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Z
Seven
DISTRIBUTION
REINVESTMENT
PLAN
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Dear Shareholder,
We are pleased that you have chosen to invest in Z-Seven Fund, Inc. and are
happy to offer you a Plan for the reinvestment of your dividends and capital
gains distributions in shares of the Fund. The features of the Plan are
described in this brochure.
If you decide to use this service, ChaseMellon Shareholder Services, LLC, as
your Agent, will automatically invest your dividends and capital gains
distributions in shares of the Fund for your account. You can expect to
receive a confirmation statement with respect to the dividends paid and
capital gains distributed.
This service is entirely voluntary and, subject to the terms of the Plan, you
may join or withdraw at any time.
We invite you to review the Plan. If you wish to participate and hold your
shares in your name (have physical possession of them), simply complete and
mail the enclosed enrollment form in the business reply envelope provided. If
your shares are held in the name of a brokerage firm, bank or other nominee,
you should contact your nominee to ask them to participate in the Plan on your
behalf. If you wish to participate in the Plan, but your brokerage firm, bank
or other nominee is unable to accommodate you, you should request that your
shares be re-registered in your name. This will enable you to participate in
the Plan.
Sincerely,
Barry Ziskin
President
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WHAT IS THE DISTRIBUTION REINVESTMENT PLAN?
The Distribution Reinvestment Plan offers shareholders in Z-Seven Fund,
Inc. a prompt and simple way to reinvest their dividends and capital gains
distributions in additional shares of the Fund.
ChaseMellon Shareholder Services, LLC (the "Plan Agent") acts as Plan
Agent for shareholders in administering the Plan. The complete Terms and
Conditions of the Plan are detailed in this brochure.
WHO CAN PARTICIPATE IN THE PLAN?
If you own shares that are held in your name, you can participate
directly in the Plan. If you own shares that are held in the name of a
brokerage firm, bank or other nominee, you should instruct your nominee to
participate on your behalf. If you wish to participate in the Plan, but your
brokerage firm, bank or other nominee is unable to accommodate you, you should
request that your shares be re-registered in your own name. This will enable
you to participate in the Plan.
HOW DOES THE PLAN WORK?
If you choose to participate in the Plan, your dividends and capital
gains distributions will be promptly invested for you, automatically
increasing your holdings in the Fund. If the market price of the shares on
the valuation date equals or exceeds the net asset value, the Fund will issue
new shares to you at the greater of net asset value or 95% of the current
market price. If the market price is lower than net asset value, then you
will receive shares purchased on the NASDAQ National Market System or
otherwise on the open market. If the market price exceeds the net asset value
before the Plan Agent has completed its purchases, the average purchase price
may exceed the net asset value. This would result in fewer shares being
acquired than if the Fund had issued new shares. All reinvestments are in
full and fractional shares (carried to four decimal places). The Fund will
not issue shares under the Plan at a price below net asset value.
IS THERE A COST TO PARTICIPATE?
There is no direct charge to participants for reinvesting dividends and
capital gains distributions since the Fund pays the Plan Agent's fees. There
are no trading fees for shares issued directly by the Fund. Whenever shares
are purchased
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on the NASDAQ National Market System or otherwise on the open market, each
participant will pay a pro rata portion of trading fees. The Plan Agent will
buy stock for all participants in blocks, generally resulting in lower than
usual fees for each participant. Trading fees will be deducted from amounts
invested.
WHAT ARE THE TAX IMPLICATIONS FOR PARTICIPANTS?
You will receive tax information annually for your personal records and
to help you prepare your federal income tax return. The automatic
reinvestment of dividends and/or capital gains distributions does not relieve
you of any income tax that may be payable on dividends or distributions.
Generally, if the Fund issues new shares pursuant to the Plan,
shareholders receiving such shares are treated as having a distribution equal
to the market value of the shares received. If shares are purchased on the
open market, shareholders generally will be treated as having received a
distribution equal to the amount paid to the Plan Agent to effect such
purchases.
ONCE ENROLLED, MAY I WITHDRAW FROM THE PLAN?
You may withdraw from the Plan without penalty at any time by written
notice to the Plan Agent. Your withdrawal will be effective as specified in
Paragraph 12 of the Terms and Conditions.
If you withdraw, you will receive, without charge, stock certificates
issued in your name for all full shares; or, if you prefer, the Plan Agent
will sell your shares and send you the proceeds, after deducting applicable
trading and service fees. the Plan Agent will convert any fractional shares,
held at the time of your withdrawal, to cash at the current market price and
will send you a check for the net proceeds.
HOW DO PARTICIPATING SHAREHOLDERS BENEFIT?
You will accumulate holdings in the Fund easily and automatically, at
reduced or zero trading fees.
You will receive a detailed account statement from the Plan Agent. This
statement will show total dividends and distributions, date of investment,
shares acquired, price per share, and total shares of record held by you and
by the Plan Agent for you. When you vote your proxy, your share balance will
include shares purchased for you by the Plan Agent according to the Plan.
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As long as you participate in the Plan, the Plan Agent will hold the
shares it has acquired for you in safekeeping, in its name or in the name of
its nominee. This convenience provides added protection against loss, theft,
or inadvertent destruction of certificates. However, you may request that a
certificate representing your Plan shares be issued to you.
WHOM SHOULD I CONTACT FOR MORE INFORMATION?
If you hold shares in your name, please address all notices,
correspondence, questions, or other communications about the Plan to:
ChaseMellon Shareholder Services, LLC
Investor Services
Post Office Box 750
Pittsburgh, Pennsylvania 15230-0750
If your shares are not held in your name, you should contact your
brokerage firm, bank or other nominee for more information and to determine if
your nominee will participate in the Plan on your behalf.
HOW DO I ENROLL?
If your shares are held in your name:
- - Review the Terms and Conditions in this brochure;
- - Complete and sign the enclosed authorization form; and,
- - Mail the form in the enclosed, pre-addressed envelope.
Your participation in the Plan will begin with the next dividend or capital
gains distribution payable after the Plan Agent receives your authorization,
provided they receive it before the record date. Should your authorization
arrive after such record date, your participation in the Plan will begin with
the following dividend or distribution.
The Z-Seven Fund, Inc. may amend or terminate the Plan upon written notice to
the Participants at least 90 days before the effective date of the amendment
or termination.
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TERMS AND CONDITIONS OF DISTRIBUTION REINVESTMENT PLAN
1. For convenience of the registered shareholders (the "Shareholders") of
the Z-Seven Fund, Inc. (the "Fund"), the Fund has adopted this Distribution
Reinvestment Plan (the "Plan") to allow Shareholders who elect to participate
in the Plan (collectively, the "Participating Shareholders") to have all
distributions payable in cash reinvested in shares of Common Stock, par value
$1.00 per share ("Common Stock") of the Fund. ChaseMellon Shareholder
Services, LLC (the "Plan Agent") administers the Plan and serves as the agent
of Participating Shareholders for the purpose of having distributions
reinvested by the Plan Agent in shares of Common Stock.
2. Shareholders may elect not to enter into, or may terminate at any
time, without penalty, their participation in the Plan. Shareholders who do
not participate in the Plan (collectively, the "Non-Participating
Shareholders") will receive all distributions in cash paid by check mailed
directly to each Non-Participating Shareholder by the Plan Agent as dividend
paying agent. Shareholders may not elect to be a Participating Shareholder
after the record date of a distribution. Other administrative rules regarding
the timing of elections and other matters may be instituted by the Fund and
Plan Agent in order to accommodate the administrative needs of the Plan and
ensure its smooth operation.
3. In the case of Shareholders such as banks, brokers or nominees which
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from time
to time by the record Shareholders as representing the total amount registered
in the record Shareholder's name and held for the account of beneficial owners
who participate in the Plan. Such record Shareholders shall receive
distributions under the Plan on behalf of beneficial owners certified to be
participating in the Plan, and cash distributions on behalf of
Non-Participating beneficial owners. Such recordholders will in turn credit
the beneficial owners' accounts with such stock or cash distribution.
4. Whenever the market price of the Fund's Common Stock is equal to or
exceeds net asset value per share at the time shares of Common Stock are
valued for the purpose of determining the number of shares equivalent to the
distributions, Participating Shareholders will be issued shares of Common
Stock valued at the greater of (i) net asset value per share or (ii) 95% of
the then current market price. Participants will receive any such
distribution entirely in shares of Common Stock, and the Plan Agent shall
automatically receive such shares of Common Stock, including fractions, for
the Participating Shareholders' accounts. Participating Shareholders
understand that the valuation date will be the payable date for such
distribution.
5. Should the net asset value per share of the Fund's Common Stock exceed
the market price per share on the payable date of a distribution, the Plan
Agent shall apply the amount of such distribution on their shares (less their
pro rata share of trading fees incurred with respect to their open-market
purchases in connection with the reinvestment of such distribution) to the
purchase on the open market of shares of the Fund's Common Stock for their
account. Such purchases will be made on or commence no sooner than the
payment date for such distribution, and in no event more than 30 days after
such date except where temporary curtailment or suspension of purchases is
necessary to comply with applicable provisions of the federal securities law.
If enough shares cannot be purchased within 30 days after the distribution
payment date, the entire distribution amount will be paid to Participating
Shareholders by check.
6. For all purposes of the Plan: (a) the market price of the Fund's
Common Stock on a particular date shall be the last sales price on the NASDAQ
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National Market System on that date, or, if there is no sale on the NASDAQ
National Market System on that date, then the mean between the closing bid and
asked quotations for such stock on the NASDAQ National Market system on such
date, and (b) net asset value per share of the Fund's Common Stock on a
particular date shall be as determined by or on behalf of the Fund.
7. Open-market purchases provided for above may be made on any securities
exchange where the Fund's Common Stock is traded, in the over-the-counter
market or in negotiated transactions and may be on such terms as to price,
delivery and otherwise as the Plan Agent shall determine. Participating
Shareholders' funds held by the Plan Agent uninvested will not bear interest,
and it is understood that, in any event, the Plan Agent shall have no
liability in connection with any inability to purchase shares within 30 days
after the initial date of such purchase as herein provided, or with the timing
of any purchase effected. The Plan Agent shall have no responsibility as to
the value of the Common Stock of the Fund acquired for the account of
Participating Shareholders. For purposes of cash investments, the Plan Agent
may commingle the funds of each Participating Shareholder with those of other
Participating Shareholders of the Fund, and the average price (including
trading fees) of all shares purchased by the Plan Agent shall be the price per
share allocable to each Participating Shareholder in connection therewith.
8. The Plan Agent may hold shares acquired pursuant to the Plan, in
non-certificated form in its name or that of its nominee. The Plan Agent will
forward to each Participating Shareholder any proxy solicitation material and
will vote any shares so held for each Participating Shareholder only in
accordance with the proxy returned by each Participating Shareholder to the
Fund. Upon the written request of a Participating Shareholder, the Plan Agent
will (i) deliver to such Participating Shareholder, without charge, a
certificate or certificates for the full shares held by it for the account of
the Participating Shareholder making such request or (ii) the Plan Agent will
sell the Participant's shares and forward the proceeds, less applicable
trading and service fees, to the Participating Shareholder.
9. The Plan Agent will confirm to each Participating Shareholder each
acquisition made for the account of such Participating Shareholder as soon as
practicable but not later than 60 days after the date thereof. Although a
Participating Shareholder may from time to time have undivided fractional
interests (computed to four decimal places) in shares of the Fund, no
certificates for fractional shares will be issued. However, dividends and
distributions on fractional shares will be credited to each Participating
Shareholder's account. In the event of termination by a Participating
Shareholder of his account under the Plan, the Plan Agent will adjust for any
such undivided fractional interest in cash at the market value of the Fund's
shares at the time of termination less the pro rata expense of any sale
required to make such an adjustment plus a reasonable service fee.
10. Any stock dividends or split shares distributed by the Fund on shares
held by the Plan Agent for Participating Shareholders will be credited to
their account. In the event that the Fund makes available to its Shareholders
rights to purchase additional shares or other securities, the shares held for
each Participating Shareholder under the Plan will be added to other shares
held by each Participating Shareholder in calculating the number of rights to
be issued.
11. The Plan Agent's service fee for handling dividends or distributions
will be paid by the Fund. Each Participating Shareholder will be charged his
pro rata share of trading fees on all open market purchases.
12. Participants may terminate their participation under the Plan by
notifying the Agent in writing. Such termination will be effective
immediately if
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notice is received by the Agent not less than two days prior to any dividend
or distribution record date; otherwise such termination will be effective
after the investment of any current dividend or distribution. The Plan may be
terminated by the Fund upon notice in writing mailed to each Participating
Shareholder at least 90 days prior to any record date for the payment of any
dividend or distribution by the Fund. Upon termination, the Plan Agent will
cause a certificate or certificates for the full shares held for each
Participating Shareholder under the Plan and cash adjustment for any fraction
to be delivered to each such Participating Shareholder without charge. If a
Participating Shareholder elects by notice to the Plan Agent in writing in
advance of such termination to have the Plan Agent sell part or all of his
shares and remit the proceeds to him, the Plan Agent is authorized to deduct a
reasonable transaction fee plus trading fees for this transaction from the
proceeds.
13. These Terms and Conditions may be amended or supplemented by the Fund
at any time or times but, except when necessary or appropriate to comply with
applicable law or the rules or policies of the Securities and Exchange
Commission or any other regulatory authority, only by mailing to each
Participating Shareholder appropriate written notice prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by
each Participating Shareholder unless, prior to the effective date thereof,
the Plan Agent receives written notice of the termination of his account under
the Plan. Any such amendment may include an appointment by the Plan Agent in
its place and stead of a successor agent under these Terms and Conditions,
with full power and authority to perform all or any of the acts to be
performed by the Plan Agent under these Terms and Conditions. Upon any such
appointment of a successor agent for the purpose of receiving dividends and
distributions, the Fund will be authorized to pay to such successor agent, for
the account of each Participating Shareholder, all dividends and distributions
payable on Common Stock of the Fund held in each Participating Shareholder's
name or under the Plan for retention or application by such successor agent as
provided in these Terms and Conditions.
14. The Plan Agent shall at all times act in good faith and agree to use
its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement and to comply with applicable law, but
assume no responsibility and shall not be liable for loss or damage due to
errors unless such errors are caused by the Plan Agent's negligence, bad
faith, or willful misconduct or that of the Plan Agent's employees.
15. These Terms and Conditions shall be governed by the laws of the State
of Maryland without regard to its conflict of laws' provision and the Rules
and Regulations of the Securities and Exchange Commission, as they may be
changed or amended from time to time.
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AUTHORIZATION FOR DISTRIBUTION REINVESTMENT PLAN
Z-Seven Fund, Inc. (This is Not a Proxy)
Please enroll the undersigned in the Z-Seven Fund, Inc. Distribution
Reinvestment Plan. The undersigned authorize(s) Z-Seven Fund, Inc. to pay to
ChaseMellon Shareholder Services, LLC (the "Plan Agent") as Agent of the
undersigned all cash distributions on Z-Seven Fund, Inc. Common Stock held of
record by the undersigned and the undersigned further authorize(s) the Plan
Agent to purchase full and fractional shares of Z-Seven Fund, Inc. Common
Stock with such cash distributions received subject to the Terms and
Conditions of the Plan as set forth in the accompanying brochure (receipt of
which is hereby acknowledged) .
The undersigned understands that participation in the Plan may be
terminated at any time by notifying the Plan Agent in writing as provided for
in Paragraph 12 of the Terms and Conditions of the Plan and agrees to be bound
by said Terms and Conditions and to notify the Plan Agent of any changes of
address.
___ ___ _______________________________________
Reinvest | | Shareholder and Social Security No.
Distributions| | _______________________________________
For the Shareholder and Social Security No.
Following | | _______________________________________
Account |___ ___| Date
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TO ENROLL IN THE Z-SEVEN FUND, INC. DISTRIBUTION REINVESTMENT PLAN:
SHAREHOLDER(S) SHOULD SIGN THE REVERSE SIDE OF CARD AND MAIL, IN THE ENCLOSED
POSTPAID ENVELOPE TO:
CHASEMELLON SHAREHOLDER SERVICES, LLC
INVESTOR SERVICES
POST OFFICE BOX 750
PITTSBURGH, PENNSYLVANIA 15230-0750
