 Professor of Finance and Real Estate, Kellogg School of
Director and Management, Northwestern University since 1988; Director and
Chairman of the Board Chairman of the Board, Mortgage Guaranty Insurance Corp. and
Director and Vice Chairman of MGIC Investment Corporation until
250 East Kilbourn 1989; Public Director of Chicago Board Options Exchange since
Milwaukee, WI 53202 1992; Director of Universal Foods since 1985; Director of the
Federal Reserve Bank of Chicago from 1981 to 1986; and Director
of Avatar Corporation since 1982.
GERALD J. LEVY (65) Since 1985 Chairman and Chief Executive Officer, Guaranty Bank, S.S.B.
Director since 1984 (from 1959 to 1984, he held a series of officers'
positions, including President); Chairman, 1986, United States
4000 W. Brown Deer Road League of Savings Institutions; Director of FIserv, Inc. since 1986;
Milwaukee, WI 53209 Director since 1995 of the Republic Mortgage Insurance Company;
Director of the Federal Asset Disposition Association from 1986 to
1989; previously Director and Vice Chairman, Federal Home Loan
Bank of Chicago and member of Advisory Committee of the
Federal Home Loan Mortgage Corporation and Federal National
Mortgage Corporation; Director of Financial Institutions Insurance
Fund, Inc. since 1987; Member of the FHLMC Affordable Housing
Advisory Council, 1992; and Director of Advance America Funds,
Inc. from 1987-1990.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME, (AGE),
POSITION WITH FUND,
ADDRESS LENGTH OF SERVICE PRINCIPAL OCCUPATION
- ---------------------- ----------------- --------------------
<S> <C> <C>
RODGER D. SHAY**(60) 1985-1990 President, Chief Executive Officer and member of the Managing
Director and President and Board of Shay Assets Management Co. since 1990 and President
1993 to present and Director of the managing partner of the adviser, Shay Assets
888 Brickell Avenue Management, Inc., since 1990; President, Chief Executive Officer
Miami, FL 33131 and member of the Managing Board of Shay Financial Services
Co. since 1990 and President and Director of the managing
partner of the Distributor, Shay Financial Services, Inc. since 1990;
Director from 1986 to 1991 and President from 1986 to 1992, U.S.
League Securities, Inc.; Director from 1985 to 1991 and Executive
Vice President from 1989 to 1992, USL Assets Management, Inc.;
Vice President since 1995 of Institutional Investors Capital
Appreciation Fund, Inc. and M.S.B. Fund, Inc.; Director of First
Home Savings Bank, S.L.A. since 1990; and President of Bolton
Shay and Company and Director and officer of its affiliates from
1981 to 1985. Previously, employed by certain subsidiaries of
Merrill Lynch & Co. from 1955 to 1981, where he served in various
executive positions including Chairman of the Board of Merrill
Lynch Government Securities, Inc., Chairman of the Board of
Merrill Lynch Money Market Securities, Inc. and Managing Director
of the Debt Trading Division of Merrill Lynch, Pierce, Fenner
& Smith Inc.
</TABLE>
- ----------------------
* As a result of the transaction described under Item 2 of this proxy
statement, the Fund's Board of Directors will be constituted with at least
75% of its members who are deemed not to be "interested persons," as
defined in the Investment Company Act of 1940, of the Fund, its adviser or
its distributor for a period of at least three years after the proposed
transaction. Mr. Holland, who has served continuously as a director of
the Fund since 1993, currently is considered to be an "interested person"
of the Fund by virtue of his positions with America's Community Banking
Partners, Inc. and its affiliates. Because Mr. Holland intends to resign
those positions concurrently with the closing of the Proposed Transaction,
Mr. Holland will be deemed to be no longer an "interested person." Under
the Investment Company Act of 1940, a person who has had a prior business
relationship with a fund, its adviser or its distributor, or their
controlling persons may be deemed to be an "interested person" only if the
Securities and Exchange Commission (the "Commission") by order finds such
relationship to have been of a material nature. Counsel to the Fund has
advised the Board that it is unlikely that the Commission would enter such
an order under these circumstances. However, if the Commission were to do
so, the Board would take necessary action to ensure that 75% of the
members of the Board would continue to be considered not "interested
persons."
** Mr. Shay is an "interested person" of the Fund, as defined in the 1940
Act, by reason of his affiliations with the Fund's investment adviser.
The following table shows each Director's beneficial interest in shares of the
Portfolios as of August 4, 1997:
<TABLE>
<S> <C>
Name of Director Portfolio: number of shares beneficially owned
----------------- -----------------------------------------------
Richard M. Amis None
Arthur G. DeRusso ARM Portfolio: 1,022 shares
David F. Holland None
Leon T. Kendall None
Gerald J. Levy None
Rodger D. Shay Money Market Portfolio: 11,013*;
Short U.S. Government Securities Portfolio: 10,000;
ARM Portfolio: 1,102;
U.S. Government Mortgage Securities Portfolio: 1,086
</TABLE>
- ------------------
* In addition, Mr. Shay has an interest in certain partnerships that, in
the aggregate, own 2,829,494 shares of the Money Market Portfolio.
3
<PAGE> 7
The Audit Committee of the Board of Directors is currently composed of
Messrs. Holland, Levy and Amis. The Audit Committee makes recommendations to
the Board of Directors with respect to the selection of the independent
accountants for the Fund, reviews with the independent accountants the
arrangements and scope of the auditing engagement, reviews and approves
non-audit service provided by the independent accountants, considers the amount
of their audit and non-audit fees, considers the effect of the foregoing on
their independence, considers comments and recommendations from the independent
accountants with respect to internal accounting controls and reviews the annual
financial statements. The Nominating Committee of the Board of Directors is
currently composed of Messrs. Amis, De Russo, Kendall and Levy. The Board of
Directors does not have a compensation committee.
During the Fund's most recent fiscal year ended October 31, 1996, there
were four meetings of the Board of Directors and one meeting of the Audit
Committee. The Nominating Committee did not meet. During this period, each
then current director attended 75% or more of the meetings of the Board and the
committees on which they served for such period.
The Fund pays the following fees to directors who are not officers or
employees of Shay Assets Management Co., the Fund's investment adviser, or Shay
Financial Services Co., the Fund's distributor: $7,500 per annum in
compensation, a fee of $1,500 for attendance at each meeting of the Board of
Directors, and $1,000 for attendance at each meeting of any committee thereof.
The Fund also reimburses the out-of-pocket expenses incurred by all directors
of the Fund in attending meetings of the Board of Directors and the committees
thereof. The table below sets forth the compensation earned by directors from
the Fund for the fiscal year ended October 31, 1996. The directors do not
receive any pension or retirement benefits from the Fund.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION
NAME OF DIRECTOR FROM THE FUND FROM FUND COMPLEX
- ---------------- ---------------------- ------------------
<S> <C> <C>
Arthur G. De Russo $14,500 $14,500
David F. Holland 14,500 14,500
Leon T. Kendall 14,500 14,500
Gerald J. Levy 14,500 14,500
Wendell L. Evans, Jr. (retired) 7,750 7,750
</TABLE>
As of August 4, 1997, no person is known to the Fund to own beneficially more
than 5% of the common stock of any Portfolio, except as shown in Exhibit A.
FUND OFFICERS.
Information about the executive officers of the Fund, with their
respective ages, addresses and terms as Fund officers indicated, is set forth
below. The officers of the Fund are elected by the Board on an annual basis to
serve until their successors are elected and qualified. As of August 4, 1997,
the executive officers of the Fund held in the aggregate directly and
beneficially less than one percent of the outstanding common stock of each
Portfolio.
Rodger D. Shay, President since 1992. Information about Mr. Shay
is set forth in the table entitled "Information Regarding
Directors" above.
Edward E. Sammons, Jr. (57), 111 East Wacker Drive, Chicago, IL
60601, Vice President since 1985, Treasurer since 1991 and
Secretary since 1993; Executive Vice President and member of the
Managing Board of Shay Assets Management Co. since 1990 and
Executive Vice President of the managing partner of the adviser,
Shay Assets Management, Inc., since 1990; Executive Vice
President and member of the Managing Board of Shay Financial
Services Co. since 1990 and Executive Vice President of the
managing partner of the Distributor, Shay Financial Services,
Inc., since 1990; President, USL Assets
4
<PAGE> 8
Management, Inc., the Fund's prior investment adviser, from 1986 to 1992
(previously Senior Vice President, including of a predecessor, from 1983
to 1986) and a Director from 1989 to 1991; Executive Vice President
from 1990 to 1992 and a Director from 1990 to 1991 of U.S. League
Securities, Inc., Vice President and Secretary since 1995 of Institutional
Investors Capital Appreciation Fund, Inc., Institutional Investors
Tax-Advantaged Income Fund, Inc. and M.S.B. Fund, Inc.; Vice President,
from 1987 to 1990, Advance America Funds, Inc. Previously, Senior Vice
President and Manager of Fixed Income Securities, Republic National Bank
in Dallas from 1962 to 1983.
Doris J. Pavel (42), 111 East Wacker Drive, Chicago, IL 60601; Assistant
Secretary, Asset Management Fund, Inc. since 1993. Administrative
Manager, ACB Investment Services Co. since 1993. Previously,
administrative assistant for several affiliated firms since 1987.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" THE ELECTION OF ALL DIRECTORS.
- --------------------------------------------------------------------------------
ITEM 2. APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
Shay Assets Management Co. ("SAMC") is the investment adviser to each
Portfolio of the Fund. SAMC is a general partnership that consists of two
general partners, Shay Assets Management, Inc. ("SAMI") and ACB Assets
Management, Inc. ("ACB"), each of which holds a fifty-percent partnership
interest. ACB and SAMI have entered into a transaction whereby SAMI has agreed
to purchase ACB's fifty-percent interest in SAMC. Immediately upon completion
of the transaction, SAMC will be dissolved and its investment management
operations will be consolidated into the investment management operations of
SAMI.
Consummation of this transaction may constitute an "assignment," as
that term is defined in the Investment Company Act of 1940 (the "1940 Act"), of
the Portfolio's current investment advisory agreement with SAMC. As required by
the 1940 Act, each current investment advisory agreement provides for its
automatic termination in the event of its assignment. In anticipation of the
transaction, a new investment advisory agreement between the Fund and SAMI is
being proposed for approval by stockholders of each Portfolio. A copy of the
form of the new investment advisory agreement is attached hereto as Exhibit B.
Except as noted below, the new investment advisory agreement is on the same
terms for each Portfolio as the current investment advisory agreement.
RECOMMENDATION OF BOARD OF DIRECTORS.
The Board of Directors met on August 4, 1997 to consider the
transaction and its anticipated effects upon SAMC and the investment advisory
and other services provided to the Fund by SAMC and its affiliates. The Board,
including a majority of the directors who are not parties to the transaction or
interested persons of any such party, voted unanimously to approve the new
investment advisory agreement and to recommend it to stockholders for their
approval. Additional information regarding the Board's deliberations and the
reasons for its recommendation are located under "Board of Directors Evaluation"
near the end of this Item 2.
INVESTMENT ADVISORY AGREEMENT.
Except as noted below, there are no material differences between the
provisions of the current investment advisory agreement and the proposed
investment advisory agreement. The current and new investment advisory
agreements provide that the Fund's investment adviser will act as investment
adviser to each Portfolio, provide investment research and advice to the Fund
and manage the investment and
5
<PAGE> 9
reinvestment of the assets of each Portfolio and their business affairs, all
under the supervision of the Board of Directors of the Fund. The investment
adviser furnishes a continuous investment program for each Portfolio, maintains
books and records with respect to securities transactions and pays all expenses
incurred by it in connection with its activities under the advisory contract
other than the cost of securities and investments purchased for the Fund
(including taxes and brokerage commissions, if any). The investment adviser
pays the salaries, fees and expenses of directors or officers of the Fund
who are officers and employees of the investment adviser.
The investment advisory agreement provides that the investment adviser
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by any portfolio of the Fund in connection with the matters to which
the investment advisory 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 the investment advisory agreement.
The investment advisory agreement will terminate automatically upon its
assignment and is terminable at any time without penalty by the Board of
Directors or by a vote of a majority of the outstanding shares of a Portfolio
on 60 days' written notice to the adviser or by the adviser on 90 days' written
notice to the Fund.
As compensation for the services rendered by the investment adviser the
Fund pays the investment adviser a fee, payable monthly, based on an annual
percentage of the average daily net assets of each Portfolio as follows:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE OF COMPENSATION
--------- ---------------------------
<S> <C>
Money Market .15% on the first $500 Million
.125% of the next $500 Million
.10% in excess of $1 Billion
Short U.S. Government Securities .25% on the first $500 Million
.175% of the next $500 Million
.125% of the next $500 Million
.10% in excess of $1.5 Billion
ARM .45% on the first $3 Billion
.35% on the next $2 Billion
.25% in excess of $5 Billion
Intermediate Mortgage Securities .35% on the first $500 Million
.275% of the next $500 Million
.20% of the next $500 Million
.10% in excess of $1.5 Billion
U.S. Government Mortgage Securities .25% on the first $500 Million
.175% of the next $500 Million
.125% of the next $500 Million
.10% in excess of $1.5 Billion
</TABLE>
For each Portfolio except the ARM Portfolio, the investment adviser has
agreed to reduce or waive (but not below zero) its advisory fees allocated to
each such Portfolio to the extent that the daily ratio of operating expenses to
average daily net assets of the Portfolio exceeds 0.75%. However, expense
limitations that are no longer required by state securities laws have been
deleted from the new investment advisory agreement.
The adviser may also voluntarily waive all or a portion of its advisory
fee. For the most recently completed fiscal year ended October 31, 1996, the
Fund paid the adviser fees with respect to each of the
6
<PAGE> 10
Portfolios as follows: Money Market Portfolio $0 (net of fee waivers of
$101,717); Short U.S. Government Securities Portfolio $446,257; ARM Portfolio
$2,290,307 (net of fee waivers of $1,832,247); Intermediate Mortgage Securities
Portfolio $359,317 (net of fee waivers of $239,669); and U.S. Government
Mortgage Securities Portfolio $146,347.
The current investment advisory agreement, dated September 1, 1990 and
amended on June 28, 1991 and November 30, 1992, was last approved for
continuation by the stockholders of each Portfolio at a special meeting held on
January 11, 1993 and was last approved by the Board of Directors at their
meeting held on December 8, 1996. On August 4, 1997, the Board of Directors,
including a majority of the directors who are not "interested persons" of the
Fund (as defined in the 1940 Act), voted to approve the new Investment Advisory
Agreement between the Fund and SAMI and recommended its approval by the
stockholders at this Meeting.
INFORMATION CONCERNING THE PROPOSED TRANSACTION.
INTRODUCTION. As noted above, SAMC, the Fund's adviser, is a general
partnership that consists of two general partners, SAMI and ACB, each of which
holds a fifty-percent partnership interest. SAMI, a Florida corporation
founded in 1990, will be located at 111 East Wacker Drive, Chicago, Illinois
60601. ACB is an indirect wholly owned subsidiary of America's Community
Bankers(R), a trade association of savings institutions and banks in the United
States (the "Association"). SAMI and ACB entered into a Purchase and Sale
Agreement dated _________, 1997 (the "Agreement"), whereby ACB has agreed to
sell its fifty-percent interest in SAMC to SAMI (the "Proposed Transaction").
Immediately upon the closing of the Proposed Transaction, all SAMC's assets
will be transferred to and liabilities assumed by SAMI who will then operate
the investment advisory business and will dissolve SAMC (the "Adviser
Reorganization"). Prior to becoming the Fund's adviser, SAMI will be
registered as an investment adviser under the Investment Advisers Act of 1940
in all necessary jurisdictions. The sole director of SAMI is Rodger D. Shay.
Concurrently with its purchase of ACB's interest in SAMC, SAMI will become a
wholly owned subsidiary of Shay Investment Services, Inc. ("SISI"), located at
888 Brickell Avenue, Miami, Florida 33131. SISI is a closely held corporation
controlled by Rodger D. Shay.
The new investment advisory agreement will be dated as of the date of
the closing of the Proposed Transaction. The Proposed Transaction is expected
to close in the fourth quarter of 1997, but in no event later than December 31,
1997. The Proposed Transaction is part of a larger set of transactions that are
subject to the Agreement. The new investment advisory agreement will have an
initial term ending on the same date as that of the current investment advisory
agreement. The new investment advisory agreement may continue thereafter from
year to year if specifically approved at least annually by a vote of "a
majority of the outstanding voting securities" of each Portfolio, as defined
under the 1940 Act, or by the Board and, in either event, the vote of a
majority of the directors who are not parties to the agreement or interested
persons of any such party, cast in person at a meeting called for such purpose.
At the closing of the Proposed Transaction, SAMI and other entities
controlled by Mr. Shay (the "Shay Entities") intend to enter into a marketing
agreement with ACB Development Services, Inc. ("Services"), an indirect
subsidiary of the Association, whereby Services will provide marketing
resources to assist the Shay Entities with promotion and marketing of
broker/dealer, asset management and investment advisory products and services
to members of the Association and their affiliated entities in exchange for
payment of an annual fee. In addition, the Shay Entities intend to enter into
a license agreement with the Association whereby the Association will permit
the use of the Association's name and logo in connection with the sale and
marketing of the Shay Entities' broker/dealer, asset management and investment
advisory products and services to members of the Association and their
affiliated entities in exchange for payment of royalties.
The effective date of the new advisory agreement is contingent upon,
among other things, the completion of the Adviser Reorganization, which includes
the completion of all appropriate and necessary registrations and filings with
federal and state authorities. In addition, as a condition to the closing of
the Proposed Transaction, the Agreement provides that the stockholders of
registered investment companies for which SAMI will act as investment adviser
shall have approved the new investment advisory agreement. If
7
<PAGE> 11
the stockholders of a particular Portfolio do not approve the new investment
advisory agreement, SAMI and ACB intend to proceed with the Proposed Transaction
(assuming that all other conditions precedent have been satisfied or waived). In
that event, the Fund's Board would take such action as it deemed to be in the
best interests of the stockholders, which could include, if necessary, seeking
exemptive relief from the Securities and Exchange Commission so that SAMI could
provide investment advisory services to such Portfolio on an interim basis. If
the Proposed Transaction is not consummated for any reason, then the current
investment advisory agreement with each Portfolio will continue.
BOARD OF DIRECTORS EVALUATION. On August 4, 1997, the Board of the
Fund held a special meeting to consider the proposed new investment advisory
agreement. The Board was informed that SAMI had entered into an agreement in
principle with ACB pursuant to which SAMI would acquire ACB's fifty-percent
partnership interest in SAMC. The Board was given information regarding the
Proposed Transaction and the pro forma financial statements of SAMI. In
addition, counsel to the Fund and the independent directors prepared and
distributed an analysis of the Board's fiduciary obligations. The directors
discussed the information provided about SAMI and the Proposed Transaction,
including the terms of the Agreement, and reviewed their fiduciary obligations.
Mr. Shay presented matters including SAMI's history, strategy and general
plans. There was extended discussion of and questioning regarding SAMI's plans
for SAMC and the Fund, some of which were to be addressed in a definitive
purchase and sale agreement (which had not yet been executed). Throughout the
review process, the independent directors of the Board had the assistance of
legal counsel. The Board discussed the Proposed Transaction, the financial
condition of SAMI and the pro forma financial statements of SAMI with the
senior management of SAMI and among themselves. The Board considered the
method of financing the transactions under the Agreement.
In connection with its deliberations, the Board obtained certain
agreements and assurances from SAMI and Mr. Shay, including the following:
* The Proposed Transaction will not result in any change in any Portfolio's
investment objective or policies.
* There will be no change in the senior management or personnel of the
adviser and there will be no changes made in the Fund's portfolio
managers. The quality of services provided to the Fund by the adviser
will not be adversely affected and Mr. Shay will continue to manage the
business affairs of the adviser.
* The new investment advisory agreement between the Fund and SAMI will be
for an initial period equal to the term remaining on the current
investment advisory agreement. Therefore, the Board would review the new
investment advisory agreement for continuance at the Board's regularly
scheduled contract renewal meeting, which is currently scheduled for
December 1997.
* The adviser will not raise its fees or lower its current levels of
voluntary waiver as a direct result of the Proposed Transaction.
SAMI and ACB assured the Board that they intend to comply with Section
15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe harbor for
an investment adviser to an investment company or any of its affiliated persons
to receive any amount or benefit in connection with a change in control of the
investment adviser so long as two conditions are met. First, for a period of
three years after the transaction, at least 75% of the board members of the
investment company must not be interested persons of such investment adviser.
The composition of the Board as proposed would be in compliance with this
provision of Section 15(f). (See Item 1 - "Election of Directors.") Second,
an "unfair burden" must not be imposed upon the investment company as a result
of such transaction or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after the
transaction whereby the investment adviser, or any interested person of any
such adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its shareholders (other than fees
for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property
8
<PAGE> 12
to, from or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such investment company). SAMI and
ACB are not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on any Fund as a result of
the Proposed Transaction. SAMI and ACB have agreed that they, and their
affiliates, will take no action that would have the effect of imposing an
"unfair burden" on any Fund as a result of the Proposed Transaction. SAMC has
undertaken to pay the costs of preparing and distributing proxy materials to and
of holding the meetings of the Fund's stockholders as well as other fees and
expenses in connection with the Proposed Transaction, including the fees and
expenses of legal counsel to the Fund and the independent directors.
In evaluating the new investment advisory agreement, the Board took into
account that the new investment advisory agreement, including the terms
relating to the services to be provided and the fees and expenses payable, is
on the same terms as the current investment advisory agreement in all material
respects. The Board noted that, in previously approving the continuation of the
current investment advisory agreement, the Board had considered a number of
factors, including the nature and quality of services provided by SAMC;
investment performance, both of the Fund itself and relative to that of
competitive investment companies; investment advisory fees and expense ratios
of the Fund and competitive investment companies; SAMC profitability from
managing the Fund; and fall-out benefits to SAMC from its relationship with the
Fund, including revenues derived from services provided to the Fund by
affiliates of SAMC. The directors received all information they deemed
necessary to their evaluation of the terms and conditions of the current
investment advisory agreement and the new investment advisory agreement. Based
upon the directors' review and evaluations of these materials and their
considerations of all factors deemed relevant, the directors determined that
the new investment advisory agreement is reasonable, fair and in the best
interest of the Fund and its stockholders. As a result of its investigation and
consideration of the Proposed Transaction and the new management agreement, the
Board, including a majority of the directors who are not "interested persons,"
as defined in the 1940 Act, voted to approve the new management agreement and
to recommend it to the stockholders of the Fund for their approval.
The new investment advisory agreement must be approved by the holders of a
majority of each Portfolio's outstanding shares. A majority of a Portfolio's
outstanding shares means the lesser of (i) more than 50 percent of the
outstanding shares of the Portfolio, or, (ii) 67 percent or more of the shares
present or represented at the Meeting provided that at least 50 percent of the
outstanding shares of the Portfolio are present in person or represented by
proxy. If approved in this manner, the proposed Investment Advisory Agreement
then will remain in effect until March 1, 1998 and shall continue from year to
year thereafter, subject to termination by the Fund or the adviser as
hereinafter provided, if such continuance is approved at least annually by (a)
a "majority of the outstanding shares" (as defined in the 1940 Act) of each
Portfolio or by a vote of the Fund's Board of Directors cast in person at a
meeting called for the purpose of voting on such approval, and (b) by a vote of
a majority of the disinterested directors of the Fund, cast in person at a
meeting called for the purpose of voting on such approval.
BROKERAGE ALLOCATION.
Purchases and sales of securities for each Portfolio usually are principal
transactions. Portfolio securities normally are purchased directly from the
issuer or from an underwriter or market maker for the securities. There
usually, but not always, are no brokerage commissions paid by the Portfolios
for such purchases. Purchases from dealers serving as market makers may
include the spread between the bid and asked prices. During the Fund's most
recent fiscal year ended October 31, 1996, none of the Portfolios paid any
brokerage commissions. The investment adviser attempts to obtain the best
price and execution for portfolio transactions. The Portfolios will not
purchase securities from, sell securities to, or enter into repurchase or
reverse repurchase agreements with the investment adviser or any of its
affiliates.
Allocation of transactions, including their frequency, to various dealers
is determined by the adviser in its best judgment under the general supervision
of the Board of Directors of the Fund and in a manner deemed fair and
reasonable to stockholders. The primary consideration is prompt execution of
orders in an
9
<PAGE> 13
effective manner at the best price. On occasion, the adviser, on behalf of a
Portfolio, may effect securities transactions on an agency basis with
broker-dealers providing research services and/or research-related products for
the Fund. Research services or research-related products may include
information in the form of written reports, reports accessed by computers or
terminals, statistical collations and appraisals and analyses relating to
companies or industries. However, in selecting such broker-dealers, the
adviser adheres to the primary consideration of best price and execution.
Investment decisions for each Portfolio are made separately from those for
the other Portfolios or other clients advised by the adviser. It may happen on
occasion that the same security is held in one portfolio of the Fund and the
other portfolios of one or more of such other clients. Simultaneous
transactions are likely when several portfolios and clients are advised by the
same investment adviser, particularly when a security is suitable for the
investment objectives of more than one of such portfolios or clients. When two
or more of the portfolios or other clients advised by the adviser are
simultaneously engaged in the purchase or sale of the same security, the
transactions are allocated to the respective portfolios or other clients, both
as to amount and price, in accordance with a method deemed equitable to each
portfolio or client. In some cases this system may adversely affect the price
paid or received by a portfolio or the size of the security position obtainable
for such portfolio.
DISTRIBUTION.
CURRENT DISTRIBUTION AGREEMENT AND PLAN AND AGREEMENT PURSUANT TO RULE
12B-1. Rule 12b-1 under the 1940 Act prohibits any registered open-end
management investment company from financing, directly or indirectly, any
activity that is primarily intended to result in the sale of its shares, other
than pursuant to a written plan that meets certain requirements set forth in
the Rule. The Fund's shares are distributed pursuant to a "best efforts"
arrangement under a Plan and Agreement Pursuant to Rule 12b-1 dated September
1, 1990, as amended (the "Plan and Agreement"), and a related Distribution
Agreement dated September 18, 1996 (the "Distribution Agreement"). Subject to
the general supervision of the Fund's Board of Directors, Shay Financial
Services Co. (the "Distributor"), an affiliate of SAMC and SAMI, provides
services, facilities, personnel and assistance with respect to the activities
associated with the distribution of the Fund's shares. Among other things, the
Distributor performs marketing and promotional activities; provides office
space and equipment, telephone facilities, heat, light, power and other
utilities; compensates personnel who perform distribution activities; bears the
costs of printing and distributing copies of prospectuses and annual and
interim reports to persons other than the Fund's current stockholders; and
bears the costs of typesetting and printing other fund advertising and sales
literature.
The Distribution Agreement provides that, in its role as principal
distributor, the Distributor receives an annual fee from the Fund, payable
monthly, as set forth in the table below ("12b-1 fees"). For the Money Market
Portfolio and the Short U.S. Government Securities Portfolio, the Fund pays an
annual fee based upon the combined average daily net assets of both of the
Portfolios. The fee is allocated between each of the Portfolios based upon
their relative net asset values. For the other Portfolios, the Fund pays the
Distributor an annual fee based upon the average daily net assets of each of
the respective Portfolios.
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE OF COMPENSATION
- --------- ---------------------------
<S> <C>
Combined Average Daily Net Assets of the .15% on the first $500 million
Money Market Portfolio and the .125% on the next $500 million
Short U.S. Government Securities Portfolio .10% on the next $1 billion
.075% in excess of $2 billion
ARM Portfolio .25% on average daily net assets
Intermediate Mortgage Securities Portfolio .15% on the first $500 million
.125% on the next $500 million
.10% on the next $500 million
.075% in excess of $1.5 billion
</TABLE>
10
<PAGE> 14
<TABLE>
<S> <C>
U.S. Government Mortgage Securities Portfolio .15% on the first $500 million
.125% on the next $500 million
.10% on the next $500 million
.075% in excess of $1.5 billion
</TABLE>
The Distributor may voluntarily elect to waive its 12b-1 fees in an amount
up to but not to exceed .25% of the average daily net assets of the ARM
Portfolio and in an amount up to but not to exceed .15% of the average daily
net assets of each of the other four Portfolios. The Distributor may terminate
these voluntary waiver agreements at any time. Although the Distributor's fee
is calculable separately with respect to each Portfolio of the Fund and the
Distributor reports expense information to the Fund on a portfolio-by-portfolio
basis, any 12b-1 fee received by the Distributor in excess of expenses for a
given Portfolio may be used for any purpose, including payment of otherwise
unreimbursed expenses incurred in distributing shares of another Portfolio or
to compensate another dealer for distribution assistance. For the Fund's most
recent fiscal year ended October 31, 1996, the Fund paid the Distributor total
fees of $2,088,171. The fees for each Portfolio were as follows: $101,717 for
the Money Market Portfolio, $267,754 for the Short U.S. Government Securities
Portfolio, $1,374,184 (net of fee waivers of $916,124) for the ARM Portfolio,
$256,708 for the Intermediate Mortgage Securities Portfolio and $87,808 for the
U.S. Government Mortgage Securities Portfolio. During the Fund's 1996 fiscal
year, out of the $2,088,171 in fees received by the Distributor from the Fund,
the Distributor made the expenditures as noted in Exhibit C.
Effective September 18, 1996, the Distributor became the Fund's principal
distributor. Before that date, the Distributor had acted as the Fund's sponsor
in the distribution of its shares. The Distributor is located at 111 East
Wacker Drive, Chicago, Illinois 60601. Currently, the Distributor is a general
partnership that consists of two partners, Shay Financial Services, Inc.
("SFSI") and ACB Securities, Inc. ("ACB Securities"), each of which holds a
fifty-percent interest in the partnership. SFSI is controlled by Mr. Shay.
ACB Securities is an indirect wholly owned subsidiary of America's Community
Banking Partners, Inc.
NEW DISTRIBUTION AGREEMENT AND AMENDED AND RESTATED 12b-1 PLAN. In a
transaction related to the Proposed Transaction described above and governed by
the same Agreement, ACB Securities has agreed to sell its fifty-percent
interest in the Distributor to SFSI. Immediately upon the purchase of ACB
Securities' interest, all the Distributor's assets will be transferred to and
liabilities assumed by SFSI who will then operate the distribution business and
will dissolve the Distributor (the "Distributor Reorganization"). As part of
the Distributor Reorganization and as a condition precedent to the closing of
the Agreement, SFSI will become a registered broker/dealer in all necessary
jurisdictions. SFSI will be a wholly owned subsidiary of SISI. Rule 12b-1
under the 1940 Act provides for the automatic termination of an agreement
related to a Rule 12b-1 plan in the event of the agreement's assignment. The
purchase by SFSI of ACB Securities' interest in the Distributor may effect a
change in control of the Distributor, which may result in the assignment and
automatic termination of the agreement related to the Fund's Rule 12b-1 Plan.
Concurrent with its review of the Proposed Transaction, at its August 4,
1997 meeting, the Board approved a new distribution agreement (the "New
Distribution Agreement") with SFSI as the provider of the services previously
rendered by the Distributor under the Distribution Agreement. To reduce future
regulatory issues in the event of a subsequent change in control of the
Distributor, the Board also approved a modification in the form of the Plan and
Agreement that separates the agreement related to the Fund's Rule 12b-1 plan
from the Rule 12b-1 plan itself (the "Amended and Restated 12b-1 Plan") and
incorporates certain provisions of the Plan and Agreement, including the
specific responsibilities of SFSI as the Fund's new distributor, into the New
Distribution Agreement. The separation of the Plan and Agreement into the New
Distribution Agreement and the Amended and Restated 12b-1 Plan does not result
in any material change in the way that the Fund's shares are distributed nor
any change in the fees charged for such distribution services. The New
Distribution Agreement and the Amended and Restated 12b-1 Plan will be
effective upon the closing of the Agreement.
11
<PAGE> 15
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" THE NEW INVESTMENT ADVISORY AGREEMENT.
- --------------------------------------------------------------------------------
ITEM 3. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
A majority of the members of the Board who are not "interested persons" of
the Fund has selected Coopers & Lybrand L.L.P., independent accountants, to
audit the books and records of the Fund for the current fiscal year. This firm
has served in this capacity for the Fund since it was organized and has no
direct or indirect financial interest in the Fund as independent accountants.
The selection of Coopers & Lybrand L.L.P. as independent accountants of the
Fund is being submitted to the stockholders for ratification. The affirmative
vote of a majority of the shares voted is necessary to ratify the selection of
the independent accountants. No representative of Coopers & Lybrand L.L.P. is
expected to be present at the Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" THE RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS.
- --------------------------------------------------------------------------------
OTHER MATTERS
The Board of Directors is not aware of any business other than as set
forth herein to come before the Meeting, but if such matters are properly
presented, the persons named in the enclosed form of proxy will vote thereon
according to their best judgment in the interest of the Fund. Failure of a
quorum to be present at the Meeting for the Fund will necessitate adjournment
of the Meeting and may cause additional expense.
STOCKHOLDERS' PROPOSALS
The Fund is not required to hold annual stockholders' meetings. However,
the Fund will hold special meetings as required or deemed desirable. Because
the Fund does not hold annual stockholders' meetings, the anticipated date of
the next stockholders' meeting cannot be provided. A stockholder proposal
intended to be presented at any subsequent meeting of the stockholders of the
Fund must be received by the Fund a reasonable time before the Board of
Directors makes the solicitation relating to such meeting in order to be
included in the Fund's Proxy Statement and form of proxy relating to that
meeting.
VOTING AND QUORUM
If the accompanying form of proxy is executed properly and returned in
time to be voted at the Meeting, the shares represented by it will be voted at
the Meeting in accordance with the instructions thereon and as the persons
named in the proxy determine on such other business as may come before the
Meeting. However, if no instructions are specified, executed proxies will be
voted FOR the election of each nominee for director and FOR the other
proposals.
The record holders of outstanding shares of each Portfolio are entitled to
one vote per share (and a fractional vote per fractional share) on all matters
presented before the Meeting. Stockholders who execute proxies may revoke them
at any time before they are voted, either by writing to the Fund or in
person at the time of the Meeting. If a proxy is not so revoked, the shares
represented by the proxy will be voted at the Meeting and any adjournments
thereof. Attendance by a stockholder at the Meeting does not in itself revoke
a proxy. Proxies given electronically transmitted instruments may be counted
if obtained pursuant to procedures designed to verify that such instructions
have been authorized. Item 1, Election of Directors,
12
<PAGE> 16
requires the vote of the holders of a majority of the total number of shares
outstanding and entitled to vote on the election of directors. Item 2, Approval
of the New Investment Advisory Agreement, requires the affirmative vote of "a
majority of the outstanding voting securities" of a Fund as defined in the 1940
Act, which means the affirmative vote of the lesser of (1) 67% of the voting
securities of a Fund present at the Meeting if more than 50% of the outstanding
shares of a present in person or by proxy or (2) more than 50% of the
outstanding voting securities of a Fund. Item 3, Ratification of Selection of
Independent Accountants, requires the affirmative vote of the majority of the
votes cast.
At least one-third of the shares of the Fund must be present, in person or
by proxy, in order to constitute a quorum. If a quorum is not present, the
stockholders of a majority of the shares of all Portfolios or an individual
Portfolio or Portfolios, as the case may be, present in person or by proxy and
entitled to vote shall have the power to adjourn the Meeting from time to time
as to all Portfolios or as to such individual Portfolio or Portfolios, as the
case may be, without notice other than announcement at the Meeting, until the
requisite number of shares entitled to vote at such Meeting shall be present.
In the event that a quorum is present at the Meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will be approved if the votes cast in favor
of such adjournment exceed the votes cast opposing such adjournment. It is
anticipated that the persons named as proxies would vote in favor of
adjournment. In tallying stockholder votes, abstentions and broker non-votes
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or persons entitled to vote and (ii)
the broker or nominee does not have discretionary voting power on a particular
matter) will be counted for determining whether a quorum is present for
purposes of convening the Meeting and will be considered present at the
Meeting. On Items 1 and 2, abstentions and broker non-votes will have the
effect of a vote against the proposal. On Item 3, abstentions and broker
non-votes will have no effect.
ANNUAL REPORT
A copy of the Fund's annual report and most recent semi-annual report are
available without charge upon request by writing the Fund at 111 East Wacker
Drive, Chicago, IL 60601, or by calling 1-800-527-3713.
By Order of the Board of Directors
Edward E. Sammons, Jr.
Secretary
Dated: September ____, 1997
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
13
<PAGE> 17
EXHIBIT A
HOLDERS OF MORE THAN 5% OF A PORTFOLIO'S COMMON STOCK
<TABLE>
<CAPTION>
PERCENT OF PORTFOLIO'S
NAME AND ADDRESS OF OUTSTANDING
BENEFICIAL OWNER NUMBER OF SHARES COMMON STOCK
- ---------------- ---------------- ----------------------
<S> <C> <C>
MONEY MARKET PORTFOLIO:
Windsor Federal Savings Bank 3,279,169.020 5.17%
250 Broad Street
Windsor, CT 06095
First Federal Savings & Loan Of East Hartford 14,451,468.170 22.79%
1007 Main Street
Manchester, CT 06040
Guaranty Savings & Homestead 3,316,849.450 5.23%
3798 Veterans Memorial Blvd.
Metairie, LA 70002
SHORT U.S. GOVERNMENT SECURITIES
PORTFOLIO:
Calumet Federal Savings & Loan Association of 644,451.102 5.83%
Chicago
1350 East Sibley Blvd.
Dolton, IL 60419
First Federal Savings & Loan Association of 1,422,195.081 12.86%
Lincolnton
320 East Main Street
Lincolnton, NC 28092
Intrust Bank, N.A. 606,964.827 5.49%
Transco & Co. - Trust Division
P.O. Box 48698
Wichita, KS 67201
ADJUSTABLE RATE MORTGAGE PORTFOLIO:
None
</TABLE>
A-1
<PAGE> 18
<TABLE>
<CAPTION>
PERCENT OF PORTFOLIO'S
NAME AND ADDRESS OF OUTSTANDING
BENEFICIAL OWNER NUMBER OF SHARES COMMON STOCK
- ---------------- ---------------- ----------------------
<S> <C> <C>
INTERMEDIATE MORTGAGE PORTFOLIO:
Fullerton Savings and Loan 1,415,257.744 16.78%
200 W. Commonwealth Avenue
Fullerton, CA 92632
Fox Valley Saving and Loan 584,538.224 6.93%
P.O. Box 1216
51 E. First Street
Fond Du Lac, WI 54935
Main Line Federal Savings Bank 1,353,737.980 16.05%
Two Aldwyn Center
Lancaster Avenue and Route 320
Villanova, PA 19085
First Federal Savings and Loan of Martinsville 936,722.297 11.11%
P.O. Box 684
Martinsville, VA 24114
First Financial Investments 541,817.214 6.43%
3800 Howard Hughes Parkway
Suite 1560
Las Vegas, NV 89109
U.S. GOVERNMENT MORTGAGE PORTFOLIO:
First Federal Savings Bank 935,162.019 18.38%
P.O. Box 6007
Sheridan, WY 82801
First Federal Bank, F.S.B. 982,067.616 19.31%
109 East Depot
P.O. Box 256
Colchester, IL 62326
Thomas County Federal Savings and Loan 278,258.791 5.47%
Association
P.O. Box 1197
Thomasville, GA 31799
Tri-County Federal Savings Bank 712,672.831 14.01%
P.O. Box 1057
Torrington, WY 82240
Crown Bank, F.S.B. 297,630.063 5.85%
105 Live Oaks Garden
Casselberry, FL 32707
St. Casimirs Savings Bank 515,373.355 10.13%
2703 Foster Avenue
Baltimore, MD 21224
</TABLE>
A-2
<PAGE> 19
EXHIBIT B
INVESTMENT ADVISORY AGREEMENT
-----------------------------
This Agreement made and entered into as of_________________, 1997, by and
between Asset Management Fund, Inc., a Maryland corporation (the "Fund"), and
Shay Assets Management, Inc., an Illinois _____________ (the "Adviser").
WITNESSETH:
WHEREAS, the Fund is an open-end diversified investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth the parties hereto agree as follows:
1. Advisory Services. The Fund hereby appoints Adviser to act as
investment adviser for the Fund and each series of the Fund listed on Schedule
A as attached hereto (a "Portfolio" or collectively, the "Portfolios"), and
Adviser accepts such appointment for the period and on the terms set forth in
this Agreement. The Fund, at its option, may also appoint the Adviser to act
as investment adviser to the Fund hereunder with respect to assets belonging to
any other Portfolio from time to time created by the Fund, but the Adviser
shall not be required to accept such appointment. Adviser shall furnish
investment research and advice to the Fund and shall manage the investment and
reinvestment of the assets of the Portfolios and their business affairs and
matters incidental thereto, all subject to the supervision of the Board of
Directors of the Fund, provisions of the Amended and Restated Articles of
Incorporation, as amended or supplemented, and By-laws of the Fund and any
resolutions, rules or regulations adopted by the Board of Directors of the
Fund. Adviser shall for all purposes herein provided be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Directors of the Fund from time to time, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent for the Fund. The Fund shall also be free to retain, at its own expense,
other persons to provide it with any services whatsoever including, but not
limited to, statistical, factual or technical information or advice. The
services of Adviser herein provided are not to be deemed exclusive and Adviser
shall be free to render similar services or other services to others.
2. Duties of Adviser. Subject to the general supervision of the Board of
Directors of the Fund, the Adviser shall, employing its discretion, manage the
investment operations of each Portfolio of the Fund and the composition of the
Portfolio of securities and investments (including cash) belonging to each
Portfolio of the Fund, including the purchase, retention and disposition
thereof and the execution of agreements relating thereto, in accordance with
the Fund's investment objective, policies and restrictions for such Portfolio
as stated in the Prospectus (as defined in section 3(f) of this Agreement) and
subject to the following understandings:
(a) The Adviser shall furnish a continuous investment program for each
Portfolio of the Fund and determine from time to time what investments or
securities will be purchased, retained or sold by the Fund with respect to
such Portfolio, and what portion of the assets belonging to such Portfolio
will be invested or held uninvested as cash.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Amended and Restated
Articles of Incorporation, the By-Laws and Prospectus of the Fund and with
the instructions and directions of the Board of Directors of the Fund and
will conform to and comply with the requirements of the 1940 Act and all
other applicable Federal and state laws and regulations.
B-1
<PAGE> 20
(d) The Adviser shall determine the securities to be purchased or sold
by the Fund with respect to each Portfolio and, as agent for the Fund on
behalf of such Portfolio, will effect Portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker and/or
dealer in such securities; in placing orders with brokers and/or dealers the
Adviser intends to seek the best price and execution for purchases and sales;
the Adviser shall also determine whether or not the Fund shall enter into
repurchase or reverse repurchase agreements with respect to such Portfolio.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of a Portfolio of the Fund as well as another
Portfolio or other Portfolios and/or as well as other customers, the Adviser
may, to the extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be sold or purchased in
order to obtain the best price and execution. 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 Adviser in a manner it considers to be
equitable and consistent with its fiduciary obligations to the Fund with
respect to each Portfolio and, if applicable, to such other customers.
(e) The Adviser shall maintain books and records with respect to the
securities transactions of each Portfolio of the Fund and shall render to the
Fund's Board of Directors such periodic and special reports as the Board of
Directors may reasonably request.
(f) The Adviser shall provide the Fund's custodian with respect to each
Portfolio on each Business Day (as defined in the Prospectus) with
information relating to all transactions concerning the assets belonging to
such Portfolio, except redemptions of and any subscriptions for Fund shares
of such Portfolios.
3. Delivery of Documents. The Fund delivered copies of each of the
following documents to the Adviser and will promptly notify it of and deliver
to it all future amendments and supplements, if any:
(a) Articles of Incorporation of the Fund, filed with the Department of
Assessments and Taxation of the State of Maryland, as presently in effect and
as amended or restated from time to time, being herein called the "Articles
of Incorporation."
(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, being herein called the "By-Laws").
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Adviser and approving the form of this
Agreement.
(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (No. 2-78808) (the "Registration Statement")
as filed with the Securities and Exchange Commission (the "Commission") on
August 12, 1982 relating to the Fund, and all amendments thereto.
(e) Notification of Registration of the Fund under the 1940 Act on Form
N-8A as filed with the Commission on August 12, 1982.
(f) Current prospectus or prospectuses of the Fund with respect to the
Portfolios (such prospectus or prospectuses as presently in effect and as
amended or supplemented from time to time, being herein called the
"Prospectus").
4. Employees of Adviser. The Adviser shall authorize and permit any of
its directors, officers and employees who may be elected as directors or
officers of the Fund to serve in capacities in which they are elected.
5. Books and Records. The Adviser shall keep the Fund's books and records
required to be maintained by it pursuant to section 2(e) of this Agreement.
The Adviser agrees that all records which it maintains for the Fund are the
property of the Fund and it will promptly surrender any of such records to the
Fund upon the Fund's request. The Adviser further agrees to preserve for the
period prescribed by Rule 31a-2 of the Commission under the 1940 Act any such
records as are required to be maintained by the Adviser with respect to the
Fund by Rule 31a-1 of the Commission under the 1940 Act.
B-2
<PAGE> 21
6. Expenses. During the term of this Agreement the Adviser will pay all
expenses (including without limitation the compensation of all its directors,
officers and employees serving as directors or officers of the Fund pursuant to
section 4 of this Agreement) incurred by it in connection with its activities
under this Agreement other than the cost of securities and investments
purchased for the Fund (including taxes ad brokerage commissions, if any).
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Fund shall pay the Adviser a fee, computed
daily and payable monthly, at the annual rate as set forth in the attached fee
schedule ("Schedule B") based upon the average net assets of each Portfolio.
Such fee as is attributable to each Portfolio shall be a separate (and not
joint or joint and several) obligation of each such Portfolio. The Fund shall
reduce the advisory fee to be paid to the Adviser by the amount of any advisory
fees paid to other investment companies relating to the Portfolios' investment
in such investment companies' securities.
8. Limitation on Expenses.
(a) In the event the daily ratio of Expenses (as defined in section 8(b)
below) to daily net assets with respect to a certain Portfolio on any day
exceeds 0.75 of 1% (such excess hereinafter called the "Excess Expense" of such
Portfolio), the compensation due to the Adviser under Schedule B for that day
shall be reduced, but not below zero, by an amount equal to the Excess Expense
of such Portfolio. The Portfolios to which this section 8(a) does not apply
are so noted on Exhibit B.
(b) For purposes of section 8(a) of this Agreement the term, "Expenses"
with respect to a Portfolio means the expenses of the Fund allocated to such
Portfolio in accordance with the Fund's Articles of Incorporation or a
resolution of the Fund's Board of Directors adopted pursuant thereto, including
such Portfolio's pro rata share, allocated as aforesaid, for the general
expenses of the Fund. Notwithstanding the foregoing, the Expenses of a
Portfolio shall include its pro rata share, allocated as aforesaid, of the fees
payable to the Adviser, to the distributor provided that the fees payable to
the distributor, for purposes of computing such Portfolio's Expenses shall not
exceed the fees of the distributor with respect to such Portfolio computed in
accordance with the fee rate (excluding any voluntary fee waivers) set forth in
the Fund's Prospectus with respect to such Portfolio as amended or supplemented
on the date of this Agreement), to the Fund's administrative agent, if any, to
the Fund's transfer agent, if any, and to the Fund's custodian; but the
Expenses of such Portfolio shall exclude any interest, taxes, brokerage
commissions and litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.
9. Limitation of Liability. The Adviser shall not be liable for any error
of judgment or mistake or law or for any loss suffered by any Portfolio of the
Fund in connection 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 in 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.
10. Effective Date and Term. This Agreement shall become effective as to
each subject Portfolio on___________________, 1997, or on such later date
specified for a Portfolio, provided that the Agreement is approved by a
majority of the outstanding voting shares (as defined in the 1940 Act) of
the subject Portfolio. This Agreement shall remain in effect until March 1,
1998, and shall continue in effect from year to year thereafter as to each
subject Portfolio, subject to termination as hereinafter provided, if such
continuance is approved at least annually by (a) a majority of the outstanding
voting shares (as defined in the 1940 Act) of each Portfolio or by vote of the
Fund's Board of Directors, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by vote of a majority of the Directors of
the Fund who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval. This Agreement may
be terminated by the Fund with respect to any or all Portfolios at any time,
without the payment of any penalty, by the Board of Directors of the Fund or by
vote of a majority of the outstanding voting shares (as defined in the 1940
Act) of the Fund or of the affected Portfolio or Portfolios, as the case may
be, on sixty (60) days' written notice to the Adviser, or by the Adviser with
respect to any or all Portfolios at any time, without the payment of any
penalty, on ninety (90) days' written notice to the Fund. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
B-3
<PAGE> 22
11. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those Directors of the Fund 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 amendment, and (b)
by vote of a majority of the outstanding voting shares (as defined in the 1940
Act) of the Fund or of the affected Portfolio or Portfolios, as the case may
be.
12. Notices. Notices of any kind to be given to the Adviser by the Fund
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 111 East Wacker Drive, Chicago, IL 60601, Attention: Executive Vice
President, or at such other address or to such other individual as shall be
specified by the Adviser to the Fund in accordance with this section 12.
Notices of any kind to be given to the Fund by the Adviser shall be in writing
and shall be duly given if mailed or delivered to the Fund at Asset Management
Fund, Inc., 111 East Wacker Drive, Chicago, IL 60601, Attention: President, or
at such other address or to such other individual as shall be specified by the
Fund to the Adviser in accordance with this section 12.
13. Authority. The directors have authorized the execution of this
Agreement in their capacity as directors and not individually and the Adviser
agrees that neither the stockholders nor the directors nor any officer,
employee, representative or agent of the Fund shall be personally liable upon,
nor shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Fund, that the
stockholders, directors, officers, employees, representatives and agents of the
Fund shall not be personally liable hereunder, and that it shall look solely to
the property of the Fund for the satisfaction of any claim hereunder.
14. Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Illinois.
15. Multiple Counterparts. This Agreement may be executed simultaneously
in several counterparts, each of which shall be deemed to be an original, but
which together shall constitute one and the same instrument.
16. Captions. The captions of the sections are for descriptive purposes
only and are not intended to limit or otherwise affect the content of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of , 1997.
-------
ASSET MANAGEMENT FUND, INC.
By:
-----------------------------------
Its: President
ATTEST:
By:
----------------------------------
Its: Secretary
SHAY ASSETS MANAGEMENT, INC.
By:
-----------------------------------
Its: Executive Vice President
ATTEST:
By:
----------------------------------
Its: Secretary
B-4
<PAGE> 23
SCHEDULE A
<TABLE>
<CAPTION>
DATE ADDED TO
PORTFOLIO AGREEMENT
- -------------------------------------------------------------------------------
<S> <C>
Short U.S. Government Securities Portfolio
U.S. Government Mortgage Securities Portfolio
Intermediate Mortgage Securities Portfolio
Money Market Portfolio
Adjustable Rate Mortgage (ARM) Portfolio
</TABLE>
ASSET MANAGEMENT FUND, INC.
By:
----------------------------------
Its:
ATTEST:
By:
----------------------------------
Its:
SHAY ASSETS MANAGEMENT, INC.
By:
----------------------------------
Its:
ATTEST:
By:
----------------------------------
Its:
B-5
<PAGE> 24
SCHEDULE B
<TABLE>
<CAPTION>
FEE SCHEDULE
FIRST SECOND THIRD OVER
PORTFOLIO $500 MILLION $500 MILLION $500 MILLION $1.5 BILLION
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short U.S. Government .25% .175% .125% .10%
Securities Portfolio
U.S. Government Mortgage .25% .175% .125% .10%
Securities Portfolio
Intermediate Mortgage .35% .275% .20% .10%
Securities Portfolio
FIRST SECOND OVER $1
$500 MILLION $500 MILLION BILLION
-----------------------------------------
Money Market Portfolio .15% .125% .10%
FIRST SECOND OVER
$3 BILLION $2 BILLION $5 BILLION
-----------------------------------------
Adjustable Rate Mortgage .45% .35% .25%
(ARM) Portfolio*
</TABLE>
- ----------------
*Expense limitation in section 8(a) is not applicable.
ASSET MANAGEMENT FUND, INC.
By:
----------------------------------
Its:
ATTEST:
By:
----------------------------------
Its:
SHAY ASSETS MANAGEMENT, INC.
By:
----------------------------------
Its:
ATTEST:
By:
----------------------------------
Its:
B-6
<PAGE> 25
EXHIBIT C
DISTRIBUTION EXPENSES FOR FISCAL YEAR ENDED OCTOBER 31,1996
<TABLE>
<CAPTION>
MONEY MARKET
PORTFOLIO AND SHORT
U.S. GOVERNMENT INTERMEDIATE U.S. GOVERNMENT
SECURITIES MORTGAGE SECURITIES MORTGAGE SECURITIES
PORTFOLIO ARM PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- ------------- -------------------- --------------------
<S> <C> <C> <C> <C>
ADVERTISING AND
PROMOTION $ 10,829 $ 40,213 $ 7,190 $ 2,908
PRINTING OF PROSPECTUSES
AND SALES MATERIALS 3,863 14,540 2,640 988
POSTAGE 3,248 12,065 2,169 799
COMPENSATION TO
UNDERWRITERS AND DEALERS 0 0 0 0
EMPLOYEE COMPENSATION
AND COSTS 440,181 1,644,309 303,098 103,788
STAFF TRAVEL AND EXPENSE 23,891 89,075 16,397 5,600
RENT AND OFFICE EXPENSE 102,363 380,394 68,679 24,922
PROFESSIONAL FEES 13,599 51,438 9,358 3,543
MISCELLANEOUS 2,532 9,300 1,682 578
---------- ---------- -------- --------
TOTAL $ 600,506 $2,241,334 $411,213 $143,126
========== ========== ======== ========
</TABLE>
C-1
<PAGE> 26
PROXY ASSET MANAGEMENT FUND, INC.
Money Market Portfolio
This proxy is solicited by the Board of Directors for use at a Special
Meeting of stockholders of Asset Management Fund, Inc. (the "Fund") to be held
in the 26th floor conference room in the offices of Shay Assets Management Co.,
111 East Wacker Drive, Chicago, IL 60601 on October 31, 1997 at __:__ p.m.
Central standard time.
The undersigned stockholder(s) hereby appoint(s) Edward E. Sammons, Jr.
and/or Robert T. Podraza the true and lawful attorney(s) of the undersigned,
each with full power of substitution, to appear and act as proxies of the
undersigned at the Special Meeting and at any adjournments thereof and to vote
all shares of the Money Market Portfolio held of record by the undersigned on
the record date for the meeting, or which the undersigned may be entitled to
vote, as set forth below:
(1) Election of Directors:
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) [ ] for all nominees listed
below [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH SUCH NOMINEE'S NAME IN THE LIST BELOW:
R.M. Amis, A.G. De Russo, D.F. Holland, L.T. Kendall, G.J.
Levy, R.D. Shay
(2) Approval of the new Investment Advisory Agreement between the
Fund and Shay Assets Management, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Coopers & Lybrand L.L.P. as
independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to consider and
act upon any other business as may properly come before the meeting
or any adjournment thereof.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2) AND (3) ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Please sign exactly as your name
appears on the proxy.
STOCKHOLDER WHOSE NAME APPEARS ON LEFT
By
------------------------------------
Signature(s) of authorized officer or
representative
--------------------------------------
--------------------------------------
Print name(s)
--------------------------------------
Print full title
Dated
---------------------------------
<PAGE> 27
PROXY ASSET MANAGEMENT FUND, INC.
Short U.S. Government Securities Portfolio
This proxy is solicited by the Board of Directors for use at a Special
Meeting of stockholders of Asset Management Fund, Inc. (the "Fund") to be held
in the 26th floor conference room in the offices of Shay Assets Management Co.,
111 East Wacker Drive, Chicago, IL 60601 on October 31, 1997 at __:__ p.m.
Central standard time.
The undersigned stockholder(s) hereby appoint(s) Edward E. Sammons, Jr.
and/or Robert T. Podraza the true and lawful attorney(s) of the undersigned,
each with full power of substitution, to appear and act as proxies of the
undersigned at the Special Meeting and at any adjournments thereof and to vote
all shares of the Short U.S. Government Securities Portfolio held of record by
the undersigned on the record date for the meeting, or which the undersigned
may be entitled to vote, as set forth below:
(1) Election of Directors:
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) [ ] for all nominees listed
below [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH SUCH NOMINEE'S NAME IN THE LIST BELOW:
R.M. Amis, A.G. De Russo, D.F. Holland, L.T. Kendall, G.J.
Levy, R.D. Shay
(2) Approval of the new Investment Advisory Agreement between the
Fund and Shay Assets Management, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Coopers & Lybrand L.L.P. as
independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to consider and
act upon any other business as may properly come before the meeting
or any adjournment thereof.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2) AND (3) ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Please sign exactly as your name
appears on the proxy.
STOCKHOLDER WHOSE NAME APPEARS ON LEFT
By
--------------------------------------
Signature(s) of authorized officer or
representative
--------------------------------------
--------------------------------------
Print name(s)
--------------------------------------
Print full title
Dated
---------------------------------
<PAGE> 28
PROXY ASSET MANAGEMENT FUND, INC.
Adjustable Rate Mortgage (ARM) Portfolio
This proxy is solicited by the Board of Directors for use at a Special
Meeting of stockholders of Asset Management Fund, Inc. (the "Fund") to be held
in the 26th floor conference room in the offices of Shay Assets Management Co.,
111 East Wacker Drive, Chicago, IL 60601 on October 31, 1997 at __:__ p.m.
Central standard time.
The undersigned stockholder(s) hereby appoint(s) Edward E. Sammons, Jr.
and/or Robert T. Podraza the true and lawful attorney(s) of the undersigned,
each with full power of substitution, to appear and act as proxies of the
undersigned at the Special Meeting and at any adjournments thereof and to vote
all shares of the Adjustable Rate Mortgage (ARM) Portfolio held of record by
the undersigned on the record date for the meeting, or which the undersigned
may be entitled to vote, as set forth below:
(1) Election of Directors:
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) [ ] for all nominees listed
below [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH SUCH NOMINEE'S NAME IN THE LIST BELOW:
R.M. Amis, A.G. De Russo, D.F. Holland, L.T. Kendall, G.J.
Levy, R.D. Shay
(2) Approval of the new Investment Advisory Agreement between the
Fund and Shay Assets Management, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Coopers & Lybrand L.L.P. as
independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to consider and
act upon any other business as may properly come before the meeting
or any adjournment thereof.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2) AND (3) ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Please sign exactly as your name
appears on the proxy.
STOCKHOLDER WHOSE NAME APPEARS ON LEFT
By
--------------------------------------
Signature(s) of authorized officer or
representative
--------------------------------------
--------------------------------------
Print name(s)
--------------------------------------
Print full title
Dated
---------------------------------
<PAGE> 29
PROXY ASSET MANAGEMENT FUND, INC.
Intermediate Mortgage Securities Portfolio
This proxy is solicited by the Board of Directors for use at a Special
Meeting of stockholders of Asset Management Fund, Inc. (the "Fund") to be held
in the 26th floor conference room in the offices of Shay Assets Management Co.,
111 East Wacker Drive, Chicago, IL 60601 on October 31, 1997 at __:__ p.m.
Central standard time.
The undersigned stockholder(s) hereby appoint(s) Edward E. Sammons, Jr.
and/or Robert T. Podraza the true and lawful attorney(s) of the undersigned,
each with full power of substitution, to appear and act as proxies of the
undersigned at the Special Meeting and at any adjournments thereof and to vote
all shares of the Intermediate Mortgage Securities Portfolio held of record by
the undersigned on the record date for the meeting, or which the undersigned
may be entitled to vote, as set forth below:
(1) Election of Directors:
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) [ ] for all nominees listed
below [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH SUCH NOMINEE'S NAME IN THE LIST BELOW:
R.M. Amis, A.G. De Russo, D.F. Holland, L.T. Kendall, G.J.
Levy, R.D. Shay
(2) Approval of the new Investment Advisory Agreement between the
Fund and Shay Assets Management, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Coopers & Lybrand L.L.P. as
independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to consider and
act upon any other business as may properly come before the meeting
or any adjournment thereof.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2) AND (3) ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Please sign exactly as your name
appears on the proxy.
STOCKHOLDER WHOSE NAME APPEARS ON LEFT
By
--------------------------------------
Signature(s) of authorized officer or
representative
--------------------------------------
--------------------------------------
Print name(s)
--------------------------------------
Print full title
Dated
---------------------------------
<PAGE> 30
PROXY ASSET MANAGEMENT FUND, INC.
U.S. Government Mortgage Securities Portfolio
This proxy is solicited by the Board of Directors for use at a Special
Meeting of stockholders of Asset Management Fund, Inc. (the "Fund") to be held
in the 26th floor conference room in the offices of Shay Assets Management Co.,
111 East Wacker Drive, Chicago, IL 60601 on October 31, 1997 at __:__ p.m.
Central standard time.
The undersigned stockholder(s) hereby appoint(s) Edward E. Sammons, Jr.
and/or Robert T. Podraza the true and lawful attorney(s) of the undersigned,
each with full power of substitution, to appear and act as proxies of the
undersigned at the Special Meeting and at any adjournments thereof and to vote
all shares of the U.S. Government Mortgage Securities Portfolio held of record
by the undersigned on the record date for the meeting, or which the undersigned
may be entitled to vote, as set forth below:
(1) Election of Directors:
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
marked to the contrary below) [ ] for all nominees listed
below [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH SUCH NOMINEE'S NAME IN THE LIST BELOW:
R.M. Amis, A.G. De Russo, D.F. Holland, L.T. Kendall, G.J.
Levy, R.D. Shay
(2) Approval of the new Investment Advisory Agreement between the
Fund and Shay Assets Management, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Coopers & Lybrand L.L.P. as
independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to consider and
act upon any other business as may properly come before the meeting
or any adjournment thereof.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2) AND (3) ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Please sign exactly as your name
appears on the proxy.
STOCKHOLDER WHOSE NAME APPEARS ON LEFT
By
--------------------------------------
Signature(s) of authorized officer or
representative
--------------------------------------
--------------------------------------
Print name(s)
--------------------------------------
Print full title
Dated
---------------------------------
