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
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240-14a-11(c) or 240.14a-12
[ ] Confidential, for use of the Commission
only (as permitted by Rule 14a-6(e)(2)
LMH Fund, Ltd.
(Name of Registrant as Specified In Its Charter)
LMH Fund, Ltd.
(Name of Person(s) Filing Proxy Statement)
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): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total Fee Paid: N/A
[ ] Fee paid previously 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 date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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Preliminary Copy
LMH FUND, LTD.
560 Hudson St., 2nd floor
Hackensack, NJ 07601
(212) 486-2004
March , 1997
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
LMH FUND, LTD. on April , 1997 at 2:00 p.m. Eastern time at the
offices of Matrix Asset Advisors, 444 Madison Ave., Suite 302, New York,
NY 10022.
The matters to be acted upon at the meeting are described in the
enclosed Notice of Meeting and Proxy Statement. We urge you to consider
these matters carefully and to complete, sign, and return the enclosed
proxy card(s) in the accompanying postage paid envelope.
Your vote is very important. Please complete, sign and return the
enclosed proxy card so that your shares will be represented. By doing
so promptly, you will help avoid the expense of follow-up solicitations
that may otherwise be necessary to obtain a quorum. If you later decide
to attend the meeting, you may revoke your proxy at that time and vote
your shares in person.
Sincerely,
David A. Katz, Vice President, Chief Investment Officer, and
Secretary
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QUESTIONS AND ANSWERS
Q. What is the purpose of this proxy solicitation?
A. The purpose of this proxy is to ask you to vote on two issues:
(1) to approve a new investment advisory agreement with Matrix Asset
Advisors ("Matrix"), the Fund's current Sub-Advisor and (2) to elect a
Board of five directors.
Q. What changes in directors and officers will occur if the
proposals are approved?
A. Mr. Leonard Heine, Chairman and President of the Fund and of
Heine Management Group ("Heine Management"), the Fund's investment
advisor since its inception in 1983, is retiring from management of the
Fund and the Advisor is ceasing operations. Mr. David A. Katz,
President of Matrix, the Fund's Sub-Advisor, and Vice President,
Secretary, and Chief Investment Officer of the Fund, is standing for
election as a Director, and if elected, it is anticipated that he will
become President and Treasurer of the Fund. Mr. Heine will retire as a
director of the Fund.
Mr. Robert Rosencrans, currently a director, is standing for
re-election, and two new candidates for director are proposed. Mr.
Richard S. Harman is not standing for re-election.
Q. Are there changes in the proposed investment advisory
agreement?
A. The terms of the proposed investment advisory agreement do not
materially differ from the existing investment advisory agreement. The
proposed agreement will be between the Fund and Matrix and the
investment advisory fee will be paid to Matrix as investment advisor.
Heine Management will cease operations. It is proposed that the fee
rate payable will remain the same, i.e., 1.00% of the Fund's average
daily net assets annually. If the Proposed Agreement is approved, it is
anticipated that the Fund's name will be changed to "Matrix/LMH Value
Fund."
Q. Will the Fund's operating expenses be changed as a result
of the proposed agreement?
A. The Fund's operating expense ratio has continued to decline,
dropping from 2.50% of average net assets at the end of the June 30,1994
fiscal year, to 1.84% at the close of the June 30, 1996 fiscal year, to
1.35% as of December 31, 1996 (reflecting advisory and sub-advisory fee
reductions described below). No fee rate or expense items are proposed
to be changed. Since Matrix became Sub-Advisor in July, 1996, it has
waived its Sub-Advisory fee and Heine Management has waived all but 25%
of its advisory fee. If the Agreement is approved, Matrix will be
entitled to receive an investment advisory fee at the rate of 1.00%
annually. This fee rate is identical to the fee rate payable to the
Advisor under the current agreement. However, Matrix has undertaken to
waive its fees and limit Fund operating expenses so that they will not
exceed 1.65% annually for the remainder of calendar year 1997. This is
a voluntary undertaking on the part of Matrix. If expenses were to
exceed that amount, Matrix would waive all or a portion of its advisory
fee or pay certain Fund operating expenses to assure that the limitation
is not exceeded. While it is expected that if the Fund increases in
size, operating expenses will continue to decline, a decrease in assets
or other circumstances could cause expenses to increase, but not beyond
1.65% during 1997. Preliminary Copy LMH FUND, LTD. 560 Hudson St., 2nd
floor Hackensack, NJ 07601 (212) 486-2004
<PAGE>
Preliminary Copy
LMH FUND, LTD.
560 Hudson St., 2d floor
Hackensack, NJ 07601
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on
April , 1997
TO THE SHAREHOLDERS:
A Special Meeting of Shareholders of the LMH Fund, Ltd. (the
"Fund") will be held on April , 1997 at 2:00 pm Eastern time at
the offices of Matrix Asset Advisors, 444 Madison Ave., Suite 302,
New York, NY 10022 for the following purposes:
1. To consider approval of a proposed Investment Advisory
Agreement between the Fund and Matrix Asset Advisors, Inc.;
2. To elect four members of the Board of Directors to serve
indefinite terms;
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on February 24,
1997 are entitled to notice of the meeting and to vote at the
meeting or any adjournment thereof. Shareholders who attend the
meeting may vote in person. Shareholders who do not expect to
attend the meeting are urged by the Board of Trustees to complete,
date, sign, and return the enclosed proxy card(s) in the enclosed
postage-paid envelope. It is important that you return your signed
proxy promptly so that a quorum may be ensured.
David A. Katz, Vice President, Chief Investment Officer, and
Secretary
March , 1997
<PAGE>
Preliminary Copy
LMH FUND, LTD.
560 Hudson St., 2d floor
Hackensack, NJ 07601
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
to be held on April , 1997
This Proxy Statement is being furnished to shareholders of LMH
Fund, Ltd. (the "Fund") in connection with the solicitation of
proxies by the Board of Directors (the "Board") of the Fund.
Proxies solicited will be used at the Special Meeting of
shareholders of the Fund to be held on [Insert Date of Shareholder
Meeting] and any adjournment thereof. This Proxy Statement
describes matters to be voted upon at the meeting. Shareholders of
record of the Fund at the close of business on February 28 , 1997
(the "Record Date") will be entitled to vote at the meeting. On
the Record Date, the Fund had net assets of $
and there were shares of the Fund outstanding. It
is expected that this proxy statement and accompanying proxy card
will first be sent to shareholders of the Fund on or about March
21, 1997.
Each shareholder will be entitled to one vote for each share of the
Fund held on the Record Date; any fractional share is entitled to
a proportional fractional vote. If the accompanying Proxy Card is
properly executed and returned, shares represented by it will not
be counted but will be voted at the meeting. The persons named as
proxies on the enclosed proxy card will vote shares represented by
such proxy cards in accordance with your direction as indicated
thereon. If no voting instructions are indicated, shares will be
voted in favor of the Proposals. However, abstentions and broker
non-votes will be counted in determining whether a quorum is
present and thus will have the same effect as a vote against the
Proposals. Shares will be voted in accordance with the
recommendation of the Board with regard to any matters not known at
this time to be presented at the meeting that properly come before
it, election of persons as directors, if any of the nominees named
herein are unable to serve, and matters incident to the conduct of
the meeting.
A shareholder may revoke a proxy previously given by executing
another, later dated, proxy, by giving written notice of revocation
to the Fund at the address indicated above prior to the time the
proxy is voted or by attending the meeting and voting in person at
that meeting. More than 50% of the total outstanding shares of the
Fund must be present (in person or by proxy) in order to conduct
business at the meeting. The affirmative vote of the holders of a
majority of the outstanding voting securities of the Fund on the
Record Date is necessary to approve Proposal 1. As defined by the
Investment Company Act of 1940 (the "1940 Act"), a "majority of the
outstanding voting securities" of the Fund means the lesser of (1)
67% of the shares of the Fund present at a meeting of shareholders
if the owners of more than 50% of the shares of the Fund then
outstanding are present in person or by proxy or (2) more than 50%
of the outstanding voting securities of the Fund.
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The solicitation of proxies will be made primarily by mail.
Employees or agents of Matrix Asset Advisors, Inc.("Matrix") the
Fund's Sub-Advisor and proposed Investment Advisor, may also
solicit proxies by telephone or other electronic means, or in
person, but will not receive any special compensation for these
activities. The cost of soliciting proxies in connection with the
meeting will be paid by the Fund. Persons holding shares of the
Fund as nominees will, upon request, be reimbursed for their
reasonable expenses incurred in sending soliciting materials to
their principals. In the event that a quorum is not present at the
meeting, or in the event that a quorum is present but sufficient
votes to approve the Proposals are not received, the persons named
as proxies may propose one or more adjournments to permit further
solicitation of proxies. In determining whether to adjourn the
meeting, the following factors may be considered: the nature of
the proposals that are the subject of the meeting, the percentage
of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation, and the information
to be provided to shareholders with respect to the reasons for the
further solicitation. Approval of any such proposal to adjourn
will require the affirmative vote of a majority of those shares
represented at the meeting in person or by proxy. A vote may,
however, be taken on any proposal in this proxy statement prior to
any adjournment, if sufficient votes have been received for
approval. Proxies received which voted in favor of the proposals
will be voted in favor of any such adjournment and proxies received
which voted against such proposals will be voted against such
adjournment.
PROPOSAL 1: APPROVAL OF AN INVESTMENT ADVISORY AGREEMENT WITH
MATRIX ASSET ADVISORS, INC.
Since the Fund's inception in 1983, Heine Management has served as the
Fund's investment advisor pursuant to an Investment Advisory Agreement
("current agreement"). During the past year, Mr. Leonard Heine, who has
owned and controlled the Advisor from its inception and has been the
Fund's portfolio manager, informed the Board of Directors that he
intended to retire from active management of the Fund on or about
year-end 1996, and recommended to the current Board of Directors that it
consider possible replacement Advisors. The Advisor recommended that
Matrix Asset Advisors, Inc. be appointed as Sub-Advisor to the Fund for
an interim period, during which time Matrix agreed to waive any
sub-advisory fees payable from the Advisor and the Advisor agreed to
waive payment of fees payable under the current Investment Advisory
Agreement in excess of 25% of the net advisory fees due thereunder.
The Board of Directors reviewed the qualifications of Matrix and the
terms of the proposed Sub-Advisory Agreement and at a meeting held on
July 3, 1996, approved the Sub-Advisory Agreement whereby Matrix became
Sub-Advisor to the Fund and Mr. David A. Katz, President and co-owner of
Matrix, was appointed as Vice President, Secretary, and Chief
Investment Officer of the Fund and became co-manager of the Fund's
portfolio. Since that date Matrix has served, and continues to serve,
as Sub-Advisor to the Fund without charge.
The Advisor's recommendation to the Board that Matrix be retained
as Sub-Advisor stemmed principally from the Advisor's belief that
in view of the Fund's small size and Mr. Katz' familiarity with the
Fund and with Heine Management's investment approach, in light of
his previous association with principals of Heine Management early
in his career in the investment management business, it would be
beneficial, in light of Matrix's willingness to provide such
assistance, to have access to its
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experienced professional staff and greater resources. Among the
factors the Board considered were the experience of Matrix's key
investment management personnel, its investment performance record
and the quality of services expected to be provided to the Fund by
Matrix. In addition, the Board considered the agreements of Matrix
and Heine Management with respect to fee waivers.
Based on the factors listed above, principally the familiarity with
and consistency of Matrix's investment management approach with
that of the Fund, and the experience to date with Matrix serving as
Sub-Advisor, including its continuing willingness to consider fee
reductions, the Board of Directors at a meeting held on February
11, 1997 approved an Investment Advisory Agreement between the Fund
and Matrix as Investment Advisor, subject to approval by
shareholders at this meeting as Proposal No. 1. The Proposed
Agreement is set forth at Exhibit A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
PROPOSAL NO. 1.
The terms of the proposed Investment Advisory Agreement ("proposed
agreement") with Matrix do not differ materially from the existing
Investment Advisory Agreement with the Advisor. Both agreements
provide in essence that the Advisor (i) furnishes the Fund with
a continuous investment program and strategy with respect to the
investment of the Fund's assets, including the provision of advice
on buying and selling securities and other investments and,
management of the investments of the Fund, (ii) furnishes the Fund
with office space (iii) provides or arranges for the provision of
administrative services and most of the personnel needed by the
Fund. Both the current and proposed Agreements provide that the
Fund is to pay the Advisor a monthly management fee (accrued daily)
based on the average daily net assets of the Fund at the rate of
1.00% annually.
Matrix has waived any fees payable to it under the Sub-Advisory
Agreement from its inception on July 3, 1996 to date, and the
Advisor has waived all but 25% of the net advisory fees otherwise
due to it from July 3, 1996 to date. If the proposed agreement is
approved, the full advisory fee rate will be accrued and payable
to Matrix as Investment Advisor. However, Matrix has voluntarily
undertaken to limit the Fund's annual ratio of operating expenses
to average net assets ("expense ratio") to 1.65% for the remainder
of calendar year 1997, and as a result may waive all or a portion
of the advisory fees to which it would otherwise be entitled, and
may in addition reimburse the Fund for other operating expenses in
order to meet this limitation.
Both the current and proposed agreements further provide that the
Fund bears all expenses incurred in the operation of the Fund that
are not specifically assumed by the Advisor under the Advisory
Agreement. These expenses include, but are not limited to,
custodial and transfer agency fees, brokerage commissions,
registration fees under the Federal securities laws and notice
filing fees payable to states, taxes, legal, accounting, and
auditing expenses. The current and proposed agreements are
terminable at any time, without the payment of any penalty by the
Fund, upon the vote of the Board or a majority of the outstanding
voting securities of the Fund and on 60 days' written notice to the
Advisor, or by the Advisor at any time, without payment of any
penalty, on 60 days'
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written notice to the Fund. In addition, the Agreements terminate
in the event of assignment as such term is defined in the 1940 Act.
Matrix and the Advisor. Matrix is a registered investment advisor
which was founded in 1986. It provides investment advisory
services to individuals, endowment, and pension accounts with a
value totaling over $400 million. The two principal shareholders
of Matrix are Mr. David A. Katz, Vice President, Chief Investment
Officer and Secretary of the Fund and Mr. Morley Goldberg. Matrix
is located at 444 Madison Avenue, New York, NY 10022. The Adviser
has provided investment advisory services to the Fund since its
inception in 1983 and formerly provided investment management
services to individual and institutional investors. It is
controlled by Mr. Leonard M. Heine, Jr.
Matrix and Mr. Heine have entered into a consulting agreement
which provides that for a term of forty-two months, Mr.Heine will
act as a consultant to the Adviser.As such he will render such
services for the beneifit of the Fund to Matrix as Matrix may
request, based on his experience, marketing expertise and
knowledge of the Fund's operations. For such services, Mr. Heine
will be entitled to receive from Matrix a monthly fee equal to (i)
an amount equal to 25% of the management fees which would have been
payable to the Advisor under the terms of the existing agreement
with the Fund for the first 30 months of the 42 month term and (ii)
20% of such management fees for the last 12 months of such term.
If Matrix receives advisory fees during the initial thirty month
period in excess of the amounts payable to Mr. Heine under this
arrangement, the consulting agreement provides that he shall
receive 35% of such management fees, subject to an overall limit of
$57,750 for any 12 month period.
Section 15(f) of the Investment Company Act of 1940 sets forth
certain conditions regarding the receipt of any amounts or benefits
in connection with a change in control of an investment adviser.
Although no change in control, assignment or sale of an interest in
the Adviser will occur as a result of the proposed arrangements,
the Fund will observe the conditions set forth in Section 15(f),
i.e., (i ) no "unfair burden" can be imposed on the Fund as a result
of the transaction, or any express or implied terms, , conditionsor
understandings applicable thereto, and (ii) at least 75% of the
Board of Directors must not be "interested persons" within the
meaning of Section 15(f) of the 1940 Act for the three year period
following the consummation of the transaction.
In the event that shareholders do not approve the proposed
agreement, the Advisor and Sub-Advisor will continue to serve as
such under the current agreement pending the Board's negotiation of
new agreements with other advisory or sub-advisory organizaztions
or making other appropriate arrangements, in either event subject
to approval by shareholders.
The Board has approved a change in the name of the Fund to "Matrix/LMH
Value Fund" contingent upon approval of the Proposed Agreement.
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Set forth below is a table illustrating the current and pro forma
fees, assuming approval of the proposed agreement.
COMPARATIVE FEE TABLE
Annual Fund Operating Expenses
(as a percentage of average net assets)
Existing Fees Proposed Fees
Management Fees 1.00% 1.00%
12b-1 Fees None None
Other Expenses (after waiver) 0.84 0.65%*
Total Fund Operating 1.84% 1.65%*
Expenses* (after waiver)
*1.84% was the Fund's actual operating expense ratio for the fiscal year
ended June 30, 1996. The Fund's annualized operating expense ratio for
the semi-annual period ended December 31, 1996, after waivers of the
sub-advisory fee and partial waiver of the advisory fee, was 1.35%. If
Fund assets increase and operating expenses remain stable, it is
expected that the operating expense ratio will remain at that level or
decline, although there can be no assurance that this will be the case.
However, in the event the new Investment Advisory Agreement is
approved, Matrix has agreed that it will waive its fees and/or
otherwise limit the Fund's operating expenses through the remainder of
1997 so that in no case will they exceed 1.65% of average net assets.
Example
This table illustrates the net transaction and operating expenses that
would be incurred by an investment in the Fund over different time
periods assuming a $1,000 investment, a 5% annual return, and redemption
at the end of each time period.
1 year 3 years 5 years 10 years
Existing Fee $19 $58 $100 $216
Proposed Fee $17 $52 $ 90 $197
The purpose of this example and the table is to assist investors in
understanding the various costs and expenses of investing in shares
of the Fund. The example above should not be considered a
representation of past or future expenses of the Fund. Actual
expenses may vary from year to year and may be higher or lower than
those shown above.
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PROPOSAL 2. ELECTION OF DIRECTORS
The present Board of Directors consists of Mr. Leonard M. Heine, Jr.,
President and Treasurer of the Fund and of the Advisor, and Mr. Richard
S. Harman and Mr. Robert Rosencrans, each of whom is not an "interested
person" within the meaning of the Investment Company Act of 1940. It is
proposed that the Board of Directors be increased from three to four
persons. Mr. Heine will not stand for re-election and will retire as a
director of the Fund. Mr. Harman is not standing for election. Mr.
Rosencrans is standing for re-election. Mr. David A. Katz, President of
Matrix and Vice President, Chief Investment Officer and Secretary of the
Fund is a nominee for Director, together with two additional nominees
who are not "interested persons." It is anticipated that Mr. Katz will
be elected as President and Treasurer of the Fund. Each of the current
Board members has been present at the meetings held during the past
fiscal year. The directors who are not interested persons of the Fund
serve as the Fund's audit committee, which met once in the past fiscal
year. The audit committee reviews reports prepared by the Fund's
independent public accountants, including reports on the Fund's internal
control procedures, reviews and makes recommendations for audit services
and fees charged for such services and makes such recommendations as it
deems necessary.
The nominees for election as Board members, their ages and a
description of their principal occupations for the past five years
are listed in the table below. All nominees have consented to serve
if elected. (*Denotes an "interested person" within the meaning of
the Investment Company Act of 1940.)
*Mr. David A. Katz, Age 35
Mr. Katz is President of Matrix, with which he has been associated
since 1986. He has served as Vice President, Chief Investment
Officer, and Secretary of the Fund since July, 1996.
Mr. Robert Rosencrans, Age 69
Mr. Rosencrans has been President of Columbia International, Inc., since
1984.
Mr. T. Michael Tucker, Age 54.
Mr. Tucker is the owner of T. Michael Tucker, a certified public
accounting firm which he established in 1977.
Mr. Larry D. Kieszek, Age 46.
Mr. Kieszek is Managing Partner of Purvis, Gray & Company, a certified
public accounting firm with which he has been associated since 1974.
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During the fiscal year ended June 30, 1996 no directors received
fees, compensation, reimbursement of expenses, retirement or other
benefits.
The candidates receiving the affirmative vote of a plurality of the
votes cast for election of Board members at the Meeting will be
elected, provided that a quorum is present.
BENEFICIAL OWNERS
As of the date of this proxy statement, the following persons own
of record and beneficially more than 5% of the Fund's outstanding
shares of common stock: Richton International Corp., Madison, NJ
07940 __.__%; Andrew Levitt, P. Whalen-Levitt, Jt Ten, Greensboro,
NC 27403, __.__% In addition, directors, nominees for director and
all officers and directors as a group owned less than 1% of the
Fund's outstanding shares of common stock.
ANNUAL MEETINGS
As a general matter, the Fund does not hold regular annual or other
meetings of Shareholders. Should such meetings be scheduled,
shareholders who wish to present a proposal for action at any such
meeting should submit the proposal to the Secretary of the Fund, at
444 Madison Ave., New York, NY 10022, to be considered for
inclusion in proxy materials for such a meeting.
The Fund will furnish without charge, a copy of the most recent
annual report to shareholders of the Fund on request. Any requests
should be directed to the Fund at (212) 486-2004 or sent to the
Fund at the address in the preceding paragraph.
OTHER BUSINESS
Management knows of no business to be presented to the meeting
other than the matters set forth in this proxy statement.
By order of the Board of Directors,
March , 1997
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Exhibit A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 1997 by and
between MATRIX/LMH VALUE FUND, LTD. a Maryland corporation
(hereinafter referred to as the "Fund"), and MATRIX ASSET ADVISORS,
INC., a Maryland corporation (hereinafter referred to as the "Advisor").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a diversified
open-end management investment company registered under the Investment
Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, the Advisor is engaged principally in rendering
management and investment advisory services and is registered as an
investment Advisor under the Investment Advisors Act of 1940; and
WHEREAS, the Fund desires to retain the Advisor to provide
management and investment advisory services to the Fund in the manner
and on the terms hereinafter set forth; and
WHEREAS, the Advisor is willing to provide management and
investment advisory services to the Fund on the terms and
conditions hereafter set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, the Fund and the Advisor hereby
agree as follows:
ARTICLE I
Duties of the Advisor
The Fund hereby employs the Advisor to act as investment
advisor of the Fund and to furnish the management and investment
advisory services described below, subject to the policies of the Fund
and the review by, and overall consent of, the Board of Directors of
the Fund, for the period and on the terms and conditions set forth in
this Agreement. The Advisor hereby accepts such employment and agrees
during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein set
forth for the compensation provided for herein. The Advisor shall for
all purposes herein be deemed to be an independent
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contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for, or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
(a) Management Services. The Advisor shall perform the
management services necessary for the operation of the Fund as
hereinafter provided. The Advisor shall generally monitor the
Fund's compliance with investment policies and restrictions as set
forth in its currently effective Prospectus and Statement of
Additional Information relating to the shares of the Fund under the
Securities Act of 1933, as amended (each a "Prospectus" and
"Statement of Additional Information," respectively). The Advisor
shall provide the Fund with such other services as the Advisor,
subject to review by the Directors, shall from time to time
determine to be necessary or useful to perform its obligations
under this Agreement. The Advisor shall make reports to the
Directors of its performance of obligations hereunder and furnish
advice and recommendations with respect to such other aspects of
the business and affairs of the Fund as it shall determine to be
desirable.
(b) Investment Advisory Services. With respect to the
Fund:
(1) The Advisor shall provide such investment research,
advice and supervision as the Fund may from time to time consider
necessary for the proper supervision of the assets of the Fund, shall
furnish continuously an investment program for the Fund, and shall
determine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held in
the various securities in which the Fund invests, options, futures,
options on futures or cash, subject always to the restrictions of the
Articles of Incorporation and By-Laws of the Fund, as amended from time
to time, the provisions of the Investment Company Act and the statements
relating to the Fund's investment objectives, investment policies and
investment restrictions as the same are set forth in the Fund's
currently effective Prospectus and Statement of Additional Information.
Should the Directors at any time, however, make any definite
determination as to investment policy and notify the Advisor thereof in
writing, the Advisor shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified
that such determination has been revoked.
(2) To the extent applicable, the Advisor shall
also make decisions for the Fund as to foreign currency matters and
make determinations as to foreign exchange contracts.
(3) The Advisor shall make decisions for the Fund
as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's
portfolio securities shall be exercised.
(4) The Advisor shall take, on behalf of the Fund,
all actions which it deems necessary to implement the Fund's
investment policies, and in particular to place all orders for the
purchase or sale of portfolio securities for the Fund's account
with brokers or dealers selected by it, and to that end, the
Advisor is authorized as the agent of the Fund to give instructions
to the custodian of the Fund as to deliveries of securities and
payments of cash for the account of the Fund.
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(5) In connection with the selection of such
brokers or dealers and the placing of such orders with respect to
assets of the Fund, the Advisor is directed at all times to seek to
obtain execution and prices within the policy guidelines determined
by the Directors and set forth in the Fund's Prospectus and
Statement of Additional Information. Subject to this requirement
and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions
of law, the Advisor may select brokers or dealers with which it or
the Fund is affiliated (if any).
ARTICLE II
Allocation of Charges and Expenses
(a) The Advisor. The Advisor assumes and shall pay for
maintaining the staff and personnel necessary to perform its
obligations under this Agreement, shall pay all compensation
relating to service to the Fund of Officers and Directors of the
Fund who are affiliated persons of the Advisor, and shall pay the
expenses of the Fund incurred in connection with the continuous
offering of Fund shares.
(b) The Fund. Except as described in paragraph (a) hereof,
the Fund assumes and shall pay all other Fund expenses, including, but
not limited to: taxes, expenses for legal and auditing services, costs
of printing proxies, stock certificates, shareholder reports,
Prospectuses and Statements of Additional Information, charges of the
custodian, any sub-custodian and transfer agent, expenses of portfolio
transactions, expenses of redemption of shares, Securities and Exchange
Commission fees, expenses of registering the shares under federal laws,
making state filings and registering or qualifying under foreign laws,
fees and actual out-of-pocket expenses of Directors who are not
affiliated persons of the Advisor, accounting and pricing costs
(including the daily calculation of the net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or
non-recurring expenses, and other expenses properly payable by the Fund.
ARTICLE III
Compensation of the Advisor
(a) Investment Advisory Fee. For the services rendered, the
facilities furnished and expenses assumed by the Advisor, the Fund
shall pay to the Advisor at the end of each calendar month a fee,
commencing on the day following effectiveness hereof, based upon the
average daily value of the net assets of the Fund, as determined and
computed in accordance with the description of the determination of net
asset value contained in the Prospectus and Statement of Additional
Information. The fee is payable by the Fund at the annual rate of 1.00%
of the Fund's average daily net assets.
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If this Agreement becomes effective subsequent to the first
day of a month or shall terminate before the last day of a month,
compensation for that part of the month that this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fee
as set forth above. Subject to the provisions of subsection (b) hereof,
payment of the Advisor's compensation for the preceding month shall be
made as promptly as possible after completion of the computations
contemplated by subsection (b) hereof. During any period when the
determination of net asset value is suspended by the Directors, the net
asset value of a share as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset value at
the close of each succeeding business day until it is again determined.
ARTICLE IV
Limitation of Liability of the Advisor
The Advisor shall not be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or
for any act or omission in the management of the Fund, except for
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of
its obligations and duties hereunder. As used in this Article IV,
the term "Advisor" shall include any directors, officers and
employees of the Advisor.
ARTICLE V
Activities of the Advisor
The services of the Advisor to the Fund are not to be deemed
to be exclusive, and the Advisor is free to render services to other
investment advisory clients. It is understood that Directors, officers,
employees and shareholders of the Fund may become interested in the
Advisor, as directors, officers, employees and shareholders or
otherwise, and that directors, officers, employees and shareholders of
the Advisor are or may become similarly interested in the Fund.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first
above written and shall remain in force with respect to the Fund until
__________, 1999 and thereafter, but only so long as such continuance is
specifically approved with respect to the Fund at least annually by:
(i) the Directors, or by the vote of a majority of the outstanding
voting securities of the Fund, and (ii) a majority of those Directors
who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on
such approval.
This Agreement may be terminated at any time without the
payment of any penalty, by the Directors or by the vote of a
majority of the outstanding voting securities of the Fund, or by
the Advisor, on sixty days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment.
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ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by: (i) the vote of a majority
of outstanding voting securities of the Fund, and (ii) a majority
of those Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person" and "interested person,"
when used in this Agreement, shall have the respective meanings
specified in the Investment Company Act and the rules thereunder,
subject, however, to such exemptions as may be granted by the Securities
and Exchange Commission under said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with laws
of the State of New York and the applicable provisions of the
Investment Company Act. To the extent that the applicable laws of
the State of New York, or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
MATRIX/LMH VALUE FUND, INC.
By:
Name:
Title:
MATRIX ASSET ADVISORS, INC.
By:
Name:
Title:
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Preliminary Copy
Please mark, date and return this Proxy by April , 1997.
Proxy Solicited on Behalf of the Board of Directors of the
LMH Fund for the Meeting of Shareholders to be held on
April , 1997
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ADOPTION OF ALL PROPOSALS
LMH FUND, LTD.
The undersigned hereby appoints Leonard M. Heine and David A. Katz
and each of them, his/her true and lawful agents and proxies with
full power of substitution in each to represent the undersigned at
the Meeting of Shareholders to he held on April , 1997 at the
offices of the Fund and at any adjournments thereof, on all matters
coming before said meeting.
(1) Approval of the Advisory Agreement between the Fund and
Matrix Asset Advisors, Inc.
_____FOR _____AGAINST _____ABSTAIN
(2) Election of 4 members of the Board of Directors
For all nominees__ Withhold authority for all nominees ___ .
To withhold authority for any individual nominees, strike a
line through the nominee's name listed below.
David A. Katz; Robert M. Rosencrans; T. Michael Tucker; Larry D. Kieszek
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no decision is
made, this proxy will be voted FOR proposals 1 and 2.
Please sign exactly as name or names appear hereon. Joint owners
should each sign personally. Corporate and partnership accounts
should be signed in the full corporate or partnership name by an
authorized officer or partner. Fiduciaries should give full titles
as such.
______________________________
Signature
______________________________
Signature
PLEASE INDICATE IF YOU PLAN TO ATTEND THE MEETING ______
Dated ______________, 1997
