File No. 2-95943; 811-4231
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 22
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22
The Rightime Fund, Inc.
(Exact Name of Registrant as Specified in Chapter)
218 Glenside Avenue, Wyncote, PA 19095-1594
(Address of Principal Executive Office)(Zip Code)
Registrant's Telephone Number, Including Area Code (800) 866-9393
David J. Rights, President; The Rightime Fund, Inc.;
218 Glenside Avenue, Wyncote, PA 19095-1594
(Name and Address of Agent for Service)
Please send copies of all communications to:
Steven M. Felsenstein, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: Upon effectiveness
of this amendment.
It is proposed that this filing will become effective
(check appropriate box)
immediately upon filing pursuant to paragraph (b).
X on March 1, 1997 pursuant to paragraph (b).
60 days after filing pursuant to paragraph (a)(1).
___ on ____ pursuant to paragraph (a)(1).
___ 75 days after filing pursuant to paragraph (a)(2).
___ on ____ pursuant to paragraph (a)(2) of Rule 485.
Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. On or about December 30, 1996
Registrant filed a Rule 24f-2 Notice for Registrant's most recent fiscal
year.
TABLE OF CONTENTS
TO FORM N-1A
The Facing Page
1 - Cross-Reference Sheet
2 - Part A - Prospectus
3 - Part B - Statement of Additional
Information
4 - Part C - Other Information
5 - Signature Page
Exhibits
CROSS REFERENCE SHEET
N-1A
Item No. Caption or Location in Prospectus
Part A
1 Cover
2 Highlights; Expense Table
3 Financial Highlights; Performance
4 Prospectus Cover; Investment Objectives and Policies of each
Fund; Investment Restrictions
5 Board of Directors; Investment Advisor; Administrator;
Distribution of Shares; Transfer and Dividend
Disbursing Agent; Custodian; General Operations
6 Capital Stock; Dividends, Distributions and Taxes
7 Determination of Net Asset Value and Public Offering Price;
How to Purchase Shares
8 Redemption of Shares
9 N/A
Part B
10 Cover
11 Table of Contents
12 N/A
13 Cover; The Fund's Investments; Investment Restrictions
14 Distributor; Transfer and Dividend Disbursing Agent; Officers
and Directors of the Fund
15 General Information
16 Investment Advisor
17 Allocation of Portfolio Brokerage
18 N/A
19 Purchase of Shares; Exchange of Shares; Determination of Net
Asset Value; Public Offering Price
20 N/A
21 Distributor
22 Performance
23 Financial Statements
Part C
Items 24 through 32 have been answered in order in Part C.
February 28, 1997 11:37AM F:\DATA27\PUBL\MPO\SECF\116220.4
116220.5
[Graphic omitted: Rightime Logo]
Prospectus
March 1, 1997
(bullet) The Rightime Fund
(bullet) The Rightime
Blue Chip Fund
(bullet) The Rightime
MidCap Fund
(bullet) The Rightime
Social Awareness Fund
(bullet) The Rightime
Government Securities Fund
Printed on recycled paper
[Graphic omitted: Rightime Logo]
PROSPECTUS
March 1, 1997
218 Glenside Ave.
Wyncote, PA 19095
(800) 866-9393
The Rightime Fund, Inc. (the "Company"), is an open-end diversified
management investment company. It was organized as a series Maryland
Corporation on November 15, 1984 and currently offers shares of multiple
Series (hereinafter a "Fund" or "Series"), each of which has a specific
investment objective. Each Fund's investment objective is summarized
below with more information in "Investment Objectives and Policies."
The Rightime Fund. The objective of the Fund is to achieve for its
investors a high total return consistent with reasonable risk. The Fund
uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by concentrating in shares of registered investment companies
and by making other investments selected in accordance with the Fund's
investment policies and restrictions.
The Rightime Blue Chip Fund. The objective of the Fund is to achieve for
its investors a high total return consistent with reasonable risk. The
Fund uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by investing in securities of well known and established
companies ("Blue Chips") and by making other investments selected in
accordance with the Fund's investment policies and restrictions.
The Rightime MidCap Fund. The objective of the Fund is to achieve for
its investors a high total return consistent with reasonable risk. The
Fund uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by investing in securities of companies with medium-size
market capitalization ("MidCaps") and by making other investments
selected in accordance with the Fund's investment policies and
restrictions.
The Rightime Social Awareness Fund. The objective of the Fund is to
achieve for its investors growth of capital and its secondary objective
is current income, consistent with reasonable risk. The Fund uses a
variety of investment techniques in an effort to balance portfolio risks
and to hedge market risks. The Fund seeks to achieve its objective by
investing in securities of companies with prospects for above-average
capital growth which, in the opinion of the Fund's Advisor, show
evidence in the conduct of their business, relative to other companies
in the same industry, of contributing to the enhancement of the quality
of human life, and by making other investments selected in accordance
with the Fund's investment policies and restrictions and social
criteria.
The Rightime Government Securities Fund. The objective of the Fund is to
achieve for its investors a high current income consistent with safety
and liquidity of principal. The Fund seeks to achieve this objective by
investing in securities that are issued or guaranteed as to principal
and interest by the U.S. Government, its agencies, authorities or
instrumentalities or secured by such securities, and by making other
investments selected in accordance with the Fund's investment policies
and restrictions.
- ----------------------------------------------------------------------
This Prospectus sets forth concisely the information about the Funds
that a prospective investor ought to know before investing. Investors
should read and retain this Prospectus for future reference. More
information about the Funds has been filed with the Securities and
Exchange Commission, and is contained in the "Statement of Additional
Information," dated March 1, 1997, which is available at no charge by
calling or writing the Fund. The Fund's Statement of Additional
Information is incorporated herein by reference.
- ----------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------
Investment Policies
The Rightime Fund, The Rightime Blue Chip Fund, and The Rightime MidCap
Fund will vary their investment strategies, including their hedging
activities, in an effort to generate a high total return, and The
Rightime Social Awareness Fund will vary its investment strategies,
including hedging activities, in an effort to achieve growth of capital
and other returns, consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
respective Fund's portfolio of securities, cash and cash equivalents,
and options and futures thereon. The Funds are unable to predict what
portion of their total return will consist of income, short-term capital
gains or long-term capital gains. Each Fund will take advantage of
opportunities to achieve its objective by establishing an "aggressive"
portfolio strategy during periods when the Advisor anticipates a
generally rising trend in securities markets which will produce income
or gains contributing to the Fund's return. Each Fund will seek to take
advantage of opportunities for dividend or interest income and stability
of principal by establishing a "conservative" portfolio strategy during
periods of time when the Advisor anticipates a generally declining trend
in securities markets, emphasizing protection of gains and income over
gains. While each Fund will continue to seek its objective, it will do
so by using investment strategies which the Advisor believes offer
protection from risk and offer more conservative expectations. In
addition, when the Advisor anticipates volatile or abnormal market
conditions, each Fund may adopt a temporary "defensive" posture which
accords a priority to protecting the inherent value of the Fund's
capital. (See "Investment Objectives and Policies" and "Investment
Restrictions").
The Rightime Government Securities Fund will invest its assets primarily
in U.S. Government Securities, including such securities purchased on a
delayed delivery basis, or repurchase agreements secured by such
securities. The Fund may write covered call and put options and purchase
call and put options on U.S. Government Securities in an effort to
increase current income and to reduce fluctuations in net asset value.
The Fund may protect against anticipated declines in the value of
securities held or increases in the cost of securities to be acquired by
hedging through purchase and sale of futures contracts on U.S.
Government Securities and related options. The Fund may temporarily take
a defensive position by investing a greater portion of its assets in
cash, short-term U.S. Government Securities and related repurchase
agreements or otherwise reducing the general maturity of its portfolio.
(See "Investment Objectives and Policies" and "Investment
Restrictions").
Special Considerations and Risk Factors
Prospective investors should consider a number of factors:
1. Each Fund may invest in repurchase agreements which involves risk of
loss if a seller defaults on its obligations under an agreement. (See
"Investment Objectives and Policies").
2. Each Fund has a right to engage in futures transactions, including
index futures, for hedging purposes, to attempt to balance portfolio
volatility, and in connection therewith will maintain certain collateral
in special accounts established by our Futures Commission Merchants in
the care of our Custodian Bank. While the Fund does not engage in
futures for speculative purposes, there are risks which result from the
use of futures which are described in this Prospectus and the Statement
of Additional Information. The Fund is not registered as a commodity
pool operator nor the Advisor as a commodities trading Advisor, in
reliance upon various exemptive rules. (See "Hedging").
3. The Rightime Fund invests in the shares of other registered
investment companies, is affected by their performance, and contributes
to the expenses of operating those companies. (See "Investment
Objectives and Policies"). The Fund has the right to investment in
investment companies which impose a sales load or sales charges. While
the Fund will seek to minimize such charges, they can reduce the Fund's
investment results.
4. The Funds expect a portfolio turnover rate higher than that of other
funds with similar objectives. The Advisor applies a market timing
approach in making investments on behalf of the Funds. (See "Investment
Objectives and Policies").
Investment Advisor
Rightime Econometrics, Inc. (the "Advisor") serves as investment Advisor
to each Fund (managing the assets and allocating portfolio
transactions). For these services, the Advisor is paid an Advisory fee
by each Fund, based on its average net assets. (See "Investment
Advisor").
How to Purchase Shares
Shares of each Fund are distributed by Lincoln Investment Planning,
Inc., the Funds' Distributor, and selected dealers. The minimum initial
investment is $1,000 and subsequent purchases must be at least $25. The
Funds have a maximum sales load of 4.75%, except for The Rightime Fund,
which has no sales load. The Funds each allow waivers of the sales load
under certain circumstances. Accounts worth less than $1,000 may be
subject to an annual maintenance fee. All the Funds bear a portion of
the costs of distributing their shares. (See "How to Purchase Shares"
and "Distribution of Shares").
How to Redeem Shares (Sell Shares)
Shares may be redeemed by each Fund (sold by a shareholder) at any time
at the net asset value next determined after receipt of the request by
the Fund at no charge. A shareholder may submit written instructions to
the Fund, or the shareholder and/or their dealer representative may make
telephone redemptions. Each Fund has the right to redeem accounts that
are less than the minimum initial investment, currently $1,000, when the
account is not brought up to the minimum after 90 days prior notice to
the shareholder. The Fund also offers exchange privileges for
shareholders and their dealer representatives. (See "How to Redeem
Shares" and "How to Exchange Shares").
<TABLE>
<CAPTION>
EXPENSE TABLE
The The The
Rightime Rightime Rightime The
The Government Blue Social Rightime
Rightime Securities Chip Awareness MidCap
Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
A. Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) None 4.75% 4.75% 4.75% 4.75%
B. Annual Fund Operating Expenses
(as a percentage of average net assets)
Advisory Fees 0.50% 0.40% 0.50% 0.50% 0.50%
12b-1 Fees (including Distribution Fees and
0.25% Shareholder Servicing Fees) 0.75% 0.25% 0.50% 0.50% 0.50%
Other Expenses (including Administration
Fees Paid to Affiliates) 1.20% 1.50% 1.08% 1.42% 1.19%
------ ------ ------ ------ ------
Total Fund Operating Expenses 2.45% 2.15% 2.08% 2.42% 2.19%
C. Example:
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual
return; and (2) redemption at end of time period
1 Year $ 25 $ 68 $ 68 $ 71 $ 69
3 Years $ 76 $112 $110 $120 $113
5 Years $131 $158 $154 $171 $160
10 Years $279 $285 $278 $311 $289
</TABLE>
The purpose of this table is to assist in understanding the various
costs and expenses that an investor in the Funds will bear directly or
indirectly. This example should not be considered a representation of
past or future expenses and actual expenses may be greater or less than
those shown. The fees incurred by The Rightime Social Awareness Fund and
The Rightime MidCap Fund may be higher than those incurred by similar
type funds. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the NASD.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
The following information for each of the periods, as indicated below, during the five year
period ended October 31, 1996 has been examined by Tait, Weller & Baker, independent certified
public accountants, whose report thereon appears in the Funds' Annual Report to shareholders for
the period ended October 31, 1996 and is incorporated by reference in this Prospectus.
Net Net Realized Distributions
Year Net Asset Investment and Unrealized Total from Net
Ended Value Income Gain (Loss) from Investment
October 31 Beg. of Period (Loss)(a) on Investments Operations Income)
- ---------- -------------- ------------ -------------- ---------- --------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1996 $37.55 $ 1.14 $ 2.11 $ 3.25 $(0.77)
1995 35.50 (0.10) 7.21 7.11 (0.30)
1994 37.42 0.29 (0.49) (0.20) --
1993 34.70 (0.32) 5.47 5.15 (0.05)
1992 37.33 0.06 2.16 2.22 (0.17)
1991 31.82 0.16 7.43 7.59 (0.61)
1990 32.52 0.95 (1.30) (0.36) (0.35)
1989 31.86 0.05* 1.53 1.58 (0.04)
1988 34.35 0.25 1.90 2.15 (0.39)
1987 32.05 0.51 3.73 4.24 --
The Rightime Government Securities Fund
1996 $13.06 $ 0.52 $(0.32) $ 0.20 $(0.61)
1995 12.93 0.68 0.08 0.76 (0.63)
1994 14.31 0.61 (1.34) (0.73) (0.65)
1993 13.16 0.66 1.21 1.87 (0.72)
1992 12.86 0.71 0.19 0.90 (0.60)
1991 12.63 0.82 0.17 0.99 (0.76)
1990 14.97 0.85 (1.85) (1.00) (0.88)
1989 13.61 0.95 1.10 2.05 (0.89)
1988 13.49 0.93 0.41 1.34 (1.02)
1987(1) 15.00 0.96 (1.62) (0.66) (0.85)
The Rightime Blue Chip Fund
1996 $32.84 $ 0.40 $ 3.52 $ 3.92 $(0.28)
1995 33.08 0.35 5.66 6.01 (0.46)
1994 33.14 0.39 (0.04) 0.35 (0.23)
1993 29.70 0.26 3.41 3.67 (0.23)
1992 28.22 0.25 1.55 1.80 (0.32)
1991 26.23 0.32 4.53 4.85 (0.55)
1990 27.24 0.44 0.34 0.78 (0.47)
1989 26.81 0.45 1.59 2.04 (1.61)
1988 25.28 1.66 (0.02) 1.66 (0.13)
1987(2) 25.00 0.28 -- 0.28 --
The Rightime Social Awareness Fund
1996 $32.37 $ 0.41 $ 3.88 $ 4.29 $ --
1995 26.84 0.08 5.91 5.99 (0.46)
1994 29.07 0.33 (0.72) (0.39) --
1993 29.64 (0.02) 1.76 1.74 (0.04)
1992 25.56 0.12 4.30 4.42 (0.23)
1991 22.29 0.16 3.51 3.67 (0.40)
1990(3) 25.00 0.32 (3.03) (2.71) --
The Rightime MidCap Fund
1996 $32.95 $ 0.49 $ 2.56 $ 3.05 $(0.14)
1995 28.44 0.26 5.25 5.51 (0.45)
1994 31.07 0.32 (0.78) (0.46) --
1993 27.08 (0.03) 4.80 4.77 (0.05)
1992(4) 25.00 0.03 2.07 2.10 (0.02)
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Distributions Distributions
Year from from Net Asset
Ended Realized Paid-in Total Value Total
October 31 Capital Gains Capital(b) Distributions End of Period Return(c)
- ---------- ------------ ------------ -------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1996 $(7.94) $ -- $(8.71) $32.09 8.96%
1995 (4.76) -- (5.06) 37.55 23.38
1994 (1.72) -- (1.72) 35.50 (0.48)
1993 (2.38) -- (2.43) 37.42 15.49
1992 (4.68) -- (4.85) 34.70 6.15
1991 (1.47) -- (2.08) 37.33 25.21
1990 -- -- (0.35) 31.82 (1.10)
1989 (0.78) (0.10) (0.92) 32.52 5.25
1988 (3.97) (0.28) (4.64) 31.86 6.37
1987 (1.94) -- (1.94) 34.35 14.05
The Rightime Government Securities Fund
1996 $ -- $ -- $(0.61) $12.65 1.48%
1995 -- -- (0.63) 13.06 6.00
1994 -- -- (0.65) 12.93 (5.15)
1993 -- -- (0.72) 14.31 14.60
1992 -- -- (0.60) 13.16 7.20
1991 -- -- (0.76) 12.86 8.14
1990 (0.46) -- (1.34) 12.63 (7.13)
1989 -- -- (0.89) 14.97 15.38
1988 -- -- (1.02) 13.81 10.32
1987(1) -- -- (0.85) 13.49 2.30
The Rightime Blue Chip Fund
1996 $(4.60) $ -- $(4.88) $31.88 12.26%
1995 (5.79) -- (6.25) 32.84 22.31
1994 (0.18) -- (0.41) 33.08 1.06
1993 -- -- (0.23) 33.14 12.41
1992 -- -- (0.32) 29.70 6.41
1991 (2.31) -- (2.86) 28.22 20.27
1990 (1.32) -- (1.79) 26.23 2.68
1989 -- -- (1.61) 27.24 8.42
1988 -- -- (0.13) 26.81 6.50
1987(2) -- -- 0.00 25.28 1.12
The Rightime Social Awareness Fund
1996 $(7.57) $ -- $(7.57) $29.09 13.62%
1995 -- -- (0.46) 32.37 22.70
1994 (1.84) -- (1.84) 26.84 (1.27)
1993 (2.27) -- (2.31) 29.07 5.82
1992 (0.11) -- (0.34) 29.64 17.43
1991 -- -- (0.40) 25.56 16.69
1990(3) -- -- 0.00 22.29 (10.84)
The Rightime MidCap Fund
1996 $(6.84) $ -- $(6.98) $29.02 9.65%
1995 (0.55) -- (1.00) 32.95 20.07
1994 (2.17) -- (2.17) 28.44 (1.38)
1993 (0.73) -- (0.78) 31.07 17.93
1992(4) -- -- (0.02) 27.08 8.40
(a) The Advisor reimbursed the respective Funds for a portion of
the Funds' expenses during certain periods.
(b) Distributions from Paid-in Capital result from required
distributions for federal excise tax purposes in excess of book
income. The Rightime Fund's statement of changes in net assets
and selected per share data for the year ended October 31, 1988
have been restated to reflect a reclass of the distribution
from net investment income to a distribution from paid-in
capital for the reason explained above.
(c) Excludes sales charge.
* Based on average monthly shares.
(1) Inception of Fund was January 2, 1987.
(2) Inception of Fund was July 22, 1987.
(3) Inception of Fund was March 1, 1990.
(4) Inception of Fund was November 11, 1991.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
Expenses to Average Net Investment Income (Loss)
Net Assets to Average Net Assets
------------------------------- -------------------------------
Net Assets at the Before After Before After Portfolio Commission
RATIOS End of Period Reimbursement Reimbursement Reimbursement Reimbursement Turnover Rate Paid (#)
- ------ -------------- ------------- ------------- ------------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Rightime Fund
1996 $166,490,280 2.45% 2.45% 3.11% 3.11% 15.40% --
1995 158,966,039 2.47 2.47 (0.27) (0.27) 9.45 --
1994 149,207,566 2.51 2.51 0.78 0.78 11.50 --
1993 172,178,587 2.52 2.52 (0.83) (0.83) 1.86 --
1992 170,955,840 2.56 2.56 0.15 0.15 72.63 --
1991 162,972,329 2.67 2.67 0.45 0.45 136.19 --
1990 134,295,952 2.67 2.67 1.52 1.52 383.38 --
1989 166,638,724 2.58 2.58 0.14 0.14 168.23 --
1988 284,923,878 2.58 2.58 0.53 0.53 187.25 --
1987 211,223,753 2.55 2.55 1.20 1.20 166.24 --
The Rightime Government Securities Fund
1996 $ 10,712,611 2.15% 2.15% 4.08% 4.08% 109.47% --
1995 18,632,859 1.90 1.90 5.29 5.29 77.98 --
1994 25,746,377 1.90 1.90 4.62 4.62 216.70 --
1993 33,934,808 1.98 1.98 4.72 4.72 120.80 --
1992 30,312,806 2.03 2.03 5.53 5.53 126.25 --
1991 42,234,866 1.82 1.82 5.55 5.55 309.57 --
1990 49,625,703 1.85 1.85 6.32 6.32 420.13 --
1989 35,476,441 1.99 1.99 6.63 6.63 451.57 --
1988 14,152,947 2.07 1.60 6.11 6.58 476.12 --
1987(1) 8,409,503 1.89* 0.12* 6.71* 8.48* 111.45 --
The Rightime Blue Chip Fund
1996 $277,639,083 2.08% 2.08% 1.25% 1.25% 1.30% $0.03
1995 249,619,271 2.17 2.17 1.13 1.13 17.52 --
1994 221,681,939 2.22 2.22 1.16 1.16 0.98 --
1993 223,687,834 2.16 2.16 0.72 0.72 1.97 --
1992 211,481,090 2.25 2.25 0.87 0.87 -- --
1991 187,307,234 2.27 2.27 1.30 1.30 34.07 --
1990 128,771,363 2.35 2.35 4.36 4.36 257.91 --
1989 94,493,124 2.38 2.38 2.32 2.32 232.92 --
1988 70,136,312 2.66 2.56 9.61 9.71 1,314.65 --
1987(2) 16,451,589 2.76* 2.08* 3.84* 4.52* -- --
The Rightime Social Awareness Fund
1996 $ 8,694,248 2.42% 2.42% 1.51% 1.51% 46.57% $0.05
1995 7,378,063 2.75 2.75 0.32 0.32 36.49 --
1994 7,221,772 2.56 2.56 1.04 1.04 54.85 --
1993 10,556,506 2.40 2.40 (0.19) (0.19) 238.52 --
1992 6,525,545 2.49 2.49 0.45 0.45 276.62 --
1991 5,770,249 2.88 2.88 0.63 0.63 247.22 --
1990(3) 5,491,349 2.85* 2.85* 2.36* 2.36* 734.44 --
The Rightime MidCap Fund
1996 $ 80,303,960 2.19% 2.19% 1.72% 1.72% 3.59% $0.02
1995 75,086,295 2.19 2.19 0.84 0.84 24.67 --
1994 65,252,084 2.28 2.28 1.14 1.14 0.75 --
1993 62,124,470 2.28 2.28 (0.19) (0.19) 38.79 --
1992(4) 31,311,779 2.34* 2.34* 0.17* 0.17* 35.10 --
- -------------
* Annualized
(#) Average Commission Rate Paid shows the
average cost per share paid by a Fund for
trades of equity securities for which a
commission was charged.
(1) Inception of Fund was January 2, 1987.
(2) Inception of Fund was July 22, 1987.
(3) Inception of Fund was March 1, 1990.
(4) Inception of Fund was November 11, 1991.
</TABLE>
PERFORMANCE
Total return data may from time to time be included in advertisements
about the Funds. "Total return" of a Fund refers to the average annual
compounded rates of return over certain periods that would equate an
initial amount invested at the beginning of a stated period from which
the maximum sales load is deducted to the ending redeemable value of the
investment. The Fund will provide total return for one, five and ten
year periods, as well as from inception. Non-standardized total return
quotations may also be presented for other periods, or to reflect
voluntary expense limitations in effect for the Fund in question during
the relevant period, or to reflect investment at reduced sales charge
levels or net asset value. Any quotation of total return not reflecting
the maximum sales charge, or which reflects any voluntary expense
limitations, would be reduced if the maximum sales charge were used or
Fund expenses were not voluntarily limited.
Each Fund may also include its yield, accompanied by its total return,
in advertising and other written material. Yield will be computed by
dividing the net investment income per share earned during a recent one-
month period by the maximum offering price per share of the Fund
(reduced by any undeclared earned income expected to be paid shortly as
a dividend) on the last day of the period.
The Funds may also compare their investment performance to appropriate
market indexes such as the Standard & Poor's 500 Stock Index or the
Standard & Poor's MidCap 400 Index and to appropriate mutual fund
indexes such as the Lipper Growth Fund Index or the Lipper Flexible
Portfolio Fund Index. The Funds may also advertise their ranking
compared to other similar mutual funds as reported by industry analysts
such as Lipper Analytical Services, Inc.
All data is based on each Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of
the Fund's portfolio and the Fund's operating expenses. Investment
performance also often reflects the risks associated with the Fund's
investment objective and policies. These factors should be considered
when comparing the Fund to other funds and other investment vehicles.
Additional information concerning performance of the Funds is contained
in the Funds' Annual Report to shareholders and the Statement of
Additional Information which may be obtained without charge.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Fund are described below.
The investment objective of a Fund may not be changed without the
approval of a majority of the Funds outstanding voting securities. There
can be no assurance that a Fund will achieve its objective.
The Rightime Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
concentrating (investing more than 25% of the value of its assets) in
shares of other registered investment companies and by making other
investments selected in accordance with the Fund's investment
restrictions and policies. The Fund generally seeks to invest in
securities that the Advisor has determined are consistent with
reasonable risk. The Fund will use a variety of investment techniques in
an effort to generate a high total return consisting of the sum of
interest, dividend and other income and net realized and unrealized
appreciation in the value of the Fund's portfolio of investment
companies (including money market mutual funds), cash equivalents (such
as repurchase agreements), cash, stocks, bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon. The Fund is unable to predict what portion of its total
return will consist of income, short-term capital gains or long-term
capital gains. The Fund's pursuit of high total return is tempered by an
attempt to limit the Fund to a reasonable level of risk in either
strategy.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to concentrate in a portfolio of
shares which the Advisor believes will benefit from such a trend. The
Advisor will use a risk adjusted analysis (which considers the relative
volatility of its various investments) to evaluate the investment
companies performance under various market conditions and to consider
the potential reward and potential risk. The Advisor will not select
such investment companies based solely upon their previous performance.
It is expected that such investment companies will generally invest more
than 50% of their assets in common and/or preferred stocks. In order to
make allowance for cash flow needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio the Fund may invest up
to 75% of its asset value in other investment vehicles such as common or
preferred stocks of companies which are not investment companies,
investment companies which are money market funds, cash equivalents, may
make use of various hedging techniques or may hold its assets as cash.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
the Fund's objective by investing in the shares of money market funds
and other types of investment companies, and investing up to 75% in cash
equivalents and by retaining cash. In applying the conservative strategy
to securities selection, a greater emphasis is placed in avoiding risk,
consistent with the objective of the Fund. The Fund may also seek to
achieve a high total return during such a period without disturbing or
restructuring the portfolio established by the Fund during an Aggressive
Period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
stocks, stock options, stock index options, stock index futures or
options on such futures. Stock options, stock index futures and options
thereon are utilized to "hedge" risks arising from the Fund's
investments originally selected under its "Aggressive Portfolio
Strategy," including those risks arising while the Fund is selecting
suitable investments for its assets, and are not entered into for
speculative purposes. Their use may impose a limit on the amount of
gains the Fund can achieve from the investments which are so "hedged."
(See "Hedging" and "Options and Futures").
The Fund, by investing in shares of investment companies, indirectly
pays a portion of the operating expenses, management expenses and
brokerage costs of such companies as well as the expense of operating
the fund. Thus, the Fund's investors may indirectly pay higher total
operating expenses and other costs than they might pay by owning the
underlying investment companies directly. The Fund attempts to identify
investment companies that have demonstrated superior management in the
past, thus possibly offsetting these factors by producing better results
and/or lower costs and expenses than other investment companies. There
can be no assurance that this result will be achieved.
The Fund must also structure its investments in other investment company
shares to comply with certain provisions of federal securities laws. The
presently applicable provisions impose limits on the amount of the
investment of the Fund's assets, and those of its affiliates, in any
investment company (3% of the total outstanding stock of any such
company) and these laws and regulations also may adversely affect the
operations of the Fund with respect to purchases or redemption of shares
issued by an investment company. (The underlying investment company may
be allowed to delay redemption of its shares held by an investment
company, such as the Fund, in excess of 1% of its total assets per
month.) Consequently, when the Fund is more heavily concentrated in
small investment companies, it may not be able to readily dispose of
such investment company shares and may be forced to redeem Fund shares
in kind to redeeming shareholders by delivering shares of investment
companies that are held in the Fund's portfolio. Although the Fund may
be restricted in its ability to redeem, Fund shareholders who receive
shares upon redemption are not so restricted. Applicable fundamental
policies are reflected in the Fund's investment restrictions.
The Fund expects that it will select the investment companies in which
it will invest based, in part, upon an analysis of the past and
projected performance and investment structure of the investment
companies. However, the Fund must consider other factors in the
selection of the investment companies. These other factors include, but
are not limited to, the investment company's size, shareholder services,
liquidity, investment objective and investment techniques, etc. The Fund
may be affected by the losses of such underlying investment companies,
and the level of risk arising from the investment practices of such
investment companies (such as repurchase agreements, quality standards,
or lending of securities) and has no control over the risks taken by
such investment companies. The Fund can also elect to redeem (subject to
the 1% limitation discussed above) its investment in an underlying
investment company (or sell it if the company is a closed-end one) if
that action is considered necessary or appropriate.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Blue Chip Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
investing primarily in Blue Chip securities ("Blue Chips"). Blue Chips
include common stocks that are included in the Standard & Poor's 500
Stock Index (the "S & P 500"), a stock index of 500 common stocks that
is a widely recognized index of stock market performance, and/or that is
included in the Dow Jones Industrial Average Index of 30 common stocks
(the "DJIA"), a widely recognized index of general stock market movement
and options, stock index options, stock index futures and options on
stock index futures, based on Blue Chip common stocks. At least 65% of
the Fund's assets will usually, except when maintaining a temporary
defensive position, be invested in Blue Chips, and up to 100% may be so
invested. Such securities generally have the following characteristics:
(i) large capitalization (greater than $100 million); (ii) history of
earnings and dividends; and (iii) large number of publicly held shares
and high trading volume, resulting in a high degree of liquidity.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate a
high total return consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
Fund's portfolio of Blue Chips, cash equivalents (such as repurchase
agreements), cash, stocks, bonds and other debt obligations, stock
options, stock index options, stock index futures and options thereon.
The Fund is unable to predict what portion of its total return will
consist of income, short-term capital gains or long-term capital gains.
The Fund's pursuit of high total return is tempered by an attempt to
limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend. In
order to make allowance for cash needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio, the Fund may also
invest up to 35% of its asset value in investment vehicles which are not
Blue Chips.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing up to 35% in securities other than Blue
Chips, such as cash, cash equivalents, bonds and other debt obligations.
In applying the conservative strategy to securities selection, a greater
emphasis is placed on avoiding risk, consistent with the objective of
the Fund. The Fund may also seek to achieve its objective during such a
period without disturbing or restructuring the portfolio established by
the Fund during an Aggressive Period by using cash, cash equivalents,
proceeds of maturing securities, new assets, etc. to purchase or sell
other investment vehicles such as bonds and other debt obligations,
stock options, stock index options, stock index futures or options on
such futures. Stock options, stock index futures and options thereon are
utilized to "hedge" risks arising from the Fund's investments originally
selected under its "Aggressive Portfolio Strategy," including those
risks arising while the Fund is selecting suitable investments for its
assets, and are not entered into for speculative purposes. Their use may
reduce or impose a limit on the amount of gains the Fund can achieve
from the investments which are so "hedged." (See "Hedging" and Options
and Futures").
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime MidCap Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
investing primarily in securities of companies with medium-size market
capitalization ("MidCaps"). The Fund generally considers a medium-size
market capitalization to be between $200 million and $5 billion. Market
capitalization means the total market value of a company's outstanding
common stock. MidCaps include common stocks that are included in the
Standard & Poor's MidCap 400 Index, an index of stock market performance
of 400 stocks, and options, stock index options, stock index futures and
options on stock index futures, based on MidCap common stocks. At least
65% of the Fund's assets will usually, except when maintaining a
temporary defensive position, be invested in MidCaps, and up to 100% may
be so invested. The securities of companies with medium-size market
capitalization are traded on the New York Stock Exchange and the
American Stock Exchange and in the over-the-counter market. Market
capitalization does not necessarily bear any correlation to other
financial attributes used to describe the size of the company, such as
levels of assets, revenues or income. Investments in MidCaps are
generally considered to offer greater opportunity for appreciation and
to involve greater risk of depreciation than securities of companies
with larger market capitalization. Since MidCaps are not broadly traded
as the securities of larger capitalized companies, they are often
subject to wider and more abrupt fluctuations in market price. Moreover,
these securities might not be as widely researched in the market. There
have been prolonged periods when these securities have substantially
underperformed or outperformed the securities of the larger
capitalization companies included in the popular stock market indices
such as the Dow Jones Industrial Average and the S & P 500.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate a
high total return consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
Fund's portfolio of MidCap securities, cash equivalents (such as
repurchase agreements), cash, stocks, bonds and other debt obligations,
stock options, stock index options, stock index futures and options
thereon. The Fund is unable to predict what portion of its total return
will consist of income, short-term capital gains or long-term capital
gains. The Fund's pursuit of high total return is tempered by an attempt
to limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend. In
order to make allowance for cash needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio, the Fund may also
invest up to 35% of its asset value in investment vehicles which are not
MidCaps.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing up to 35% in securities other than MidCaps,
such as cash, cash equivalents, bonds and other debt obligations. In
applying the conservative strategy to securities selection, a greater
emphasis is placed on avoiding risk, consistent with the objective of
the Fund. The Fund may also seek to achieve its objective during such a
period without disturbing or restructuring the portfolio established by
the Fund during an Aggressive Period by using cash, cash equivalents,
proceeds of maturing securities, new assets, etc. to purchase or sell
other investment vehicles such as bonds and other debt obligations,
stock options, stock index options, stock index futures or options on
such futures. Stock options, stock index futures and options thereon are
utilized to "hedge" risks arising from the Fund's investments originally
selected under its "Aggressive Portfolio Strategy," including those
risks arising while the Fund is selecting suitable investments for its
assets, and are not entered into for speculative purposes. Their use may
reduce or impose a limit on the amount of gains the Fund can achieve
from the investments which are so "hedged." (See "Hedging" and Options
and Futures").
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Social Awareness Fund
The Fund's objective is to achieve for its investors growth of capital
and its secondary objective is current income, consistent with
reasonable risk. It seeks to achieve its objective by investing in
securities of companies with prospects for above-average capital growth,
companies which the Advisor believes demonstrate the ability to exceed
the average of companies in the S & P 500. The Fund will attempt to
invest in companies which, in the opinion of the Advisor, not only meet
the Fund's investment standards, but also show evidence in the conduct
of their business, relative to other companies in the same industry, of
contributing to the enhancement of the quality of human life. This may
include companies which conduct their business in a socially responsible
manner with a demonstrable commitment to certain social issues or
enterprises that make a significant contribution to society through
their products and services and through the way they do business. The
Fund generally seeks to invest in securities that the Advisor has
determined are investments consistent with reasonable risk and offer
prospects for above-average capital growth. The Fund will normally
invest at least 65% of its total assets in securities of companies which
satisfy the financial and social criteria described herein. The Fund
will invest primarily in common stocks, but may also invest in
securities convertible into common stocks, preferred stocks and other
securities (as described below) selected by the Advisor generally on the
basis of industry analysis, including analysis of underlying economic
factors, financial characteristics and trends, securities prices and
trends, sales, earnings, products or services, new technology and
markets. The Fund generally invests in United States equity securities
that are listed on securities exchanges or traded in the over-the-
counter market. The Fund will invest in common stocks which offer
prospects for growth and which may or may not pay current dividends. The
Fund will invest in securities of well-known and established companies
as well as smaller, less well-known companies that it believes have
prospects for above-average capital growth. The Fund's investments in
smaller, less well-known companies may involve greater risk than is
inherent in securities of more established companies.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate
growth of capital and other returns consisting of the sum of interest,
dividend and other income and net realized and unrealized appreciation
in the value of the Fund's portfolio of stocks, cash equivalents (such
as repurchase agreements), cash, stocks, bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon. The Fund is unable to predict what portion of its total
return will consist of income, short-term capital gains or long-term
capital gains. The Fund's pursuit of growth of capital is tempered by an
attempt to limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing in securities such as cash, cash equivalents,
bonds and other debt obligations. In applying the conservative strategy
to securities selection, a greater emphasis is placed on avoiding risk,
consistent with the objective of the Fund. The Fund may also seek to
achieve its objective during such a period without disturbing or
restructuring the portfolio established by the Fund during an Aggressive
Period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
bonds and other debt obligations, stock options, stock index options,
stock index futures or options on such futures. Stock options, stock
index futures and options thereon are utilized to "hedge" risks arising
from the Fund's investments originally selected under its "Aggressive
Portfolio Strategy," including those risks arising while the Fund is
selecting suitable investments for its assets, and are not entered into
for speculative purposes. Their use may reduce or impose a limit on the
amount of gains the Fund can achieve from the investments which are so
"hedged." (See "Hedging" and Options and Futures").
After determining that a prospective investment meets the financial
criteria described above, the Advisor will seek to select securities for
the Fund based upon an analysis of the relative social performance of
the issuer. The Advisor will numerically rate the social performance of
each issuer regarding specific social issues and rate the overall social
performance of each issuer between 1 and 10, with 1 indicating the
highest rating and 10 indicating the lowest. The Advisor considers
information provided by various sources, including the issuers of
securities, publicly disclosed corporate documents filed with federal
agencies, and information provided by Kinder, Lydenberg, Domini & Co.
("KLD") and its Domini Social Index (the "DSI"). The DSI is a market
capitalization-weighted common stock index which monitors the
performance of 400 corporations that pass multiple, broad-based social
screens. The DSI 400 consists of approximately 250 companies included in
the Standard & Poor's 500 Stock Index, approximately 100 of the largest
companies not included in the S & P 500 or companies providing industry
representation, and 50 companies with particularly strong social
characteristics. The Advisor may select companies listed in the DSI for
investment, but is not limited to the selection of such companies.
The DSI was created to fill two primary needs:
(bullet) To create a diversified benchmark against which social
investors can measure the investment performance of
socially screened portfolios. The DSI is constructed to
represent the broad market available to the social
investor.
(bullet) To provide a resource for social investors wishing a broad
index of companies in a variety of industries that pass
commonly applied social screens.
The DSI uses a combination of exclusionary and qualitative social
screens:
Exclusionary screens:
(bullet) Eliminate companies that derive two percent or more of
sales from military weapons systems; derive any revenues
from the manufacture of alcoholic or tobacco products; or
derive any revenues from the providing of gaming products
or services; and
(bullet) Eliminate electric utilities that own interests in nuclear
power plants or derive electricity from nuclear power
plants in which they have an interest.
Qualitative screens:
(bullet) Evaluate companies' records in areas such as diversity,
employee relations, the environment, and product. KLD makes
an effort to include companies with a positive record in
these areas.
Investors should be aware that the Fund's social criteria may limit the
availability of investment opportunities more than is customary with
other investment companies. The Advisor may change the social criteria
used to rate social performance of an issuer without prior notice or
shareholder approval.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap Fund
and The Rightime Social Awareness Fund
The Advisor will select securities for each Fund based upon an analysis
of the expected contribution of the security to the Fund's investment
objective. Equity securities (such as common and preferred stock) will
be selected based upon the expected appreciation potential, income,
and/or liquidity of the security. In selecting preferred stock, the
Advisor does not rely upon published ratings of issuers, but may
consider such ratings in making its recommendations. Debt securities
(such as bonds or other obligations, including money market securities),
will be selected after considering factors such as the interest rate and
the soundness of the issuer. The Advisor does not rely upon published
ratings of such issuers, but may consider such ratings in making its
recommendations. Preferred stocks and debt securities in which the Fund
may invest will be rated at the time of purchase Baa or higher by
Moody's Investor Service, Inc., or BBB or higher by Standard & Poor's
Corporation, or in the opinion of the Advisor will be of comparable
quality. Baa and BBB rated securities are considered to have speculative
characteristics. Adverse economic conditions and changing circumstances
are more likely to lead to a weakened capacity to pay principal and
interest. In the event the rating on an issue held in a Fund's portfolio
is changed by the ratings service, such change will be considered by the
Fund in its evaluation of the overall investment merits of that
security.
The Funds also seek to protect the value of their investments in the
Fund by temporarily foregoing the Fund's objective for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated by the Advisor (as indicated by rapidly accelerating
inflation or interest rates, sharply declining stock markets, increasing
deterioration in the banking situation and/or increasing threats to
national or world security.) This will involve the selection of high
proportions, up to 100%, of temporary defensive investments such as U.S.
Government securities or other money market securities (see "Money
Market Securities"), the use of very short portfolio maturities of 60
days or less, other investments which protect the value of the Fund, and
similar techniques such as holding cash.
The Advisor will attempt to minimize market risk by the use of "market
timing" concepts and procedures. Market timing involves the use of
analytical techniques which seek to anticipate major market trends
which, in the opinion of the Advisor, affect securities markets over
periods of time, so an investor (such as the Fund) may restructure its
portfolio of investments to increase gains or income, or avoid losses.
There can be no assurance the Advisor will achieve timing consistently.
If the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
The Rightime Government Securities Fund
The Fund's objective is to achieve for its investors a high current
income consistent with safety and liquidity of principal. The Fund seeks
to achieve this objective by investing in securities that are issued or
guaranteed as to principal and interest by the U.S. Government, its
agencies, authorities or instrumentalities ("Government Securities"),
investing in securities secured by Government Securities (such as
repurchase agreements), and by engaging in transactions involving
related options, futures and options on futures. The shares of the Fund
are not issued by the U.S. Government, nor is the Fund's net asset value
guaranteed by the U.S. Government.
Under normal circumstances at least 65% of the Fund's assets will be
invested at all times in Government Securities, including such
securities purchased on a delayed delivery basis, or repurchase
agreements secured by such securities. Government Securities include:
(1) U.S. Treasury obligations, which differ only on their interest
rates, maturities and times of issuance: U.S. Treasury bills (maturity
of one year or less). U.S. Treasury notes (maturities of one to ten
years), and U.S. Treasury bonds (generally maturities of greater than
ten years), and separated or divided U.S. Treasury securities (stripped
by the U.S. Treasury) whose payments of principal and interest are all
backed by the full faith and credit of the United States; and (2)
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, some of which are backed by the full faith and credit
of the U.S. Treasury, e.g., direct pass-through certificates of the
Government National Mortgage Association (generally referred to as
"GNMA"); some of which are supported by the right of the issuer to
borrow from the U.S. Government, e.g., obligations of Federal Home Loan
Banks; and some of which are backed only by the credit of the issuer
itself, e.g., obligations of the Student Loan Marketing Association.
Generally, GNMA's are inversely affected by changes in interest rates,
i.e., as interest rates decline, market value increases and as interest
rates rise, market value declines. Consequently, GNMA's are subject to
the risk of market price fluctuations. The Fund cannot "lock-in" long-
term interest rates by purchasing such securities because the average
life of the underlying mortgage instrument is likely to be substantially
less than the original maturity. As a result of the need to reinvest
prepayment of principal generally and the possibility of significant
unscheduled prepayments resulting from decline in mortgage interest
rates, the Fund may have to invest such assets at current rates which
may be less favorable.
The Fund may also purchase U.S. Treasury securities that have been
separated or divided by financial institutions and also receipts or
certificates representing interests in such stripped debt obligations
and coupons. Separated U.S. Treasury securities are sold under different
names including: Certificate of Accrual on Treasury Securities, Treasury
Receipts, Separated Trading of Registered Interest and Principal of
Securities and Treasury Investment Growth Receipts.
The Fund may write covered call and put options and purchase call and
put options on Government Securities in an effort to increase current
income and to reduce fluctuations in net asset value. Consistent with
the investment objective of recognizing safety and liquidity of
principal, the Fund may protect against anticipated declines in the
value of securities held or increases in the cost of securities to be
acquired by hedging through purchase or sale of futures contracts on
Government Securities and related options.
Depending on market conditions, the Fund may temporarily take a
defensive position by investing a greater portion of its assets in cash,
short-term Government Securities and related repurchase agreements or by
otherwise reducing the general maturity of its portfolio.
Government Securities do not generally involve the credit risks
associated with other types of interest bearing securities, although, as
a result, the yields available from Government Securities are generally
lower than the yields available from corporate interest-bearing
securities. To the extent the Fund purchases U.S. Obligations of medium
term (maturities of one to ten years) or longer, the Fund's net asset
value will vary inversely with changes in market interest rates.
Consequently, investors in the Fund may be subject to more risk than
other funds which do not purchase investments of medium term or longer.
However, on an historical basis, securities issued or guaranteed by the
U.S. Government or its agencies and instrumentalities have involved
minimal risk of loss of principal or interest.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
OTHER INVESTMENT POLICIES
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund
Hedging
Under certain conditions, each Fund may choose to restructure its
investments in anticipation of market movement. This could involve the
sale of investments owned by the Fund to secure gains or to avoid losses
before an expected decline in the market reduces the market value of
such securities.
In place of or to supplement such restructuring, each Fund may seek to
protect itself from anticipated market action by using "hedging"
techniques that the Fund expects will generate gains which would offset
losses on other securities owned by the Fund. These hedging techniques
could involve combinations of various techniques, such as the purchase
or sale of stocks or the use of stock options, stock index options,
stock index futures and options thereon to seek to achieve increases in
the values of such options and futures which offset decreases in the
values of other securities owned by the Fund. The Advisor would select
the specific technique(s) based upon analysis of the Fund's portfolio,
market conditions, relative costs and risks, tax effects and other
factors. There can be variations between the relative movements of
investments and hedge selected with respect to that investment. This may
increase or decrease the gains or losses each Fund achieves by its
hedging relative to its losses or gains on the hedged investments.
While the investment companies in which The Rightime Fund invests will
generally not perform in exactly the same proportions as the indexes on
which options or futures are available, the Advisor believes it can
identify certain ratios reflecting relationships between the previous
performance by such companies and the indexes on which the Fund will
engage in options or futures transactions, and will attempt to allow for
such differences in selecting its "hedging" investments. Because the
Fund does not control the underlying investment company, an unexpected
and unprecedented restructuring of the portfolio of an underlying
investment company could have an unexpected, and possibly adverse,
effect on the hedging efforts of the Advisor. If the Fund invested
directly in a portfolio of operating companies its hedging efforts
usually would not involve the risk of such an intervening level of
hedging or defensive investments. This risk is present when the Fund
invests in other investment companies, because each is separately
managed by Advisors or officers who may also hedge simultaneously or
take action which may render the Advisor's action ineffective or
unsuccessful; the Fund benefits, in this respect, from the study of the
prior records of, and the restrictions and limitations applicable to
such companies, but is dependent upon the success or failure in these
efforts of the Advisor.
Options and Futures
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund may use stock options,
stock index futures and options on such futures to "hedge" their
portfolio investments. The following descriptions illustrate some of the
techniques and risks involved in such hedging. Further information
appears in the Statement of Additional Information.
Options: Each Fund intends to purchase and/or write call and put
options that are traded on U.S. securities exchanges or over-the-
counter. Each Fund seeks to enhance its objective by receiving premiums
for writing covered call and put options. Although each Fund receives
premium income from these techniques, any appreciation realized will be
limited by the terms of the option. Each Fund may purchase call options
to protect against an increase in the price of securities that it
ultimately wants to buy. It may purchase put options to protect its
portfolio securities against a decline in market value.
Stock Index Futures: Each Fund intends to purchase and sell stock
index futures contracts. A Fund may sell stock index futures contracts
in anticipation of, or during a market decline to attempt to offset the
decrease in market value of its common stocks and/or investment company
holdings that might otherwise result; and it may purchase such contracts
in order to offset increases in the cost of common stocks and/or
investment company holdings that it intends to purchase.
Options on Stock Indexes and Stock Index Futures: Each Fund intends to
purchase and/or write call and put options on Stock Indexes which are
traded on U.S. exchanges. The Funds also intend to purchase and/or write
call and put options on stock index futures which are traded on U.S.
exchanges. Options on stock index futures are similar to options on
stocks or options on stock indexes.
The selection of the foregoing techniques or any combination of them to
be used at any particular time will depend upon an assessment of the
relative implementation costs and the liquidity of the particular
secondary market in which such options, stock index futures, and options
on stock indexes and stock index futures are traded.
Risks of Transactions in Stock Options, Stock Index Options and Options
on Stock Index Futures: An option position may be closed out only on
an exchange or with a dealer who provides a secondary market for an
option of the same series. Although the Funds will generally purchase or
write only those options for which the Advisor believes there is an
active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option. In such
event, it might not be possible to effect closing transactions in
particular options, with the result that the Fund would have to exercise
its options in order to realize any profit or allow the option to
expire. The inability to close-out these options may result in a loss to
the Fund. If exercised, the Fund would incur brokerage commissions upon
the subsequent disposition of underlying securities acquired. It is the
position of the Staff of the Securities and Exchange Commission that
over-the-counter options are illiquid. An imperfect correlation exists
between the options and securities being hedged. The success of any
hedging position depends on the ability of the Advisor to predict stock
and interest rate movement.
While the Funds have not adopted fundamental limitations on their
futures or options activities, they must comply with certain
requirements of the U.S. Securities and Exchange Commission and the
Commodities Futures Trading Commission. For example, these provisions
require that each Fund shall not purchase or sell any futures or puts or
calls on futures if immediately thereafter the sum of the amount of the
Fund's margin deposits (both initial and variation deposits) and
premiums paid for outstanding puts and/or calls on futures would exceed
5% of the value of its total assets. (While the amount represented by
such premiums or margin may be small, the value of the assets affected
by options of futures may be large.) This limitation (or the others
described below) could, however, change if regulatory provisions
applicable to the Funds were to be changed.
The conditions with which each Fund will comply under the terms of the
Rightime Fund, Inc. Exemptive Order include requirements that: (1) the
Fund maintain liquid assets in the segregated custody of its Custodian
Bank equal to the combined value of its additional obligations for
futures and certain other investments; (2) the sum of specified premiums
and margins will not exceed 5% of the Fund's market value when such
investments are made; (3) the Fund will establish and maintain funds in
FCM Accounts in its Custodian Bank as described in its Exemptive
Application; and (4) the Fund will withdraw excess variation margin
from its FCM Accounts as described in its Application.
Money Market Securities
The Funds may invest in money market securities, which include:
marketable securities issued or guaranteed as to principal and interest
by the government of the United States or by its agencies or
instrumentalities; domestic bank certificates of deposit; bankers'
acceptances; prime commercial paper rated in the two highest categories
by Moody's and Standard & Poor's Corp.; and repurchase agreements
(secured by U.S. Treasury or agency obligations).
Under a repurchase agreement the Fund acquires a debt instrument for a
relatively short period (usually not more than one week) subject to the
obligations of the seller to repurchase and of the Fund to resell such
instrument at a fixed price. The use of repurchase agreements involves
certain risks. For example, if the seller of the agreement defaults on
its obligation to repurchase the underlying securities at a time when
the value of these securities has declined, the Fund may incur a loss
upon disposition of them. If the seller of the agreement becomes
insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of the Fund
and therefore subject to sale by the trustee in bankruptcy. Finally, it
is possible that the Fund may not be able to substantiate its interest
in the underlying securities. While management of the Funds acknowledges
these risks, it is expected that they can be controlled through
stringent security selection and careful monitoring procedures.
The Funds will select money market securities for investment when such
securities offer a current market rate of return which the Advisor
considers reasonable in relation to the risk of the investment, and the
issuer can satisfy suitable standards of creditworthiness set by the
Advisor and described in the Statement of Additional Information.
The Rightime Government Securities Fund
Futures Contracts and Options on Futures Contracts
The Fund may enter into contracts for the purchase or sale for future
delivery of fixed income securities ("Futures Contracts") and may
purchase and write options to buy or sell Futures Contracts ("Options on
Futures Contracts"). These investment techniques will only be used by
the Fund to hedge against anticipated future changes in interest rates
which otherwise might either adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of Government
Securities which the Fund intends to purchase at a later date. Should
interest rates move in an unexpected manner, the Fund may not achieve
the anticipated benefits of Futures Contracts or Options on Futures
Contracts or may realize a loss.
Options
The Fund may write (sell) "covered" put and call options on optionable
Government Securities. Call options written by the Fund give the holder
the right to buy the underlying securities from the Fund during the term
of the option at a stated exercise price; put options give the holder
the right to sell the underlying security to the Fund during the term of
the option at a stated exercise price. Call options are "covered" when
the Fund owns the underlying securities and put options are "covered"
when the Fund has established a segregated account of cash and
Government Securities which can be liquidated promptly to satisfy any
obligation of the Fund to purchase the underlying securities. The Fund
may also write straddles (combinations of puts and calls on the same
underlying security) in exchange for a combined premium on the two
writing transactions. (See "Dividends, Distributions and Taxes" in the
Statement of Additional Information for a discussion of the tax
consequences of Straddle Writing.)
The Fund will receive a premium from writing a put or call option, which
increases the Fund's gross income in the event the option expires
unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the
remaining term of the option. By writing a call option, the Fund limits
its opportunity to profit from any increase in the market value of the
underlying security above the exercise price of the option. By writing a
put option, the Fund assumes the risk that it may be required to
purchase the underlying for an exercise price higher than its then
current market value, resulting in a potential capital loss unless the
security subsequently appreciates in value.
The Fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction in which it
purchases an option having the same terms as the option written. It is
possible, however, that illiquidity in the options markets may make it
difficult from time to time for the Fund to close out its written option
positions. Also, the securities exchanges have established limitations
on the number of options that may be written by an investor or group of
investors acting in concert. It is possible in the future that the Fund
and other investment companies or series of this company might be
considered to be such a group. It is not contemplated that these
position limits will have any adverse impact on the Fund's portfolio
strategies.
The Fund may also purchase listed or over-the-counter put or call
options in anticipation of changes in interest rates which may adversely
affect the value of its portfolio or the prices of Government Securities
that the Fund wants to purchase at a later date. The premium paid for a
put or call option plus any transaction costs will reduce the benefit,
if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security changes sufficiently, the option
may expire without value to the Fund. The Fund intends to treat options
in respect of specific securities that are not traded on a national
securities exchange as not readily marketable and therefore subject to
the limitations set forth under "Investment Restrictions" below.
When-Issued Securities
When securities are offered on a "when-issued" basis, the price is fixed
at the time the commitment to purchase is made, but delivery and payment
for the when-issued securities take place at a later date, normally
within one month. The Fund will establish a segregated account with the
Custodian in which it will maintain cash and marketable securities equal
in value to commitments for when-issued securities. Such segregated
securities either will mature, be replaced with cash or other comparable
securities or, if necessary, be sold on or before the settlement date.
The Fund intends to purchase when-issued securities with the purpose of
actually acquiring them, although they may be sold prior to the
settlement date if a sale appears desirable for investment reasons.
Securities purchased on a when-issued basis are subject to changes in
value based upon the public's perception of the creditworthiness of the
issuer and changes, real and anticipated, in the level of interest
rates. Securities purchased on a when-issued basis may expose the Fund
to additional risks because they may experience such fluctuations prior
to their actual delivery. Purchasing securities on a when-issued basis
can involve a risk that the yields available in the market when the
delivery takes place actually may be higher than those obtained in the
transaction itself.
Lending of Securities and Short-Sales
The Fund may make loans of Government Securities in its portfolio to
broker-dealers under contracts calling for collateral that will consist
of either Government Securities (which may have different maturities) or
cash. The Fund will continue to collect interest on the securities
loaned and will also receive either interest (through investment of cash
collateral) or a fee (if the collateral is Government Securities). The
Fund may pay fees in connection with securities loans. There may be
risks of delay in receiving additional collateral, or risks of delay in
recovery of the securities or even loss of rights of the collateral,
should the borrower of the securities fail financially. However, loans
are made only to borrowers deemed by the Advisor to be of good standing,
and when, in the judgement of the Advisor, the fee which can be earned
from such securities loan justifies the attendant risk. The Fund may
also make short sales involving either securities held in the Fund's
portfolio or securities which the Fund has the right to acquire without
paying additional consideration, generally referred to as "short sales
against the box." Such short sales involve the risk that if the Fund
holds a right to acquire a security it sells short, it may have to go
into the market to acquire the security for delivery if that security is
not received pursuant to the right to acquire. The continued obligation
to hold a security for delivery under the short sale can also cause the
Fund's assets to be tied up in the security for the intervening period,
when the Fund might otherwise determine not to use its assets in such
fashion. It is the present intention of management to make such sales
only for the purpose of deferring realization of gain or loss for
federal income tax purposes. (See "Dividends, Distributions and Taxes"
in the Statement of Additional Information.)
INVESTMENT RESTRICTIONS
The investment restrictions set forth below have been adopted by the
respective Funds to limit certain risks that may result from investment
in specific types of securities or from engaging in certain kinds of
transactions addressed by such restrictions. They may not be changed
without the affirmative vote of a majority of the outstanding voting
securities of the particular Fund. Certain of these policies are
detailed below, while other policies are set forth in the Statement of
Additional Information. Changes in values of a particular Fund's assets
or the assets of the Company as a whole will not cause a violation of
the investment restrictions so long as percentage restrictions are
observed by the Fund at the time it purchases any security.
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund
Each Fund's investment restrictions specifically provide that the Fund
will not:
(a) as to 75% of the Fund's total assets, invest more than 5% of its
total assets in the securities of any one issuer. (This limitation does
not apply to cash and cash items, obligations issued or guaranteed by
the United States government, its agencies or instrumentalities, or
securities of other investment companies);
(b) purchase more than 10% of the voting securities or more than 10% of
any class of securities of any issuer. (For purposes of this
restriction, all outstanding fixed income securities of an issuer are
considered as one class);
(c) purchase or sell commodities or commodity futures contracts, other
than those related to stock indexes as previously outlined in the
section entitled "Investment Objectives and Policies";
(d) make loans of money or securities, except (1) by the purchase of
fixed income obligations in which the Fund may invest consistent with
its investment objective and policies; or (2) by investment in
repurchase agreements (see "Investment Objectives and Policies");
(e) invest in securities of any company if, to the knowledge of the
Fund, any officer or director of the Company or the Advisor owns more
than .5% of the outstanding securities of such company and such officers
and directors (who own more than .5%) in the aggregate own more than 5%
of the outstanding securities of such company;
(f) borrow money, except the Fund may borrow from banks: (1) for
temporary or emergency purposes in an amount not exceeding 5% of the
Fund's assets; or (2) to meet redemption requests that might otherwise
require the untimely disposition of portfolio securities in an amount up
to 33-1/3% of the value of the Fund's total assets (including the amount
borrowed) valued at market less liabilities (not including the amount
borrowed) at the time the borrowing was made. While borrowings exceed 5%
of the value of the Fund's total assets, the Fund will not make
additional investments. Interest paid on borrowings will reduce net
income;
(g) pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 33-1/3% of the value of its net assets but
only to secure borrowings for temporary or emergency purposes, such as
to effect redemptions; and,
(h) purchase the securities of any issuer if, as a result, more than
10% of the value of the Fund's net assets would be invested (1) in
securities that are subject to legal or contractual restrictions on
resale ("restricted securities"), (2) in securities for which there are
no readily available market quotations, or (3) in repurchase agreements
maturing in more than seven days.
The Rightime Fund
The Fund has also adopted these two additional investment restrictions.
The Fund will not:
(i) invest in any investment company if a purchase of its shares would
result in the Fund and its affiliates owning more than 3% of the total
outstanding stock of such investment company; and,
(j) invest in any investment company which itself does not qualify as a
diversified investment company under the Internal Revenue Code.
The Rightime Government Securities Fund
The Statement of Additional Information provides a listing of investment
restrictions which govern the Fund's investment policies and a
description of strategies which may be used by the Fund in managing its
portfolio. Among other restrictions set forth therein, the Fund will not
borrow money or pledge its assets except as a temporary measure for
extraordinary or emergency purposes and not in excess of 33-1/3% of the
value of the total assets of the Fund taken at lower of their market
value or cost. If borrowings exceed 5% of the Fund's assets, the Fund
will not purchase securities.
CAPITAL STOCK
The authorized capital stock of the Company consists of 500,000,000
shares of Common Stock with a par value of $0.01 each. At the present
time 50,000,000 shares have been allocated to The Rightime Fund, and
20,000,000 shares of stock have been allocated to each of The Rightime
Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social Awareness
Fund, and The Rightime Government Securities Fund. Each share has equal
dividend, voting, liquidation and redemption rights. There are no
conversion or preemptive rights. Shares, when issued, will be fully paid
and nonassessable. Fractional shares have proportional voting rights.
Shares of the Funds do not have cumulative voting rights which means
that the holders of more than 50% of the shares voting for the election
of directors can elect all of the directors if they choose to do so and,
in such event, the holders of the remaining shares will not be able to
elect any person to the Board of Directors. The Funds' shareholders will
vote together to elect directors and on other matters affecting the
entire corporation, but will vote separately on matters affecting
separate series. The Funds do not intend to hold annual meetings of
shareholders. The Company will call a meeting of Shareholders, if
requested to do so by the holders of at least 10% of the Company's
outstanding shares, for the purpose of voting upon the question of
removal of a director or directors and will assist in communications
with other shareholders as required by Section 16(c) of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
BOARD OF DIRECTORS
The Board of Directors of the Company are fiduciaries for the Funds'
shareholders and are governed by the law of the State of Maryland in
this regard. They establish policy for the operation of the Funds, and
appoint the Officers who conduct the daily business of the Funds.
INVESTMENT ADVISOR
The investments of each Fund are managed by Rightime Econometrics, Inc.
(previously defined as the "Advisor"), 1095 Rydal Road, Rydal, PA 19046-
1711, under an investment Advisory agreement (the "Advisory Agreement")
which became effective as to the Funds on the following dates: The
Rightime Fund, March 26, 1985; The Rightime Blue Chip Fund, July 1,
1987; The Rightime MidCap Fund, November 10, 1991; The Rightime Social
Awareness Fund, March 1, 1990; and The Rightime Government Securities
Fund, December 24, 1986. The Advisor has been providing investment
management services to the Funds and to separately managed accounts
since 1979 and currently has over $2 billion (including the Funds) in
assets under management.
Pursuant to each Advisory Agreement, the Advisor will manage the assets
of each Fund in accordance with the stated objective, policies and
restrictions of the Fund (subject to the supervision of the Fund's Board
of Directors and the Fund's officers.) The Advisor is responsible for
selecting brokers and dealers (including, when appropriate, Lincoln
Investment Planning, Inc. or other affiliated broker-dealers) to execute
transactions for each Fund. The Board has also authorized the Advisor
and the Company's officers to consider sales of Fund shares when
allocating brokerage, subject to the policy of obtaining best price and
execution of such transactions. The Advisor will also keep certain books
and records in connection with its services to each Fund. The Advisor
has also authorized any of its directors, officers and employees who
have been elected as directors or officers of the Company to serve in
the capacities in which they have been elected. Services furnished by
the Advisor under each Advisory Agreement may be furnished through the
medium of any such directors and officers.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of .50% of the average
daily net assets of each of The Rightime Fund, The Rightime Blue Chip
Fund, The Rightime MidCap Fund, and The Rightime Social Awareness Fund,
and .40% of the average daily net assets of The Rightime Government
Securities Fund.
David J. Rights, the Chairman of the Board, President, and Treasurer of
The Rightime Fund, Inc., has been the Portfolio Manager of each Fund
since its inception. Mr. Rights is the President and owner of all of the
voting common stock of the Advisor and has provided Lincoln Investment
Planning, Inc. with investment research and related consulting services
for over fourteen years directly or through a predecessor entity of the
same name that merged into the Advisor.
ADMINISTRATOR
Each Fund has selected Rightime Administrators, Inc. (the
"Administrator") to serve as the Administrator of the Fund. The
Administrator, which is affiliated with the Advisor, is located at 218
Glenside Avenue, Wyncote, PA 19095-1595. The Administrator serves under
an agreement (the "Administration Agreement") with the Company on behalf
of each Fund, dated the same date as the respective Fund's Advisory
Agreement. Each Administration Agreement provides that the Administrator
will administer the Fund's affairs subject to the supervision of the
Company's Board of Directors and, in connection therewith, furnish each
Fund with office facilities, and with any ordinary clerical and
bookkeeping services not furnished by the Funds' Transfer Agent or
Custodian. The Administrator has authorized any of its directors,
officers or employees who are elected as directors or officers of the
Company, including a majority of the directors who are not "interested
persons," as defined in the Investment Company Act of 1940, as amended,
with respect to each Fund. The Administrator has retained Lincoln
Investment Planning, Inc., the distributor and transfer agent for each
Fund, to provide certain accounting services and shareholder services
for each Fund.
As compensation for its services, the Administrator receives a fee,
computed daily and payable monthly, at an annualized rate of each Fund's
average daily net assets of .95% for The Rightime Fund, .85% for each of
The Rightime Blue Chip Fund, The Rightime MidCap Fund, and The Rightime
Social Awareness Fund, and .75% for The Rightime Government Securities
Fund. The Administrator will pay the fees of the Distributor for the
accounting and shareholder services referred to in the previous
paragraph.
DISTRIBUTION OF SHARES
Lincoln Investment Planning, Inc. (the "Distributor") is each Fund's
distributor under a distribution agreement ("Distribution Agreement")
dated the same as the respective Fund's Advisory and Administration
Agreements. The Distributor promotes the distribution of the shares of
Funds in accordance with the Distribution Agreements and terms of the
distribution plan of each Fund (the "Plan") adopted pursuant to Rule
12b-1 under the Investment Company Act. The Distributor has retained RTE
Securities, Inc., a separate broker-dealer firm, to provide consulting
services and to assist with wholesaling activities for the Funds. David
J. Rights who is the Chairman of the Board, President and Treasurer of
the Company is also the owner of RTE Securities, Inc., as well as a
consultant for the Distributor. Edward S. Forst, Sr. who is a Director
and the Vice-President and Secretary of the Company is also the Chairman
of the Board of the Distributor, and is considered an "affiliated
person" of the Funds under the Investment Company Act. The Distributor's
offices are at 218 Glenside Avenue, Wyncote, PA 19095-1595.
The Plans provide for the use of Fund assets to pay expenses of
distributing Fund shares. The Distribution Agreements and the Plans were
each approved by the Board of Directors, including a majority of the
directors who are not "interested persons" of the Fund as defined in the
1940 Act (and each of whom has no direct or indirect financial interest
in the Plan or any agreement related thereto, referred to herein as the
"12b-1 Directors"). Each Fund's Plan and the agreements under each Plan
may be different from, and will operate independently of, any plan
adopted by any other series of the Company. Each Plan may be terminated
at any time by the vote of the Company's Board of Directors or the 12b-1
Directors, or by the vote of a majority of the outstanding voting
securities of the Fund. While a Plan continues in effect, the selection
of the 12b-1 Directors is committed to the discretion of such persons
then in office.
As compensation for its services, the Distributor receives a fee,
computed daily and payable monthly, at an annualized rate of each Fund's
average daily net assets of .75% for The Rightime Fund, .50% for The
Rightime Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social
Awareness Fund, and .25% for The Rightime Government Securities Fund.
The Plans provide that each Fund's costs may not exceed the annual rates
listed above, for payments to the Distributor, sales representatives or
third parties who render promotional and distribution services, for
items such as advertising expenses, selling expenses, commissions or
travel reasonably intended to result in sales of shares of the Fund and
for the printing of prospectuses sent to prospective investors. The
Funds will not bear any distribution expenses in excess of their
payments to the Distributor under the Plans at the rates set forth
above.
The Plans do not limit the amounts paid to the Distributor by each Fund
to amounts actually expended by the Distributor, and it is therefore
possible for payments to the Distributor to exceed its expenses in a
particular year. At the present time, however, the budgeted expenses of
the Distributor, including commissions to its representatives and those
of other dealers, will substantially exceed the payments under each
Distribution Agreement. The Distributor will advance such amounts from
its own resources. While the Distributor has advised the Funds it hopes
to recover such "excess" payments through its normal fees in later
years, the Funds are not legally obligated to repay such excess amounts
or to continue the Plans or the Distribution Agreements for such
purpose. Although the Plans may be amended by the Board of Directors,
any change in a Plan that would materially increase the amounts
authorized to be paid under the Plan must be approved by shareholders.
The total amounts paid by the Funds under the foregoing arrangements may
not exceed the maximum Plan limit specified above, and the amounts and
purposes of expenditures under the Plan must be reported to the 12b-1
Directors quarterly. The amounts allowable under the Plan for each of
the Funds is limited by provisions complying with certain rules of the
National Association of Securities Dealers. The 12b-1 Directors may
require or approve changes in the implementation or operation of the
Plans and may also require the total expenditures by each Fund under its
Plan be kept within limits lower than the maximum amount permitted by
the Plan as stated above. The 12b-1 Directors may terminate the
Distribution Agreement in accordance with its terms on thirty days'
notice.
CUSTODIAN
CoreStates Bank, NA, Philadelphia, Pennsylvania acts as the Custodian of
the securities and cash of each Fund.
TRANSFER AND DIVIDEND DISBURSING AGENT
The Company has selected Lincoln Investment Planning, Inc. to serve as
its transfer agent, dividend disbursing agent, and as redemption agent.
In the opinion of the Board of Directors, the fees charged by Lincoln
Investment Planning, Inc. for these services are comparable to those
charged by others for comparable services. The transfer agent's expenses
will be monitored for reasonableness by the Board of Directors.
GENERAL OPERATIONS
Except as indicated above, each Fund is responsible for the payment of
its expenses, including: (a) the fees payable to the Advisor,
Administrator, and the Distributor; (b) the fees and expenses of
Directors who are not affiliated with the Advisor, the Administrator, or
the Distributor; (c) the fees and certain expenses of the Fund's
Custodian and Transfer Agent; (d) the charges and expenses of the
Company's legal counsel and independent accountants; (e) brokers'
commissions and any issue or transfer taxes in connection with its
securities transactions; (f) all taxes and corporate fees payable to
governmental agencies; (g) the fees of any trade association of which
each Fund is a member; (h) the cost of stock certificates representing
shares of each Fund; (i) reimbursements of the organization expenses of
each Fund; (j) the fees and expenses involved in registering and
maintaining registration of the Company and the shares of each Fund with
the U.S. Securities and Exchange Commission, paying notice filing fees
to states in which Fund shares are sold, and the preparation and
printing of the Company's registration statements and prospectuses; for
such purposes; (k) allocable communication expenses with respect to
investor services and all expenses of shareholders and directors
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders; and (l) litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of each
Fund's business. Expenses which are identifiable to a specific Fund are
charged to the appropriate Fund and general corporate expenses are
allocated proportionately to each Fund based on relative net assets.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund will declare and pay annual
dividends to shareholders of substantially all of its net investment
income, if any, earned during the year from investments. The Rightime
Government Securities Fund will declare and pay monthly dividends to its
shareholders of substantially all of its net investment income, if any,
earned during the year from its investments. All Funds will distribute
net realized gains, if any, once each year.
Expenses of the Funds, including the fees of the Advisor, the
Administrator, and the Distributor, are accrued each day. Reinvestments
of dividends and distributions in additional shares of the Fund will be
made at the net asset value determined on the payable date, unless the
shareholder has elected to receive the dividends and/or distributions in
cash. An election may be changed at any time by notifying the Fund.
Each of the Funds is qualified as a "regulated investment company"
under the Internal Revenue Code of 1986 (the "Code") and intends to
continue such qualification in the future. Such qualification removes
each Fund from any liability for federal income taxes upon the portion
of its net investment income and net capital gains distributed to
shareholders and makes federal income tax upon such distributed income
and capital gains the sole responsibility of the shareholders. Continued
qualification requires each Fund to distribute to its shareholders each
year substantially all of its income and capital gains. The Code imposes
a nondeductible, 4% excise tax on regulated investment companies that do
not distribute to shareholders in each calendar year, an amount equal
to: (i) 98% of its calendar year net investment income; (ii) 98% of its
net capital gains for the one-year period ending October 31; and (iii)
100% of any undistributed net investment income or net capital gains
from the prior year. Each Fund intends to declare and pay dividends and
capital gain distributions in a manner to avoid imposition of the excise
tax. Each Fund also proposes to comply with other requirements, such as:
(a) appropriate diversification of its portfolio of investments; (b)
realization of 90% of annual gross income from dividends, interest,
gains from sale of securities, or other "qualifying income;" and, (3)
realization of less than 30% of gross income from gains on the sale or
other disposition of securities held less than three months, unless such
a policy would be disadvantageous to the Funds.
The Company is a series corporation. Each series of the Company (each
Fund) is treated as a separate entity for federal tax purposes. Any net
capital gains recognized by a Fund will be distributed to its investors
without need to offset (for federal tax purposes) such gains against any
net capital losses of another series.
The sale of shares of a Fund is a taxable event and may result in a
capital gain or loss. A capital gain or loss may be realized from a
redemption or exchange of shares among the Funds. In calculating any
gain or loss on a share exchange, investors should recognize that they
must hold their shares within The Rightime Blue Chip Fund, The Rightime
MidCap Fund, The Rightime Social Awareness Fund, and The Rightime
Government Securities Fund for more than 90 days in order to take into
account the sales load incurred on such shares (to the extent the
otherwise applicable sales load on the shares received in the exchange
is reduced or waived). Any amount of sales load not so taken into
account is added to the tax basis of the shares received in the
exchange.
Any dividend or distribution to a shareholder shortly after the purchase
of a Fund's shares will have the effect of reducing the net asset value
per share of such shares by the amount of the dividend or distribution.
While such payment (whether made in cash or reinvested in shares) is in
effect a return of capital, it may be subject to income taxes.
Regardless of the length of time Fund shares have been owned by
shareholders who are subject to federal income taxes, distributions from
long-term capital gains are taxable as such.
The dividends paid by The Rightime Fund, The Rightime Blue Chip Fund,
The Rightime MidCap Fund, and The Rightime Social Awareness Fund may
qualify, in part, for the 70% dividends received deduction. Corporate
shareholders should recognize that the shareholder must hold the shares
of a Fund for more than 45 days to qualify any dividends (or portion
thereof) for the dividends received deduction. The dividends paid by The
Rightime Government Securities Fund will not qualify for such deduction.
Each Fund will provide an information return to shareholders describing
the Federal tax status of the dividends paid by the Fund during the
preceding calendar year within 60 days after the end of each year as
required by present tax law. Shareholders should consult their tax
Advisors concerning the state and local taxation of such dividends, and
the federal, state and local taxation of capital gain distributions.
Dividends declared in October, November or December of any year to
investors of record on any date in such month will be deemed to have
been received by the investors and paid by the series on the earlier of:
(1) the date of payment; or (2) if paid after December 31, on December
31, provided such dividends are paid before February 1 of the following
year.
In accordance with the Internal Revenue Code, each Fund may be required
to withhold a portion of dividends or redemptions or capital gains paid
to a shareholder and remit such amount to the Internal Revenue Service,
if the shareholder fails to furnish the Fund with a correct taxpayer
identification number, if the shareholder fails to supply the Fund with
a taxpayer identification number altogether, if the shareholder fails to
make a required certification, or if the Internal Revenue Service
notifies the Fund to withhold a portion of such distributions from an
investor's account. Certain entities, such as certain types of trusts,
may be exempt from this withholding provided they file an appropriate
exemption certificate with the Fund.
DETERMINATION OF NET ASSET VALUE AND PUBLIC OFFERING PRICE
Orders for purchases are effected at the offering price next calculated
by each Fund after receipt of the order by the Fund's Transfer Agent.
The public offering price consists of the net asset value per share next
calculated plus any applicable sales load. The offering price and the
net asset value of a Fund share are determined as of the close of
regular trading on each day the New York Stock Exchange (the "NYSE") is
open. The net asset value is determined by dividing the value of each
Fund's securities, plus any cash and other assets, less liabilities, by
the number of shares outstanding. Expenses and fees of each Fund are
accrued daily and taken into account for the purpose of determining the
net asset value.
The Rightime Fund will value redeemable securities issued by open-end
investment companies using their respective net asset values determined
at the close of the NYSE. All Funds will value a portfolio security
listed on a securities exchange at the last sales price on the
security's principal exchange on that day. Listed securities not traded
on an exchange that day, and other securities which are traded in the
over-the-counter market will be valued at the last reported bid price in
the market on that day, if any. Stock options, stock index options or
options on stock index futures traded on national security exchanges are
valued at the close of option trading on such exchanges. Stock index
futures which are traded on commodities exchanges are valued at the last
transaction price as of the close of regular trading of the particular
exchange on each day that exchange is open. The value of assets held in
The Rightime Government Securities Fund may be determined on the basis
of market values or valuations furnished by a pricing service, as
described in the Statement of Additional Information. Securities for
which market quotations are not readily available and all other assets
will be valued at their respective fair market value as determined in
good faith by, or under procedures established by the Board of
Directors.
Money market securities with less than 60 days remaining to maturity
when acquired by a Fund will be valued on an amortized cost basis by the
Fund, excluding unrealized gains or losses thereon from the valuation.
This is accomplished by valuing the security at cost and then assuming a
constant amortization to maturity of any premium or discount. If the
Fund acquires a money market security with more than 60 days remaining
to maturity, it may be valued at current market value until the 60th day
prior to maturity, and will then be valued on an amortized cost basis
based upon the value on such a date.
HOW TO PURCHASE SHARES
Each Fund offers its shares for sale to the public through its
Distributor or through any dealer or financial institution ("dealers")
that has a dealers' agreement with the Distributor. The minimum initial
investment for each Fund is $1,000 and each subsequent investment must
be not less than $25. Each Fund may waive these minimums for qualified
tax sheltered retirement plans. Orders for purchases are effected at the
offering price next calculated by each Fund after receipt of the order
by the Fund's Distributor. (See "Determination of Net Asset Value and
Public Offering Price"). Shares of The Rightime Fund are purchased at
the net asset value without any sales charge. Shares of The Rightime
Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social Awareness
Fund, and The Rightime Government Securities Fund are purchased at the
offering price which reflects a maximum sales load of 4.75%. Lower sales
loads apply for larger purchases. See table below.
<TABLE>
<CAPTION>
Sales Load as % of
Offering Amount Dealer's
Amount of Purchase Price Invested Concession*
- ---------------------------- -------------- -------------- ----------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 3.75 3.90 3.35
$100,000 but under $500,000 2.75 2.83 2.45
$500,000 but under $1,000,000 1.75 1.80 1.55
$1,000,000 but under $2,000,000 0.75 0.76 0.65
</TABLE>
For amounts of $2 million or more there is no sales load.
* In some circumstances, the Distributor may allow a larger percentage
of the sales load to dealers. Such dealers may have additional
responsibilities under the federal securities laws.
- --------------------------------------------
Each Fund must be notified when a sale takes place that would qualify
for the reduced sales load on the basis of previous purchases and
current purchases. The reduced sales load will be granted upon
confirmation of the shareholder's holdings by the Fund.
Shareholders of The Rightime Blue Chip Fund, The Rightime MidCap Fund,
The Rightime Social Awareness Fund, and The Rightime Government
Securities Fund may reduce their sales load by signing a Letter of
Intent, that permits purchases over a 13-month period to obtain a
reduced sales load. They may also combine shares in their Rightime Blue
Chip Fund, Rightime MidCap Fund, Rightime Social Awareness Fund, and/or
Rightime Government Securities Fund accounts for Rights of Accumulation
to provide a reduced sales load on new purchases. Rights of Accumulation
are applicable to purchases made at one time by an individual; or an
individual, his or her spouse and their children under the age of 21; or
a trustee or other fiduciary of a single trust estate or a single
fiduciary account (including an employee benefit plan qualified under
Section 401 of the Internal Revenue Code).
Shares may be purchased initially by completing the application
accompanying this Prospectus and mailing it, together with a check
payable to The Rightime Fund, Inc. to:
Rightime Fund Quick Mail The Rightime Family of Funds
P.O. Box 13813 OR 218 Glenside Avenue
Philadelphia, PA 19101-3813 Wyncote, PA 19095-1595
(Regular Mail) (Overnight Mail)
Subsequent investments to existing accounts may be made at any time
using the address above. Mail orders should include, when possible, the
"Invest By Mail" stub from your previous confirmation statement. It is
important that your account number be referenced with all subsequent
purchases or correspondence.
Shareholders who want to invest regularly may participate in the
Automatic Investing Plan. This plan allows you to buy shares ($25
minimum) through pre-authorized withdrawals from your bank account.
These investments are made on the 15th day of each month or the next
business day thereafter.
For information on purchasing shares by wire and the issuance of stock
certificates, please contact the Fund at (800) 866-9393.
The Company reserves the right in its sole discretion: (i) to suspend
the offering of its shares; (ii) to reject purchase orders when in the
best interest of the Fund; and, (iii) to reduce or waive the minimum for
initial and subsequent investments as set forth above.
The Company reserves the right to charge a $15 annual maintenance fee to
accounts which have no new purchase during a calendar year (excluding
reinvestment of dividends and capital gains), and which have balances
that remain below $1,000 during the last six months of such calendar
year. Prior to deducting the fee, the Fund will provide 90 days notice
to the shareholder, during which the shareholder may increase their
account balance to $1,000 to avoid any fee. The Fund will not charge a
fee if an account balance is worth less than $1,000 solely as a result
of a market decline or sales load or if the account is actively
participating in a systematic withdrawal plan.
Waiver of Sales Loads
The sales loads will not apply to purchases of The Rightime Blue Chip
Fund, The Rightime MidCap Fund, The Rightime Social Awareness Fund, and
The Rightime Government Securities Fund in the following circumstances
provided that the Funds are notified at the time of purchase:
(bullet) shares acquired through dividend or capital gain
reinvestment from any series of The Rightime Fund, Inc.;
(bullet) shares acquired by the officers, directors and employees of
Rightime Econometrics, Inc., Lincoln Investment
Planning, Inc., and The Rightime Fund, Inc.;
(bullet) shares acquired by any pension, profit-sharing or qualified
retirement plan of Rightime Econometrics, Inc. and
Lincoln Investment Planning, Inc.;
(bullet) shares acquired by registered representatives of dealers
who have entered into dealers' agreements with the
Distributor;
(bullet) shares acquired by certain family members of any such
individual and their spouses identified above and cer-
tain trusts, pension, profit-sharing or qualified
retirement plan for the sole benefit of such persons;
(bullet) shares acquired and paid for with the proceeds from a
Teacher's Insurance Annuity Association (TIAA) or
College Retirement Equity Fund (CREF) account, and ongoing
retirement plan investments after a TIAA-CREF
transfer is received;
(bullet) shares acquired and paid for with the proceeds from
accounts of employees of organizations who have or had a
contract or agreement with TIAA or CREF, and ongoing
retirement plan investments after the transfer is received;
(bullet) shares acquired and paid for with the proceeds of a
redemption of an account in an unaffiliated mutual fund
when the assets were managed by an outside investment
Advisor or market timer for a minimum of one year;
and
(bullet) shares acquired and paid for with the proceeds of a
redemption of an account in an unaffiliated mutual fund or
insurance company which had previously incurred an initial
sales charge or contingent deferred sales charge
provided the assets maintain dealer or registered
representative continuity. To qualify for this waiver the
Fund may require evidence of the previously incurred
charges.
HOW TO REDEEM SHARES
Shareholders may redeem their shares of the Funds without charge on any
day that the Funds calculate their net asset values (see "Determination
of Net Asset Value and Public Offering Price"). Redemptions will be
effected at the net asset value per share next determined after the
receipt of a redemption request meeting the requirements described
below. The Funds normally send redemption proceeds on the next business
day, but in any event redemption proceeds are sent within seven days of
receipt of a redemption request in proper form or within such earlier
period as required under applicable law. Any redemption proceeds may be
reinvested in the Fund at net asset value without any sales charges
within 90 days of the redemption date.
A written redemption request to the Fund must: (i) identify the
shareholder's Fund and account number; (ii) state the dollar amount or
number of shares to be redeemed; and (iii) include the signatures of all
registered owners exactly as the account is registered. If the shares to
be redeemed were issued in certificate form, the certificates must be
endorsed for transfer (or be accompanied by an endorsed stock power) and
must be submitted to the Fund together with the redemption request. A
redemption request must be accompanied by a signature guarantee for the
following:
(bullet) amounts in excess of $25,000;
(bullet) if the proceeds are to be made payable to other than the
registered owner(s); or
(bullet) if the proceeds are to be sent elsewhere than the address
of record.
A signature guarantee verifies the authenticity of the shareholder's
signature(s) and may be obtained from an acceptable financial
institution such as a bank, savings and loan association, trust company,
credit union, broker or dealer, registered securities association or
clearing agency. A notarized signature is not sufficient.
The Fund may require additional supporting documents for redemptions
made by corporations, executors, administrators, trustees and guardians.
A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.
Delivery of the proceeds of a redemption of shares purchased and paid
for by check or shares purchased by the automatic investing plan shortly
before the receipt of the redemption request may be delayed until the
Fund determines that its Custodian Bank has completed collection of the
funds. This may take up to 15 days. The Board of Directors may suspend
the right of redemption or postpone the date of payment for more than
seven days during any period when: (i) trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange
Commission (the "Commission") or such Exchange is closed for other than
weekends and holidays; (ii) the Commission has by order permitted such
suspension; or (iii) an emergency, as defined by rules of the
Commission, exists during which time the sale of portfolio securities or
valuation of securities held by the Fund are not reasonably practicable.
Shareholders and their dealer representatives are permitted to redeem
shares by telephone. Shareholders who establish new accounts subsequent
to the date of this prospectus by completing and returning a signed
application will automatically receive telephone redemption privileges
for themselves and their dealer representatives listed on the Fund's
records, unless the shareholder waives telephone redemption privileges
for their dealer representative or entirely by checking the appropriate
box on the application. Existing shareholders will have their accounts
converted to this telephone redemption privilege on the date of this
prospectus and must notify the Fund in writing or by telephone if they
wish to waive any portion of this privilege.
To redeem shares of your account by telephone, please call the Fund at
(800) 866-9393. Telephone redemptions:
(bullet) are not available on certain retirement accounts, such as
403(b)(7) accounts;
(bullet) are not available within 15 days of changing the address of
record on an account;
(bullet) may not exceed $25,000 in any 15-day period;
(bullet) must be payable to the registered owner(s) and mailed to
the address of record or wired to the bank account
designated on record at the Fund;
(bullet) may not be available on shares purchased by check or
automatic investing plan within 15 days of the telephone
redemption request; and
(bullet) are not available on outstanding shares issued in
certificate form.
The Funds' Transfer Agent will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. These
procedures include requiring the shareholder and/or their dealer
representative to provide personal or other identifying information.
These calls will also be recorded. For the protection of the shareholder
and the Fund, a transaction may be delayed or not implemented if the
Funds' Transfer Agent is not reasonably satisfied that the telephone
instructions are genuine. Neither a Fund nor its Transfer Agent will be
responsible for any loss, liability, cost or expense for following
instructions received by telephone that it reasonably believes to be
genuine. The Fund and the Transfer Agent may cancel the telephone
redemption privilege at any time without prior notice.
If the Board of Directors determines that it would be detrimental to the
best interest of the remaining shareholders of a Fund to make payment in
cash, the Fund may pay the redemption price in whole or in part by
distribution in kind of securities from the portfolio of the Fund. Such
securities will be valued on the basis of the procedures used to
determine the net asset value at the time of the redemption. If shares
are redeemed in kind, the redeeming shareholder may incur brokerage
costs in converting the assets into cash.
Each Fund reserves the right to redeem a shareholder's account where the
account is worth less than the minimum initial investment required when
the account is established, presently $1,000. (Any redemption of shares
from an inactive account established with a minimum investment may
reduce the account below the minimum initial investment, and could
subject the account to such redemption.) The Fund will advise the
shareholder of such intention in writing at least 90 days prior to
effecting such redemption, during which time the shareholder may
purchase additional shares in any amount necessary to bring the account
back to $1,000. The Fund will not redeem a shareholder's account that is
worth less than $1,000 solely as a result of a market decline, or if the
account is actively participating in a systematic withdrawal plan. The
Fund will not redeem a shareholder's account that has been charged an
annual maintenance fee within the current calendar year (see "How To
Purchase Shares").
Shareholders of a Fund worth at least $5,000 can open a Systematic
Withdrawal Plan. They can arrange to withdraw a specific dollar amount
(at least $25) on a monthly, quarterly, semiannual, or annual basis.
Interested shareholders may contact the Fund for instructions on how to
establish a systematic withdrawal plan.
HOW TO EXCHANGE SHARES
Shareholders of a Fund that has a sales load are permitted to exchange
all or part of their shares into any Fund in the Rightime Family of
Funds at net asset value, in states where shares of the Fund being
acquired can be sold. Shareholders of a Fund that does not have a sales
load, who previously incurred a sales load in connection with the
purchase of shares, which were subsequently exchanged into the Fund with
no sales load, may exchange a dollar amount equal to the current value
of such shares into another Fund at net asset value. No fees are charged
for the exchange privilege. Exchanges will be effected at the net asset
price or public offering price next determined after the receipt of the
exchange request. Exchange instructions may be in writing or by
telephone. Written exchange requests should be mailed to the Fund's
address listed in "How to Purchase Shares."
Telephone exchange requests may be made by calling the Fund at (800)
866-9393. Shareholders and their dealer representatives automatically
receive the telephone exchange privilege, unless the shareholder waives
the privilege for their dealer representative or entirely by checking
the appropriate box on the application or by calling the Fund at the
above telephone number. Telephone exchanges will be processed for
authorized accounts as long as proper identification is given by the
shareholder or dealer representative at the time of the exchange. Shares
issued in certificate form may not be exchanged by telephone.
Shareholders of a Fund may exchange their shares into and from a
designated money market portfolio organized and managed independently of
the Funds.
An exchange, for tax purposes, constitutes the sale of one fund and the
purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes. See "Dividends,
Distributions and Taxes."
The exchange privilege is subject to termination and its terms are
subject to change without notice to shareholders.
SPECIAL PLANS
Each Fund also offers its shares for use in certain Tax-Sheltered Plans
(such as IRA and 403(b)(7) plans) and Withdrawal Plans. Information on
these Plans is available from the Fund's Distributor or by reviewing the
Statement of Additional Information.
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THE RIGHTIME FUND, INC.
ADMINISTRATOR
Rightime Administrators, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
INVESTMENT ADVISOR
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
DISTRIBUTOR
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
CUSTODIAN
CoreStates Bank, NA
Broad & Chestnut Sts.
Philadelphia, PA 19101-7618
TRANSFER AGENT
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
Mailing Address
Rightime Fund Quick Mail
P.O. Box 13813
Philadelphia, PA 19101-3813
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102-1544
Table of Contents
Expense Table 3
Financial Highlights 4
Performance 6
Investment Objectives
and Policies 6
Other Investment Policies 13
Investment Restrictions 17
Capital Stock 18
Board of Directors 18
Investment Advisor 18
Administrator 19
Distribution of Shares 19
Custodian 20
Transfer and Dividend Disbursing
Agent 20
General Operations 21
Dividends, Distributions and Taxes 21
Determination of Net Asset Value
and Public Offering Price 22
How to Purchase Shares 23
How to Redeem Shares 25
How to Exchange Shares 26
Special Plans 27
2423
426
THE RIGHTIME FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 1, 1997
218 GLENSIDE AVENUE
WYNCOTE, PA 19095-1594
The Fund may be telephoned at (800) 866-9393.
The Rightime Fund, Inc. is an open-end diversified investment
company which offers multiple series of shares (each, a "Fund"). This
Statement of Additional Information relates to: The Rightime Fund, The
Rightime Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social
Awareness Fund, and The Rightime Government Securities Fund. The shares
of each Fund may be purchased or redeemed at any time. Purchases will
be effected at the public offering price and redemptions will be
effected at net asset value next computed after the receipt of the
investor's request. A copy of the Fund's Prospectus is available
without charge upon request to the Fund.
The Rightime Fund
The Rightime Blue Chip Fund
The Rightime MidCap Fund
The objective of each of the above Funds is to achieve for its
investors a high total return consistent with reasonable risk. Each
Fund will use a variety of investment strategies in an effort to balance
portfolio risks and to hedge market risks. There is no assurance that
the objective of a Fund will be achieved.
The Rightime Social Awareness Fund
The objective of the above Fund is to achieve for its
investors growth of capital and its secondary objective is current
income, consistent with reasonable risk. The Fund uses a variety of
investment strategies in an effort to balance portfolio risks and to
hedge market risks. There is no assurance that the objective of the
Fund will be achieved.
The Rightime Government Securities Fund
The objective of the above Fund is to achieve for its
investors high current income consistent with safety and liquidity of
principal. The Fund seeks to achieve this objective by investing in
securities that are issued or guaranteed as to principal and interest by
the U.S. Government, its agencies, authorities or instrumentalities or
secured by such securities, and by investing in and by earning premiums
from transactions involving related options, futures and options on
futures. There is no assurance the objective will be achieved.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD
BE READ IN CONNECTION WITH THE FUND'S PROSPECTUS DATED MARCH 1, 1997.
RETAIN THIS STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE.
TABLE OF CONTENTS
Page
Investment Objectives and Policies 1
The Rightime Fund 1
The Rightime Blue Chip Fund and
The Rightime MidCap Fund 4
The Rightime Social Awareness Fund 6
Options and Futures 8
Money Market Securities 11
The Rightime Government Securities Fund 12
Portfolio Turnover 21
Investment Restrictions 21
Investment Advisor 24
Distributor 25
Distribution Plan 26
Allocation of Portfolio Brokerage 28
Transfer Agent 28
Purchase of Shares 29
Dividends, Distribution and Taxes 32
Officers and Directors of the Fund 36
General Information 38
Performance 38
Financial Statements
INVESTMENT OBJECTIVES AND POLICIES
THE RIGHTIME FUND
The investment objective of the Fund is to achieve a high total
return consistent with reasonable risk. It seeks to achieve this
objective by concentrating in shares of investment companies and by
making other investments selected in accordance with the Fund's
investment restrictions and policies. The Fund will vary its investment
strategy as described in the Fund's Prospectus to seek to achieve its
objective. This Statement of Additional Information contains further
information concerning the techniques and operations of the Fund, the
securities in which it will invest, and the policies it will follow.
High Total Return
The Fund seeks to achieve a high total return for its shareholders.
It seeks to achieve this goal by a combination of capital appreciation
on investments (which may be emphasized during periods when a generally
rising trend in securities markets is anticipated by the Fund's
investment advisor, Rightime Econometrics, Inc. (the "Advisor") and high
income (which may be emphasized during periods when the Advisor
anticipates that income producing securities will provide performance
superior to the appreciation the Fund might otherwise achieve). The
Fund also seeks to achieve a high total return by avoiding the full
impact of periods of market decline by either shifting its investments
or by hedging its investments. The Fund does not seek the "maximum
total return" sought by some funds, because the Fund attempts to limit
to a reasonable level the risk which it will bear in the selection of
its investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by concentrating in a portfolio of shares of investment
companies which the Advisor believes will benefit from such a trend.
The Advisor will use a risk adjusted analysis (which considers the
relative volatility of its various investments) to evaluate the
investment companies' performance under various market conditions and to
consider the potential reward and potential risk. The Advisor will not
select such investment companies based solely upon their previous
performance. It is expected that such investment companies will
generally invest more than 50% of their assets in common and/or
preferred stocks. In order to make allowance for cash flow needs of the
Fund or when the Fund is otherwise pursuing appreciation in its
portfolio the Fund may also invest up to 75% of its asset value in other
investment vehicles such as common or preferred stocks of companies
which are not investment companies, investment companies which are money
market funds, cash equivalents, may make use of various hedging
techniques, or may hold its assets as cash. Though not required by its
policies to do so, the Fund may make such investments, if necessary, to
qualify as a "regulated investment company" under the Internal Revenue
Code (the "IRC"). (See "Dividends, Distributions and Taxes" in the
Prospectus for a discussion of qualification under Subchapter M of the
IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the Fund's investment
objective by investing in the shares of money market funds and other
types of investment companies, and investing up to 75% in cash
equivalents and by retaining cash. The Fund may also seek to achieve a
high total return during such a period without disturbing or
restructuring the portfolio established by the Fund during an aggressive
period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
stocks, stock options, stock index options, stock index futures or
options on such futures. (The Fund may also use such techniques to
accommodate cash needs or to avoid impairing the Fund's status as a
regulated investment company under the IRC.)
To this end, the Fund may, as to 75% or less of its asset value buy
or sell stock, stock options, stock index options, stock index futures
and options thereon to seek to counter-balance portfolio volatility
and/or market risk consistent with the intention of the investment
objective to limit investments to those which involve a reasonable risk.
Stock options, stock index futures and options thereon are utilized to
"hedge" risks arising from the Fund's investments originally selected
under its "Aggressive Portfolio Strategy," including those risks arising
while the Fund is selecting suitable investments for its assets, and are
not entered into for speculative purposes. Unlike funds which seek
"maximum" total return without limitation on the degree of risk the fund
will bear, when such option and futures techniques are used to reduce
the risk of loss (or secure investment gains) for this Fund, their use
will generally reduce or impose a limit on the amount of gains the Fund
can achieve from the investments which are so "hedged." (See "Hedging"
in the Prospectus and "Options and Futures" below.)
Other Factors
The Fund seeks to provide its shareholders with a high total return
consistent with reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for the Fund. This involves the use of "market timing"
concepts and procedures which have been developed and applied by the
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
Advisor affect securities markets over periods of time, so an investor
(such as the Fund) may restructure its portfolio of investments to
increase gains or income, or avoid losses. The Fund's Advisor will
apply such analytical techniques to the Fund's investments, including
the investment companies in which the Fund invests. It should be noted
that some members of the investment community believe that market timing
cannot be achieved successfully on a consistent basis and there can be
no assurance the Advisor will achieve such a level of consistency. If
the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, the Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stocks, stock
options, stock index options, stock index futures or options on such
futures to avoid untimely portfolio transactions, costly restructuring
of the portfolio, or adverse market effects while the Fund is investing
its assets. These techniques and securities are generally considered to
be speculative and to involve higher risks or costs to an investor. The
Fund will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by the Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
The Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing high total return for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
Investment Company Securities
The other investment companies in which the Fund invests will be
diversified investment companies managed by a number of investment
advisors and portfolio managers. This will offer the Fund an
opportunity to benefit from a variety of diversified portfolios.
Each such company will be a registered investment company, and will
operate subject to a variety of regulatory constraints. While such
regulation does not guarantee the investment success of an investment
company, or assure that it will not suffer investment losses, the
Advisor believes that such investment companies provide a sound
foundation upon which to base an investment portfolio. By investing in
a broad spectrum of such companies the Fund hopes to benefit from the
collective research and analysis of many experienced investment
personnel.
There are many types of investment companies. All maintain
portfolios which are generally liquid, but can be composed of different
kinds of securities and involve different objectives. Such companies
may seek only income, only appreciation, or various combinations of
these. They may invest in money market securities, short or long term
bonds, dividend producing stocks, tax-exempt municipal securities, or a
variety of other instruments. They may seek speculative or conservative
investments ranging from securities issued by new companies to
securities issued by "blue-chip" companies. An investment company which
has a policy of holding 80% of its assets in debt securities maturing in
thirteen months or less, or which holds itself out as a "money market
fund" will be treated as a money market fund by the Fund.
The Advisor be responsible for monitoring and evaluating these
kinds of factors to select investment company fund securities for the
Fund's portfolio in accordance with the policies and techniques
described in the Prospectus.
THE RIGHTIME BLUE CHIP FUND AND THE RIGHTIME MIDCAP FUND
The investment objective of each Fund is to achieve a high total
return consistent with reasonable risk. The Rightime Blue Chip Fund
seeks to achieve this objective by investing in shares of blue chip
securities ("Blue Chips") and by making other investments selected in
accordance with the Fund's investment restrictions and policies. The
Rightime MidCap Fund seeks to achieve this objective by investing
primarily in securities of companies with medium-size market
capitalizations ("MidCaps") and by making other investments selected in
accordance with the Fund's investment restrictions and policies. Each
Fund will vary its investment strategy as described in the Fund's
Prospectus to seek to achieve its objective. This Statement of
Additional Information contains further information concerning the
techniques and operations of each Fund, the securities in which it will
invest, and the policies it will follow.
High Total Return
Each Fund seeks to achieve a high total return for its
shareholders. Each Fund seeks to achieve this goal by a combination of
capital appreciation on investments (which may be emphasized during
periods when a generally rising trend in securities markets is
anticipated by the Advisor Fund's) and high income (which may be
emphasized during periods when the Advisor anticipates that income
producing securities will provide performance superior to the
appreciation the Fund might otherwise achieve). Each Fund also seeks to
achieve a high total return by avoiding the full impact of periods of
market decline by either shifting its investments or by hedging its
investments. The Funds do not seek the "maximum total return" sought by
some funds, because each Fund attempts to limit to a reasonable level
the risk which it will bear in the selection of its investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by investing in a portfolio of Blue Chips for The Rightime
Blue Chip Fund and MidCaps for The Rightime MidCap Fund, which the
advisor believes will benefit from such a trend. In order to make
allowance for cash flow needs of a Fund or when a Fund is otherwise
pursuing appreciation in its portfolio, the respective Fund may also
invest up to 35% of its asset value in other investment vehicles which
are not classified as such. Though not required by its policies to do
so, the Fund may make such investments, if necessary, to qualify as a
"regulated investment company" under the Internal Revenue Code (the
"IRC"). (See "Dividends, Distributions and Taxes" in the Prospectus for
a discussion of qualification under Subchapter M of the IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the respective Fund's
investment objective by investing up to 35% in securities other than
Blue Chips or MidCaps. Each Fund may also seek to achieve a high total
return during such a period without disturbing or restructuring the
portfolio established by the Fund during an aggressive period by using
cash, cash equivalents, proceeds of maturing securities, new assets,
etc. to purchase or sell other investment vehicles such as bonds and
other debt obligations, stock options, stock index options, stock index
futures or options on such futures. (Each Fund may also use such
techniques to accommodate cash needs or to avoid impairing the Fund's
status as a regulated investment company under the IRC.)
To this end, each Fund may, as to 35% or less of its asset value
buy or sell bonds and other debt obligations, stock options, stock index
options, stock index futures and options thereon to seek to counter-
balance portfolio volatility and/or market risk consistent with the
intention of the investment objective to limit investments to those
which involve a reasonable risk. Stock options, stock index futures and
options thereon are utilized to "hedge" risks arising from a Fund's
investments originally selected under its "Aggressive Portfolio
Strategy", including those risks arising while the Fund is selecting
suitable investments for its assets, and are not entered into for
speculative purposes. Unlike funds which seek "maximum" total return
without limitation on the degree of risk the fund will bear, when such
option and futures techniques are used to reduce the risk of loss (or
secure investment gains) for a Fund, their use will generally reduce or
impose a limit on the amount of gains a Fund can achieve from the
investments which are so "hedged." (See "Hedging" in the Prospectus and
"Options and Futures" below.)
Other Factors
Each Fund seeks to provide its shareholders with a high total
return consistent with reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for each Fund. This involves the use of "market timing"
concepts and procedures which have been developed and applied by the
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
investment advisor affect securities markets over periods of time, so an
investor (such as the Fund) may restructure its portfolio of investments
to increase gains or income, or avoid losses. The Advisor will apply
such analytical techniques to each Fund's investments, including the
Blue Chips in which The Rightime Blue Chip Fund invests and the MidCaps
in which The Rightime MidCap Fund invests. It should be noted that some
members of the investment community believe that market timing cannot be
achieved successfully on a consistent basis and there can be no
assurance the Advisor will achieve such a level of consistency. If the
Advisor incorrectly judges turns in the market, a Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, each Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stock options,
stock index options, stock index futures or options on such futures to
avoid untimely portfolio transactions, costly restructuring of the
portfolio, or adverse market effects while the Fund is investing its
assets. These techniques and securities are generally considered to be
speculative and to involve higher risks or costs to an investor. The
Funds will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by each Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
Each Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing high total return for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
THE RIGHTIME SOCIAL AWARENESS FUND
The investment objective of the Fund is to achieve for its
investors growth of capital and its secondary objective is current
income, consistent with reasonable risk. The Fund seeks to achieve this
objective by investing in securities of well known and established
companies, as well as smaller, less well known companies, with prospects
for above average capital growth and by making other investments
selected in accordance with the Fund's investment restrictions and
policies. As described in the Prospectus, the Fund also imposes certain
social criteria prior to selecting investments for the Fund. The Fund
will vary its investment strategy as described in the Fund's Prospectus
to seek to achieve its objective. This Statement of Additional
Information contains further information concerning the techniques and
operations of the Fund, the securities in which it will invest, and the
policies it will follow.
Growth of Capital and Income
The Fund seeks to achieve primarily growth of capital and
secondarily current income for its shareholders. The Fund seeks to
achieve this goal by a combination of capital appreciation on
investments (which may be emphasized during periods when a generally
rising trend in securities markets is anticipated by the Advisor) and
high income (which may be emphasized during periods when the investment
advisor anticipates that income producing securities will provide
performance superior to the appreciation the Fund might otherwise
achieve, consistent with maintaining the Fund's objective). The Fund
also seeks to achieve a return on its investments by avoiding the full
impact of periods of market decline by either shifting its investments
or by hedging its investments. The Fund attempts to limit to a
reasonable level the risk which it will bear in the selection of its
investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by investing in a portfolio of securities, primarily common
stocks, which the advisor believes will benefit from such a trend. In
order to make allowance for cash flow needs of the Fund or when the Fund
is otherwise pursuing appreciation in its portfolio, the Fund may also
invest its assets in other investment vehicles. Though not required by
its policies to do so, the Fund may make such investments, if necessary,
to qualify as a "regulated investment company" under the Internal
Revenue Code (the "IRC"). (See "Dividends, Distributions and Taxes" in
the Prospectus for a discussion of qualification under Subchapter M of
the IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the Fund's investment
objective by investing in securities other than common stocks,
consistent with maintaining the Fund's objective. The Fund may also
seek to achieve its objective during such a period without disturbing or
restructuring the portfolio established by the Fund during an aggressive
period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
bonds and other debt obligations, stock options, stock index options,
stock index futures or options on such futures. (The Fund may also use
such techniques to accommodate cash needs or to avoid impairing the
Fund's status as a regulated investment company under the IRC.)
To this end, the Fund may buy or sell bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon to seek to counter-balance portfolio volatility and/or
market risk consistent with the intention of the investment objective to
limit investments to those which involve a reasonable risk. Stock
options, stock index futures and options thereon are utilized to "hedge"
risks arising from the Fund's investments originally selected under its
"Aggressive Portfolio Strategy," including those risks arising while the
Fund is selecting suitable investments for its assets, and are not
entered into for speculative purposes. When such option and futures
techniques are used to reduce the risk of loss (or secure investment
gains) for the Fund, their use will generally reduce or impose a limit
on the amount of gains the Fund can achieve from the investments which
are so "hedged." (See "Hedging" in the Prospectus and "Options and
Futures" below.)
Other Factors
The Fund seeks to provide its shareholders with growth of capital
and with current income as a secondary objective, consistent with
reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for a Fund. This involves the use of "market timing" concepts
and procedures which have been developed and applied by the Fund's
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
Advisor affect securities markets over periods of time, so an investor
(such as the Fund) may restructure its portfolio of investments to
increase gains or income, or avoid losses. The Advisor will apply such
analytical techniques to the Fund's investments. It should be noted
that some members of the investment community believe that market timing
cannot be achieved successfully on a consistent basis and there can be
no assurance the Advisor will achieve such a level of consistency. If
the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, the Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stock options,
stock index options, stock index futures or options on such futures to
avoid untimely portfolio transactions, costly restructuring of the
portfolio, or adverse market effects while the Fund is investing its
assets. These techniques and securities are generally considered to be
speculative and to involve higher risks or costs to an investor. The
Fund will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by the Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
The Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing growth of capital for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
OPTIONS AND FUTURES
The following descriptions of stock options, stock index options,
stock index futures and options on such futures are summaries of the
vehicles The Rightime Fund, The Rightime Blue Chip Fund, The Rightime
MidCap Fund and The Rightime Social Awareness Fund may use to "hedge"
their respective investments, and illustrate techniques each Fund can
select to achieve such hedging.
Option Characteristics and Transactions: The Fund intends to
purchase and/or write put and call options that are traded on United
States securities exchanges and over-the-counter. A call option is a
short-term contract (having a duration of nine months or less) pursuant
to which the purchaser of the call option, in return for a premium paid,
has the right to buy the security underlying the option at a specified
exercise price at any time during the term of the option. The writer of
the call option, who receives the premium, has the obligation, upon
exercise of the option, to deliver the underlying security against
payment of the exercise price during the option period. A put option is
a similar contract which gives the purchaser of the put option, in
return for a premium, the right to sell the underlying security at a
specified price during the term of the option. The writer of the put,
who receives the premium, has the obligation to buy the underlying
security, upon exercise, at the exercise price during the option period.
A call option is "covered" if the Fund owns the underlying security
(or equivalent in the case of stock index options) covered by the call
or has an absolute and immediate right to acquire that security without
additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of
other securities held in its portfolio. A call option is also covered
if the Fund holds on share-for-share basis a call on the same security
as the call written where the exercise price of the call held is equal
to or less than the exercise price of the call written or greater than
the exercise price of the call written if the difference is maintained
by the Fund in cash, Treasury bills or other high grade short-term
obligations in a segregated account with its custodian. A put option is
"covered" if the Fund maintains cash, Treasury bills or other high grade
short-term obligations with a value equal to the exercise price in a
segregated account with its custodian, or else holds on a share-for-
share basis a put on the same security as the put written where the
exercise price of the put held is equal to or greater than the exercise
price of the put written. The premium paid by the purchaser of an
option will reflect, among other things, the relationship of the
exercise price to the market price and volatility of the underlying
security, the remaining term of the option, supply and demand and
interest rates.
If the Fund as the writer of an option wishes to terminate its
obligation, the Fund may effect a "closing purchase transaction." This
is accomplished by buying an option of the same series as the option
previously written. The effect of the purchase is that the writer's
position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after it has been
notified of the exercise of an option. Likewise, an investor (such as
the Fund) who is the holder of an option may liquidate his position by
effecting a "closing sale transaction." This is accomplished by selling
an option of the same series as the option previously purchased. There
is no guarantee that either a closing purchase or a closing sale
transaction can be effected.
Effecting a closing transaction in the case of a written call
option will permit the Fund to write another call option on the
underlying security with either a different exercise price or expiration
date, or both, or in the case of a written put option will permit the
Fund to write another put option to the extent that the exercise price
thereof is secured by deposited cash or short-term securities. Also,
effecting a closing transaction will permit the cash or proceeds from
the concurrent sale of any securities subject to the option to be used
for other Fund investments.
The Fund will realize a profit from a closing purchase transaction
if the price of the transaction is less than the premium received from
writing the option or in the case of a closing sale transaction, the
price received on the transaction is more than the premium paid to
purchase the option; the Fund will realize a loss from a closing
purchase transaction if the price of the transaction is more than the
premium received from writing the option or in the case of a closing
sale transaction, the price received on the transaction is less than the
premium paid to purchase the option. Because increases in the market
price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from the closing
purchase transaction of a call option is likely to be offset in whole or
in part by appreciation of the underlying security if it is owned by the
Fund.
Stock Index Futures Characteristics: The Fund intends to purchase
and sell stock index futures contracts as a hedge against changes in
market conditions in accordance with the portfolio strategies described
in the Prospectus. A stock index assigns relative values to the common
stocks included in the index, and the index fluctuates with the changes
in the market values of the common stocks so included. A stock index
futures contract is a bilateral agreement pursuant to which two parties
agree to take, or make delivery of, an amount of cash equal to a
specified dollar amount times the difference between the stock index
value at the close of the last trading day of the contract and the price
at which the futures contract is originally struck. No physical
delivery of the underlying stocks in the index is made.
Characteristics of Options on Stock Index Futures: The Fund
intends to purchase and/or write put and call options on stock index
futures which are traded on a U.S. exchange or Board of Trade. Options
on stock index futures are similar to options on stocks except that an
option on a stock index future gives the purchaser the right, in return
for the premiums paid, to assume a position in a stock index futures
contract (a purchase if the option is a call and a sale if the option is
a put), rather than to purchase or sell stock, at a specified exercise
price at any time during the period of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the option
to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the stock index
futures contract, at exercise, exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of the option on the
stock index future. If an option is exercised on the last trading day
prior to the expiration date of the option, the settlement will be made
entirely in cash equal to the difference between the exercise price of
the option and the closing level of the index on which the future is
based on the expiration date.
Risks of Transactions in Stock Options: An option position may be
closed out only on an exchange which provides a secondary market for an
option of the same series. Although the Fund will generally purchase or
write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option, or at any
particular time, and for some options no secondary market on an exchange
may exist. In such event it might not be possible to effect closing
transactions in particular options, with the result that the Fund would
have to exercise its options in order to realize any profit and would
incur brokerage commissions upon the exercise of call options and upon
the subsequent disposition of underlying securities acquired through the
exercise of call options or upon the purchase of underlying securities
for the exercise of put options. If the Fund as a covered call option
writer is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange
could include the following: l) there may be insufficient trading
interest in certain options; 2) restrictions may be imposed by an
exchange on opening transactions or closing transactions or both; 3)
trading-halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying
securities; 4) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; 5) the facilities of an exchange or a
clearing corporation may not at all times be adequate to handle current
trading volume; or 6) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in
which event the secondary market on that exchange (or in the class or
series of options) would cease to exist, although outstanding options on
that exchange that had been issued by a clearing corporation as a result
of trades on that exchange would continue to be exercisable in
accordance with their terms. There is no assurance that higher than
anticipated trading activity or other unforeseen events might not, at
times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an
exchange of special procedures which may interfere with the timely
execution of customers' orders. However, the Options Clearing
Corporation, based on forecasts provided by the U.S. exchanges, believes
that its facilities are adequate to handle the volume of reasonably
anticipated options transactions, and such exchanges have advised such
clearing corporation that they believe their facilities will also be
adequate to handle reasonably anticipated volume.
When the Fund enters into a futures transaction, it must
deliver to the Futures Commission Merchant (the "FCM") selected by the
Fund an amount referred to as "initial margin." This amount is
maintained by the FCM in an account at the Fund's Custodian Bank.
Thereafter "variation margin" may be paid by the Fund to, or drawn by
the Fund from, such account in accordance with the controls set for such
account. These controls, including the requirement that the Fund draw
out amounts in excess of $50,000 in any one such account, are intended
to protect the Fund from misappropriation of such "margin." The Fund
will carefully monitor such accounts to seek to minimize the risk
attendant upon such accounts.
The Fund will also request that the Custodian Bank segregate
other securities of the Fund equal in value to the Fund's potential
liability under such transactions in excess of any amount held by the
FCM, so that the Fund will always have the necessary assets to fulfill
its obligation. The segregated account procedures will comply with
Investment Company Act Release Number 10666 so the Fund will not be
deemed to be engaged in the issuance of senior securities.
MONEY MARKET SECURITIES
Although The Rightime Fund intends to concentrate its investments
in investment company securities and The Rightime Blue Chip Fund, The
Rightime MidCap Fund, and The Rightime Social Awareness Fund intend to
invest their assets primarily in common stocks, each Fund may invest its
assets directly in money market securities whenever deemed appropriate
by the Advisor to achieve the Fund's investment objective. It may
invest without limitation in such securities on a temporary basis for
defensive purposes.
Securities issued or guaranteed as to principal and interest by the
United States government ("Government Securities") include a variety of
Treasury securities, which differ in their interest rates, maturities
and date of issue. Treasury bills have a maturity of one year or less;
Treasury notes have maturities of one to ten years; Treasury bonds
generally have a maturity of greater than five years. Each Fund will
only acquire Government Securities which are supported by the "full
faith and credit" of the United States. Securities which are backed by
the full faith and credit of the United States include Treasury bills,
Treasury notes, Treasury bonds, and obligations of the Government
National Mortgage Association, the Farmers Home Administration, and the
Export-Import Bank. The Fund's direct investments in money market
securities will generally favor securities with shorter maturities
(maturities of less than 60 days) which are less affected by price
fluctuations than those with longer maturities.
Certificates of deposit are certificates issued against funds
deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return. Bankers'
acceptances are negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specific merchandise, which are
"accepted" by a bank, meaning, in effect, that the bank unconditionally
agrees to pay the face value of the instrument on maturity. Investments
in bank certificates of deposit and bankers' acceptances are limited to
domestic banks and savings and loan associations that are members of the
Federal Deposit Insurance Corporation having total assets in excess of
five hundred million dollars ("Domestic Banks").
Investments in prime commercial paper may be made in notes, drafts,
or similar instruments payable on demand or having a maturity at the
time of issuance not exceeding nine months, exclusive of days of grace,
or any renewal thereof payable on demand or having a maturity likewise
limited.
Under a repurchase agreement the Fund acquires a debt instrument
for a relatively short period (usually not more than one week) subject
to the obligation of the seller to repurchase and the Fund to resell
such debt instrument at a fixed price. The Fund will enter into
repurchase agreements only with banks which are members of the Federal
Reserve System, or securities dealers who are members of a national
securities exchange or are market makers in government securities and in
either case, only where the debt instrument collateralizing the
repurchase agreement is a U.S. Treasury or agency obligation supported
by the full faith and credit of the U.S. A repurchase agreement may
also be viewed as the loan of money by the Fund to the seller. The
resale price specified is normally in excess of the purchase price,
reflecting an agreed upon interest rate. The rate is effective for the
period of time the Fund is invested in the agreement and may not be
related to the coupon rate on the underlying security. The term of
these repurchase agreements will usually be short (from overnight to one
week) and at no time will the Fund invest in repurchase agreements of
more than sixty days. The securities which are collateral for the
repurchase agreements, however, may have maturity dates in excess of
sixty days from the effective date of the repurchase agreement. The
Fund will always receive, as collateral, securities whose market value,
including accrued interest, will be at least equal to 100% of the dollar
amount to be paid to the Fund under each agreement at its maturity, and
the Fund will make payment for such securities only upon physical
delivery or evidence of book entry transfer to the account of the
Custodian. If the seller defaults, the Fund might incur a loss if the
value of the collateral securing the repurchase agreement declines, and
might incur disposition costs in connection with liquidation of the
collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the security, collection of the collateral by
the Fund may be delayed or limited. The Fund may not enter into a
repurchase agreement with more than seven days to maturity if, as a
result, more than 10% of the market value of the Fund's net assets would
be invested in such repurchase agreements together with any other
illiquid assets.
THE RIGHTIME GOVERNMENT SECURITIES FUND
The objective of the Fund is to achieve for its investors a high
current income, consistent with safety and liquidity of principal.
The Fund seeks to achieve its investment objective by investing in
securities that are issued or guaranteed as to principal and interest by
the U.S. Government, its agencies, authorities or instrumentalities
("Government Securities") or securities secured by such securities, and
by engaging in transactions involving related options, futures and
options on futures.
This Statement of Additional Information contains further
information concerning the techniques and operations of the Fund, the
securities in which it will invest, and the policies it will follow.
Government Securities include: (1) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance:
U.S. Treasury bills (maturity of one year or less), U.S. Treasury notes
(maturities of one to 10 years), and U.S. Treasury bonds (generally
maturities of greater than 10 years) all of which are backed by the full
faith and credit of the United States; and (2) obligations issued or
guaranteed by U.S. Government agencies or instrumentalities, some of
which are backed by the full faith and credit of the U.S. Treasury,
e.g., direct pass-through certificates of the Government National
Mortgage Association, some of which are supported by the right of the
issuer to borrow from the U.S. Government, e.g., obligations of Federal
Home Loan Banks, and some of which are backed only by the credit of the
issuer itself, e.g., obligations of the Student Loan Marketing
Association.
The Fund may also purchase separated or divided U.S. Treasury
securities. Separated or Divided U.S. Treasury securities is the term
used by the Fund to describe U.S. Treasury bills, notes and bonds which
have been stripped of their unmatured interest coupons. These
securities are often referred to as zero coupon Treasury Securities or
Treasury Receipts. The term also describes the stripped coupons
themselves and receipts or certificates representing interest in the
stripped obligations and coupons. Like a Treasury bill, a zero-coupon
security pays no interest to its holder during its life. Its value to
an investor consists of the difference between its face value at the
time of maturity and the price for which it was acquired, which is
generally an amount substantially less than its face value (sometimes
referred to as a "deep discount" price).
Currently the only U.S. Treasury security issued without coupons is
the Treasury bill. However, in the last few years a number of banks and
brokerage firms have separated ("stripped") the principal portions
("corpus") from the coupon portions of the U.S. Treasury bonds and notes
and sold them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments
are generally held by a bank in a custodial or trust account). The
timely payment of interest and principal on the stripped securities
remains guaranteed by the "full, faith and credit" of the U.S.
Government. The receipts and certificates are sold at a discount from
face value. Their prices may exhibit greater volatility than ordinary
debt securities because of the manner in which their principal and
interest is returned to the investor. The investor's yield is computed
by amortizing the difference between the discounted purchase price and
the face value at the purchase price and the face value at the maturity
date over the life of the security, rather than interim interest
payments. More recently, the U.S. Treasury Department has facilitated
the stripping of Treasury notes and bonds by permitting the separated
corpus and coupons to be transferred directly through the Federal
Reserve Banks' book-entry system. This program, which eliminates the
need for custodial or trust accounts to hold the Treasury securities, is
called "Separate Trading of Registered Interest and Principal of
Securities". Each such stripped instrument (or receipt) entitles the
holder to a fixed amount of money from the Treasury at a single,
specified future date. The U.S. Treasury redeems zero coupon securities
consisting of the corpus for the face value thereof at maturity and
those consisting of stripped coupons for the amount of interest, and at
the date, stated thereon.
Separated or divided U.S. Treasury Securities represent a single
interest, or principal, payment on a U.S. Treasury bond which has been
separated from all the other interest coupons as well as the bond
itself. When the Fund purchases such an instrument, it purchases the
right to receive a single payment of a set sum at a known date in the
future. The interest rate on such an instrument is determined by the
difference between the price the Fund pays for the instrument when it
purchases the instrument at a discount and what the instrument entitles
the Fund to receive when the instrument matures. That difference is
amortized and accrued each day during the time the security is held.
The amount of the discount the Fund will receive will depend upon the
length of time to maturity of the separated U.S. Treasury security and
prevailing market interest rates when the separated U.S. Treasury
security is purchased. Separated U.S. Treasury securities can be
considered a zero coupon investment because no payment is made to the
Fund until maturity. These investments' market values are much more
susceptible to changes in market interest rates than income-producing
securities. These securities are purchased with original issue discount
and such discount is includable as gross income to a Fund shareholder
over the life of the security. The Fund does not intend to hold such
securities to maturity for the purpose of achieving potential capital
gains, unless current yields on these securities remain attractive.
The Fund may temporarily take a defensive position by investing a
greater portion of its assets in cash, short term Government Securities
and related repurchase agreements or by reducing the average weighted
maturity of its portfolio. The Fund may enter into repurchase
agreements (a purchase of and simultaneous commitment to resell a
security at an agreed upon price on an agreed upon date) from a seller,
usually a bank or brokerage firm, and only for Government Securities.
The value of the securities held by the custodian pursuant to the
repurchase agreement will at all times be greater than or equal to the
resale price. The resale price is in excess of the purchase price and
reflects an agreed upon market rate unrelated to the coupon rate on the
purchased security. Such transactions afford the Fund the opportunity
to earn a return on temporarily available cash at minimal market rise.
While the underlying security may be a bill, certificate of
indebtedness, note or bond issued by an agency, authority or
instrumentality of the United States Government, the obligation of the
seller is not guaranteed by the United States Government. If the vendor
fails to pay the sum agreed to on the agreed upon delivery date, the
Fund would have the right to sell the Government Securities, but might
incur a loss in so doing and in certain cases may not be permitted to
sell the Government Securities. For additional information concerning
repurchase agreements, see "Investment Restrictions" in this Statement
of Additional Information.
Government Securities do not generally involve the credit risks
associated with other types of interest bearing securities, although, as
a result, the yields available from Government Securities are generally
lower than the yields available from corporate interest bearing
securities. To the extent the Fund purchases U.S. Obligations of medium
term or longer, the Fund's net asset value will vary inversely with
changes in market interest rates. Consequently, investors in the Fund
may be subject to more risk than other funds which do not purchase
investments of medium term or longer. However, on an historical basis,
securities issued or guaranteed by the U.S. Government or its agencies
and instrumentalities have involved minimal risk of loss of principal or
interest.
Changes in the value of the Fund's portfolio securities subsequent
to their acquisition are reflected in the net asset value of shares of
the Fund. Such changes do not affect the income received by the Fund
from such securities. However since available yields vary over time, no
specific level of income can ever be assured. The dividends paid by the
Fund will increase or decrease in relation to the income received by the
Fund from its investments, which will in any case be reduced by the
Fund's expenses before being distributed to the Fund's shareholders.
When Issued and Delayed Delivery Transactions: The Fund may
purchase and sell securities on a "when issued" and "delayed delivery"
basis, that is, obligate itself to purchase or sell securities with
delivery and payment to occur at a later date in order to secure what is
considered to be an advantageous price and yield to the Fund at the time
of entering into the obligation. When the Fund engages in "when issued"
and "delayed delivery" transactions, the Fund relies on the buyer or
seller, as the case may be, to consummate the sale. Failure to do so
may result in the Fund missing the opportunity of obtaining a price or
yield considered to be advantageous. No interest accrues to the Fund
with respect to securities purchased on a "when issued" or "delayed
delivery" basis until delivery and payment take place. Such securities
are subject to market fluctuation; the value at delivery may be less
than the purchase price. "When issued" and "delayed delivery"
transactions may be expected to occur a month or more before delivery is
due. No payment or delivery, however, is made by the Fund until it
receives delivery or payment from the other party to the transaction.
The Fund will maintain in a segregated account with its custodian, cash,
Treasury bills, or other U.S. Government securities having an aggregate
value equal to the amount of such purchase commitments until payment is
made. To the extent the Fund engages in "when issued" and "delayed
delivery" transactions, it will do so for the purpose of acquiring
securities for the Fund's portfolio consistent with the Fund's
investment objective and policies and not for the purpose of investment
leverage.
Futures Contracts and Options on Futures Contracts: The Fund may
enter into contracts for the purchase or sale for future delivery of
fixed income securities ("Futures Contracts"). This investment
technique is designed to hedge (i.e., protect) against anticipated
changes in interest rates which otherwise might either adversely affect
the value of the Fund's portfolio securities or adversely affect the
prices of Government Securities which the Fund intends to purchase at a
later date.
When a Futures Contract is sold, the Fund incurs a contractual
obligation to deliver the securities underlying the contract at a
specified price on a specified date during a specified future month. A
"purchase" of a Futures Contract means the acquisition of a contractual
right to obtain delivery to the Fund of the securities called for by the
contract at a specified price during a specific future month.
Futures Contracts have been designed by exchanges which have been
designated "contract markets" by the Commodity Futures Trading
Commission ("CFTC"), and must be executed through a futures commission
merchant, or brokerage firm, which is a member of the relevant contract
market. Futures Contracts trade on these markets, and the exchanges,
through their clearing organizations, guarantee that the contracts
between the clearing members of the exchange will be performed. The
Fund will only enter into Futures contracts which are based on
Government Securities, including any index of government securities.
While Futures Contracts based on debt securities provide for the
delivery of securities, deliveries usually do not occur. Contracts are
generally terminated by entering into an off-setting transaction. The
Fund will incur brokerage fees when it purchases or sells Futures
Contracts. At the same time such a purchase or sale is made, the Fund
must provide cash or securities as a deposit ("initial deposit") known
as "margin." It is expected that the initial deposit would be
approximately 4% of the contract's face value. Daily thereafter, the
Futures Contract is valued and the payment of "variation margin" may be
required since each day the Fund may provide or receive cash that
reflects the decline or increase in the value of the contract. At the
time of delivery of securities pursuant to such a contract, adjustments
are made to recognize differences in value arising from the delivery of
securities with different interest rate than the specific security that
provides the standard for the contract. In some (but not many) cases,
securities called for by a Futures Contract may not have been issued
when the contract was written.
The purpose of the purchase or sale of a Futures Contract, in the
case of a portfolio such as the Fund's portfolio, which holds or intends
to acquire Government Securities, is to protect the Fund against the
adverse effects of fluctuations in interest rates without actually
buying or selling such securities. For example, if the Fund owns
Government Securities, and if interest rates were expected to increase,
the Fund might enter into Futures Contracts for the sale of such
securities. Such a sale would have much the same economic effect as
selling an equivalent value of the Government Securities the Fund owns.
If interest rates did increase, the value of the securities in the
portfolio would decline, but the value of the Fund Futures Contracts
would increase at approximately the same rate thereby keeping the net
asset value of the Fund from declining, or declining as much as it
otherwise would have.
Similarly, when it is expected that interest rates may decline,
Futures Contracts may be purchased to hedge in anticipation of
subsequent purchases of Government Securities at higher prices. The
Fund could take advantage of the anticipated rise in the value of such
securities without actually buying them until the necessary cash became
available or the market had stabilized. At that time, the Futures
Contracts could be liquidated and the Fund could buy the Government
Securities on the cash market. Due to changing market conditions,
however, and interest rate forecasts, a futures position may be
terminated without a corresponding purchase of securities. The Fund
could accomplish similar results by selling Government Securities with
long maturities and investing in Government Securities with short
maturities when interest rates are expected to increase. However, when
the futures market is more liquid than the cash market, the use of
Futures Contracts as a hedging technique allows the Fund to maintain a
defensive position without having to sell its portfolio securities. To
the extent the Fund enters into Futures Contracts for these purposes, it
will maintain a segregated asset account consisting of cash or high
grade Government Securities in an amount equal to the difference between
the fluctuating market value of such Futures Contracts and the aggregate
value of the initial deposit and variation margin payments made by the
Fund with respect to such Futures Contracts.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the natures of those markets, are subject
to distortions. First, all participants in the futures market are
subject to initial deposit and variation margin requirements. Rather
than meeting additional variation margin requirements, investors may
close Futures Contracts through offsetting transactions which could
distort the normal relationship between the cash and futures markets.
Second, the liquidity of the futures market depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing
distortion. Third, from the point of view of speculators, the margin
deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore increased
participation by speculators in the futures market may cause temporary
price distortions. Due to the possibility of such distortion, a correct
forecast of general interest rate trends by the Advisor may still not
result in a successful transaction.
The liquidity of a market in a futures contract may also be
adversely affected by "daily price fluctuation limits" established by
commodity exchanges which limit the amount of fluctuation in a futures
contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price
beyond the limit, thus preventing the liquidation of open futures
positions. Prices have in the past exceeded the daily limit on a number
of consecutive trading days. On any day or days when the price
fluctuation limits have been reached, the Fund may be unable to
liquidate existing futures positions or to implement a hedging strategy
through the purchase or sale of particular futures.
The Fund will not maintain open short positions in futures
contracts if, in the aggregate, the value of its open positions (marked
to market) exceeds the current market value of its securities portfolio
plus or minus the unrealized gain or loss on such open positions,
adjusted for historical volatility relationship between the portfolio
and futures contracts.
Investments in Futures Contracts entail the risk that if the
Advisor's investment judgment about the general direction of interest
rates is incorrect the Fund's overall performance may be poorer than if
it had not entered into any such contract. For example, if the Fund has
hedged against the possibility of an increase in interest rates which
would adversely affect the price of Government Securities held in its
portfolio and interest rates decrease instead, the Fund will lose part
or all of the benefit of the increased value of its Government
Securities which it has because it will have offsetting losses in its
futures position. In addition, in such situations, if the Fund had
insufficient cash, it may have to sell Government Securities from its
portfolio to meet daily variation margin requirements. Such sale of
Government Securities may be, but will not necessarily be, at increased
prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.
The Fund intends to purchase and sell options on Futures Contracts
for hedging purposes. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call option on
an individual security. Depending on the pricing of the option compared
to either the price of the futures contract upon which it is based or
the price of the underlying security, it may or may not be less risky
than ownership of the futures contract or underlying security. As with
the purchase of futures contracts, when the Fund is not fully invested
it may purchase a call option on a futures contract to hedge against a
market advance due to declining interest rates.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price
at expiration of the option is below the exercise price, the Fund will
retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in the portfolio
holdings. The writing of a put option on a futures contract constitutes
a partial hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price
at expiration of the option is higher than the exercise price, the Fund
will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of Government Securities
which the Fund intends to purchase. If a put or call option the Fund
has written is exercised, the Fund will incur a loss which will be
reduced by the amount of the premium it receives. Depending on the
degree of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, the Fund's
losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.
The purchase of put options on a futures contract is similar in
some respects to the purchase of protective put options on portfolio
securities. The Fund will purchase a put option on a futures contract
to hedge the Fund's portfolio against the risk of rising interest rates.
The amount of risk the Fund assumes when it purchases an option on
a futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that changes in
the value of the underlying futures contract will not be fully reflected
in the value of the option purchased.
The Fund's ability to engage in the options and futures strategies
described above will depend on the availability of a liquid market in
such instruments. Markets in options and futures with respect to
Government Securities are relatively new and still developing. It is
impossible to predict the amount of trading interest that may exist in
various types of options or futures. Therefore no assurance can be
given that the Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, the Fund's
ability to engage in options and futures transactions may be limited by
tax considerations.
Options: The Fund intends to write covered put and call options
and purchase put and call options on Government Securities and options
on other optionable Government Securities.
Call options written by the Fund give the holder the right to buy
the underlying securities from the Fund at a stated exercise price; put
options written by the Fund give the holder the right to sell the
underlying security to the Fund at a stated exercise price. A call
option written by the Fund is "covered" if the Fund owns the underlying
security covered by the call or has an absolute and immediate right to
acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also covered if the Fund holds a call on
the same security and in the same principal amount as the call written
where the exercise price of the call held: (a) is equal to or less than
the exercise price of the call written; or (b) is greater than the
exercise price of the call written if the difference is maintained by
the Fund in cash and Government Securities in a segregated account with
its custodian. A put option written by the Fund is "covered" if the
Fund maintains cash and Government Securities with a value equal to the
exercise price in a segregated account with its custodian, or else holds
a put on the same security and in the same principal amount as the put
written where the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by the
purchaser of an option will reflect, among other things, the
relationship of the exercise price to the market price and volatility of
the underlying security, the remaining term of the option, supply and
demand and interest rates.
The writer of an option has no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in
the case of a put option, since the writer may be assigned an exercise
notice at any time prior to the termination of the obligation. If an
option expires unexercised, the writer retains the amount of the
premium. This amount, of course, may, in the case of a covered call
option, be offset by a decline in the market value of the underlying
security during the option period. If a call option is exercised, the
writer experiences a profit or loss from the sale of the underlying
security. If a put option is exercised, the writer must fulfill the
obligation to purchase the underlying security at the exercise price,
which will usually exceed the then market value of the underlying
security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by buying
an option of the same series as the option previously written. The
effect of the purchase is that the writer's position will be canceled by
the clearing corporation. However, a writer may not effect a closing
purchase transaction after being notified of the exercise of an option.
Likewise, an investor who is the holder of an option may liquidate its
position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option
previously purchased. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call
option will permit the Fund to write another call option on the
underlying security with either a different exercise price or expiration
date or both, or in the case of a written put option will permit the
Fund to write another put option to the extent that the exercise price
thereof is secured by deposited cash or Government Securities. Also,
effecting a closing transaction will permit the cash or proceeds from
the concurrent sale of any securities subject to the option to be used
for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it
will effect a closing transaction prior to or concurrent with the sale
of the security.
The Fund will realize a profit from a closing transaction if the
price of the transaction is less than the premium received from writing
the option or is more than the premium paid to purchase the option; the
Fund will realize a loss from a closing transaction if the price of the
transaction is more than the premium received from writing the option or
is less than the premium paid to purchase the option. Because increases
in the market price of a call option will generally reflect increases in
the market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary
market does not exist, it might not be possible to effect closing
transactions in particular options with the result that the Fund would
have to exercise the options in order to realize any profit. If the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market include the
following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by a national securities
exchange ("Exchange") on opening transactions or closing transactions or
both; (iii) trading halts, suspensions or other restrictions may be
imposed with respect to particular classes or series of options or
underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an Exchange; (v) the facilities of an
Exchange or the Options Clearing Corporation may not at all times be
adequate to handle current trading volume, or (vi) one or more Exchanges
could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class
or series of options), in which event that secondary market on that
Exchange (or in that class or series of options) would cease to exist,
although outstanding options on that Exchange that had been issued by
the Options Clearing Corporation as a result of trades on that Exchange
would continue to be exercisable in accordance with their terms.
The Fund may write options in connection with buy-and-write
transactions; that is the Fund may purchase a security and then, either
simultaneously or in a separate transaction, write a call option against
the security. The exercise price of the call the Fund determines to
write will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below ("in-the-
money"), equal to ("at-the-money") or above ("out-of-the-money") the
current value of the underlying security at the time the option is
written. Buy-and-write transactions using in-the-money call options may
be used when it is expected that the price of the underlying security
will remain flat or decline moderately during the option period. Buy-
and-write transactions using at-the-money call options may be used when
it is expected that the price of the underlying security will remain
fixed or advance moderately during the option period. Buy-and-write
transactions using out-of-the-money call options may be used when it is
expected that the premiums received from writing the call option plus
the appreciation in the market price of the underlying security up to
the exercise price will be greater than the appreciation in the price of
the underlying security alone. If the call options are exercised in
such transactions, the Fund's maximum gain will be the premium received
by it for writing the option, adjusted upwards or downwards by the
difference between the Fund's purchase price of the security and the
exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be offset
in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of
risk/return characteristics to buy-and-write transactions. If the
market price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and the Fund's gain
will be limited to the premium received. If the market price of the
underlying security declines or otherwise is below the exercise price,
the Fund may elect to close the position or take delivery of the
security at the exercise price and the Fund's return will be the premium
received from the put option minus the amount by which the market price
of the security is below the exercise price. Out-of-the-money, at-the-
money and in-the-money put options may be used by the Fund in the same
market environments that call options are used in equivalent buy-and-
write transactions.
The Fund may purchase put options to hedge against a decline in the
value of its portfolio. By using put options in this way, the Fund will
reduce any profit it might otherwise have realized in the underlying
security by the amount of the premium paid for the put option and by
transaction costs.
The Fund may purchase call options to hedge against an increase in
the price of Government Securities that the Fund anticipates purchasing
in the future. The premium paid for the call option plus any
transaction costs will reduce the benefit, if any, realized by the Fund
upon exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to the
Fund.
The Fund will not purchase put and call options if as a result more
than 5% of its total assets would be invested in such options.
Lending of Portfolio Securities: The Fund may seek to increase its
income by lending portfolio securities. Under present regulatory
policies, including those of the Board of Governors of the Federal
Reserve System and the Securities and Exchange Commission, such loans
may be made only to member firms of the New York Stock Exchange, and
would be required to be secured continuously by collateral in cash, cash
equivalents or high quality Government Securities maintained on a
current basis at an amount at least equal to the market value of the
securities loaned. The Fund would have the right to call a loan and
obtain the securities loaned at any time on twenty-four hours' notice.
During the existence of a loan, the Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the
securities loaned and would also receive compensation based on
investment of the collateral. As with other extensions of credit, there
are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the
loans would be made only to firms deemed by the Advisor to be of good
standing, and when, in the judgment of the Advisor the consideration
which could be earned currently from securities loans of this type
justifies the attendant risk. The Fund pays various fees in connection
with such loans including shipping fees and reasonable custodian and
placement fees approved by the Advisor in accordance with instructions
of the Board of Directors of the Fund or designated officers of the
Fund. If the Advisor determines to make securities loans, it is not
intended that the value of the securities loaned would exceed 30% of the
value of the Fund's total assets.
Portfolio Management: The Fund intends to fully manage its
portfolio by buying and selling Government Securities or holding
selected Government Securities to maturity, by purchasing securities
secured by such securities, and by engaging in transactions involving
related Options, Futures and Options on Futures. In managing its
portfolio the Fund seeks a high current income consistent with liquidity
and safety of principal by taking advantage of market developments and
yield disparities, which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in
anticipation of a rise in interest rates so as to reduce the potential
for depreciation of principal;
(2) lengthening the average maturity of its portfolio in
anticipation of a decline in interest rates so as to increase the
potential for appreciation of principal;
(3) selling one type of Government Security (e.g., Treasury
bonds) and buying another (e.g., GNMA direct pass-through certificates)
when disparities arise in the relative values of each; and
(4) changing from one U.S. Government obligation to an
essentially similar U.S. Government obligation when their respective
yields are distorted due to market factors.
The Fund will also use the techniques described above under "When-
Issued Securities," "Futures Contracts and Options on Futures Contracts"
and "Options" to manage its portfolio.
These strategies may result in increases or decreases in the Fund's
current income available for distribution to the Fund's shareholders and
in the holding by the Fund of obligations which sell at moderate to
substantial premiums or discounts from face value. Moreover, if the
Fund's expectations of changes in interest rates or its evaluation of
the normal yield relationship between two obligations proves to be
incorrect, the Fund's income, net asset value per share and potential
capital gain may be decreased or its potential capital loss may be
increased.
PORTFOLIO TURNOVER
It is not the policy of any of the Funds to purchase or sell
securities for short-term trading purposes, but each Fund may sell
securities to recognize gains or avoid potential for loss. Each Fund
will, however, sell any portfolio security (without regard to the time
it has been held) when the Advisor believes that market conditions,
credit-worthiness factors or general economic conditions warrant such a
step. Each Fund may seek to avoid untimely portfolio transactions by
utilizing hedging techniques which reduce the necessity to restructure
portions of each Fund's portfolio. Each Fund presently estimates that
its annualized portfolio turnover rate will generally not exceed 300%.
High portfolio turnover might involve additional transaction costs (such
as brokerage commissions or sales charges) which are borne by the
Fund,or adverse tax effects. (See "Dividends, Distributions and Taxes"
in the Prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in The Rightime Fund, Inc.'s current
Prospectus, each Fund has adopted the Investment Restrictions set forth
below, which cannot be changed without the approval of a majority of the
outstanding voting securities of the Fund. As provided in the
Investment Company Act of 1940 a "vote of a majority of the outstanding
voting securities" of the Fund means the affirmative vote of the lesser
of: (i) more than 50% of the outstanding shares of the Fund; or (ii)
67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy.
So long as percentage restrictions are observed by a Fund at the time it
purchases any security, changes in values of particular Fund assets or
the assets of the Fund as a whole will not cause a violation of any of
the following restrictions. These investment restrictions provide that
the Funds will not:
The Rightime Fund, The Rightime Blue Chip Fund,
The Rightime MidCap Fund, and The Rightime Social Awareness Fund
(1) issue senior securities, except to the extent that an
investment technique described in the Fund's prospectus (such as the use
of stock index futures) may be deemed to involve a "senior security;"
(2) engage in the underwriting of securities except insofar as
the Fund may be deemed an underwriter under the Securities Act of 1933
in disposing of a portfolio security;
(3) purchase or sell real estate or interests therein, although
it may purchase securities of issuers which engage in real estate
operations and securities which are secured by real estate or interests
therein;
(4) invest for the purpose of exercising control or management
of another company;
(5) purchase oil, gas or other mineral leases, rights or
royalty contracts or exploration or development programs, except that
the Fund may invest in the securities of companies which invest in or
sponsor such programs;
(6) make purchases of securities on "margin" (though the Fund
will comply with applicable requirements of the Commodities Futures
Trading Commission with respect to futures); or
(7) sell securities short;
The Rightime Fund
(8) concentrate its investments in any industry other than
registered investment companies;
The Rightime Blue Chip Fund, The Rightime MidCap Fund,
and The Rightime Social Awareness Fund
(9) concentrate its investments in any industry;
The Rightime Government Securities Fund
(10) borrow money or pledge its assets except as a temporary
measure for extraordinary or emergency purposes and not in excess of 33
1/3% of the value of the total assets of the Fund taken at the lower of
their market value or cost (the Fund intends to borrow money only from
banks and only to accommodate requests for the redemption of shares of
the Fund while effecting an orderly liquidation of portfolio securities)
(for the purpose of this restriction, collateral arrangements with
respect to options, futures contracts, options on futures contracts and
collateral arrangements with respect to initial and variation margins
are not considered a pledge of assets);
(11) purchase any security or evidence of interest therein on
margin, except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities and
except that the Fund may make deposits on margin in connection with
futures contracts and related options;
(12) write, purchase or sell any put or call option or any
combination, provided that this shall not prevent the writing,
purchasing and selling of puts, calls or combinations thereof with
respect to Government Securities and with respect to futures contracts
or the purchase, ownership, holding or sale of contracts for the future
delivery of fixed income securities; etc. as described in "Investment
Objective and Policies";
(13) underwrite securities issued by other persons except
insofar as the Fund may technically be deemed an underwriter under the
Securities Act of 1933 in selling a portfolio security;
(14) purchase or sell commodities or commodity contracts,
except that the Fund may purchase and sell financial futures contracts
and related options as described in "Investment Objective and Policies";
(15) make short sales of securities or maintain a short
position, unless at all times when a short position is open it owns an
equal amount of such securities or securities convertible into or
exchangeable for, without payment of any further consideration,
securities of the same issue as, and equal in amount to, the securities
sold short, and unless not more than 10% of the Fund's net assets (taken
at market value) is held as collateral for such sales at any one time
(It is the present intention of management to make such sales only for
the purpose of deferring realization of gain or loss for Federal income
tax purposes; such sales would not be made of securities subject to
outstanding options);
(16) make loans to other persons except through the lending of
its portfolio securities not in excess of 30% of its total assets (taken
at market value) and except through the use of repurchase agreements
maturing in less than seven days (for these purposes the purchase of all
or a portion of an issue of debt securities in accordance with the
Fund's investment objective and policies shall not be considered the
making of a loan);
(17) knowingly invest in securities which are restricted
securities (including repurchase agreements maturing in more than seven
days) under the Securities Act of 1933 if, as a result thereof, more
than 10% of the Fund's net assets (taken at market value) would be so
invested (the Fund currently does not intend to invest in restricted
securities if such investments would equal 5% of the Fund's net assets);
(18) purchase securities of any issuer if such purchase at the
time thereof would cause more than 10% of the voting securities of such
issuer to be held by the Fund;
(19) purchase securities of any issuer if such purchase at the
time thereof would cause more than 5% of the Fund's assets (taken at
market value) to be invested in the securities of such issuer (other
than securities or obligations issued or guaranteed by the United
States, any state or political subdivision thereof, or any political
subdivision of any such state, or any agency or instrumentality of the
United States or of any state or of any political subdivision of any
state or the United States); or
(20) issue any senior security (as that term is defined in the
Investment Company Act of 1940 (the "1940 Act")), if such issuance is
specifically prohibited by the 1940 Act or the rules and regulations
promulgated thereunder (for the purpose of this restriction, collateral
arrangements with respect to options, futures contracts and collateral
arrangements with respect to initial and variation margin are not deemed
to be the issuance of a senior security).
Other Restrictions: (The Rightime Government Securities Fund) In
addition to the restrictions noted above, the Fund will not, as a matter
of operating policy: (i) invest more than 5% of its total assets at the
time of investment in companies which, including predecessors, have a
record of less than three years' continuous operation; or (ii) invest
for the purpose of exercising control or management.
Non-Fundamental Restrictions
In addition to the restrictions outlined above, the Funds (as
indicated below) will also be subject, as a matter of operating policy,
to the restrictions noted below: (i) (All Funds) the Funds may only
invest in other investment companies within limits set by the Investment
Company Act of 1940. With respect to all Funds other than The Rightime
Fund, this would allow a Fund to invest up to 10% of its total assets in
other investment companies, although not more than 5% of the Fund's
total assets may be invested in any one investment company and the
Fund's investment in another investment company may not represent more
than 3% of the securities of any one investment company. All Funds may
also acquire securities of other investment companies beyond such limits
pursuant to a merger, consolidation or reorganization; (ii) (Government
Securities Fund only) the Fund may not invest more than 5% of its total
assets at the time of investment in companies which, including
predecessors, have a record of less than three years' continuous
operation; and (iii) (Government Securities Fund only) the Fund may not
invest for the purpose of exercising control or management.
INVESTMENT ADVISOR
The Rightime Fund, Inc. has entered into investment advisory
agreements with the Advisor on behalf of each series of the Fund, as of
the following dates: The Rightime Fund, March 26, 1985; The Rightime
Government Securities Fund, December 24, 1986; The Rightime Blue Chip
Fund, July 1, 1987; The Rightime Social Awareness Fund, March 1, 1990;
The Rightime MidCap Fund, November 10, 1991. Each Agreement was
initially approved by the Board of Directors for a term of two years
from its effective date, subject to shareholder ratification. Each
Agreement will continue in effect from year to year thereafter only if
such continuance is approved annually by either the Fund's Board of
Directors or by a vote of a majority of the outstanding voting
securities of the Fund and in either case by the vote of a majority of
the directors who are not parties to the Agreement or interested persons
(as such term is defined in the Investment Company Act of 1940, as
amended) of any party to the Agreement, voting in person at a meeting
called for the purpose of voting on such approval. Each Agreement may
be terminated at any time without penalty by the Fund's Board of
Directors or by a majority vote of the outstanding shares of the Fund,
or by the Investment Advisor, in each instance on not less than 60 days'
written notice and shall automatically terminate in the event of its
assignment. Each Agreement also identifies the right of the Advisor to
control the use of the name "Rightime", and each Fund may be required to
change its name if the Advisor ceases to act as advisor to the Fund.
The following table shows the fees paid by each series pursuant to its
Advisory Agreement, during the three most recent fiscal years:
1996 1995 1994
The Rightime Fund $ 830,865 $ 747,548 $ 792,006
The Rightime Government Securities
Fund 57,725 91,578 117,018
The Rightime Blue Chip Fund 1,360,520 1,163,294 1,099,297
The Rightime Social Awareness Fund 40,814 35,179 42,361
The Rightime MidCap Fund 396,405 354,183 321,829
The sole officer, director and shareholder of the Advisor is David
J. Rights. Mr. Rights is also the Chairman of the Board, President and
Treasurer of the Fund and the President and Treasurer of Rightime
Administrators, Inc., the Fund's administrator. Mr. Rights is the owner
of RTE Securities, Inc., a broker-dealer firm which has been retained by
Lincoln Investment Planning, Inc. the Fund's distributor and transfer
agent, to provide consulting and wholesaling services with respect to
the distribution of the Fund's shares. The Advisor presently serves as
advisor to other clients and may do so in the future.
DISTRIBUTOR
Pursuant to the Distribution Agreement for each Fund, the expenses
of printing all sales literature, including prospectuses, are to be
borne by Lincoln Investment Planning, Inc. (the "Distributor"). Each
Distribution Agreement provides that it will continue in effect from
year to year only so long as such continuance is specifically approved
at least annually by either the Fund's Board of Directors or by a vote
of a majority of the outstanding voting securities of the Fund and in
either case by the vote of a majority of the directors who are 12b-1
Directors as that term is defined in the prospectus, voting in person at
a meeting called for the purpose of voting on such approval. Each
agreement will terminate automatically in the event of its assignment.
Under each Distribution Agreement, the Distributor is the exclusive
agent for the Fund's shares, and has the right to select selling dealers
to offer the shares to investors.
Edward S. Forst, Sr., the Vice-President and Secretary of The
Rightime Fund, Inc., is the Chairman of the Distributor; he is also Vice
President and Secretary of Rightime Administrators, Inc., each Fund's
Administrator. David J. Rights, through RTE Securities, Inc., acts as a
consultant to the Distributor, and holds other positions with Fund
affiliates as described above under "Investment Advisor."
The services provided by the Distributor under each Distribution
Agreement relate to the sale of the Fund's shares. These services are
separate from those provided by the Distributor in its capacity as sub-
administrator to Rightime Administrators, Inc., such as receiving and
responding to shareholder inquiries, assisting each Fund with tax
returns, proxy statements, and other services not undertaken to
distribute shares.
Commissions for distribution of Fund shares and other compensation
received by Lincoln Investment Planning during the Fund's fiscal years
ended October 31, 1996, 1995, and 1994:
<TABLE>
<CAPTION>
Distributor
Net Underwriting Compensation
Total Underwriting Commissions to on Redemption
Commissions Distributor and Repurchases Brokerage Commissions Other Compensation
<S> <C> <C> <C> <C> <C>
1994 1,286,060* 1,286,060 -0- -0- -0-
1995 1,091,389* 1,091,389 -0- -0- -0-
1996 1,236,367* 1,236,367 -0- -0- -0-
* Does not include nominal amounts paid to Lincoln Investment
Planning by investment companies whose shares are purchased by The
Rightime Fund to compensate Lincoln Investment Planning for shareholder
servicing and/or distribution activities on behalf of such companies.
</TABLE>
DISTRIBUTION PLAN
Pursuant to each Fund's 12b-1 Distribution Plan, each Fund may
incur distribution costs which may not exceed: .50% per annum of The
Rightime Fund's net assets and .25% per annum for each of The Rightime
Blue Chip Fund's, The Rightime Social Awareness Fund's and The Rightime
MidCap Fund's net assets for payments to the Distributor or others for
items such as advertising expenses, selling expenses, commissions or
travel reasonably intended to result in sales of shares of the Fund.
The 12b-1 Distribution Plan for each Fund also provides that each Fund
may incur a shareholder servicing fee of .25% per annum of the Fund's
net assets which is paid to the Distributor or others for ongoing
servicing and/or maintenance of shareholder accounts.
During the most recent fiscal year, the distribution expenses paid
by the Funds were as follows: The Rightime Fund $830,865; The Rightime
Government Securities Fund $0; The Rightime Blue Chip Fund $680,260; The
Rightime Social Awareness Fund $20,407; and The Rightime MidCap Fund
$198,202. The shareholder servicing expenses paid by the Series of the
Fund were as follows: The Rightime Fund $415,432; The Rightime
Government Securities Fund $36,078; The Rightime Blue Chip Fund
$680,260; The Rightime Social Awareness Fund $20,407; and The Rightime
MidCap Fund $198,202.
The following table sets forth the distribution and shareholder
servicing expenses paid on behalf of each series by the Distributor
during the most recent fiscal year ended October 31. The excess costs
incurred over payments received from the Funds pursuant to each Fund's
12b-1 Distribution Plan were paid by the Distributor from its own
resources and will not be reimbursed by the Fund.
1996
The Rightime Fund
Commissions to Salesmen $682,692
Administration Staff 113,040
Advertising & Printing 25,520
Miscellaneous Selling Expenses 100,039
Office Expenses 91,860
Professional Services 31,142
The Rightime Government Securities Fund
Commissions to Salesmen $ 61,786
Administration Staff 10,231
Advertising & Printing 2,310
Miscellaneous Selling Expenses 9,054
Office Expenses 8,314
Professional Services 2,819
The Rightime Blue Chip Fund
Commissions to Salesmen $1,106,900
Administration Staff 183,280
Advertising & Printing 41,378
Miscellaneous Selling Expenses 162,201
Office Expenses 148,940
Professional Services 50,494
The Rightime Social Awareness Fund
Commissions to Salesmen $33,659
Administration Staff 5,573
Advertising & Printing 1,258
Miscellaneous Selling Expenses 4,932
Office Expenses 4,529
Professional Services 1,535
The Rightime MidCap Fund 1996
Commissions to Salesmen $326,197
Administration Staff 54,012
Advertising & Printing 12,194
Miscellaneous Selling Expense 47,800
Office Expense 43,892
Professional Services 14,880
ALLOCATION OF PORTFOLIO BROKERAGE
The Advisor, in effecting the purchases and sales of portfolio
securities for the account of each Fund, will seek execution of trades
either: (i) at the most favorable and competitive rate of commission
charged by any broker, dealer or member of an exchange; or (ii) at a
higher rate of commission charges if reasonable in relation to brokerage
and research services provided to the Fund or the Advisor by such
member, broker, or dealer. Such services may include, but are not
limited to, any one or more of the following: Information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments. The Advisor may use
research and services provided to it by brokers and dealers in servicing
all its clients, however, not all such services will be used by the
Advisor in connection with the Fund. Portfolio orders may be placed
with affiliated broker-dealers, and in such case, the affiliated broker-
dealers will receive brokerage commissions. However, portfolio orders
will be placed with the affiliated broker-dealers only where the price
being charged and the services being provided compare favorably with
those which would be charged to the Fund by non-affiliated broker-
dealers, and with those charged by the affiliated broker to other
unaffiliated customers, on transactions of a like size and nature.
Brokerage may also be allocated to dealers in consideration of Fund
share distribution but only when execution and price are comparable to
that offered by other brokers. The Fund follows the standards of SEC
Rule 17e-1 under the Investment Company Act of 1940 which requires that
the commission paid to the Distributor must be reasonable and fair
compared to the commissions, fees or other remuneration received or to
be received by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time.
For the Fund's last three fiscal years ended October 31, none of
the Fund's aggregate brokerage commissions were paid to Lincoln
Investment Planning, Inc. and for the same periods, none of the Fund's
aggregate amount of portfolio transactions (purchases and sales) were
effected by Lincoln Investment Planning, Inc.
The Advisor is responsible for making the Fund's portfolio
decisions subject to instructions described in the prospectus. The
Board of Directors may however impose limitations on the allocation of
portfolio brokerage.
The Fund expects that purchases and sales of portfolio money market
securities will be principal transactions. Such securities are normally
purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage
commissions paid by the Fund for such purchases. Purchases from the
underwriters will include the underwriter commission or concession and
purchases from dealers serving as market makers will include the spread
between the bid and asked price.
TRANSFER AGENT
Lincoln Investment Planning, Inc. serves as transfer agent,
dividend disbursing agent and redemption agent for redemptions pursuant
to a Transfer and Dividend Disbursing Agency Agreement approved by the
shareholders of The Rightime Fund, Inc. at a meeting held for such
purpose on October 23, 1986. The agreement is subject to annual renewal
by the Board of Directors of the Fund, including the directors who are
not interested persons of the Fund or of the Transfer Agent. Pursuant
to the agreement, as amended and approved by the Board of Directors, the
Transfer Agent receives a fee calculated at an annual rate of $15.00 per
shareholder account and will be reimbursed out-of-pocket expenses
incurred on the Fund's behalf.
The Transfer Agent acts as paying agent for all Fund expenses and
provides all the necessary facilities, equipment and personnel to
perform the usual or ordinary services of Transfer and Dividend Paying
Agent, including: receiving and processing orders and payments for
purchases of shares, opening stockholder accounts, preparing annual
stockholder meeting lists, mailing proxy material, receiving and
tabulating proxies, mailing stockholder reports and prospectuses,
withholding certain taxes on nonresident alien accounts, disbursing
income dividends and capital distributions, preparing and filing U.S.
Treasury Department Form 1099 (or equivalent) for all stockholders,
preparing and mailing confirmation forms to stockholders for all
purposes and redemption of the Fund's shares and all other confirmable
transactions in stockholders' accounts, recording reinvestment of
dividends and distributions of the Fund's shares and causing redemption
of shares for and disbursements of proceeds to withdrawal plan
stockholders. The Transfer Agent may contract with other parties to
provide services under the agreement. Pursuant to this authority, the
Transfer Agent has entered into an agreement under which DST Systems
Inc. and its subsidiaries provide computer services and the printing and
distribution of confirmations and tax forms.
PURCHASE OF SHARES
The shares of the Fund are continuously offered by the Distributor.
Orders for the purchase of shares of the Fund received by the
Distributor prior to the close of regular trading on any day the New
York Stock Exchange ("NYSE") is open for trading will be confirmed at
the offering price next determined (based upon the sales charges and
valuation procedures described in the Prospectus) as of the close of
regular trading of the NYSE on that day. The New York Stock Exchange is
scheduled to be open Monday through Friday throughout the year except
for New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. Orders
received by the Distributor after the close of regular trading of the
NYSE will be confirmed at the next day's price. It is the
responsibility of dealers to transmit orders received by them promptly
to the Distributor.
Purchases of The Rightime Government Securities Fund, The Rightime
Blue Chip Fund, The Rightime Social Awareness Fund, and The Rightime
MidCap Fund of $50,000 or more at offering price carry reduced sales
loads as shown in the table below and may include a series of purchases
over a 13-month period under a Letter of Intention signed by a
purchaser. The sales loads set forth below are applicable to purchases
made at one time by an individual; or an individual, his or her spouse
and their children under the age of 21; or a trustee or other fiduciary
of a single trust estate or single fiduciary account (including an
employee benefit plan qualified under Section 401 of the Internal
Revenue Code). For purchases of $2 million or more, there is no sales
charge.
<TABLE>
<CAPTION>
Sales Load
as % of
Offering Amount Dealer's
Amount of Purchase Price Invested Concession*
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 3.75 3.90 3.35
$100,000 but under $500,000 2.75 2.83 2.45
$500,000 but under $1,000,000 1.75 1.80 1.55
$1,000,000 but under $2,000,000 .75 .76 .65
For purchases of $2 million or more there is no sales load.
*In some circumstances, the Distributor may allow a larger percentage of
the sales load to dealers. Such dealers may have additional
responsibilities under the federal securities laws
</TABLE>
The Fund must be notified when a sale takes place which
would qualify for the reduced sales charge on the basis of previous
purchases and current purchases. The reduced sales charge will be
granted upon confirmation of the shareholder's holdings by the Fund.
Officers, directors and employees, and any pension, profit-sharing
or qualified retirement plan of The Rightime Fund, Inc., Rightime
Econometrics, Inc. and Lincoln Investment Planning, Inc., and registered
representatives of dealers who have entered into dealers agreements with
the Distributor, may purchase shares of the Funds at the net asset value
per share. Certain family members of any such individual and their
spouses identified above, and certain trusts, pension, profit-sharing or
qualified retirement plan for the sole benefit of such persons may
purchase shares of the Fund at the net asset value per share. (See
"Waivers of Sales Loads" within "How to Purchase Shares" of the
Prospectus.)
Letter of Intent: The above table is also applicable to the
aggregate amount of purchases made by any such purchaser previously
enumerated within a 13-month period pursuant to a written Letter of
Intent provided by the Distributor, and not legally binding on the
signer or the Fund, which includes provisions for a price adjustment,
depending upon the actual amount purchased within such period, and which
provides for the holding in escrow by the Distributor of 5% of the total
amount intended to be purchased until such purchase is completed within
the 13-month period. If the intended investment is not completed, the
purchaser will be asked to pay an amount equal to the difference between
the sales load on the shares purchased at the reduced rate and the sales
load otherwise applicable to the total shares purchased. If such
payment is not made within 20 days following the expiration of the 13-
month period, the Distributor will surrender an appropriate number of
the escrowed shares for redemption in order to realize the difference.
Such purchasers may include the value (at offering price at the level
designated in their Letter of Intent) of all their shares of the Fund
previously purchased and still held as of the date of their Letter of
Intent toward the completion of such Letter.
Right of Accumulation: The reduced sales load is applicable to any
subsequent purchases of shares of the Fund, by any such purchaser where
the aggregate investment in the Funds by such purchaser is $50,000 or
more. The Right of Accumulation is applicable to purchases made at any
one time by an individual; or an individual, his or her spouse and their
children under the age of 21; or a trustee or other fiduciary of a
single trust estate or single fiduciary account (including an employee
benefit plan qualified under Section 401 of the Internal Revenue Code).
Tax-Sheltered Retirement Plans
Shares of the Funds are available to all types of tax-deferred
retirement plans including custodial accounts described in Section
403(b)(7) of the Internal Revenue Code. Qualified investors benefit
from the tax-free compounding of income dividends and capital gains
distributions. You can transfer an existing plan into the Fund or set
up a new plan in the manner described below.
Individual Retirement Accounts (IRA) -- Individuals, who are not
active participants (and, when a joint return is filed, who do not have
a spouse who is an active participant) in an employer maintained
retirement plan are eligible to contribute on a deductible basis to an
IRA account. The IRA deduction is also available for individual
taxpayers and married couples with adjusted gross incomes not in excess
of certain specified limits. All individuals may make nondeductible IRA
contributions to a separate account to the extent that they are not
eligible for a deductible contribution. Income earned by an IRA account
is tax deferred. Special IRA programs called SEP-IRAs (Simplified
Employee Pension-IRA) and SIMPLE-IRAs (Savings Incentive Match Plan for
Employees-IRA) are also available under which employees may set up IRA
accounts, into which employers can make contributions in lieu of
establishing retirement plans for such employees. SEP-IRAs and SIMPLE-
IRAs can free employers of many of the recordkeeping requirements of
establishing and maintaining a retirement plan trust.
If you have received a lump sum distribution from another qualified
retirement plan, you may rollover all or part of that distribution into
an IRA. Your rollover contribution is not subject to the limits on
annual IRA contributions. By acting within applicable time limits of
the lump sum distribution you can continue to defer Federal income taxes
on your lump sum contribution and on any income that is earned on that
contribution.
KEOGH Plans for Self-Employed -- If you are a self-employed
individual, you may establish a Self-Employed Retirement (KEOGH) Plan
and contribute up to the maximum amounts permitted for your plan under
current tax laws. Under a Defined Benefit KEOGH Plan, you may establish
a program with a specific amount of retirement income as your objective.
The annual contributions needed to achieve this goal are calculated
actuarially and can sometimes exceed the tax-deductible contributions
allowed under a regular KEOGH Plan.
Tax-Sheltered Custodial Accounts -- If you are an employee of a
public school, state college or university, or an employee of a non-
profit organization exempt from tax under Section 501(c)(3) of the
Internal Revenue Code, you may be eligible to make contributions into a
custodial account (pursuant to section 403(b)(7) of the IRC) which
invests in Fund shares. Such contributions, to the extent that they do
not exceed certain limits, are excludable from the gross income of the
employee for federal income tax purposes.
Other Retirement, Savings, and Deferred Compensation Plans -- Our
Investment Advisor and Distributor make available, through their
affiliates, a full range of consulting and plan administrative services,
on a fee basis. Information is available to explain and assist you with
the establishment of various types of corporate retirement plans,
education and charitable organizations deferred compensation plans,
thrift and savings plans. Also available are automated recordkeeping
and actuarial services for tax-sheltered plan sponsors which fulfill all
appropriate accounting and recordkeeping requirements. These services
can also accommodate so called "split-funding" options where plan assets
may be invested in various investments in addition to the Fund.
How to establish Retirement Accounts -- All the foregoing
retirement plan options require special applications or plan documents.
Please call us to obtain information regarding the establishing of
retirement plan accounts. CoreStates Bank NA acts as the plan custodian
for retirement plan accounts with the Fund, and charges nominal fees in
connection with plan establishment and maintenance. These fees are
detailed in the plan documents. You may wish to consult with your
attorney or other tax advisor for specific advice prior to establishing
a plan.
Systematic Withdrawal Plan
You can arrange to make systematic cash withdrawals from your
account monthly, quarterly or annually. Your account, initially, must
be at least $5,000 in order to establish this service, although the
withdrawals may continue even though your account subsequently drops
below $5,000. Each payment must be for an amount not less than $25. If
the periodic amount you elect to withdraw is more than the increase in
the value of any income or gains in your account, the withdrawals can
deplete the value of your account. If the withdrawals are to be sent to
someone who is not a registered owner of the shares, a signature
guarantee is required on your application for this service. The Fund
bears the cost of providing this plan at the present time. Please
contact the Fund to obtain information about establishing a systematic
withdrawal plan.
In-Kind Redemptions
To comply with certain state securities regulations, the Fund has
undertaken that any portfolio securities issued in an in-kind redemption
will be readily marketable securities.
DIVIDENDS, DISTRIBUTION AND TAXES
The Funds' investments in options and futures contracts are subject
to many complex and special tax rules. For example, over-the-counter
options on debt and equity securities will generally produce a long-term
or short-term capital gain or loss upon exercise, lapse, or closing out
of the option or sale of the underlying stock or security. By contrast,
the Fund's positions in put or call options (including options it has
written as well as options it has purchased) which are "listed" (traded
on or subject to the rules of a qualified board of Exchange) and which
include non-equity options, regulated futures contracts and options on
futures contracts will be required to be "marked to market" at the end
of the Fund's fiscal year -- that is, treated as closed out or sold at
their fair market value -- for Federal income tax purposes. This means
that the unrealized appreciation or depreciation in such positions will
be treated as having been realized on that date. Sixty percent of such
gain or loss and sixty percent of any gain or loss from the actual
closing out or exercise of such positions, will be treated as long-term
capital gain or loss and the remainder will be treated as short-term
capital gain or loss. In addition, on the stipulated expiration date
sixty percent of any gain realized on the expiration of a listed option
which the Fund has written and sixty percent of any loss realized on the
expiration of such an option it has purchased will also be treated as
long-term capital gain or loss, as the case may be, and the balance as
short-term capital gain or loss.
Section 1092 of the Code may affect the taxation of options on
securities, futures contracts and options on futures contracts. Section
1092 defines a "straddle" as offsetting positions with respect to
personal property. A position in personal property is generally defined
as any interest, including an option, in personal property. A position
in personal property, therefore, includes a debt security and an option
written on, or a futures contract to sell, a debt security. Section
1092 generally provides that in the case of a straddle, any loss from
the disposition of a position in the straddle can be deducted only to
the extent that the loss exceeds the unrealized gains on any offsetting
straddle position. For example, if the Fund enters into a straddle
consisting of a U.S. Treasury bond and a purchased put with respect to
such bond, any loss realized from a closing purchase transaction with
respect to the put can be recognized only to the extent that such loss
exceeds any unrealized gain on the underlying bond. Section 1092 also
provides that "wash sale" rules are applicable to transactions where a
position is sold at a loss and a new offsetting position is acquired
within a prescribed period as are "short sale" rules which could (i)
eliminate or stop the Fund's holding period in a security, and (ii)
convert losses arising from the disposition of an option or futures
position from short-term to long-term when a hypothetical sale of the
underlying security on the date of entry into the option or futures
position would have given rise to a long-term capital gain. Management
will manage the Fund so as to take into account Section 1092 and IRS
regulations thereunder. However, the Fund's ability to obtain a high
current income may, under certain circumstances, be adversely affected.
If such a put or call option or futures contract is part of a
"mixed straddle," as defined in the Code, however, the Fund may be able
to make an election under Section 1256(d) of the Code under which the
mark to market and 60/40 rules and the straddle rules of Section 1092
will be inapplicable in whole or in part to positions within the
straddle. If a Section 1256(d) election is made and a call or put
option the Fund has written lapses, the Fund will recognize a short-term
capital gain for Federal income tax purposes. If a call option the Fund
has written is exercised and the Fund makes such an election, the Fund
will realize a capital gain or loss (long-term or short-term, depending
on the Fund's holding period in the underlying security) from the sale
of the underlying security and the proceeds from such sale will be
increased by the premium originally received. Also, in such case, if a
put option which the Fund has written is exercised, the amount of the
premium originally received will reduce the cost of the security which
the Fund purchases upon exercise of the option. If the Fund terminates
its obligation under an option it has written by entering a closing
purchase transaction and it makes such an election it will recognize a
short-term gain or loss measured by the difference between the price it
has to pay to close the option position and the premium it received for
writing the option. This election would also apply to options purchased
and futures contracts entered into by the Fund. A Section 1256(d)
election could result in an increase in distributions or ordinary income
(relative to long-term capital gains) to shareholders.
In the case of another election the Fund may make, the Fund may set
up one or more mixed straddle accounts comprising all or some positions
held by the Fund that are required to be "marked to market" as described
above (called "Section 1256 contracts"), and all positions offsetting
such positions. In such a case, the Fund will mark each such position
to market on a daily basis, compute the net Section 1256 contract gain
or loss and net non-Section 1256 contract gain or loss for the account,
and the "daily account net gain or loss" for each account. Any daily
account net gain or loss attributable to a net non-Section 1256 gain or
loss will be treated as short-term and any daily account net gain or
loss attributable to net Section 1256 contract gain or loss will be
treated as sixty percent long-term capital gain or loss, and forty
percent short-term capital gain or loss, with corresponding basis
adjustments. Such daily account net gains and losses will be netted on
an annual basis as will the annual account net gains and losses for all
mixed straddle accounts; however, no more than fifty percent of the
total annual account net gain for a taxable year shall be treated as
long-term capital gain, and no more than forty percent of the total
annual account net loss for a taxable year shall be treated as short-
term capital loss.
Yet a third election the Fund may make would enable it to identify
separately those mixed straddles with respect to which it chooses to
offset gains and losses before applying "60/40 treatment" to the net
amount of any gains or losses attributable to Section 1256 contracts.
Section 1233 of the Code provides generally for the gain and loss
consequences of short sales. Such gains and losses are capital gains
and losses to the extent the property used to close the short sale
constitutes a capital asset of the Fund (which will always be the case
under the Fund's method of investment). Section 1233 establishes those
rules for determining holding period of securities involved in short
sales and whether the capital gain or loss on short sales is long term
and short term. Under Rule one, if at the time of a short sale, the
Fund has not held short term securities "substantially identical" to the
securities sold short [for a period longer than the short time holding
period], then any gain realized on the closing on the short sale is
short term regardless of the length of time the sale was open or the
period for which the securities used to close the sale were held. Rule
two provides that the holding period of any securities "substantially
identical" to the securities sold short, which were held short term at
the time of the short sale or required thereafter and before its
closing, begins on the earlier of: (a) the date the short sale is
closed; and (b) the date such other acquired securities are sold or
otherwise disposed of. Rule one applies only to the extent gain is
realized; Rule two applies in gain or loss situations. Rule three
provides that when at the time of a short sale the Fund holds securities
long term which are "substantially identical" to those sold short, any
loss resulting from the closing of the short sale is a long term loss
regardless of the holding period of the securities used to close the
short sale. Rules one and three apply only to the extent the securities
used to close the transaction are not in excess of the substantially
identical securities in the order of acquisition and only to the extent
they do not exceed the quantity sold short. The term "substantially
identical" in the case of securities has the same meaning as in Section
1091 of the Code dealing with "wash sales".
A holder of a zero coupon Treasury security will receive no cash
payment of interest prior to maturity; it will, under recent tax
legislation, be required for federal income taxes purposes to include an
imputed amount of interest income on its investment income calculations
each year a particular zero coupon Treasury security is held. In
general, this income computation will be based upon the "effective
interest" method of calculation. This method results in the reporting
of income in increasing amounts each year and in reduced net investment
income on a present value basis when compared to the (former) "straight-
line" method. The straight-line computation of interest simply
allocates the total discount equally over all periods during which the
obligation will exist.
Since it is the Fund's policy to meet the requirements of
Subchapter M of the Internal Revenue Code of 1986, and accordingly
distribute to its shareholders at least 90% of the income, the Fund may
be required to pay out as a dividend each year an amount which is
greater than the total amount of cash interest the Fund actually
received. Such distributions will be made from the cash assets of the
Fund or by liquidation of portfolio securities, if necessary. If a
distribution of cash necessitates the liquidation of portfolio
securities, the Investment Advisor will select which securities to sell.
The Fund may realize a gain or loss from such sales. In the event the
Fund realizes net capital gain from such transactions, its shareholders
may receive a larger capital gain distribution, if any, than they would
in the absence of such transactions.
<TABLE>
<CAPTION>
OFFICERS AND DIRECTORS OF THE FUND
<S> <C> <C>
Position and Office Principal Occupation
Name, Address and Age with the Fund During Past Five Years
David J. Rights* Chairman of the Board, President of
1095 Rydal Road President, and Rightime, Econometrics, Inc. a
Rydal, PA 19046 Treasurer registered investment advisor;President and
Age 51 PA Treasurer of Rightime Administrators;
President of RTE Securities, Inc. a
registered broker-dealer; and
Consultant to Lincoln Investment Planning,
Inc., a registered investment advisor and
broker dealer.
Edward S. Forst Sr. Director, Vice- Chairman of the Board, Lincoln Investment
218 Glenside Avenue President and Planning Inc., a registered investment
Wyncote, PA 19095-1595 Secretary advisor and broker
Age 70 dealer; Vice
President and Secretary of Rightime
Administrators.
Francis X. Barrett Director Director and Member of the Finance and
3121 Kutztown Road Pension Committee, Sacred Heart Hospital;
Reading, PA 19605 Formerly, Executive Director, National
Age 71 Catholic Education Association; and Pastor,
Church of Holy Guardian Angels, Reading, PA
Dr. Winifred L. Tillery Director Superintendent of Schools, Camden County, New
744 Amsterdam Road Jersey; Formerly, Director, Division of
Mt. Laurel, NJ 08054 Direct Services, NJ Dept. of Education; and
Age 64 Executive Director for Special Education for
the Philadelphia School District
Dr. Carol A. Wacker Director Formerly, Assistant Superintendent for
1659 Landquist Dr. Senior High Schools, the Philadelphia School
Encinitas, CA 92024 District.
Age 63
</TABLE>
The officers conduct and supervise the daily business operations of the
Fund, while the directors, in addition to functions set forth under
"Advisor," "Administrator" and "Distributor" review such actions and
decide on general policy. Compensation to officers and directors of the
Fund who are affiliated with the Administrator, the Investment Advisor
or the Distributor is paid by the Administrator, the Investment Advisor
or the Distributor, respectively, and not by the Fund. Directors
receive a $7,000 annual retainer and $1,250 per board of directors
meeting attended and are reimbursed for expenses incurred in connection
with attendance at such meetings. Directors who are members of the
audit committee receive $1,250 per audit committee meeting if such
meeting is held separately from a board meeting. During the most recent
fiscal year, there were four meetings of the board of directors, and two
separate meetings of the audit committee. The Fund has adopted a Code
of Ethics which governs when and how securities investment personnel may
engage in personal securities transactions.
The officers and directors of The Rightime Fund, Inc. do not,
individually or as a group, beneficially own more than 1% of any of the
Funds.
<TABLE>
<CAPTION>
(5)
(3) Total
Pension or Compensation
Retirement (4) From
(2) Benefits Estimated Registrant
Aggregate Accrued As Annual and Fund
Compensation Part of Benefits Complex
(1) from Fund Upon Paid to
Name of Person, Position Registrant Expenses Retirement Directors
<S> <C> <C> <C> <C>
David J. Rights, Director* $0 None None None
Edward S. Forst, Sr., Director* $0 None None None
Francis X. Barrett, Director $14,500 None None $14,500
Dr. Winifred L. Tillery, Director $14,500 None None $14,500
Dr. Carol A. Wacker, Director $14,500 None None $14,500
* "Interested" person as defined in the Investment Company Act of 1940 (the "1940 Act").
</TABLE>
GENERAL INFORMATION
Audits and Reports
The accounts of The Rightime Fund, Inc., are audited each year by
Tait, Weller & Baker of Philadelphia, PA, independent certified public
accountants. Shareholders receive semiannual and annual reports of the
Fund including the annual audited financial statements and a list of
securities owned.
Custodian
The Fund has retained CoreStates Bank, NA, Philadelphia,
Pennsylvania to act as custodian of the securities and cash of each
series of the Fund.
PERFORMANCE
Current yield and total return may be quoted in advertisements,
shareholder reports or other communications to shareholders.
Occasionally, the Fund may include its distribution rate in sales
literature. Yield is the ratio of income per share derived from the
Fund's portfolio investments to a current maximum offering price
expressed in terms of percent. The yield is quoted on the basis of
earnings after expenses have been deducted. Total return is the total
of all income and capital gains paid to shareholders, assuming
reinvestment of all distributions, plus (or minus) the change in the
value of the original investment, expressed as a percentage of the
purchase price. The distribution rate is the amount of distributions
per share made by the Fund over a twelve-month period divided by the
current maximum offering price.
Securities and Exchange Commission rules require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by the Fund be accompanied
by certain standardized performance information computed as required by
the Commission. Current yield and total return quotations used by the
Fund are based on the standardized methods of computing performance
mandated by the Commission. An explanation of those and other methods
used by the Fund to compute or express performance follows:
The yield for The Rightime Government Securities Fund for the 30-
day period ended on the date of the audited financial statements
contained herein was 2.01%.
As indicated below, current yield is determined by dividing the net
investment income per share earned during the period by the maximum
offering price per share on the last day of the period and analyzing the
result. Expenses accrued for the period include any fees charged to all
shareholders during the 30-day base period. According to the SEC
formula:
Yield = 2 [( a-b + 1)6-1]
cd
where
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
<TABLE>
<CAPTION>
The average annual total return for each Fund for the
indicated period ended on the date of the balance sheet contained herein
is as follows:
<S> <C> <C> <C> <C>
One Year Five Year Ten Year Since Fund's
Fund Name Period Period Period Inception
The Rightime Fund 8.96% 10.40% 10.00% 11.48%
The Rightime Government
Securities Fund (3.33)% 3.61% -- 4.42%
The Rightime Blue
Chip Fund 6.92% 9.59% -- 9.29%
The Rightime Social
Awareness Fund 8.23% 10.25% -- 8.23%
The Rightime MidCap
Fund 4.46% -- -- 9.64%
</TABLE>
As the following formula indicates, the average annual total
return is determined by multiplying a hypothetical initial purchase
order of $1,000 by the average annual compound rate of return (including
capital appreciation/depreciation and dividends and distributions paid
and reinvested) for the stated period less any fees charged to all
shareholder accounts and analyzing the result. The calculation assumes
the maximum sales load is deducted from the initial $1,000 purchase
order and that all dividends and distributions are reinvested at the net
asset value on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each one, five
and ten year period or since inception and the deduction of all
applicable charges and fees. According to the SEC formula:
n
P(1+T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1, 5, or 10 year periods at the
end of the 1, 5, or 10 year periods (or fractional portion
thereof).
Sales literature pertaining to the Fund may quote a
distribution rate in addition to the yield or total return. The
distribution rate is the amount of distributions per share made by the
Fund over a twelve-month period divided by the current maximum offering
price. The distribution rate differs from the yield because it measures
what the Fund paid to shareholders rather than what the Fund earned from
investments. It also differs from the yield because it may include
dividends paid from premium income from option writing, if applicable,
and short-term capital gains in addition to dividends from investment
income. Under certain circumstances, such as when there has been a
change in the amount of dividend payout, or a fundamental change in
investment policies, it might be appropriate to annualize the
distributions paid over the period such policies were in effect, rather
than using the distributions paid during the past twelve months.
With respect to those categories of investors who are
permitted to purchase shares of the Fund at net asset value, sales
literature pertaining to the Fund may quote a "Current Return for Net
Asset Value Investments." This rate is computed by adding the income
dividends paid by the Fund during the last twelve months and dividing
that sum by a current net asset value. Figures for compound yield,
total return and other measures of performance for Net Asset Value
Investments may also be quoted. These will be derived as described
elsewhere in this Statement with the substitution of net asset value for
public offering price.
Sales literature referring to the use of the Fund(s) as a
potential investment for Individual Retirement Accounts (IRAs), and
other tax-advantaged retirement plans may quote a total return based
upon compounding of dividends on which it is presumed no federal income
tax applies.
Regardless of the method used, past performance is not
necessarily indicative of future results, but is an indication of the
return to shareholders only for the limited historical period used.
Comparisons and Advertisements
To help investors better evaluate how an investment in the
Fund(s) might satisfy their investment objective, advertisements
regarding the Fund(s) may discuss yield or total return for the Fund(s)
as reported by various financial publications. Advertisements may also
compare yield or total return to yield or total return as reported by
other investments, indices, and averages. The following publications,
indices, and averages may be used:
a) Dow Jones Composite Average or its component averages - an
unmanaged index composed of 30 blue-chip industrial corporation stocks
(Dow Jones Industrial Average), 15 utilities company stocks (Dow Jones
Utilities Average), and 20 transportation company stocks. Comparisons
of performance assume reinvestment of dividends.
b) Standard & Poor's 500 Stock Index or its component indices
- - an unmanaged index composed of 400 industrial stocks, 40 financial
stocks, 40 utilities stocks, and 20 transportation stocks. Comparisons
of performance assume reinvestment of dividends.
c) Standard & Poor's MidCap 400 Index - an unmanaged index
composed of 400 domestic and Canadian stocks which measures the mid-
range sector of the U.S. stock market.
d) The New York Stock Exchange composite or component indices
- - unmanaged indices of all industrial, utilities, transportation, and
finance stocks listed on the New York Stock Exchange.
e) Lipper - Mutual Fund Performance Analysis, Lipper Fixed
Income Analysis, and Lipper Mutual Fund Indices - measures total return
and average current yield for the mutual fund industry. Ranks
individual mutual fund performance over specified time periods assuming
reinvestment of all distributions, exclusive of sales charges.
f) The Ryan composite or component indices - unmanaged
indices of U.S. government securities as published in Barron's and other
publications.
g) Donoghue money market fund indices - unmanaged indices of
money market funds as published in Barron's and other publications.
h) CDA Mutual Fund Report, published by CDA Investment
Technologies, Inc. - analyzes price, current yields, risk, total return,
and average rate of return (average annual compounded growth rate) over
specified time periods for the mutual fund industry.
i) Weisenberger - Mutual Funds Panorama, Weisenberger
Investment Companies, published by Warren, Gorham & Lamont, Inc. - Lists
distributions, price and fund privileges; measures performance over
varying time period, calculates yield and lists expense ratios.
j) Mutual Fund Values and Mutual Fund Source Book, published
by Morningstar, Inc. - Lists fund assets, portfolio composition, annual
total return, portfolio statistics, income and expense ratios, risk
statistics and ranks funds by objective. Provides statistics on the
mutual fund industry.
k) Financial publications such as Business Week, Changing
Times, Financial World, Forbes, Fortune, Money Magazine, Wall Street
Journal, Barron's et al. which rate fund performance over various time
periods.
l) Consumer Price Index (or Cost of Living Index), published
by the U.S. Bureau of Labor Statistics - a statistical measure of
change, over time, in the price of goods and services, in major
expenditure groups.
In assessing such comparisons of yield, return, or volatility,
an investor should keep in mind that the composition of the investments
in the reported indices and averages is not identical to the Fund's
portfolio, that the averages are generally unmanaged, and that the items
included in the calculations of such averages may not be identical to
the formula used by the Fund to calculate its figures. In addition
there can be no assurance that the Fund will continue this performance
as compared to such other averages.
FINANCIAL STATEMENTS
The Rightime Fund Inc.'s financial statements are contained in its
annual report to shareholders dated October 31, 1996, which is available
without charge upon request, and is incorporated herein by reference.
ADMINISTRATOR
Rightime Administrators Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
INVESTMENT ADVISOR
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
DISTRIBUTOR
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
CUSTODIAN
CoreStates Bank, NA
Broad and Chestnuts Streets
Philadelphia, PA 19101-7618
TRANSFER AGENT
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
MAILING ADDRESS:
Rightime Fund Quick Mail
P.O. Box 13813
Philadelphia, PA 19101-3813
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102-1544
1* "Interested" person as defined in the Investment Company Act of 1940
(the "1940 Act").January 1, 1990 12:00 am
F:\DATA27\PUBL\MPO\SAI\116001.5 January 1, 1990 12:00 am
48
47
PART C
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements for the Rightime Fund, Inc.:
(1) Statement of Net Assets - October 31, 1996
(2) Statement of Operations for the year ended October 31, 1996
(3) Statement of Charges in Net Assets for the year ended
October 31, 1996
(4) Financial Highlights September 17, 1985 to October 31, 1996.
(5) Report of Independent Accountants dated December 2, 1996.
(6) Notes to Financial Statements.
All Financial Statements referred to above are contained in the
Registrant's Annual Report to Shareholders, which is
incorporated by reference in the Statement of Additional
Information.
(b) Exhibits:
(1) (a) Articles of Incorporation of Registrant
(Exhibit to Form N 1A filed 2/19/85; filed via
EDGAR in PE#22 on 3/1/97);
(b) Articles Supplementary establishing The Rightime
Government Securities Fund
(Exhibit to Post effective Amendment No. 4 to Form N 1A;
filed via EDGAR in PE#22 on 3/1/97);
(c) Articles Supplementary establishing The Rightime Blue
Chip Fund (Exhibit to Post effective Amendment
No. 7 to Form N 1A; filed via EDGAR in PE#22 on
3/1/97);
(d) Articles Supplementary establishing The Rightime Growth
Fund (Exhibit to Post effective Amendment No. 11
to Form N 1A; filed via EDGAR in PE#22 on
3/1/97);
(e) Articles Supplementary establishing The Rightime Social
Awareness Fund
(Exhibit to Post effective Amendment No. 13 to Form N 1A;
filed via EDGAR in PE#22 on 3/1/97);
(f) Articles Supplementary establishing The Rightime MidCap
Fund
(Exhibit to Post-effective Amendment No. 16 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97):
(2) Bylaws of Registrant
(Exhibit to Form N 1A filed 2 19-85; filed via EDGAR in PE#22
on 3/1/97);
(3) Not applicable;
(4) (a) Specimen of capital stock certificate of
The Rightime Series of Registrant (Exhibit to
Post effective Amendment No. 2 to Form N 1A);
(b) Specimen of capital stock certificate of The Rightime
Government Securities Series (Exhibit to Post
effective Amendment No. 4 to Form N 1A);
(c) Specimen of capital stock certificate of The Rightime
Blue Chip Fund Series (Exhibit to Post effective
Amendment No. 7 to Form N 1A);
(d) Specimen of capital stock certificate of The Rightime
Growth Fund Series (Exhibit to Post effective
Amendment No. 11 to Form N 1A);
(e) Specimen of capital stock certificate of The Rightime
Social Awareness Fund (Exhibit to Post effective
Amendment No. 13 to Form N 1A);
(f) Specimen of capital stock certificate of The Rightime
MidCap Fund (Exhibit to Post-effective Amendment
No. 16 to Form N-1A);
(5) (a) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime Series (Exhibit to Form N
1A filed 2/19/85; filed via EDGAR in PE#22 on
3/1/97);
(b) Investment Advisory Agreement between the Registrant and
Rightime Econometrics, Inc. on behalf of The
Rightime Government Securities Series (Exhibit
to Post effective Amendment No. 4 to Form N 1A;
filed via EDGAR in PE#22 on 3/1/97);
(c) Investment Advisory Agreement between the Registrant and
Rightime Econometrics, Inc. on behalf of The
Rightime Blue Chip Fund Series (Exhibit to Post
effective Amendment No. 7 to Form N 1A; filed
via EDGAR in PE#22 on 3/1/97);
(d) Investment Advisory Agreement between the Registrant and
Rightime Econometrics, Inc. on behalf of The
Rightime Growth Fund Series (Exhibit to Post
effective Amendment No. 11 to Form N 1A);
(e) Investment Advisory Agreement between the Registrant and
Rightime Econometrics, Inc. on behalf of The
Rightime Social Awareness Fund (Exhibit to Post
effective Amendment No. 13 to Form N 1A; filed
via EDGAR in PE#22 on 3/1/97);
(f) Investment Advisory Agreement between the Registrant and
Rightime Econometrics, Inc. on behalf of The
Rightime MidCap Fund (Exhibit to Post-effective
Amendment No. 16 to Form N-1A; filed via EDGAR
in PE#22 on 3/1/97);
(6) (a) Distribution Agreement between Registrant
and Lincoln Investment Planning, Inc. on behalf
of The Rightime Series (Exhibit to Pre effective
Amendment No. 1 to Form N 1A; filed via EDGAR in
PE#22 on 3/1/97);
(b) Distribution Agreement between Registrant and Lincoln
Investment Planning, Inc. on behalf of The
Rightime Government Securities Series (Exhibit
to Post effective Amendment No. 4 to Form N 1A;
filed via EDGAR in PE#22 on 3/1/97);
(i) Amended Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. for the
Rightime Government Securities Series
(Exhibit to Post effective Amendment No. 9
to Form N 1A);*
(c) Distribution Agreement between Registrant and Lincoln
Investment Planning, Inc. on behalf of The
Rightime Blue Chip Fund Series (Exhibit to Post
effective Amendment No. 7 to Form N 1A; filed
via EDGAR in PE#22 on 3/1/97);
(d) Distribution Agreement between Registrant and Lincoln
Investment Planning, Inc. on behalf of The
Rightime Growth Fund (Exhibit to Post effective
Amendment No. 11 to Form N 1A);
(e) Distribution Agreement between Registrant and Lincoln
Investment Planning, Inc. on behalf of The
Rightime Social Awareness Fund (Exhibit to Post
effective Amendment No. 13 to Form N 1A; filed
via EDGAR in PE#22 on 3/1/97);
(f) Distribution Agreement between Registrant and Lincoln
Investment Planning, Inc. on behalf of The
Rightime MidCap Fund (Exhibit to Post-effective
Amendment No. 16 to Form N-1A; filed via EDGAR
in PE#22 on 3/1/97);
(7) Not applicable;
(8) (a) Custody Agreement between the Registrant
and First Pennsylvania Bank, N.A. on behalf of
The Rightime Series. (Exhibit to Form N 1A
filed 2/19/85);
(b) Custody Agreement between the Registrant and Investors
Fiduciary Trust Company on behalf of The
Rightime Government Securities Series. (Exhibit
to Post effective Amendment No. 4 to Form N 1A);
(c) Custody Agreement between the Registrant and First
Pennsylvania Bank, N.A. on behalf of The
Rightime Blue Chip Fund Series (Exhibit to Post
effective Amendment No. 7 to Form N 1A);
(d) Custody Agreement between Registrant and Philadelphia
National Bank for custodial services (Exhibit to
Post effective Amendment No. 11 to Form N 1A
filed via EDGAR in PE#22 on 3/1/97);
(e) Amendment to Custodian Agreement (Exhibit to Post
effective Amendment No. 13 to Form N 1A filed
via EDGAR in PE#22 on 3/1/97);
(f) Amendment to Custodian Agreement (Exhibit to Post-
effective Amendment No. 16 to Form N-1A filed
via EDGAR in PE#22 on 3/1/97);
(9) (a) (i) Transfer Agency Agreement between the Registrant
and First Pennsylvania Bank, N.A. on
behalf of The Rightime Series. (Exhibit
to Form N 1A filed 2/19/85);
(ii) Amendment to the Transfer Agency Agreement (Exhibit
to Post effective Amendment No. 2 to Form
N-1A);
(b) Transfer and Dividend Disbursing Agency Agreement between
the Registrant and Lincoln Investment Planning
(Exhibit to Post-Effective Amendment No. 4 to
Form N-1A; filed via EDGAR in PE#22 on 3/1/97);
(c) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
Series (Exhibit to Pre effective Amendment No. 1
to Form N 1A filed via EDGAR in PE#22 on
3/1/97);
(d) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
Government Securities Series (Exhibit to Post
effective Amendment No. 4 to Form N 1A filed via
EDGAR in PE#22 on 3/1/97);
(e) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
Blue Chip Fund series (Exhibit to Post effective
Amendment No. 7 to Form N 1A filed via EDGAR in
PE#22 on 3/1/97);
(f) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
Growth Fund (Exhibit to Post effective Amendment
No. 11 to Form N 1A);
(g) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
Social Awareness Fund (Exhibit to Post effective
Amendment No. 13 to Form N 1A filed via EDGAR in
PE#22 on 3/1/97);
(h) Administration Agreement between Registrant and Rightime
Administrators, Inc. on behalf of The Rightime
MidCap Fund, Inc. (Exhibit to Post-effective
Amendment No. 16 to Form N-1A filed via EDGAR in
PE#22 on 3/1/97);
(i) Services Agreement between Rightime Administrators, Inc.
and Lincoln Investment Planning, Inc. (Exhibit
to Form N 1A filed 2/19/85); (to be filled by amendment);
(j) Accounting Services Agreement between Rightime
Administrators, Inc. and First Pennsylvania
Bank, N.A. (Exhibit to Post effective Amendment
No. 2 to Form N 1A);.
(k) Amendment of the Accounting Services Agreement (Exhibit
to Post effective Amendment No. 2 to Form N-1A);
(l) Accounting Servicer (1) agreement between the Registrant
and Lincoln Investment Planning (To be filed by amendment).
(10) Opinion of Stradley, Ronon, Stevens & Young, LLP for the
Registrant filed with its Rule 24f 2 Notice on or
about December 30, 1996;*
(11) Consent of the Auditors;
(12) Not applicable;
(13) Undertaking of the initial shareholders
(Exhibit to Pre effective Amendment No. 1 to Form N 1A);
(14) Not Applicable;
(15) (a) 12b-1 Plan regarding: The Rightime Series (Exhibit
to Form N 1A filed 2/19/85; filed; via EDGAR in
PE#22 on 3/1/97);
(b) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);
(c) 12b-1 Plan regarding: The Rightime Government Securities
Series (Exhibit to Post effective Amendment No.
4 to Form N 1A; filed via EDGAR in PE#22 on
3/1/97);
(d) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);
(e) 12b-1 Plan regarding: The Rightime Blue Chip Fund Series
(Exhibit to Post effective Amendment No. 7 to
Form N 1A; filed via EDGAR in PE#22 on 3/1/97);
(f) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);
(g) 12b-1 Plan regarding: The Rightime Growth Fund Series
(Exhibit to Post Effective Amendment No.11 to
Form N 1A; filed via EDGAR in PE#22 on 3/1/97);
(h) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);
(i) 12b-1 Plan regarding: The Rightime Social Awareness Fund
Series (Exhibit to Post effective Amendment No.
13 to Form N 1A; filed via EDGAR in PE#22 on
3/1/97);
(j) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);
(k) 12b-1 Plan regarding: The Rightime MidCap Fund Series
(Exhibit to Post-effective Amendment No. 16 to
Form N-1A; filed via EDGAR in PE#22 on 3/1/97);
(16) Schedule for computation of performance quotations for:
(a) The Rightime Series;
(b) The Rightime Government Securities Series;
(c) The Rightime Blue Chip Fund Series;
(d) The Rightime Social Awareness Fund Series; and
(f) The Rightime MidCap Fund Series.
(17) Financial data schedules for:
(a) The Rightime Series;
(b) The Rightime Government Securities Series;
(c) The Rightime Blue Chip Fund Series;
(d) The Rightime Social Awareness Fund Series; and
(e) The Rightime MidCap Fund Series.
*Previously filed and incorporated herein by reference.
ITEM 25. Persons Controlled By or Under Common Control of the
Registrant
NONE
ITEM 26. Number of Holders of Securities
The number of record holders of each class of securities of the
Registrant as of February 26, 1997, is as follows:
(1) (2)
Number of Record Holders at
Title of Class at February 26, 1997
-------------- --------------------
Common stock $.01 par value:
The Rightime Fund 10,380
The Rightime Blue Chip Fund 19,869
The Rightime Social Awareness Fund 1,194
The Rightime MidCap Fund 6,653
The Rightime Government Securities Fund 2,628
ITEM 27. Indemnification
The Articles and Bylaws of the Registrant, and other instruments
by which the Registrant is administered, do not contain any provisions
or references to indemnification. The Board of Directors has been
advised of the provisions of Sections 17(h) and (i) of the Act, ICA
Release Number 11330 and relevant portions of ICA Release number 7221.
Reference is hereby made to the Maryland Corporations and
Associations Annotated Code, Section 2 418 (1983), which contains
various provisions authorizing Maryland Corporations to indemnify
various persons.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Registrant pursuant to the foregoing provisions,
the Registrant has been informed that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy
as expressed in the Act and is therefore unenforceable.
ITEM 28. Business and Other Connections of Investment Advisor
The principal business of Rightime Econometrics, Inc. is to
provide investment counsel and advice to individual and
institutional investors.
ITEM 29. Principal Underwriters
(a) Lincoln Investment Planning, Inc., the only principal
underwriter of the Registrant, does not act as
principal underwriter, depositor or investment advisor
to any other investment company.
(b) Herewith is the information required by the following table
with respect to each director, officer or partner of
the only underwriter named in answer to Item 21 of
Part B:
Position and Position and
Name and Principal Officers with Offices with
Business Address Underwriter Registrant
- ------------------- -------------- -------------
Edward S. Forst, Sr. Director Vice President
Lincoln Investment and Secretary
Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095 1595
Edward S. Forst, Jr. President/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095 1595
Karen O'Neill Secretary/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095 1595
Thomas Forst Vice President Assistant
Lincoln Investment /Director Secretary
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095 1595
Harry S. Forst Treasurer/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
Mareillen Forst-Paulus Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
Paul S. Mendelson Chief Oper. Officer N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
James M. Frank Chief Legal Officer N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
(c) Not applicable.
ITEM 30. Location of Accounts and Records
Each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the
Rules (17 CFR 270.31a 1 to 31a 3) promulgated thereunder
is in the physical possession of:
Advisor
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
Underwriter and Transfer Agent
Lincoln Investment Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095 1595
Custodian
CoreStates Bank, NA
Broad & Chestnut Sts.
Philadelphia, PA 19101
ITEM 31. Management Services
All management services are covered in the management agreement
between the Registrant and Rightime Econometrics, Inc., as discussed in
Parts A and B.
ITEM 32. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this amended Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Wyncote,
Pennsylvania, on the 26th day of February, 1997.
THE RIGHTIME FUND, INC.
By:David J. Rights
------------------------
David J. Rights
President
Pursuant to the requirements of the Securities Act of 1933, this
Post Effective Amendment No. 22 to its Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
Director, Presi-
dent (Principal
Executive Offi-
cer), and Trea-
surer (Principal
Financial and
David J. Rights Accounting Officer) 2/26/97
- ---------------------- ---------------
David J. Rights
Edward S. Forst Director 2/26/97
- ---------------------- ---------------
Edward S. Forst, Sr.
Director
- ---------------------- ---------------
Francis X. Barrett
Director
- ---------------------- ---------------
Winifred L. Tillery
Carole A. Wacker Director 2/26/97
- ---------------------- ---------------
Carol A. Wacker
EXHIBITS
Item No.
EX27.(b)(17)(a) Financial data schedule for The Rightime Series
EX27.(b)(17)(b) Financial data schedule for The Rightime Government
Securities Series
EX27.(b)(17)(c) Financial data schedule for The Rightime Blue Chip
Fund Series
EX27.(b)(17)(d) Financial data schedule for The Rightime Social
Awareness Fund series
EX27.(b)(17)(e) Financial data schedule for The Rightime MidCap Fund
series
EX99.(b)(1)(a) Articles of Incorporation of Registrant
(Doc no. 197758.1)
EX99.(b)(1)(b) Articles Supplementary establishing The Rightime
Government Securities Fund
(Doc no. 197759.1)
EX99.(b)(1)(c) Articles Supplementary establishing The Rightime
Blue Chip Fund
(Doc no. 197760.1)
EX99.(b)(1)(e) Articles Supplementary establishing The Rightime
Social Awareness Fund
(Doc no. 197778.1)
EX99.(b)(1)(f) Articles Supplementary establishing The Rightime
MidCap Fund
(Doc no. 197780.1)
EX99.(b)(2) Bylaws of Registrant
(Doc no. 197781.1)
EX99.(b)(5)(a) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime Series
(Doc no. 197790.1)
EX99.(b)(5)(b) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime Government Securities
Series
(Doc no. 197795.1)
EX99.(b)(5)(c) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime Blue Chip Fund series
(Doc no. 197791.1)
EX99.(b)(5)(e) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime Social Awareness Fund
series (Doc no. 197793.1)
EX99.(b)(5)(f) Investment Advisory Agreement between the
Registrant and Rightime Econometrics, Inc. on
behalf of The Rightime MidCap Fund series (Doc
no. 197794.1)
EX99.(b)(6)(a) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on behalf of
The Rightime Series
(Doc no. 197943.1)
EX99.(b)(6)(b) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on behalf of
The Rightime Government Securities Series
(Doc no. 197944.1)
EX99.(b)(6)(c) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on behalf of
The Rightime Blue Chip Fund Series
(Doc no. 197945.1)
EX99.(b)(6)(e) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on behalf of
The Rightime Social Awareness Fund series
(Doc no. 197947.1)
EX99.(b)(6)(f) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on behalf of
The Rightime MidCap Fund series
(Doc no. 197948.1)
EX99.(b)(8)(d) Custody Agreement between the Registrant and
Philadelphia National Bank (Doc. no. 198099.1).
EX99.(b)(8)(e) Amendment to Custody Agreement between the
Registrant and Philadelphia National Bank (Doc.
no. 198100.1).
EX99.(b)(8)(f) Amendment to Custody Agreement between the
Registrant and Philadelphia National Bank (Doc.
no. 198101.1).
EX99.(b)(9)(b) Transfer Agency Agreement between Registrant and
Lincoln Investment Planning (Doc. no. 198098.1)
EX99.(b)(9)(c) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf of The
Rightime Series (Doc no. 199419.1)
EX99.(b)(9)(d) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf of The
Rightime Government Securities Fund series (Doc
no. 199420.1).
EX99.(b)(9)(e) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf of The
Rightime Blue Chip Fund series (Doc no.
199421.1).
EX99.(b)(9)(g) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf of The
Rightime Social Awareness Fund series (Doc no.
199426.1).
EX99.(b)(9)(h) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf of The
Rightime MidCap Fund series (Doc no. 199427.1).
EX99.(b)(10) Opinion of Stradley, Ronon, Stevens & Young, LLP for
the Registrant filed with its Rule 24f 2 Notice
on or about December 30, 1996;
EX99.(b)(11) Consent of the Auditors
EX99.(b)(15)(a) 12b-1 Plan regarding The Rightime Series
(Doc no. 199622.1)
EX99.(b)(15)(b) Amendment No. 1 to the 12b-1 Plan regarding The
Rightime Series (Doc
no. 199626.1)
EX99.(b)(15)(c) 12b-1 Plan regarding The Rightime Government
Securities Series (Doc no. 199623.1)
EX99.(b)(15)(d) Amendment No. 1 to the 12b-1 Plan regarding The
Rightime Government Securities series (Doc no.
199634.1)
EX99.(b)(15)(e) 12b-1 Plan regarding The Rightime Blue Chip Fund
Series (Doc no. 199624.1)
EX99.(b)(15)(f) Amendment No. 1 to the 12b-1 Plan regarding The
Rightime Blue Chip Fund series (Doc no. 199636.1)
EX99.(b)(15)(i) 12b-1 Plan regarding The Rightime Social Awareness
Fund series (Doc no. 199625.1)
EX99.(b)(15)(j) Amendment No. 1 to the 12b-1 Plan regarding The
Rightime Social Awareness Fund series (Doc no.
199637.1)
EX99.(b)(15)(k) 12b-1 Plan regarding The Rightime MidCap Fund series
(Doc no. 199627.1)
EX99.(b)(16) Schedule for computation of performance quotations
EX99.(b)(19) Annual Report to Shareholders dated 10/31/96
116224.5
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> RIGHTIME GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 10,344,811
<INVESTMENTS-AT-VALUE> 10,605,236
<RECEIVABLES> 74,885
<ASSETS-OTHER> 3,127
<OTHER-ITEMS-ASSETS> 59,067
<TOTAL-ASSETS> 10,742,315
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29,704
<TOTAL-LIABILITIES> 29,704
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,296,737
<SHARES-COMMON-STOCK> 847,040
<SHARES-COMMON-PRIOR> 1,426,333
<ACCUMULATED-NII-CURRENT> 2,088
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5,513,545)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (72,669)
<NET-ASSETS> 10,712,611
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 898,074
<OTHER-INCOME> 0
<EXPENSES-NET> (309,875)
<NET-INVESTMENT-INCOME> 588,199
<REALIZED-GAINS-CURRENT> 762,818
<APPREC-INCREASE-CURRENT> (1,114,091)
<NET-CHANGE-FROM-OPS> 236,926
<EQUALIZATION> (18,607)
<DISTRIBUTIONS-OF-INCOME> (694,855)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70,161
<NUMBER-OF-SHARES-REDEEMED> (699,840)
<SHARES-REINVESTED> 50,386
<NET-CHANGE-IN-ASSETS> (7,920,248)
<ACCUMULATED-NII-PRIOR> 127,351
<ACCUMULATED-GAINS-PRIOR> (6,276,363)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,725
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 57,725
<AVERAGE-NET-ASSETS> 14,404,093
<PER-SHARE-NAV-BEGIN> 13.06
<PER-SHARE-NII> .052
<PER-SHARE-GAIN-APPREC> (.32)
<PER-SHARE-DIVIDEND> .61
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.65
<EXPENSE-RATIO> 2.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> RIGHTIME BLUE CHIP FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 236,594,859
<INVESTMENTS-AT-VALUE> 278,793,908
<RECEIVABLES> 297,607
<ASSETS-OTHER> 61,900
<OTHER-ITEMS-ASSETS> 56,016
<TOTAL-ASSETS> 279,209,431
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,570,348
<TOTAL-LIABILITIES> 1,570,348
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 231,408,544
<SHARES-COMMON-STOCK> 8,707,798
<SHARES-COMMON-PRIOR> 7,600,332
<ACCUMULATED-NII-CURRENT> 3,408,045
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7,757,570
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 35,064,924
<NET-ASSETS> 277,639,083
<DIVIDEND-INCOME> 4,148,564
<INTEREST-INCOME> 4,891,982
<OTHER-INCOME> 0
<EXPENSES-NET> (5,649,852)
<NET-INVESTMENT-INCOME> 3,390,694
<REALIZED-GAINS-CURRENT> 36,497,016
<APPREC-INCREASE-CURRENT> (9,392,418)
<NET-CHANGE-FROM-OPS> 30,495,292
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,105,663)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 891,634
<NUMBER-OF-SHARES-REDEEMED> (959,181)
<SHARES-REINVESTED> 1,175,013
<NET-CHANGE-IN-ASSETS> 28,019,812
<ACCUMULATED-NII-PRIOR> 2,064,369
<ACCUMULATED-GAINS-PRIOR> 7,031,726
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,360,520
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,360,520
<AVERAGE-NET-ASSETS> 272,204,986
<PER-SHARE-NAV-BEGIN> 32.84
<PER-SHARE-NII> .4
<PER-SHARE-GAIN-APPREC> 3.52
<PER-SHARE-DIVIDEND> .28
<PER-SHARE-DISTRIBUTIONS> 4.6
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 31.88
<EXPENSE-RATIO> 2.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> RIGHTIME SOCIAL AWARENESS FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 8,688,292
<INVESTMENTS-AT-VALUE> 8,688,292
<RECEIVABLES> 2,729
<ASSETS-OTHER> 1,812
<OTHER-ITEMS-ASSETS> 13,513
<TOTAL-ASSETS> 8,706,346
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,098
<TOTAL-LIABILITIES> 12,098
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,273,326
<SHARES-COMMON-STOCK> 298,882
<SHARES-COMMON-PRIOR> 227,939
<ACCUMULATED-NII-CURRENT> 123,444
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 297,478
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 8,694,248
<DIVIDEND-INCOME> 61,393
<INTEREST-INCOME> 259,921
<OTHER-INCOME> 0
<EXPENSES-NET> (197,870)
<NET-INVESTMENT-INCOME> 123,444
<REALIZED-GAINS-CURRENT> 1,969,179
<APPREC-INCREASE-CURRENT> (1,100,218)
<NET-CHANGE-FROM-OPS> 992,405
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,799,322)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,737
<NUMBER-OF-SHARES-REDEEMED> (33,480)
<SHARES-REINVESTED> 60,687
<NET-CHANGE-IN-ASSETS> 1,316,185
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 127,621
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 40,814
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40,814
<AVERAGE-NET-ASSETS> 8,165,559
<PER-SHARE-NAV-BEGIN> 32.37
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> 3.88
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 7.57
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.02
<EXPENSE-RATIO> 2.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> RIGHTIME MIDCAP FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 80,296,815
<INVESTMENTS-AT-VALUE> 80,296,815
<RECEIVABLES> 17,392
<ASSETS-OTHER> 18,004
<OTHER-ITEMS-ASSETS> 12,382
<TOTAL-ASSETS> 80,344,593
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 40,633
<TOTAL-LIABILITIES> 40,633
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 76,311,319
<SHARES-COMMON-STOCK> 2,766,945
<SHARES-COMMON-PRIOR> 2,278,756
<ACCUMULATED-NII-CURRENT> 1,334,681
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,657,960
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 80,303,960
<DIVIDEND-INCOME> 568,250
<INTEREST-INCOME> 2,532,943
<OTHER-INCOME> 0
<EXPENSES-NET> (1,733,820)
<NET-INVESTMENT-INCOME> 1,367,373
<REALIZED-GAINS-CURRENT> 15,793,126
<APPREC-INCREASE-CURRENT> (9,976,725)
<NET-CHANGE-FROM-OPS> 7,183,774
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (328,544)
<DISTRIBUTIONS-OF-GAINS> (15,773,543)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 261,155
<NUMBER-OF-SHARES-REDEEMED> (320,085)
<SHARES-REINVESTED> 547,119
<NET-CHANGE-IN-ASSETS> 5,217,665
<ACCUMULATED-NII-PRIOR> 295,852
<ACCUMULATED-GAINS-PRIOR> 2,638,377
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 296,405
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 296,405
<AVERAGE-NET-ASSETS> 79,301,889
<PER-SHARE-NAV-BEGIN> 32.95
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> 2.56
<PER-SHARE-DIVIDEND> .14
<PER-SHARE-DISTRIBUTIONS> 6.84
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.02
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
and any reserves or charges, determined in accordance with generally
accepted accounting principles, for any or all thereof, whether for
taxes, including estimated taxes or unrealized book profits, expenses,
contingencies or otherwise).
In determining the total appraised value of all the property
and assets of the corporation:
(a) Securities owned shall be valued at market value or, in
the absence of readily available market quotations, at fair value as
determined in good faith by or as directed by the Board of Directors in
accordance with applicable statutes and regulations.
(b) Dividends declared but not yet received, or rights, in
respect of securities which are quoted ex-dividend or ex-rights, shall
be accounted for as determined by or pursuant to the direction of the
Board of Directors as deemed necessary by the Board of Directors in
connection with the calculation of anticipated daily distributable
income of the corporation and with such others matters as the Board of
Directors shall determine to be proper.
(c) The value of any other assets of the corporation (and
any of the assets mentioned in paragraphs (a) or (b), in the discretion
of the Board of Directors in the event of a national financial
emergency, as hereinafter defined) shall be determined in such manner as
may be approved from time to time by or pursuant to the direction of the
Board of Directors.
The net asset value of each share of the Common Stock of the
corporation shall be determined by dividing the total market value of
the property and assets of the corporation by the total number of shares
of its Common Stock then issued and outstanding, including any shares
sold by the corporation up to and including the date as of which such
net asset value is to be determined whether or not certificates therefor
have actually been issued. In case the net asset value of each share so
determined shall include a fraction of one cent, such net asset value of
each share shall be adjusted to the nearest full cent.
For the purposes of these Articles of Incorporation, a
"national financial emergency" is defined as the whole or any part of
any period (i) during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, (ii) during which trading
on the New York Stock Exchange is restricted, (iii) during which an
emergency exists as a result of which disposal by the corporation of
securities owned by such series is not reasonably practicable or it is
not reasonably practicable for the corporation fairly to determine the
value of the net assets of such series, or (iv) during any other period
when the Securities and Exchange Commission (or any succeeding
governmental authority) may for the protection of security holders of
the corporation by order permit suspension of the right of redemption or
postponement of the date of payment on redemption; provided that
applicable rules and regulations of the Securities and Exchange
Commission (or any succeeding governmental authority) shall govern as to
whether the conditions prescribed in (ii), (iii), or (iv) exist. The
Board of Directors may, in its discretion, declare the suspension
described in (iv) above at an end, and such other suspension relating to
a natural financial emergency shall terminate as the case may be on the
first business day on which said Stock Exchange shall have reopened or
the period specified in (ii) or (iii) shall have expired (as to which in
the absence of an official ruling by said Commission or succeeding
authority, the determination of the Board of Directors shall be
conclusive)
2. To the extent permitted by law, and except in the case of a
national financial emergency, the-corporation shall redeem shares of its
Common Stock from its stockholders upon request of the holder thereof
received by the corporation or its designated agent during business
hours of any business day, provided that such-request must be
accompanied by surrender of outstanding certificate or certificates for
such shares in form for transfer, together with such proof of the
authenticity of signatures as may reasonably be required on such shares
(or, on such request in the event no certificate is outstanding) by, or
pursuant to the direction of the Board of Directors of the corporation,
and accompanied by proper stock transfer stamps. Shares redeemed upon
any such request shall be purchased by the corporation at the net asset
value of such shares determined in the manner provided in Paragraph (1)
of this Article Seventh, as of the close of business on the business day
during which such request was received in good order by the corporation.
Payments for shares of its Common Stock so redeemed by the
corporation shall be made in cash, except payment for such shares may,
at the option of the Board of Directors, or such officer or officers as
they may duly authorize for the purpose in their complete discretion, be
made from the assets of that series in kind or partially in cash and
partially in kind. In case of any payment in kind the Board of
Directors, or their delegate, shall have absolute discretion as to what
security or securities of such series shall be distributed in kind and
the amount of the same; and the securities shall be valued for purposes
of distribution at the value at which they were appraised in computing
the current net asset value of the series of the Fund's shares, provided
that any stockholder who cannot legally acquire securities so
distributed in kind by reason of the prohibitions of the Investment
Company Act of 1940 shall receive cash.
Payment for shares of its Common Stock so redeemed by the
corporation shall be made by the corporation as provided above within
seven days after the date which such shares are deposited; provided,
however, that if payment shall be made by delivery of assets of the
corporation, as provided above, any securities to be delivered as part
of such payment shall be delivered as promptly as any necessary
transfers of such securities on the books of the several corporations
whose securities are to be delivered may be made, but not necessarily
within such seven day period.
The right of any holder of shares of the Common Stock of the
corporation to receive dividends thereon and all other rights of such
stockholder with respect to the shares so redeemed by the corporation
shall cease and determine from and after the time as of which the
purchase price of such shares shall be fixed, as provided above, except
the right of such stockholder to receive payment for such shares as
provided for herein.
3. The Board of Directors, may from time to time, without the
vote or consent of stockholders, establish uniform standards with
respect to the minimum net asset value of a stockholder account or a
minimum investment which may be made by a stockholder. The Board of
Directors may authorize the closing of those stockholder accounts not
meeting the specified minimum standards of net asset value by redeeming
all of the shares in such accounts, provided there is mailed to each
affected stockholder account, at least thirty (30) days prior to the
planned redemption date, a notice setting forth the minimum account size
requirement and the date on which the account will be closed if the
minimum size requirement is not met prior to said closing date.
EIGHTH: The holders of a majority of the shares of capital stock
present in person or by proxy at a meeting thereof at which a quorum is
present shall have the power to approve any matter properly before the
meeting; provided, if any provision of the Maryland General Corporation
Law requires a greater percentage of shares to approve a matter, the
holders of the majority of the shares of capital stock of the
corporation issued and outstanding and entitled to vote at the meeting
shall have the power to approve such matter. In addition to the
foregoing, when required under the Investment Company Act of 1940, as
amended, holders of a majority of the outstanding voting securities of
the corporation or any series thereof shall be required to approve such
matter.
NINTH: The corporation expressly reserves the right to amend,
alter, change or repeal any provision contained in these Articles of
Incorporation, and all rights, contract and otherwise, conferred herein
upon the stockholders are granted subject to such reservation.
IN WITNESS WHEREOF, the undersigned incorporator of The Rightime
Fund, Inc. who executed the foregoing Articles of Incorporation hereby
acknowledges the same to be his act and further acknowledges that, to
the best of his knowledge the matters and facts set forth therein are
true in all material respects under the penalties of perjury.
Dated the day of November , 1984.
Steven M. Felsenstein
-----------------------------------
Steven M. Felsenstein, Esq.
197758.1
THE RIGHTIME FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE RIGHTIME FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of
the Maryland General Corporation Law, the Board of Directors of the
Corporation, at a meeting called for such purpose on June 25, 1986,
adopted these Articles Supplementary classifying or reclassifying
unissued shares of the Common Stock of the Corporation.
SECOND: A new series of shares of the Corporation's Common Stock
(par value $.01 per share) is designated as the Rightime Government
Securities Series and 20,000,000 shares of the unallocated and unissued
stock of the Corporation are classified and allocated to such Series.
THIRD: The shares of said Rightime Government Securities Series
so classified and allocated shall have all the rights and privileges as
set forth in the Corporation's Articles of Incorporation, including such
priority in the assets and liabilities of such Series as may be provided
in such Articles.
FOURTH: The shares of such Series have been classified and
reclassified by the Board of Directors pursuant to authority contained
in the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, The Rightime Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this
day of October, 1986.
THE RIGHTIME FUND, INC.
By:________________________________
David J. Rights
President
Attest:
______________________________
Edward S. Forst, Sr.
Secretary
THE UNDERSIGNED, President of The Rightime Fund, Inc., who
executed on behalf of said Corporation the foregoing Articles
Supplementary to the Articles of Incorporation, of which this
certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles Supplementary to the
Articles of Incorporation to be the corporate act of said Corporation
and further certifies that, to the best of his knowledge, information
and belief, the matters in fact set forth herein with respect to the
approval thereof are true in all material respects, under the penalties
of perjury.
__________________________________
David J. Rights
President
197759.1
THE RIGHTIME FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE RIGHTIME FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of
the Maryland General Corporation Law, the Board of Directors of the
Corporation, at a meeting called for such purpose on March 25, 1987,
adopted these Articles Supplementary classifying or reclassifying
unissued shares of the Common Stock of the Corporation.
SECOND: A new series of shares of the Corporation's Common Stock
(par value $.01 per share) is designated as the Rightime Blue Chip Fund
Series and 20,000,000 shares of the unallocated and unissued stock of
the Corporation are classified and allocated to such Series.
THIRD: The shares of said Rightime Blue Chip Fund Series so
classified and allocated shall have all the rights and privileges as set
forth in the Corporation's Articles of Incorporation, including such
priority in the assets and liabilities of such Series as may be provided
in such Articles.
FOURTH: The shares of such Series have been classified and
reclassified by the Board of Directors pursuant to authority contained
in the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, The Rightime Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this
day of May, 1987.
THE RIGHTIME FUND, INC.
By:________________________________
David J. Rights, President
Attest:
______________________________
Edward S. Forst, Sr.
Secretary
THE UNDERSIGNED, President of The Rightime Fund, Inc., who
executed on behalf of said Corporation the foregoing Articles
Supplementary to the Articles of Incorporation, of which this
certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles Supplementary to the
Articles of Incorporation to be the corporate act of said Corporation
and further certifies that, to the best of his knowledge, information
and belief, the matters in fact set forth herein with respect to the
approval thereof are true in all material respects, under the penalties
of perjury.
__________________________________
David J. Rights
President
197760.1
THE RIGHTIME FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE RIGHTIME FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of
the Maryland General Corporation Law, the Board of Directors of the
Corporation, at a meeting called for such purpose on December 13, 1989,
adopted these Articles Supplementary classifying or reclassifying
unissued shares of the Common Stock of the Corporation.
SECOND: A new series of shares of the Corporation's Common Stock
(par value $.01 per share) is designated as The Rightime Social
Awareness Fund Series and 20,000,000 shares of the unallocated and
unissued stock of the Corporation are classified and allocated to such
Series.
THIRD: The shares of The Rightime Social Awareness Fund Series
so classified and allocated shall have all the rights and privileges as
set forth in the Corporation's Articles of Incorporation, including such
priority in the assets and liabilities of such Series as may be provided
in such Articles.
FOURTH: The shares of such Series have been classified and
reclassified by the Board of Directors pursuant to authority contained
in the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, The Rightime Fund, Inc. has caused
these Articles Supplementary to be signed in its name and on its behalf
this 13th day of December, 1989.
THE RIGHTIME FUND, INC.
By:_______________________________
David J. Rights
President
Attest:
______________________________
Edward S. Forst, Sr.
Secretary
THE UNDERSIGNED, President of The Rightime Fund, Inc., who
executed on behalf of said Corporation the foregoing Articles
Supplementary to the Articles of Incorporation, of which this
certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles Supplementary to the
Articles of Incorporation to be the corporate act of said Corporation
and further certifies that, to the best of his knowledge, information
and belief, the matters in fact set forth herein with respect to the
approval thereof are true in all material respects, under the penalties
of perjury.
___________________________________
David J. Rights
President
197778.1
THE RIGHTIME FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE RIGHTIME FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of
the Maryland General Corporation Law, the Board of Directors of the
Corporation, at a meeting called for such purpose on June 19, 1991,
adopted these Articles Supplementary classifying or reclassifying
unissued shares of the Common Stock of the Corporation.
SECOND: A new series of shares of the Corporation's Common Stock
(par value $.01 per share) is designated as The Rightime Mid-Cap Fund
Series and 20,000,000 shares of the unallocated and unissued stock of
the Corporation are classified and allocated to such Series.
THIRD: The shares of The Rightime Mid-Cap Fund series so
classified and allocated shall have all the rights and privileges as set
forth in the Corporation's Articles of Incorporation, including such
priority in the assets and liabilities of such Series as may be provided
in such Articles.
FOURTH: The shares of such Series have been classified and
reclassified by the Board of Directors pursuant to authority contained
in the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, The Rightime Fund, Inc. has caused
these Articles Supplementary to be signed in its name and on its behalf
this 3rd day of September, 1991.
THE RIGHTIME FUND, INC.
By:________________________________
David J. Rights
President
Attest:
______________________________
Edward S. Forst, Sr.
Secretary
THE UNDERSIGNED, President of The Rightime Fund, Inc., who
executed on behalf of said Corporation the foregoing Articles
Supplementary to the Articles of Incorporation, of which this
certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles Supplementary to the
Articles of Incorporation to be the corporate act of said corporation
and further certifies that, to the best of his knowledge, information
and belief, the matters in fact set forth herein with respect to the
approval thereof are true in all material respects, under the penalties
of perjury.
___________________________________
David J. Rights
President
197780.1
THE RIGHTIME FUND, INC.
BY-LAWS
ARTICLE I
OFFICES
1. The principal office of the Corporation shall be in the
City of Baltimore, State of Maryland. The Corporation shall also have
offices at such other places as the Board of Directors may from time to
time determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS AND STOCK CERTIFICATES
1. Every stockholder of record shall be entitled to a
stock certificate representing the shares owned by him. Stock
certificates shall be in such form as may be required by law and as the
Board of Directors shall prescribe. Every stock certificate shall be
signed by the President or a Vice President and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary, and
sealed with the corporate seal, which may be a facsimile, either
engraved or printed. Whenever permitted by law, the Board of Directors
may authorize the issuance of stock certificates bearing the facsimile
signatures of the officers authorized to sign such certificates.
2. The shares of stock of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in
person or by a duly authorized attorney, upon surrender for cancellation
of a certificate or certificates for a like number of shares, with a
duly executed assignment and power of transfer endorsed thereon or
attached thereto, and with such proof of the authenticity of the
signatures as the Corporation or its agent may reasonably require.
3. No certificate for share of stock of the Corporation
shall be issued in place of any certificate alleged to have been lost,
stolen, mutilated or destroyed except upon production of such evidence
of the loss, theft, mutilation or destruction, and upon indemnification
of the Corporation and its agents to such extent and in such manner as
the Board of Directors may from time to time prescribe.
4. The Corporation shall be entitled to treat the holder
of record of any share or shares of its capital stock as the owner
thereof and, unless provided for by the Board Directors, shall not be
bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not the
Corporation shall have express or other notice thereof, except as
otherwise required by the laws of the State of Maryland.
ARTICLE III
MEETINGS OF STOCKHOLDERS
1. The annual meeting of the stockholders of the
Corporation shall be held at such place within or without the State of
Maryland as the Board of Directors may from time to time prescribe,
during the month of April, or at such other time as fixed by the Board
of Directors, for the purpose of electing by a plurality vote a Board of
Directors and transacting general business. The place of the annual
meeting of the stockholders of the Corporation shall not be changed
within sixty days next before the day on which such meeting is to be
held. A notice of any change in the place of the annual meeting shall
be given to each stockholder at least ten days before the meeting is to
be held.
2. Special meetings of the stockholders may be called at
any time by the President and shall be called at any time by the
President, or by the Secretary, upon the written request of a majority
of the members of the Board of Directors, or upon the written request of
the holders of at least twenty-five percent of the shares of the capital
stock of the Corporation issued and outstanding and entitled to vote at
such meeting unless otherwise prescribed by prescribed by applicable
law. Upon receipt of a written request from any person or persons
entitled to call a special meeting, which shall state the object of the
meeting, it shall be the duty of the President, or, in his absence, the
Secretary, to call such meeting to be held not less than ten days nor
more than ninety days after the receipt of such request. Special
meetings of the stockholders shall be held at such place within or
without the State of Maryland as the Board of Directors may from time to
time direct, or at such place within or without the State of Maryland as
shall be specified in the notice of such meeting.
3. Notice of the time and place of the annual or any
special meeting of the stockholders shall be given to each stockholder
entitled to notice of such meeting at least ten days prior to the date
of such meeting, unless a greater period is required by applicable law.
In the case of special meetings of the stockholders, the notice shall
specify the object or objects of such meeting, and no business shall be
transacted at such meeting other than that mentioned in the call.
4. Meetings of the stockholders shall be presided over by
the Chairman of the Board or, if he is not present, by the President or
a Vice President or, in their absence, by a Chairman to be chosen at the
meeting. The Secretary of the Corporation, or if he is not present, an
Assistant Secretary of the Corporation, or if neither is present, a
secretary to be chosen at the meeting, shall act as secretary of the
meeting.
5. The Board of Directors may close the stock transfer
books of the Corporation for a period not exceeding twenty days
preceding the date of any meeting of stockholders, or the date for
payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go
into effect, or for a period of not exceeding twenty days in connection
with the obtaining of the consent of stockholders for any purpose;
provided, however, in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date, not
exceeding ninety days preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent, as a record date for the determination of
the stockholders entitled to notice of, and to vote at any such meeting
and any adjournment thereof, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the rights
in respect of any such change, conversion or exchange of capital stock
or to give such consent, and in such case such stockholders and only
such stockholders as shall be stockholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such meeting
and any adjournment thereof, or to receive payment of such dividend or
to receive such allotment or rights or to exercise such rights, or to
give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the Corporation after any such record date
fixed as aforesaid.
6. At all meetings of the stockholders a quorum shall
consist of the persons representing a majority of the outstanding shares
of the capital stock of the Corporation entitled to vote at such
meeting. In the absence of a quorum, no business shall be transacted
except that the stockholders present in person or by proxy and entitled
to vote at such meeting shall have power to adjourn the meeting from
time to time without notice other than announcement at the meeting until
a quorum shall be present. At any such adjourned meeting at which a
quorum shall be present any business may be transacted which might have
been transacted at the meeting on the date specified in the original
notice. If a quorum is present at any meeting, the holders of a
majority of the shares of capital stock present in person or by proxy at
such meeting shall have the power to approve any matter properly before
the meeting, and shall also have the power to adjourn the meeting to any
specific time or times, and no notice of any such adjourned meeting need
be given to stockholders absent or otherwise; provided, if any provision
of the Maryland General Corporation Law requires holders of a greater
percentage of shares to approve a matter, the holders of the majority of
the shares of capital stock of the Corporation issued and outstanding
and entitled to vote at the meeting shall have the power to approve such
matter. In addition to the foregoing, when required under the
Investment Company Act of 1940, as amended, holders of a majority of the
outstanding voting securities of the Corporation or any series thereof
shall be required to approve such matter.
ARTICLE IV
DIRECTORS
1. The Board of Directors shall consist of not less than
three nor more than fifteen members. The number of directors (within
the above limits) shall be determined by the Board of Directors from
time to time as it deems appropriate by a vote of a majority of the
whole Board. Directors need not be stockholders of the Corporation.
2. The directors shall be elected annually by the
stockholders of the Corporation at their annual meeting, and shall hold
office for the term of one year and until their successors shall be duly
elected and shall qualify.
3. The Board of Directors shall have the control and
management of the business of the Corporation, and in addition to the
powers and authority by these By--Laws expressly conferred upon them
may, subject to the provisions of the laws of the State of Maryland and
of the Certificate of Incorporation of the Corporation, exercise all
such powers of the Corporation and do all such acts and things as are
not required by law or by the Certificate of Incorporation to be
exercised or done by the stockholders.
4. The Board of Directors shall have power to fill
vacancies occurring on the Board, whether by death, resignation or
otherwise. A vacancy on the Board of Directors resulting from any cause
except an increase in the number of directors may be filled by a vote of
the majority of the remaining members of the Board, though less than a
quorum; and a vacancy on the Board of Directors resulting from an
increase in the number of directors may be filled by a majority of the
entire Board of Directors. A director elected by the Board of Directors
to fill a vacancy serves until the next annual meeting of stockholders
and until his successor is elected and qualifies. If less than a
majority of the directors in office shall have been elected by the
stockholders, a meeting of the stockholders shall be called as required
under the Investment Company Act of 1940, as amended.
5. The Board of Directors shall have power to appoint, and
at its discretion to remove or suspend, any officer, officers, manager,
superintendents, subordinates, assistants, clerks, agents and employees,
permanently or temporarily, as the Board may think fit, and to determine
their duties and to fix, and from time to time to change, their salaries
or emolument, and to require security in such instances and in such
amounts as it may deem proper.
6. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or
more committees, each committee to consist of two or more of the
directors of the Corporation which, to the extent provided in such
resolution or resolutions, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the Corporation
to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time
to time by resolution adopted by the Board of Directors. Any such
committee shall keep regular minutes of its proceedings, and shall
report the same to the Board when required.
7. The Board of Directors may hold their meetings and keep
the books of the Corporation, except the original or duplicate stock
ledger, outside of the State of Maryland, at such place or places as
they may from time to time determine.
8. Upon the retirement of a Director, the Board may elect
him or her to the position of Director Emeritus. Said Director Emeritus
shall serve for one year and may be reelected by the Board from year to
year thereafter. Said Director Emeritus shall not vote at meetings of
Directors and shall not be held responsible for actions of the Board but
shall receive fees paid to Board members for serving as such.
ARTICLE V
DIRECTORS MEETINGS
1. The first regular meeting of the Board of Directors
shall be held following the annual meeting of the stockholders at which
the directors are elected, or at such other time and place as shall be
fixed by the Board of Directors. Regular meetings of the Board of
Directors shall also be held without notice at such times and places as
may be from time to time prescribed by the Board.
2. Special meetings of the Board of Directors may be
called at any time by the President, and shall be called by the
President upon the written request of a majority of the members of the
Board of Directors. Unless notice is waived by a director, notice of
any special meeting shall be sent to each director at least twenty-four
hours prior to the date of such meeting, and such notice shall state the
time, place and object or objects of such special meeting.
3. One-third of the whole Board of Directors shall constitute a
quorum, except that if the number of Directors on the Board is less than
six, two members shall constitute a quorum for the transaction of
business at any meeting. The act of a majority of the directors present
at any meeting where there is a quorum shall be the act of the Board of
Directors except as may be otherwise specifically provided by statute or
by the Certificate of Incorporation or by these By-Laws.
4. The order of business at meetings of the Board of
Directors shall be prescribed from time to time by the Board.
ARTICLE VI
OFFICERS AND AGENTS
1. At the first meeting of the Board of Directors after
the election of directors in each year, the Board shall elect a
President, a Secretary and a Treasurer and may elect or appoint one or
more Assistant Secretaries, one or more Assistant Treasurers, and such
other officers and agents as the Board may deem necessary and as the
business of the Corporation may require.
2. The President shall be elected from the membership of
the Board of Directors. Any two or more offices may be held by the same
person except the offices of President and Vice President. All officers
of the Corporation shall serve for one year and until their successors
shall have been duly elected and shall have qualified; provided,
however, that any officer may be removed at any time, either with or
without cause, by action of the Board of Directors.
3. Subject to such limitations as the Board of Directors
may from time to time prescribe, the officers of the Corporation shall
each have such powers and duties as generally appertain to their
respective offices, as well as such powers and duties as from time to
time may be conferred by the Board of Directors. Any officer, agent or
employee of the Corporation may be required by the Board of Directors to
give bond for the faithful discharge of his duties, in such sum and of
such character as the Board may from time to time prescribe.
ARTICLE VII
CHECKS, DRAFTS, NOTES, ETC.
1. All checks shall bear the signature of such person or
persons as the Board of Directors may from time to time direct.
2. All notes And other similar obligations and acceptances of drafts
by the Corporation shall be signed by such person or persons as the
Board of Directors may from time to time direct.
3. Any officer of the Corporation or any other employee,
as the Board of Directors may from time to time direct, shall have full
power to endorse for deposit all checks and all negotiable paper drawn
payable to his or their order or to the order of the Corporation.
ARTICLE VIII
CORPORATE SEAL
1. The corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation, the year of its
organization, and the words "Corporate Seal, Maryland". Such seal may
be used by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
ARTICLE IX
DIVIDENDS
1. Dividends upon the shares of the capital stock of any
class or series of shares of the Corporation may, subject to the
provisions of the Certificate of Incorporation of the Corporation, if
any, be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property,
or in shares of the capital stock of the Corporation.
2. Before payment of any dividend there may be set aside
out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors may, from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of
the Corporation, or for such other purpose of the Board of Directors
shall deem to be for the best interests of the Corporation, and the
Board of Directors may abolish any such reserve in the manner in which
it was created.
ARTICLE X
FISCAL YEAR
1. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
ARTICLE XI
NOTICES
1. Whenever under the provisions of these By-Laws notice
is required to be given to any director or stockholder, such notice is
given when it is personally delivered, left at the residence or usual
place of business of the director or stockholder, or mailed to such
director or stockholder at such address as shall appear on the books of
the Corporation, and such notice if mailed shall be deemed to be given
at the time it shall be so deposited in the United States mail postage
prepaid. In the case of directors, such notice may also be given by
telephone, telegraph or cable.
2. Any notice required to be given under these By-Laws may
be waived in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein.
ARTICLE XII
AMENDMENTS
1. These By-Laws may be amended, altered, repealed or
added to by the holders of a majority of the shares of capital stock of
the Corporation present in person or by proxy at a meeting of the
stockholders at which a quorum is present, or by a majority of directors
present at a meeting of the Board of Directors at which a quorum is
present, as the case may be.
197781.1
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this ____ day of
___________________, 1985 between The Rightime Fund, Inc., a Maryland
corporation (the "Fund"), and Rightime Econometrics, Inc., a
Pennsylvania corporation (the "Advisor").
BACKGROUND
The Fund is a diversified open-end management investment company
registered under the Investment Company Act of 1940 as amended (the
"1940 Act"). The Fund desires to retain the Advisor to render
investment advisory services to the Fund, and the Advisor is willing to
render such services on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Fund hereby appoints the Advisor to act as investment
advisor to the Fund for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Fund, the Advisor shall manage the investment operations of the Fund and
the composition of the Fund's portfolio, including the purchase,
retention and disposition thereof, in accordance with the Fund's
investment objectives, policies and restrictions as stated in and
limited by the statements contained in the various documents filed with
the U. S. Securities and Exchange Commission ("the Commission") as such
documents may from time to time be amended and subject to the following
understandings:
(a) The Advisor shall provide supervision of the Fund's
investments and determine from time to time what investments or
securities, including futures contracts, will be purchased, retained,
sold or loaned by the Fund, and what portion of the assets will be
invested, hedged, or held uninvested as cash.
(b) The Advisor shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Articles of Incorporation, 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.
(d) The Advisor shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determinations
with or through such persons, brokers or dealers in conformity with the
policy with respect to brokerage as set forth in the Fund's Registration
Statement and Prospectus or as the Board of Directors may direct from
time to time. In providing the Fund with investment supervision., it is
recognized that the Advisor will give primary consideration to securing
most favorable price and efficient execution. Consistent with this
policy, the Advisor may consider the financial responsibility, research
and investment information and other services provided by brokers or
dealers who may effect or be a party to any such transaction or other
transactions to which other clients of the Advisor may be a party. It
is understood that neither the Fund nor the Advisor has adopted a
formula for allocation of the Fund's investment transaction business.
It is also understood that it is desirable for the Fund that the Advisor
have access to supplemental investment and market research and security
and economic analysis provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Advisor is
authorized to place orders for the purchase and sale of securities for
the Fund with such brokers, subject to review by the Fund's Board of
Directors from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such
brokers may be useful to the Advisor in connection with its services to
other clients.
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient 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
Advisor in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(e) The Advisor shall maintain all books and records with
respect to the Fund's securities transactions required by subparagraphs
(b)(5), (6) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Fund's Board of Directors such periodic.and
special reports as the Board may reasonably request.
(f) The Advisor shall provide the Fund's custodian and the Fund
on each business day with information relating to all transactions
concerning the Fund's assets.
(g) The investment management services provided by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to render similar services to others. While information and
recommendations supplied to the Fund shall, in the Advisor's judgment,
be appropriate under the circumstances and in light of investment
objectives and policies of the Fund, they may be different from the
information and recommendations supplied to other investment companies
and customers. The Fund shall be entitled to equitable treatment under
the circumstances in receiving information, recommendations and any
other services, but the Fund shall not be entitled to receive
preferential treatment as compared with the treatment given to any other
investment company or customer.
(h) The Advisor shall perform such other services as are
reasonably incidental to the foregoing duties.
3. The Fund has delivered to the Advisor copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Fund, filed with the
Secretary of the State of Maryland (such Articles of Incorporation, as
in effect on the date hereof and as amended from time to time, are
herein called the "Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-
Laws");
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Advisor 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 (the "Registration Statement"), as
filed with the Commission relating to the Fund and shares of the Fund's
common stock and all amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act
on Form N-8A as filed with the Commission and all amendments thereto;
and
(f) Prospectus of the Fund (such Prospectus, as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus").
(g) Any other documents filed with the Commission. The Advisor
shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the 1940 Act or
the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. The Fund agrees to indemnify the Advisor
to the full extent permitted by the Fund governing instruments.
4. The Advisor 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 the capacities in which they are elected. Services
to be furnished by the Advisor under this Agreement may be furnished
through the medium of any of such directors, officers or employees.
5. The Advisor agrees that no officer or director of the Advisor
will deal for or on behalf of the Fund with himself as principal or
agent, or with any corporation, partnership or other person in which he
may have a financial interest, except that this shall not prohibit:
(a) officers and directors of the Advisor from having a
financial interest in the Fund or in the Advisor.
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer, one
or more of whose partners, officers or directors is an officer or a
director of the Advisor, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
6. If any occasion should arise in which the Advisor or any of its
officers or directors advises persons concerning the shares of the Fund,
the Advisor or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
7. The Advisor agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any
time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character
in connection with the purchase or sale of securities (except securities
issued by the Fund) or other assets by or for the Fund.
8. The Advisor shall keep the Fund's books and records required to
be maintained by it pursuant to paragraph 2 hereof. The Advisor agrees
that all records which it maintains for the Fund are the property of the
Fund and it will surrender promptly to the Fund any of such records upon
the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Advisor
pursuant to paragraph 2 hereof.
9. During the term of this Agreement, the Advisor will pay (i)
the salaries and expenses of all its personnel, and (ii) all expenses
incurred by it in the ordinary course of performing its duties
hereunder, but not expenses assumed by the Administrator of the Fund or
the Fund pursuant to the Administration Agreement. All costs and
expenses not expressly assumed by the Advisor under this Agreement shall
be paid by the Administrator or the Fund, including but not limited to:
(i) interest and taxes, including but not limited to all issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Board of Directors of the Fund; (v)
legal and audit expenses; (vi) fees and expenses of the Fund's
Administrator, custodian, distributor, transfer agent and accounting
services agents; (vii) expenses incident to the issuance of shares,
including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
State securities laws of the Fund or its shares; (ix) expenses of
preparing, printing, and mailing reports and notices and proxy material
to shareholders of the Fund; (x) all other expenses incidental to
holding meetings of the Fund's directors and shareholders and all
allocable communications expenses with respect to investor services and
to preparing, printing, and mailing prospectuses and reports to
shareholders in the amount necessary for distribution to the
shareholders; (xi) dues or assessments of or contributions to any trade
association of which the Fund is a member; (xii) such non-recurring
expenses as may arise, including litigation affecting the Fund and the
legal obligations which the Fund may have to indemnify its officers and
directors with respect thereto; (xiii) all expenses which the Fund
agrees to bear in any distribution agreement or in any plan adopted by
the Fund pursuant to Rule 12b-1 under the Act; and (xiv) all corporate
fees payable by the Fund to federal, state or other governmental
agencies.
10. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Advisor as full compensation
therefor a fee at an annualized rate of .50 of one percent (.50%) of the
Fund's average daily net assets (specifically 1/24th of 1% per month of
the average daily net assets). This fee will be computed daily as of
the close of business and will be paid to the Advisor monthly within ten
(10) business days after the last day of each month and such advisory
fee shall be adjusted, if necessary, at the time of the payment due in
the last month in the fiscal year of the Fund. The Advisory Fee shall
be prorated for any fraction of a month at the commencement or
termination of this Agreement.
11. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Advisor and the Fund's administrator,
but excluding interest, taxes, brokerage commissions, distribution fees,
amortization of organization expenses and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) exceed the limits set by applicable
regulation of state securities commissions, if any, the compensation due
to the Advisor hereunder will be reduced by twenty percent (20%) of the
amount of such excess. If for any month such expenses exceed such
limitation after giving effect to the above reduction of the fees
payable to the Advisor and the Fund's administrator, the payment to the
Advisor for that month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Advisor's obligation hereunder will be limited
to the amount of its fee paid or accrued with respect to such fiscal
year.
12. The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering service hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any securities or hedging instrument, whether or
not such purchase, sale or retention shall have been based upon its own
investigation or upon investigation and research made by any other
individual, firm or corporation. The Advisor shall not be liable for
any error of judgment or mistake of law or for any loss suffered by 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 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. Any person employed by the
Advisor, who may be or become an employee of and paid by any other
entity affiliated with the Fund, such as the administrator, distributor,
or custodian to the Fund, shall be deemed, when acting within the scope
of his employment by such other affiliated entity, to be acting in such
employment solely for such other affiliated entity and not as the
Advisor's employee or agent.
13. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may
be terminated by the Fund 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 securities (as defined in the 1940 Act) of the
Fund, or by the Advisor at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
14. Nothing in this Agreement shall limit or restrict the right of
any of the Advisor's directors, officers, or employees who may also be a
director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any business, whether of a similar or a dissimilar
nature, nor limit or restrict the Advisor's right to engage in any other
business or to render services of any kind to any other corporation,
firm, individual or association. Nothing in this Agreement shall
prevent the Advisor or any affiliated person (as defined in the 1940
Act) of the Advisor from acting as investment advisor and/or principal
underwriter for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any such affiliated person from
buying, selling, or trading any securities or hedging instruments for
its or their own accounts or for the account of others for whom it or
they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of its obligations to the Fund
under the Agreement.
15. Neither this Agreement nor any transaction made pursuant
hereto shall be invalidated or in any way affected by the fact that
directors, officers, agents and/or shareholders of the Fund are or may
be interested in the Advisor, or any successor or assignee thereof, as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of the Advisor are or may be interested
in the Fund as directors, officers, shareholders or otherwise; or that
the Advisor or any successor or assignee, is or may be interested in the
Fund as shareholders or otherwise; provided, however, that neither the
Advisor nor any officer or director of the Advisor or of the Fund shall
sell to or buy from the Fund any property or security other than a
security issued by the Fund, except in accordance with an applicable
order or exemptive rule of the Commission.
16. Except as otherwise provided herein or authorized by the Board
of Directors of the Fund from time to time, the Advisor shall for all
purposes herein be deemed to be an independent contractor and, except as
expressly provided or authorized in this Agreement, shall have no
authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. The Fund and the Advisor are not partners
or joint venturers with each other and nothing herein shall be construed
so as to make them such partners or joint venturers or impose any
liability as such on either of them.
17. During the term of this Agreement, the Fund agrees to furnish
the Advisor at its principal office with all prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public,
which refer to the Advisor in any way, prior to use thereof and not to
use such material if the Advisor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Advisor copies of any of the
above mentioned materials which refer in any way to the Advisor. The
Fund shall furnish or otherwise make available to the Advisor such other
information relating to the business affairs of the Fund as the Advisor
at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder. The Fund agrees that, in the event
that the Advisor ceases to be the Fund's investment advisor for any
reason, the Fund will (unless the Advisor otherwise agrees in writing)
promptly take all necessary steps to propose to the shareholders at the
next regular meeting that the Fund change to a name not including the
word "Rightime." The Fund agrees that the word "Rightime" in its name
is derived from the name of the Advisor and is the property of the
Advisor for copyright and all other purposes and that therefore such
word may be freely used by the Advisor as to other investment activities
or other investment products.
18. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
19. This Agreement shall be subject to all applicable provisions
of law, including, without limitation, the applicable provisions of the
1940 Act.
20. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
21. Compensation to be paid to the Advisor hereunder shall be
separate and distinct from organizational expenses, if any, to be
reimbursed to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:________________________________
President
[Corporate Seal] Attest:___________________________
Secretary
RIGHTIME ECONOMETRICS, INC.
By:________________________________
President
[Corporate Seal] Attest:___________________________
Secretary
197790.1
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this day of 1986 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for the Rightime Government Securities Series (the
"Fund"), and Rightime Econometrics, Inc., a Pennsylvania corporation
(the "Advisor").
BACKGROUND
The Fund, a Series of the Corporation, has been organized and
operates as an open-end management investment company registered under
the Investment Company Act of 1940 as amended (the "1940 Act"). The
Corporation desires to retain the Advisor to render investment advisory
services to the Fund, and the Advisor is willing to render such services
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints the Advisor to act as investment
advisor to the Fund for the period and on the terms set forth in this
Agreement. The advisor accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Advisor shall manage the investment operations of the
Fund and the composition of the Fund's portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Fund's investment objectives, policies and restrictions as stated in and
limited by the statements contained in the various documents filed with
the U. S. Securities and Exchange Commission ("the Commission") as such
documents may from time to time be amended and subject to the following
understandings:
(a) The Advisor shall provide supervision of the Fund's
investments and determine from time to time what investments or
Securities, including futures contracts, will be purchased, retained,
sold or loaned by the Fund, and what portion of the assets will be
invested, hedged, or held uninvested as cash.
(b) The Advisor shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and the Prospectus
of the Fund and with the instructions and directions of the Board of
Directors of the Corporation and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations.
(d) The Advisor shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determination
with or through such persons, brokers or dealers in conformity with the
policy with respect to brokerage as set forth in the Corporation's
Registration Statement and Prospectus of the Fund or as the Board of
Directors may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Advisor will give
primary consideration to securing most favorable price and efficient
execution. Consistent with this policy, the Advisor may consider the
financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be party to
any such transaction or other transactions to which other clients of the
Advisor may be a party. It is understood that neither the Fund nor the
Advisor has adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable
for the Fund that the Advisor have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Advisor is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the
Corporation's Board of Directors from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Advisor in
connection with its services to other clients.
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient 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 '
Advisor in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(e) The Advisor shall maintain all books and records with
respect to the Fund's securities transactions required by subparagraphs
(b)(5), (6) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Fund's Board of Directors such periodic and
special reports as the Board may reasonably request.
(f) The Advisor shall provide the Fund's custodian and the Fund
on each business day with information relating to all transactions
concerning the Fund's assets.
(g) The investment management services provided by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to render similar services to others. While information and
recommendations supplied to the Fund shall, in the Advisor's judgment,
be appropriate under the circumstances in light of investment objectives
and policies of the Fund, they may be different from the information and
recommendations supplied to other investment companies and customers.
The Fund shall be entitled to equitable treatment under the
circumstances in receiving information, recommendations and any other
services, but the Fund shall not be entitled to receive preferential
treatment as compared with the treatment given to any other investment
company or customer.
(h) The Advisor shall perform such other services as are
reasonably incidental to the foregoing duties.
3. The Fund has delivered to the Advisor copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Corporation, filed with the
Secretary of the State of Maryland (such Articles of Incorporation, as
in effect on the date hereof and as amended from time to time, are
herein called the "Articles of Incorporation");
(b) By-Laws of the Corporation (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Directors of the
Corporation authorizing the appointment of the Advisor 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 (the "Registration Statement"), as
filed with the Commission relating to the Fund and shares of the Fund's
common stock and all amendments thereto;
(e) Notification of Registration of the Corporation under the
1940 Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus of the Fund (such Prospectus, as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus").
(g) Any other documents filed with the Commission. The Advisor
shall have no responsibility or liability for the accuracy or
completeness of the Corporation's Registration Statement under the 1940
Act or the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. on behalf of the Fund, the Corporation
agrees to indemnify the Advisor to the full extent permitted by the
Corporation's governing instruments.
4. The Advisor shall authorize and permit any of its directors,
officers and employees who may be elected as directors or officers of
the Corporation to serve in the capacities in which they are elected.
Services to be furnished by the Advisor under this Agreement may be
furnished through the medium of any of such directors, officers or
employees.
5. The Advisor agrees that no officer or director of the Advisor,
or of any affiliate of the Advisor, will deal for or on behalf of the
Fund with himself as principal or agent, or with any corporation,
partnership or other person in which he may have a financial interest,
except that this shall not prohibit:
(a) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from having a financial interest in the Fund, in the
Advisor, or in any affiliate of the Advisor.
(b) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from providing services to the Fund of a type usually
and customarily provided to an investment company, pursuant to a written
agreement approved by the Board of Directors of the Fund, including a
majority of the disinterested directors of the Fund (as defined in the
1940 Act).
(c) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer, one
or more of whose partners, officers or directors is an officer or a
director of the Advisor, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
6. If any occasion should rise in which the Advisor or any of its
officers or directors advises persons concerning the shares of the Fund,
the Advisor or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
7. The Advisor agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any
time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character
in connection with the purchase or sale of securities (except securities
issued by the Fund) or other assets by or for the Fund.
8. The Advisor shall keep the Fund's books and records required to
be maintained by it pursuant to paragraph 2 hereof. The Advisor agrees
that all records which it maintains for the Fund are the property of the
Fund and it will surrender promptly to the Fund any of such records upon
the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 3la-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Advisor
pursuant to paragraph 2 hereof.
9. During the term of this Agreement, the Advisor will pay the
salaries and expenses of all its personnel, and (ii) all expenses
incurred by it in the ordinary course of performing its duties
hereunder, but not expenses assumed by the Administrator of the Fund or
the Fund pursuant to the Administration Agreement. All costs and
expenses not expressly assumed by the Advisor under this Agreement shall
be paid by the Administrator or the Fund, including but not limited to:
(i) interest and taxes, including but not limited to all issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Board of Directors of the Fund; (v)
legal and audit expenses; (vi) fees and expenses of the Fund's
Administrator, custodian, distributor, transfer agent and accounting
services agents; (vii) expenses incident to the issuance of shares,
including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Fund or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy material
to shareholders of the Fund; (x) all other expenses incidental to
holding meetings of the Fund's directors and shareholders and all
allocable communications expenses with respect to investor services and
to preparing, printing, and mailing prospectuses and reports to
shareholders in the amount necessary for distribution to the
shareholders; (xi) dues or assessments of or contributions to any trade
association of which the Fund is a member; (xii) such nonrecurring
expenses as may arise, including litigation affecting the Fund and the
legal obligations which the Fund may have to indemnify its officers and
directors with respect thereto; (xiii) all expenses which the Fund
agrees to bear in any distribution agreement or in any plan adopted by
the Fund pursuant to Rule 12b-1 under the Act; and (xiv) all corporate
fees payable by the Fund to federal, state or other governmental
agencies.
10. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Advisor as full compensation
therefor a fee at an annualized rate of .40 of one percent (.40%) of the
Fund's average daily net assets (specifically 1/30th of 1% per month of
the average daily net assets). This fee will be computed daily as of
the close of business and will be paid to the Advisor monthly within ten
(10) business days after the last day of each month and such a fee shall
be adjusted, if necessary, at the time of the payment due in the last
month in the fiscal year of the Fund. The Advisory Fee shall be
prorated for any fraction of a month at the commencement or termination
of this Agreement.
11. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Advisor and the Fund's administrator,
but excluding interest, taxes, brokerage commissions, distribution fees,
amortization of organization expenses and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) exceed the limit set by applicable
regulation of state securities commissions, if any, the compensation due
to the Advisor hereunder will be reduced by twenty percent (20%) of the
amount of such excess. If for any month such expenses exceed such
limitation after giving effect to the above reduction of the fees
payable to the Advisor and the Fund's administrator, the payment to the
Advisor for that month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Advisor's obligation hereunder will be limited
to the amount of its fee paid or accrued with respect to such fiscal
year.
12. The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any securities or hedging instrument, whether or
not such purchase, sale or retention shall have been based upon its own
investigation or upon investigation and research made by any other
individual, firm or corporation. The Advisor shall not be liable for
any error of judgment or mistake of law for any loss suffered by 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 the amount set forth in
Section 36(b)(3) of the 1940 Act) or 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. Any person employed by the
Advisor, who may be or become an employee of and paid by any other
entity affiliated with the Fund, such as the administrator, distributor,
or custodian to the Fund, shall be deemed, when acting within the scope
of his employment by such other affiliated entity, to be acting in such
employment solely for such other affiliated entity and not as the
Advisor's employee or agent.
13. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the
requirements of the 1940 Act,- provided, however, that this Agreement my
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Advisor at any time, without the payment of
any penalty, on not more than sixty (60) days' nor less than thirty (30)
days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
14. Nothing in this Agreement shall limit or restrict the right of
any of the Advisor's directors, officers, or employees who may also be a
director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any, business, whether of similar or a dissimilar
nature, nor limit or restrict the Advisor's right to engage in any other
business or to render services of any kind to any other corporation,
firm, individual or association. Nothing in this Agreement shall
prevent the Advisor or any affiliated person (as defined in the 1940
Act) of the Advisor from acting as investment advisor and/or principal
underwriter for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any such affiliated person from
buying, selling, or trading any securities or hedging instruments for
its or their own accounts or for the account of others for whom it or
they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of it obligations to the Fund
under the Agreement.
15. Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in the Advisor, or any successor or assignee thereof, as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of the Advisor are or may be interested
in the Fund as directors, officer, shareholders or otherwise; or that
the Advisor or any successor or assignee, is or may be interested in the
Fund as shareholders or otherwise; provided, however, that neither the
Advisor nor any officer or director of the Advisor or of the Corporation
shall sell to or buy from the Fund any property or security other than a
security issued by the Fund, except in accordance with an applicable
order or exemptive rule of the Commission.
16. Except as otherwise provided herein or authorized by the Board
of Directors of the Corporation from time to time, the Advisor shall for
all purposes herein be deemed to be an independent contractor and,
except as expressly provided or authorized in this Agreement, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. The Fund and the Advisor are not partners
or joint venturers with each other and nothing herein shall be construed
to make them such partners or joint venturers or impose any liability as
such on either of them.
17. During the term of this Agreement, the Fund agrees to furnish
the Advisor at its principal office with all prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public,
which refer to the Advisor in any way, prior to use thereof and not to
use such material if the Advisor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Advisor copies of any of the
above-mentioned materials which refer in any way to the Advisor. The
Fund shall furnish or otherwise make available to the Advisor such other
information relating to the business affairs of the Fund as the Advisor
at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder. The Corporation agrees that, in
the event that the Advisor ceases to be the Fund's investment advisor
for any reason, the Fund will (unless the Advisor otherwise agrees in
writing) promptly take all necessary steps to propose to the
shareholders at the next regular meeting that the Fund change to a name
not including the word "Rightime." The Corporation agrees that the word
"Rightime" in its name is derived from the name of the Advisor and is
the property of the Advisor for copyright and all other purposes and
that therefore such word may be freely used by the Advisor as to other
investment activities or other investment products.
18. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
19. This Agreement shall be subject to all applicable provisions of
law, including, without limitation, the applicable provisions of the
1940 Act.
20. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
21. Compensation to be paid to the Advisor hereunder shall be
separate and distinct from organizational expenses, if any, to be
reimbursed to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
---------------------------------
President
[Corporate Seal] Attest:
----------------------------
Secretary
RIGHTIME ECONOMETRICS, INC.
By:
---------------------------------
President
[Corporate Seal] Attest:
----------------------------
Secretary
197795.1
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this ______________ day of
__________________, 1987 by and between The Rightime Fund, Inc., a
Maryland corporation (the "Corporation") for the Rightime Blue Chip Fund
Series (the "Fund"), and Rightime Econometrics, Inc., a Pennsylvania
corporation (the "Advisor").
BACKGROUND
The Fund, a Series of the Corporation, is organized and operated as
an open-end management investment company under the Investment Company
Act of 1940 as amended (the "1940 Act"). The Corporation desires to
retain the Advisor to render investment advisory services to the Fund,
and the Advisor is willing to render such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints the Advisor to act as investment
advisor to the Fund for the period and on the terms set forth in this
Agreement. The advisor accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Advisor shall manage the investment operations of the
Fund and the composition of the Fund's portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Fund's investment objectives, policies and restrictions as stated in and
limited by the statements contained in the various documents filed with
the U. S. Securities and Exchange Commission ("the Commission") as such
documents may from time to time be amended and subject to the following
understandings:
(a) The Advisor shall provide supervision of the Fund's
investments and determine from time to time what investments or
Securities, including futures contracts, will be purchased, retained,
sold or loaned by the Fund, and what portion of the assets will be
invested, hedged, or held uninvested as cash.
(b) The Advisor shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and the Prospectus
of the Fund and with the instructions and directions of the Board of
Directors of the Corporation and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations.
(d) The Advisor shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determination
with or through such persons, brokers or dealers in conformity with the
policy with respect to brokerage as set forth in the Corporation's
Registration Statement and Prospectus of the Fund or as the Board of
Directors may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Advisor will give
primary consideration to securing most favorable price and efficient
execution. Consistent with this policy, the Advisor may consider the
financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be party to
any such transaction or other transactions to which other clients of the
Advisor may be a party. It is understood that neither the Fund nor the
Advisor has adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Advisor have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Advisor is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the
Corporation's Board of Directors from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Advisor in
connection with its services to other clients.
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient 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
Advisor in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to.such other
clients.
(e) The Advisor shall maintain all books and records with
respect to the Fund's securities transactions required by subparagraphs
(b)(5), (6) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Fund's Board of Directors such periodic and
special reports as the Board may reasonably request.
(f) The Advisor shall provide the Fund's custodian and the Fund
on each business day with information relating to all transactions
concerning the Fund's assets.
(g) The investment management services provided by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to render similar services to others. While information and
recommendations supplied to the Fund shall, in the Advisor's judgment,
be appropriate under the circumstances in light of investment objectives
and policies of the Fund, they may be different from the information and
recommendations supplied to other investment companies and customers.
The Fund shall be entitled to equitable treatment under the
circumstances in receiving information, recommendations and any other
services, but the Fund shall not be entitled to receive preferential
treatment as compared with the treatment given to any other investment
company or customer.
(h) The Advisor shall perform such other services as are
reasonably incidental to the foregoing duties.
3. The Fund has delivered to the Advisor copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Corporation, filed with the
Secretary of the State of Maryland (such Articles of Incorporation, as
in effect on the date hereof and as amended from time to time, are
herein called the "Articles of Incorporation")
(b) By-Laws of the Corporation (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Directors of the
Corporation authorizing the appointment of the Advisor 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 (the "Registration Statement"), as
filed with the Commission relating to the Fund and shares of the Fund's
common stock and all amendments thereto;
(e) Notification of Registration of the Corporation under the
1940 Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus of the Fund (such Prospectus, as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus").
(g) Any other documents filed with the Commission. The Advisor
shall have no responsibility or liability for the accuracy or
completeness of the Corporation's Registration Statement under the 1940
Act or the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. On behalf of the Fund, the Corporation
agrees to indemnify the Advisor to the full extent permitted by the
Corporation's governing instruments.
4. The Advisor shall authorize and permit any of its directors,
officers and employees who may be elected as directors or officers of
the Corporation to serve in the capacities in which they are elected.
Services to be furnished by the Advisor under this Agreement may be
furnished through the medium of any of such directors, officers or
employees.
5. The Advisor agrees that no officer or director of the Advisor,
or of any affiliate of the Advisor, will deal for or on behalf of the
Fund with himself as principal or agent, or with any corporation,
partnership or other person in which he may have a financial interest,
except that this shall not prohibit:
(a) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from having a financial interest in the Fund, in the
Advisor, or of any affiliate of the Advisor.
(b) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from providing services to the Fund of a type usually
and customarily provided to an investment company, pursuant to a written
agreement approved by the Board of Directors of the Fund, including a
majority of the disinterested directors of the Fund (as defined in the
1940 Act).
(c) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer, one
or more of whose partners, officers or directors is an officer or a
director of the Advisor, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
6. If any occasion should rise in which the Advisor or any of its
officers or directors advises persons concerning the shares of the Fund,
the Advisor or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
7. The Advisor agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any
time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character
in connection with the purchase or sale of securities (except securities
issued by the Fund) or other assets by or for the Fund.
8. The Advisor shall keep the Fund's books and records required to
be maintained by it pursuant to paragraph 2 hereof. The Advisor agrees
that all records which it maintains for the Fund are the property of the
Fund and it will surrender promptly to the Fund any of such records upon
the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Advisor
pursuant to paragraph 2 hereof.
9. During the term of this Agreement, the Advisor will pay the
salaries and expenses of all its personnel, and (ii) all expenses
incurred by it in the ordinary course of performing its duties
hereunder, but not expenses assumed by the Administrator of the Fund or
the Fund pursuant to the Administration Agreement. All costs and
expenses not expressly assumed by the Advisor under this Agreement shall
be paid by the Administrator or the Fund, including but not limited to:
(i) interest and taxes, including but not limited to all issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Board of Directors of the Fund; (v)
legal and audit expenses; (vi) fees and expenses of the Fund's
Administrator, custodian, distributor, transfer agent and accounting
services agents; (vii) expenses incident to the issuance of shares,
including issuance on ",he payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Fund or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy material
to shareholders of the Fund; (x) all other expenses incidental to
holding meetings of the Fund's directors and shareholders and all
allocable communications expenses with respect to investor services and
to preparing, printing, and mailing prospectuses and reports to
shareholders in the amount necessary for distribution to the
shareholders; (xi) dues or assessments of or contributions to any trade
association of which the Fund is a member; (xii) such nonrecurring
expenses as may arise, including litigation affecting the Fund and the
legal obligations which the Fund may have to indemnify its officers and
directors with respect thereto; (xiii) all expenses which the Fund
agrees to bear in any distribution agreement or in any plan adopted by
the Fund pursuant to Rule 12b-1 under the Act; and (xiv) all corporate
fees payable by the Fund to federal, state or other governmental
agencies.
10. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Advisor as full compensation
therefor a fee at an annualized rate of .50 of one percent (.50%) of the
Fund's average daily net assets (specifically 1/24th of 1% per month of
the average daily net assets). This fee will be computed daily as of
the close of business and will be paid to the Advisor monthly within ten
(10) business days after the last day of each month and such a fee shall
be adjusted, if necessary, at the time of the payment due in the last
month in the fiscal year of the Fund. The Advisory Fee shall be
prorated for any fraction of a month at the commencement or termination
of this Agreement.
11. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Advisor and the Fund's administrator,
but excluding interest, taxes, brokerage commissions, distribution fees,
amortization of organization expenses and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) exceed the limit set by applicable
regulation of state securities commissions, if any, the compensation due
to the Advisor hereunder will be reduced by twenty percent (20%) of the
amount of such excess. If for any month such expenses exceed such
limitation after giving effect to the above reduction of the fees
payable to the Advisor and the Fund's administrator, the payment to the
Advisor for that month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Advisor's obligation hereunder will be limited
to the amount of its fee paid or accrued with respect to such fiscal
year.
12. The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any securities or hedging instrument, whether or
not such purchase, sale or retention shall have been based upon its own
investigation or upon investigation and research made by any other
individual, firm or corporation. The Advisor shall not be liable for
any error of judgment or mistake of law for any loss suffered by 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 the amount set forth in
Section 36(b)(3) of the 1940 Act) or 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. Any person employed by the
Advisor, who may be or become an employee of and paid by any other
entity affiliated with the Fund, such as the administrator, distributor,
or custodian to the Fund, shall be deemed, when acting within the scope
of his employment by such other affiliated entity, to be acting in such
employment solely for such other affiliated entity and not as the
Advisor's employee or agent.
13. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Advisor at any time, without the payment of
any penalty, on not more than sixty (60) days' nor less than thirty (30)
days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
14. Nothing in this Agreement shall limit or restrict the right of
any of the Advisor's directors, officers, or employees who may also be a
director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any business, whether of similar or a dissimilar
nature, nor limit or restrict the Advisor's right to engage in any other
business or to render services of any kind to any other corporation,
firm, individual or association. Nothing in this Agreement shall
prevent the Advisor or any affiliated person (as defined in the 1940
Act) of the Advisor from acting as investment advisor and/or principal
underwriter for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any such affiliated person from
buying, selling, or trading any securities or hedging instruments for
its or their own accounts or for the account of others for whom it or
they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of it obligations to the Fund
under the Agreement.
15. Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in the Advisor, or any successor or assignee thereof, as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of the Advisor are or may be interested
in the Fund as directors, officer, shareholders or otherwise; or that
the Advisor or any successor or assignee, is or may be interested in the
Fund as shareholders or otherwise; provided, however, that neither the
Advisor nor any officer or director of the Advisor or of the Corporation
shall sell to or buy from the Fund any property or security other than a
security issued by the Fund, except in accordance with an applicable
order or exemptive rule of the Commission.
16. Except as otherwise provided herein or authorized by the Board
of Directors of the Corporation from time to time, the Advisor shall for
all purposes herein be deemed to be an independent contractor and,
except as expressly provided or authorized in this Agreement, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. The Fund and the Advisor are not partners
or joint venturers with each other and nothing herein shall be construed
to make them such partners or joint venturers or impose any liability as
such on either of them.
17. During the term of this Agreement, the Fund agrees to furnish
the Advisor at its principal office with all prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public,
which refer to the Advisor in any way, prior to use thereof and not to
use such material if the Advisor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Advisor copies of any of the
above mentioned materials which refer in any way to the Advisor. The
Fund shall furnish or otherwise make available to the Advisor such other
information relating to the business affairs of the Fund as the Advisor
at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder. The Corporation agrees that, in
the event that the Advisor ceases to be the Fund's investment advisor
for any reason, the Fund will (unless the Advisor otherwise agrees in
writing) promptly take all necessary steps to propose to the
shareholders at the next regular meeting that the Fund change to a name
not including the word "Rightime." The Corporation agrees that the word
"Rightime" in its name is derived from the name of the Advisor and is
the property of the Advisor for copyright and all other purposes and
that therefore such word may be freely used by the Advisor as to other
investment activities or other investment products.
18. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
19. This Agreement shall be subject to all applicable provisions
of law, including, without limitation, the applicable provisions of the
1940 Act.
20. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
21. Compensation to be paid to the Advisor hereunder shall be
separate and distinct from organizational expenses, if any, to be
reimbursed to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:________________________________
President
[Corporate Seal] Attest:___________________________
Secretary
RIGHTIME ECONOMETRICS, INC.
By:________________________________
President
[Corporate Seal] Attest:___________________________
Secretary
197791.1
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this 1st day of March, 1990 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for the Rightime Social Awareness Fund Series (the
"Fund"), and Rightime Econometrics, Inc., a Pennsylvania corporation
(the "Advisor").
BACKGROUND
The Fund, a Series of the Corporation, is organized and operated as
an open-end management investment company under the Investment Company
Act of 1940 as amended (the "1940 Act"). The Corporation desires to
retain the Advisor to render investment advisory services to the Fund,
and the Advisor is willing to render such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints the Advisor to act as investment
advisor to the Fund for the period and on the terms set forth in this
Agreement. The advisor accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Advisor shall manage the investment operations of the
Fund and the composition of the Fund's portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Fund's investment objectives, policies and restrictions as stated in and
limited by the statements contained in the various documents filed with
the U. S. Securities and Exchange Commission ("the Commission") as such
documents may from time to time be amended and subject to the following
understandings:
(a) The Advisor shall provide supervision of the Fund's
investments and determine from time to time what investments or
Securities, including futures contracts, will be purchased, retained,
sold or loaned by the Fund, and what portion of the assets will be
invested, hedged, or held uninvested as cash.
(b) The Advisor shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and the Prospectus
of the Fund and with the instructions and directions of the Board of
Directors of the Corporation and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations.
(d) The Advisor shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determination
with or through such persons, brokers or dealers in conformity with the
policy with respect to brokerage as set forth in the Corporation's
Registration Statement and Prospectus of the Fund or as the Board of
Directors may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Advisor will give
primary consideration to securing most favorable price and efficient
execution. Consistent with this policy, the Advisor may consider the
financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be party to
any such transaction or other transactions to which other clients of the
Advisor may be a party. It is understood that neither the Fund nor the
Advisor has adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Advisor have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Advisor is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the
Corporation's Board of Directors from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Advisor in
connection with its services to other clients.
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient 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
Advisor in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(e) The Advisor shall maintain all books and records with
respect to the Fund's securities transactions required by subparagraphs
(b)(5), (6) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Fund's Board of Directors such periodic and
special reports as the Board may reasonably request.
(f) The Advisor shall provide the Fund's custodian and the Fund
on each business day with information relating to all transactions
concerning the Fund's assets.
(g) The investment management services provided by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to render similar services to others. While information and
recommendations supplied to the Fund shall, in the Advisor's judgment,
be appropriate under the circumstances in light of investment objectives
and policies of the Fund, they may be different from the information and
recommendations supplied to other investment companies and customers.
The Fund shall be entitled to equitable treatment under the
circumstances in receiving information, recommendations and any other
services, but the Fund shall not be entitled to receive preferential
treatment as compared with the treatment given to any other investment
company or customer.
(h) The Advisor shall perform such other services as are
reasonably incidental to the foregoing duties.
3. The Fund has delivered to the Advisor copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Corporation, filed with the
Secretary of the State of Maryland (such Articles of Incorporation, as
in effect on the date hereof and as amended from time to time, are
herein called the "Articles of Incorporation");
(b) By-Laws of the Corporation (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Directors of the
Corporation authorizing the appointment of the Advisor 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 (the "Registration Statement"), as
filed with the Commission relating to the Fund and shares of the Fund's
common stock and all amendments thereto;
(e) Notification of Registration of the Corporation under the
1940 Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus of the Fund (such Prospectus, as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus").
(g) Any other documents filed with the Commission. The Advisor
shall have no responsibility or liability for the accuracy or
completeness of the Corporation's Registration Statement under the 1940
Act or the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. on behalf of the Fund, the Corporation
agrees to indemnify the Advisor to the full extent permitted by the
Corporation's governing instruments.
4. The Advisor shall authorize and permit any of its directors,
officers and employees who may be elected as directors or officers of
the Corporation to serve in the capacities in which they are elected.
Services to be furnished by the Advisor under this Agreement may be
furnished through the medium of any of such directors, officers or
employees.
5. The Advisor agrees that no officer or director of the Advisor,
or of any affiliate of the Advisor, will deal for or on behalf of the
Fund with himself as principal or agent, or with any corporation,
partnership or other person in which he may have a financial interest,
except that this shall not prohibit:
(a) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from having a financial interest in the Fund, in the
Advisor, or of any affiliate of the Advisor.
(b) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from providing services to the Fund of a type usually
and customarily provided to an investment company, pursuant to a written
agreement approved by the Board of Directors of the Fund, including a
majority of the disinterested directors of the Fund (as defined in the
1940 Act).
(c) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer, one
or more of whose partners, officers or directors is an officer or a
director of the Advisor, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
6. If any occasion should rise in which the Advisor or any of its
officers or directors advises persons concerning the shares of the Fund,
the Advisor or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
7. The Advisor agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any
time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character
in connection with the purchase or sale of securities (except securities
issued by the Fund) or other assets by or for the Fund.
8. The Advisor shall keep the Fund's books and records required to
be maintained by it pursuant to paragraph 2 hereof. The Advisor agrees
that all records which it maintains for the Fund are the property of the
Fund and it will surrender promptly to the Fund any of such records upon
the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Advisor
pursuant to paragraph 2 hereof.
9. During the term of this Agreement, the Advisor will pay (i)
the salaries and expenses of all its personnel, and (ii) all expenses
incurred by it in the ordinary course of performing its duties
hereunder, but not expenses assumed by the Administrator of the Fund or
the Fund pursuant to the Administration Agreement. All costs and
expenses not expressly assumed by the Advisor under this Agreement shall
be paid by the Administrator or the Fund, including but not limited to:
(i) interest and taxes, including but not limited to all issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Board of Directors of the Fund; (v)
legal and audit expenses; (vi) fees and expenses of the Fund's
Administrator, custodian, distributor, transfer agent and accounting
services agents; (vii) expenses incident to the issuance of shares,
including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Fund or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy material
to shareholders of the Fund; (x) all other expenses incidental to
holding meetings of the Fund's directors and shareholders and all
allocable communications expenses with respect to investor services and
to preparing, printing, and mailing prospectuses and reports to
shareholders in the amount necessary for distribution to the
shareholders; (xi) dues or assessments of or contributions to any trade
association of which the Fund is a member; (xii) such nonrecurring
expenses as may arise, including litigation affecting the Fund and the
legal obligations which the Fund may have to indemnify its officers and
directors with respect thereto; (xiii) all expenses which the Fund
agrees to bear in any distribution agreement or in any plan adopted by
the Fund pursuant to Rule 12b-1 under the Act; and (xiv) all corporate
fees payable by the Fund to federal, state or other governmental
agencies.
10. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Advisor as full compensation
therefor a fee at an annualized rate of .50 of one percent (.50%) of the
Fund's average daily net assets (specifically 1/24th of 1% per month of
the average daily net assets). This fee will be computed daily as of
the close of business and will be paid to the Advisor monthly within ten
(10) business days after the last day of each month and such a fee shall
be adjusted, if necessary, at the time of the payment due in the last
month in the fiscal year of the Fund. The Advisory Fee shall be
prorated for any fraction of a month at the commencement or termination
of this Agreement.
11. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Advisor and the Fund's administrator,
but excluding interest, taxes, brokerage commissions, distribution fees,
amortization of organization expenses and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) exceed the limit set by applicable
regulation of state securities commissions, if any, the compensation due
to the Advisor hereunder will be reduced by twenty percent (20%) of the
amount of such excess. If for any month such expenses exceed such
limitation after giving effect to the above reduction of the fees
payable to the Advisor and the Fund's administrator, the payment to the
Advisor for that month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Advisor's obligation hereunder will be limited
to the amount of its fee paid or accrued with respect to such fiscal
year.
12. The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any securities or hedging instrument, whether or
not such purchase, sale or retention shall have been based upon its own
investigation or upon investigation and research made by any other
individual, firm or corporation. The Advisor shall not be liable for
any error of judgment or mistake of law for any loss suffered by 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 the amount set forth in
Section 36(b)(3) of the 1940 Act) or 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. Any person employed by the
Advisor, who may be or become an employee of and paid by any other
entity affiliated with the Fund, such as the administrator, distributor,
or custodian to the Fund, shall be deemed, when acting within the scope
of his employment by such other affiliated entity, to be acting in such
employment solely for such other affiliated entity and not as the
Advisor's employee or agent.
13. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Advisor at any time, without the payment of
any penalty, on not more than sixty (60) days, nor less than thirty (30)
days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
14. Nothing in this Agreement shall limit or restrict the right of
any of the Advisor's directors, officers, or employees who may also be a
director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any business, whether of similar or a dissimilar
nature, nor limit or restrict the Advisor's right to engage in any other
business or to render services of any kind to any other corporation,
firm, individual or association. Nothing in this Agreement shall
prevent the Advisor or any affiliated person (as defined in the 1940
Act) of the Advisor from acting as investment advisor and/or principal
underwriter for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any such affiliated person from
buying, selling, or trading any securities or hedging instruments for
its or their own accounts or for the account of others for whom it or
they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of it obligations to the Fund
under the Agreement.
15. Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in the Advisor, or any successor or assignee thereof, as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of the Advisor are or may be interested
in the Fund as directors, officer, shareholders or otherwise; or that
the Advisor or any successor or assignee, is or may be interested in the
Fund as shareholders or otherwise; provided, however, that neither the
Advisor nor any officer or director of the Advisor or of the Corporation
shall sell to or buy from the Fund any property or security other than a
security issued by the Fund, except in accordance with an applicable
order or exemptive rule of the Commission.
16. Except as otherwise provided herein or authorized by the Board
of Directors of the Corporation from time to time, the Advisor shall for
all purposes herein be deemed to be an independent contractor and,
except as expressly provided or authorized in this Agreement, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. The Fund and the Advisor are not partners
or joint venturers with each other and nothing herein shall be construed
to make them such partners or joint venturers or impose any liability as
such on either of them.
17. During the term of this Agreement, the Fund agrees to furnish
the Advisor at its principal office with all prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public,
which refer to the Advisor in any way, prior to use thereof and not to
use such material if the Advisor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Advisor copies of any of the
above mentioned materials which refer in any way to the Advisor. The
Fund shall furnish or otherwise make available to the Advisor such other
information relating to the business affairs of the Fund as the Advisor
at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder. The Corporation agrees that, in
the event that the Advisor ceases to be the Fund's investment advisor
for any reason, the Fund will (unless the Advisor otherwise agrees in
writing) promptly take all necessary steps to propose to the
shareholders at the next regular meeting that the Fund change to a name
not including the word "Rightime." The Corporation agrees that the word
"Rightime" in its name is derived from the name of the Advisor and is
the property of the Advisor for copyright and all other purposes and
that therefore such word may be freely used by the Advisor as to other
investment activities or other investment products.
18. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
19. This Agreement shall be subject to all applicable provisions
of law, including, without limitation, the applicable provisions of the
1940 Act.
20. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
21. Compensation to be paid to the Advisor hereunder shall be
separate and distinct from organizational expenses, if any, to be
reimbursed to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:________________________________
President
[Corporate Seal] Attest:____________________________
Secretary
RIGHTIME ECONOMETRICS, INC.
By:________________________________
President
[Corporate Seal] Attest:____________________________
Secretary
197793.1
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this day of
November, 1991, by and between The Rightime Fund, Inc., a
Maryland corporation (the "Corporation") for The Rightime Mid-Cap
Fund Series (the "Fund"), and Rightime Econometrics, Inc., a
Pennsylvania corporation (the "Advisor").
BACKGROUND
The Fund, a Series of the Corporation, is organized and operated as
an open-end management investment company under the Investment Company
Act of 1940 as amended (the "1940 Act"). The Corporation desires to
retain the Advisor to render investment advisory services to the Fund,
and the Advisor is willing to render such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints the Advisor to act as investment
advisor to the Fund for the period and on the terms set forth in this
Agreement. The advisor accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Advisor shall manage the investment operations of the
Fund and the composition of the Fund's portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Fund's investment objectives, policies and restrictions as stated in and
limited by the statements contained in the various documents filed with
the U. S. Securities and Exchange Commission ("the Commission") as such
documents may from time to time be amended and subject to the following
understandings:
(a) The Advisor shall provide supervision of the Fund's
investments and determine from time to time what investments or
Securities, including futures contracts, will be purchased, retained,
sold or loaned by the Fund, and what portion of the assets will be
invested, hedged, or held uninvested as cash.
(b) The Advisor shall use its best judgment in the performance
of its duties under this Agreement.
(c) The Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and the Prospectus
of the Fund and with the instructions and directions of the Board of
Directors of the Corporation and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations.
(d) The Advisor shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determination
with or through such persons, brokers or dealers in conformity with the
policy with respect to brokerage as set forth in the Corporation's
Registration Statement and Prospectus of the Fund or as the Board of
Directors may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Advisor will give
primary consideration to securing most favorable price and efficient
execution. consistent with this policy, the Advisor may consider the
financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be party to
any such transaction or other transactions to which other clients of the
Advisor may be a party. It is understood that neither the Fund nor the
Advisor has adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for
the Fund that the Advisor have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore,
the Advisor is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the
Corporation's Board of Directors from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Advisor in
connection with its services to other clients.
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient 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
Advisor in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(e) The Advisor shall maintain all books and records with
respect to the Fund's securities transactions required by subparagraphs
(b)(5), (6) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Fund's Board of Directors such periodic and
special reports as the Board may reasonably request.
(f) The Advisor shall provide the Fund's custodian and the Fund
on each business day with information relating to all transactions
concerning the Fund's assets.
(g) The investment management services provided by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to render similar services to others. While information and
recommendations supplied to the Fund shall, in the Advisor's judgment,
be appropriate under the circumstances in light of investment objectives
and policies of the Fund, they may be different from the information and
recommendations supplied to other investment companies and customers.
The Fund shall be entitled to equitable treatment under the
circumstances in receiving information, recommendations and any other
services, but the Fund shall not be entitled to receive preferential
treatment as compared with the treatment given to any other investment
company or customer.
(h) The Advisor shall perform such other services as are
reasonably incidental to the foregoing duties.
3. The Fund has delivered to the Advisor copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Corporation, filed with the
Secretary of the State of Maryland (such Articles of Incorporation, as
in effect on the date hereof and as amended from time to time, are
herein called the "Articles of Incorporation");
(b) By-Laws of the Corporation (such By-Laws, as in effect on
the date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Directors of the
Corporation authorizing the appointment of the Advisor 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 (the "Registration Statement"), as
filed with the Commission relating to the Fund and shares of the Fund's
common stock and all amendments thereto;
(e) Notification of Registration of the Corporation under the
1940 Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus of the Fund (such Prospectus, as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus").
(g) Any other documents filed with the Commission. The Advisor
shall have no responsibility or liability for the accuracy or
completeness of the Corporation's Registration Statement under the 1940
Act or the Securities Act of 1933 except for information supplied by the
Advisor for inclusion therein. on behalf of the Fund, the Corporation
agrees to indemnify the Advisor to the full extent permitted by the
Corporation's governing instruments.
4. The Advisor shall authorize and permit any of its directors,
officers and employees who may be elected as directors or officers of
the Corporation to serve in the capacities in which they are elected.
Services to be furnished by the Advisor under this Agreement may be
furnished through the medium of any of such directors, officers or
employees.
5. The Advisor agrees that no officer or director of the Advisor,
or of any affiliate of the Advisor, will deal for or on behalf of the
Fund with himself as principal or agent, or with any corporation,
partnership or other person in which he may have a financial interest,
except that this shall not prohibit:
(a) officers and directors of the Advisor, or of any affiliate
of the Advisor, from having a financial interest in the Fund, in the
Advisor, or of any affiliate of the Advisor.
(b) Officers and directors of the Advisor, or of any affiliate
of the Advisor, from providing services to the Fund of a type usually
and customarily provided to an investment company, pursuant to a written
agreement approved by the Board of Directors of the Fund, including a
majority of the disinterested directors of the Fund (as defined in the
1940 Act).
(c) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer, one
or more of whose partners, officers or directors is an officer or a
director of the Advisor, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
6. If any occasion should rise in which the Advisor or any of its
officers or directors advises persons concerning the shares of the Fund,
the Advisor or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
7. The Advisor agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any
time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character
in connection with the purchase or sale of securities (except securities
issued by the Fund) or other assets by or for the Fund.
8. The Advisor shall keep the Fund's books and records required to
be maintained by it pursuant to paragraph 2 hereof. The Advisor agrees
that all records which it maintains for the Fund are the property of the
Fund and it will surrender promptly to the Fund any of such records upon
the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Advisor
pursuant to paragraph 2 hereof.
9. During the term of this Agreement, the Advisor will pay (i)
the salaries and expenses of all its personnel, and (ii) all expenses
incurred by it in the ordinary course of performing its duties
hereunder, but not expenses assumed by the Administrator of the Fund or
the Fund pursuant to the Administration Agreement. All costs and
expenses not expressly assumed by the Advisor under this Agreement shall
be paid by the Administrator or the Fund, including but not limited to:
(i) interest and taxes, including but not limited to all issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions; (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Board of Directors of the Fund; (v)
legal and audit expenses; (vi) fees and expenses of the Fund's
Administrator, custodian, distributor, transfer agent and accounting
services agents; (vii) expenses incident to the issuance of shares,
including issuance on the payment of, or reinvestment of, dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Fund or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy material
to shareholders of the Fund; (x) all other expenses incidental to
holding meetings of the Fund's directors and shareholders and all
allocable communications expenses with respect to investor services and
to preparing, printing, and mailing prospectuses and reports to
shareholders in the amount necessary for distribution to the
shareholders; (xi) dues or assessments of or contributions to any trade
association of which the Fund is a member; (xii) such non-recurring
expenses as may arise, including litigation affecting the Fund and the
legal obligations which the Fund may have to indemnify its officers and
directors with respect thereto; (xiii) all expenses which the Fund
agrees to bear in any distribution agreement or in any plan adopted by
the Fund pursuant to Rule 12b-1 under the Act; and (xiv) all corporate
fees payable by the Fund to federal, state or other governmental
agencies.
10. For the services provided and the expenses assumed pursuant to
this Agreement, the Fund will pay to the Advisor as full compensation
therefor a fee at an annualized rate of .50 of one percent (.50%) of the
Fund's average daily net assets (specifically 1/24th of 1% per month of
the average daily net assets). This fee will be computed daily as of
the close of business and will be paid to the Advisor monthly within ten
(10) business days after the last day of each month and such a fee shall
be adjusted, if necessary, at the time of the payment due in the last
month in the fiscal year of the Fund. The Advisory Fee shall be
prorated for any fraction of a month at the commencement or termination
of this Agreement.
11. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Advisor and the Fund's administrator,
but excluding interest, taxes, brokerage commissions, distribution fees,
amortization of organization expenses and litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary
course of the Fund's business) exceed the limit set by applicable
regulation of state securities commissions, if any, the Compensation due
to the Advisor hereunder will be reduced by twenty percent (20%) of the
amount of such excess. If for any month such expenses exceed such
limitation after giving effect to the above reduction of the fees
payable to the Advisor and the Fund's administrator, the payment to the
Advisor for that month will be reduced or postponed so that at no time
will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Advisor's obligation hereunder will be limited
to the amount of its fee paid or accrued with respect to such fiscal
year.
12. The Advisor shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any securities or hedging instrument, whether or
not such purchase, sale or retention shall have been based upon its own
investigation or upon investigation and research made by any other
individual, firm or corporation. The Advisor shall not be liable for
any error of judgment or mistake of law for any loss suffered by 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 the amount set forth in
Section 36(b)(3) of the 1940 Act) or 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. Any person employed by the
Advisor, who may be or become an employee of and paid by any other
entity affiliated with the Fund, such as the administrator, distributor,
or custodian to the Fund, shall be deemed, when acting within the scope
of his employment by such other affiliated entity, to be acting in such
employment solely for such other affiliated entity and not as the
Advisor's employee or agent.
13. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Advisor at any time, without the payment of
any penalty, on not more than sixty (60) days' nor less than thirty (30)
days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
14. Nothing in this Agreement shall limit or restrict the right of
any of the Advisor's directors, officers, or employees who may also be a
director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any business, whether of similar or a dissimilar
nature, nor limit or restrict the Advisor's right to engage in any other
business or to render services of any kind to any other corporation,
firm, individual or association. Nothing in this Agreement shall
prevent the Advisor or any affiliated person (as defined in the 1940
Act) of the Advisor from acting as investment advisor and/or principal
underwriter for any other person, firm or corporation and shall not in
any way limit or restrict the Advisor or any such affiliated person from
buying, selling, or trading any securities or hedging instruments for
its or their own accounts or for the account of others for whom it or
they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of it obligations to the Fund
under the Agreement.
15. Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be
interested in the Advisor, or any successor or assignee thereof, as
directors, officers, shareholders or otherwise; that directors,
officers, shareholders or agents of the Advisor are or may be interested
in the Fund as directors, officer, shareholders or otherwise; or that
the Advisor or any successor or assignee, is or may be interested in the
Fund as shareholders or otherwise; provided, however, that neither the
Advisor nor any officer or director of the Advisor or of the corporation
shall sell to or buy from the Fund any property or security other than a
security issued by the Fund, except in accordance with an applicable
order or exemptive rule of the commission.
16. Except as otherwise provided herein or authorized by the Board
of Directors of the Corporation from time to time, the Advisor shall for
all purposes herein be deemed to be an independent contractor and,
except as expressly provided or authorized in this Agreement, shall have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund. The Fund and the Advisor are not partners
or joint venturers with each other and nothing herein shall be construed
to make them such partners or joint venturers or impose any liability as
such on either of them.
17. During the term of this Agreement, the Fund agrees to furnish
the Advisor at its principal office with all prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public,
which refer to the Advisor in any way, prior to use thereof and not to
use such material if the Advisor reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Advisor copies of any of the
above-mentioned materials which refer in any way to the Advisor. The
Fund shall furnish or otherwise make available to the Advisor such other
information relating to the business affairs of the Fund as the Advisor
at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder. The Corporation agrees that, in
the event that the Advisor ceases to be the Fund's investment advisor
for any reason, the Fund will (unless the Advisor otherwise agrees in
writing) promptly take all necessary steps to propose to the
shareholders at the next regular meeting that the Fund change to a name
not including the word "Rightime." The Corporation agrees that the word
"Rightime" in its name is derived from the name of the Advisor and is
the property of the Advisor for copyright and all other purposes and
that therefore such word may be freely used by the Advisor as to other
investment activities or other investment products.
18. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
19. This Agreement shall be subject to all applicable provisions
of law, including, without limitation, the applicable provisions of the
1940 Act.
20. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
21. Compensation to be paid to the Advisor hereunder shall be
separate and distinct from organizational expenses, if any, to be
reimbursed to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
---------------------------------
President
(Corporate Seal) Attest:
----------------------------
Secretary
RIGHTIME ECONOMETRICS, INC.
By:
---------------------------------
President
(Corporate Seal) Attest:
----------------------------
Secretary
197794.1
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the day of May 1985, by and between
THE RIGHTIME FUND, INC., a Maryland corporation with an office located
at The Benson East Office Plaza; Jenkintown Pennsylvania 19046
(hereinafter called the "Fund"), and LINCOLN INVESTMENT PLANNING INC., a
Pennsylvania corporation with its principal office located at Dept. F,
Suite 1000, Benson East Office Plaza, Jenkintown, PA 19046 (hereinafter
called the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Fund hereby appoints the Distributor as agent of the Fund to
effect the sale and public distribution of shares of the capital stock
of the Fund. This appointment is made by the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Articles of
Incorporation, the By-Laws and the then current Prospectus of the Fund,
to determine the terms and prices in any contract for the sale of shares
to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for
the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
though the Distributor; provided however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all the assets of any investment company or substantially all the
outstanding shares ,of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the
Fund's capital stock to dealers, as needed (making reasonable allowance
for clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares placed with the
Distributor by dealers. In every case the Distributor shall charge and
the Fund shall receive the net asset value for the shares sold,
determined as provided in Paragraph 4 hereof. The Distributor shall
notify the Fund at the close of each business day (normally 5:00 p.m.,
New York City time) of the number of shares sold during each day.
4. The net asset value of shares of the Fund shall be determined
by the Fund or the Fund's custodian, or such officer or officers or
other persons as the Board of Directors of the Fund may designate. The
determination shall be made once a day on which the New York Stock
Exchange is open for a full business day and in accordance with the
method set out in the By-Laws of the Fund and the current Prospectus of
the Fund.
5. The Distributor agrees that it will not sell any shares of the
Fund to any officer, director, or partner of either the Distributor or
of the Fund or any firm or corporation which may be employed by the Fund
or by the Distributor except for investment purposes only and where the
purchaser agrees not to resell the securities to anyone except the Fund.
The Distributor further agrees that it will promptly advise the
Secretary of the Fund of all sales of shares of the Fund to or purchase
of shares of the Fund from any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) The Fund appoints and designates the Distributor as agent of
the Fund and the Distributor accepts such appointment as such agent, to
repurchase shares of the Fund in accordance with the provisions of the
Articles of Incorporation and By-Laws of the Fund.
(b) In connection with such redemptions or repurchase the Fund
authorizes and designates the Distributor to take any action, to make
any adjustments in net asset value, and to make any arrangements for the
payment of the redemption or repurchase price authorized or permitted to
be taken or made in accordance with the Investment Company Act of 1940
and as set forth in the By-Laws and then current Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7
may, with the consent of the Fund, be re-delegated in whole or in part
to another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended
by the Fund at any time or from time to time pursuant to the provisions
of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Fund shall have
the power granted by said provisions. After any such suspension the
authority granted to the Distributor by this Paragraph 7 shall be
reinstated only by a written instrument executed on behalf of the Fund
by its President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The Distributor
may make payments to others from such amounts in accordance with the
Plan or any agreement in effect under such Plan. The Distributor agrees
to comply with the Rule and the Plan in connection with receipt and
disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective ____________, 1984 and
shall continue in effect for a period of more than one year from its
effective date only as long as such continuance is approved, at least
annually, by the Board of Directors of the Fund, including a majority of
those Directors who are not "interested persons" of any party to this
Agreement voting in person at a meeting called for the purpose of voting
on such approval. If payments hereunder are made pursuant to provisions
of a plan adopted by the Fund pursuant to Investment Company Act of 1940
Rule 12b-1 then renewals hereof shall also be made in accordance with
the requirements of such rule. This Agreement may be terminated by
either party hereto upon thirty (30) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor (as the term "assignment" is defined by
the Investment Company Act of 1940, as amended) unless the United States
Securities and Exchange Commission has issued an order exempting the
Fund and the Distributor from the provisions of the Investment Company
Act of 1940, as amended, which would otherwise have effected the
termination of this Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved: (a) by a majority of the
directors of the Fund including a majority of those directors who are
not interested persons of any party to this Agreement, or (b) by the
vote of a majority of the outstanding voting securities of the Fund.
13. The Fund and the Distributor hereby each agree that all
literature and publicity issued by either of them referring directly or
indirectly to the Fund or to the Distributor shall be submitted to and
receive the approval of the Fund and the Distributor before the same may
be used by either party.
14. (a) The Distributor agrees to use its best efforts in effecting
the sale and public distribution of the shares of the Fund through
dealers and to perform its duties in redeeming and repurchasing the
shares of the Fund, but nothing contained in this Agreement shall make
the Distributor or any of its officers and directors or shareholders
liable for any loss sustained by the Fund or any of its officers,
directors or shareholders, or by any other person on account of any act
done or omitted to be done by the Distributor under this Agreement
provided that nothing herein contained shall protect the Distributor
against any liability to the Fund or to any of its shareholders to which
the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties as Distributor or by reason of its reckless disregard of its
obligations or duties as Distributor under this Agreement. Nothing in
this Agreement shall protect the Distributor from any liabilities which
it may have under the Securities Act of 1933 or the Investment Company
Act of 1940.
(b) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for the Rightime
Government Securities Series, and LINCOLN INVESTMENT PLANNING, INC. have
caused this Agreement to be signed by their duly authorized officers and
their corporate seals to be hereunto duly affixed all on the day and
year above written.
Attest: THE RIGHTIME FUND, INC.
______________________________ ______________________________
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, INC.
______________________________ ______________________________
Secretary Edward S. Forst, Sr.,
President,
197943.1
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the day of 1986, by and
between THE RIGHTIME FUND, INC., a Maryland corporation with an office
located at The Benson East Office Plaza., Jenkintown Pennsylvania 19046
(the "Corporation") for the Rightime Government Securities Series (the
"Fund"), and LINCOLN INVESTMENT PLANNING INC., a Pennsylvania
corporation, with its principal office located at Dept. F, Suite 1000,
Benson East Office Plaza, Jenkintown, PA 19046 (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation and the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for
the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
though the Distributor; provided, however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all,the assets of any investment company or substantially all the
outstanding shares of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the
Fund's capital stock to dealers, as needed (making reasonable allowance
for clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares placed with the
Distributor by dealers. In every case the Distributor shall charge and
the Fund shall receive the net asset value for the shares sold,
determined as provided in Paragraph 4 hereof. The Distributor shall
notify the Fund at the close of each business day (normally 5:00 p.m.,
New York City time), of the number of shares sold during each day.
4. The net asset value of shakes of the Fund shall be determined by
the Fund or the Fund's custodian, or such officer or officers or other
persons as the Board of Directors of the Corporation may designate. The
determination shall be made once a day on which the New York Stock
Exchange is open for a full business day and in accordance with the
method set out in the ByLaws of the Corporation and the current
Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of the
Fund to any officer, director, or partner of either the Distributor or
of the Corporation or any firm or corporation which may be employed by
the Fund or by the Distributor except for investment purposes only and
where the purchaser agrees not to resell the securities to anyone except
the Fund. The Distributor further agrees that it will promptly advise
the Secretary of the Corporation of all sales of shares of the Fund to,
or purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the . Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) On behalf of the Fund the Corporation appoints and
designates the Distributor as agent of the Fund and the Distributor
accepts such appointment as such agent, to repurchase shares of the Fund
in accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(b) In connection with such redemptions or repurchases the
Corporation authorizes and designates the Distributor to take any
action, to make any adjustments in net asset value, and to make any
arrangements for the payment of the redemption or repurchase price
authorized or permitted to be taken or made in accordance with the
Investment Company Act of 1940 and as set forth in the Corporation's By-
Laws and then current Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7 may,
with the consent of the Corporation, be redelegated in whole or in part
to another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended
by the Corporation at any time or from time to time pursuant to the
provisions of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Corporation
shall have the power granted by said provisions. After any such
suspension the authority granted to the Distributor by this Paragraph 7
shall be reinstated only by a written instrument executed on behalf of
the Fund by the Corporation's President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The Distributor
may make payments to others from such amounts in accordance with the
Plan or any agreement in effect under such Plan. The Distributor
agrees to comply with the Rule and the Plan in connection with receipt
and disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective December , 1986 and
shall continue in effect for a period of more than one year from its
effective date only as long as such continuance is approved, at least
annually, by the Board of Directors of the Corporation, including a
majority of those Directors who are not "interested persons" of any
party to this Agreement voting in person at a meeting called for the
purpose of voting on such approval. If payments hereunder are made
pursuant to provisions of a plan adopted by the Fund pursuant to
Investment Company Act of 1940 Rule 12b-1 then renewals hereof shall
also be made in accordance with the requirements of such rule. This
Agreement may be terminated by either party hereto upon thirty (30)
days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment by the
Distributor (as the term "assignment" is defined by the Investment
Company Act of 1940, as amended) unless the United States Securities and
Exchange Commission has issued an order exempting the Fund and the
Distributor from the provisions of the Investment Company Act of 1940,
as amended, which would otherwise have effected the termination of this
Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved (a) by a majority of the
directors of the Corporation or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) by a majority of
those directors who are not interested persons of the Fund or of any
party to this Agreement.
13. The Corporation, on behalf of the Fund, and the Distributor
hereby each agree that all literature and publicity issued by either of
them referring directly or indirectly to the Fund or to the Distributor
shall be submitted to and receive the approval of the Fund and the
Distributor before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in effecting
the sale and public distribution of the shares of the Fund through
dealers and to perform its duties in redeeming and repurchasing the
shares of the Fund, but nothing contained in this Agreement shall make
the Distributor or any of its officers and directors or shareholders
liable for any loss sustained by the Fund or any of the Corporation's
officers, directors or shareholders, or by any other person on account
of any act done or omitted to be done by the Distributor under this
Agreement provided that nothing herein contained shall protect the
Distributor against any liability to the Fund or to any of its
shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties as Distributor or by reason of its reckless
disregard of its obligations or duties as Distributor under this
Agreement. Nothing in this Agreement shall protect the Distributor from
any liabilities which it may have under the Securities Act of 1933 or
the Investment Company Act of 1940.
(b) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for the Rightime
Government Securities Series, and LINCOLN INVESTMENT PLANNING, INC. have
caused this Agreement to be signed by their duly authorized officers and
their corporate seals to be hereunto duly affixed all on the day and
year above written.
Attest: THE RIGHTIME FUND, INC.
______________________________ ______________________________
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, INC.
______________________________ ______________________________
Secretary Edward S. Forst, Sr.,
President,
197944.1
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the 15th day of July, 1987, by and
between THE RIGHTIME FUND, INC., a Maryland corporation with an office
located at The Benson East Office Plaza, Jenkintown Pennsylvania 19046
(the "Corporation") for the Rightime Blue Chip Fund Series (the "Fund"),
and LINCOLN INVESTMENT PLANNING INC., a Pennsylvania corporation, with
its principal office located at Dept. F, Suite 1000, Benson East Office
Plaza, Jenkintown, PA 19046 (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation and the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for
the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
though the Distributor; provided, however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all the assets of any investment company or substantially all the
outstanding shares of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the
Fund's capital stock to dealers, as needed (making reasonable allowance
for clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares placed with the
Distributor by dealers. In every case the Distributor shall charge the
public offering price and the Fund shall receive the net asset value for
the shares sold, determined as provided in Paragraph 4 hereof. The
Distributor shall notify the Fund at the close of each business day
(normally 5:00 p.m., New York City time), of the number of shares sold
during each day. Notwithstanding the foregoing, the Fund may sell its
shares to certain affiliated persons at net asset value, as described in
the prospectus.
4. The public offering price consists of the net asset value per
share plus a maximum sales charge of: 4.75% for purchases under $50,000;
3.75% for purchases of $50,000 but less than $100,000; 2.75% for
purchases of $1,000,000 but less than $500,000; 1.75% for purchases of
$500,000 but less than $1,000,000; .75% for purchases of $1,000,000 but
less than $3,000,000; and no sales charges for purchases of $3,000,000
or more; unless otherwise stated in the Fund's currently effective
Prospectus. The net asset value of shares of the Fund shall be
determined by the Fund or the Fund's custodian, or such officer or
officers or other persons as the Board of Directors of the Corporation
may designate. The determination shall be made once each day on which
the New York Stock Exchange is open for a full business day and in
accordance with the method set out in the ByLaws of the Corporation and
the current Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of the
Fund to any officer, director, or partner of either the Distributor or
of the Corporation or any firm or corporation which may be employed by
the Fund or by the Distributor except for investment purposes only and
where the purchaser agrees not to resell the securities to anyone except
the Fund. The Distributor further agrees that it will promptly advise
the Secretary of the Corporation of all sales of shares of the Fund to,
or purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) On behalf of the Fund the Corporation appoints and
designates the Distributor as agent of the Fund and the Distributor
accepts such appointment as such agent, to repurchase shares of the Fund
in accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(b) In connection with such redemptions or repurchases the
Corporation authorizes and designates the Distributor to take any
action, to make any adjustments in net asset value, and to make any
arrangements for the payment of the redemption or repurchase price
authorized or permitted to be taken or made in accordance with the
Investment Company Act of 1940 and as set forth in the Corporation's By-
Laws and then current Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7 may,
with the consent of the Corporation, be redelegated in whole or in part
to another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended
by the Corporation at any time or from time to time pursuant to the
provisions of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Corporation
shall have the power granted by said provisions. After any such
suspension the authority granted to the Distributor by this Paragraph 7
shall be reinstated only by a written instrument executed on behalf of
the Fund by the Corporation's President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The Distributor
may make payments to others from such amounts in accordance with the
Plan or any agreement in effect under such Plan. The Distributor agrees
to comply with the Rule and the Plan in connection with receipt and
disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective July 15, 1987 and shall
continue in effect for a period of more than one year from its effective
date only as long as such continuance is approved, at least annually, by
the Board of Directors of the Corporation, including a majority of those
Directors who are not "interested persons" of any party to this
Agreement voting in person at a meeting called for the purpose of voting
on such approval. If payments hereunder are made pursuant to provisions
of a plan adopted by the Fund pursuant to Investment Company Act of 1940
Rule 12b-1, then renewals hereof shall also be made in accordance with
the requirements of such rule. This Agreement may be terminated by
either party hereto upon thirty (30) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor (as the term "assignment" is defined by
the Investment Company Act of 1940, as amended) unless the United States
Securities and Exchange Commission has issued an order exempting the
Fund and the Distributor from the provisions of the Investment Company
Act of 1940, as amended, which would otherwise have effected the
termination of this Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved (a) by a majority of the
directors of the Corporation or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) by a majority of
those directors who are not interested persons of the Fund or of any
party to this Agreement.
13. The Corporation, on behalf of the Fund, and the Distributor
hereby each agree that all literature and publicity issued by either of
them referring directly or indirectly to the Fund or to the Distributor
shall be submitted to and receive the approval of the Fund and the
Distributor before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in effecting
the sale and public distribution of the shares of the Fund through
dealers and to perform its duties in redeeming and repurchasing the
shares of the Fund, but nothing contained in this Agreement shall make
the Distributor or any of its officers and directors or shareholders
liable for any loss sustained by the Fund or any of the Corporation's
officers, directors or shareholders, or by any other person on account
of any act done or omitted to be done by the Distributor under this
Agreement provided that nothing herein contained shall protect the
Distributor against any liability to the Fund or to any of its
shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties as Distributor or by reason of its reckless
disregard of its obligations or duties as Distributor under this
Agreement. Nothing in this Agreement shall protect the Distributor from
any liabilities which it may have under the Securities Act of 1933 or
the Investment Company Act of 1940.
(b) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for the Rightime Blue
Chip Fund Series, and LINCOLN INVESTMENT PLANNING, INC. have caused this
Agreement to be signed by their duly authorized officers and their
corporate seals to be hereunto duly affixed all on the day and year
above written.
Attest: THE RIGHTIME FUND, INC.
Edward S. Forst, Sr. David J. Rights
- ------------------------ ----------------------------
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, INC.
Edward S. Forst, Sr.
- ------------------------ ----------------------------
Secretary Edward S. Forst, Sr.,
President
197945.1
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the 1st day of March 1990, by and between
THE RIGHTIME FUND, INC., a Maryland corporation with an office located
at The Benson East office Plaza, Jenkintown Pennsylvania 19046 (the
"Corporation") for The Rightime Social Awareness Fund Series (the
"Fund"), and LINCOLN INVESTMENT PLANNING INC., a Pennsylvania
corporation, with its principal office located at Dept. F, Suite 1000,
Benson East Office Plaza, Jenkintown, PA 19046 (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation and the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for
the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
though the Distributor; provided, however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all the assets of any investment company or substantially all the
outstanding shares .of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the
Fund's capital stock to dealers, as needed (making reasonable allowance
for clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares placed with the
Distributor by dealers. In every case the Distributor shall charge the
public offering price and the Fund shall receive the net asset value for
the shares sold, determined as provided in Paragraph 4 hereof. The
Distributor shall notify the Fund at the close of each business day
(normally 5:00 p.m., New York City time), of the number of shares sold
during each day. Notwithstanding the foregoing, the Fund may sell its
shares to certain affiliated persons at net asset value, as described in
the prospectus.
4. The public offering price consists of the net asset value per
share plus a maximum sales charge of: 4.75% for purchases under $50,000;
3.75% for purchases of $50,000 less than $100,000; 2.75% for purchases
of $1,000,000 but less than $500,000; 1.75% for purchases of $500,000
but less than $10,000,000; .75% for purchases of $1,000,000 but less
than $3,000,000; and no sales charges for purchases of $3,000,000 or
more; unless otherwise stated in the Fund's currently effective
Prospectus. The net asset value of shares of the Fund shall be
determined by the Fund or the Fund's custodian, or such officer or
officers or other persons as the Board of Directors of the Corporation
may designate. The determination shall be made once each day on which
the New York Stock Exchange is open for a full business day and in
accordance with the method set out in the ByLaws of the Corporation and
the current Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of the
Fund to any officer, director, or partner of either the Distributor or
of the Corporation or any firm or corporation which may be employed by
the Fund or by the Distributor except for investment purposes only and
where the purchaser agrees not to resell the securities to anyone except
the Fund. The Distributor further agrees that it will promptly advise
the Secretary of the Corporation of all sales of shares of the Fund to,
or purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) On behalf of the Fund the Corporation appoints and
designates the Distributor as agent of the Fund and the Distributor
accepts such appointment as such agent, to repurchase shares of the Fund
in accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(b) In connection with such redemptions or repurchases the
Corporation authorizes and designates the Distributor to take any
action, to make any adjustments in net asset value, and to make any
arrangements for the payment of the redemption or repurchase price
authorized or permitted to be taken or made in accordance with the
Investment Company Act of 1940 and as set forth in the Corporation's By-
Laws and then current Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7
may, with the consent of the Corporation, be redelegated in whole or in
part to another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended
by the Corporation at any time or from time to time pursuant to the
provisions of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Corporation
shall have the power granted by said provisions. After any such
suspension the authority granted to the Distributor by this Paragraph 7
shall be reinstated only by a written instrument executed on behalf of
the Fund by the Corporation's President or any vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The Distributor
may make payments to others from such amounts in accordance with the
Plan or any agreement in effect under such Plan. The Distributor agrees
to comply with the Rule and the Plan in connection with receipt and
disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective June 1, 1988 and shall
continue in effect for a period of more than one year from its effective
date only as long as such continuance is approved, at least annually, by
the Board of Directors of the Corporation, including a majority of those
Directors who are not "interested persons" of any party to this
Agreement voting in person at a meeting called for the purpose of voting
on such approval. If payments hereunder are made pursuant to provisions
of a plan adopted by the Fund pursuant to Investment Company Act of 1940
Rule 12b-1, then renewals hereof shall also be made in accordance with
the requirements of such rule. This Agreement may be terminated by
either party hereto upon thirty (30) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor (as the term "assignment" is defined by
the Investment Company Act of 1940, as amended) unless the United States
Securities and Exchange Commission has issued an order exempting the
Fund and the Distributor from the provisions of the Investment Company
Act of 1940, as amended, which would otherwise have effected the
termination of this Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved (a) by a majority of the
directors of the Corporation or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) by a majority of
those directors who are not interested persons of the Fund or of any
party to this Agreement.
13. The Corporation, on behalf of the Fund, and the Distributor
hereby each agree that all literature and publicity issued by either of
them referring directly or indirectly to the Fund or to the Distributor
shall be submitted to and receive the approval of the Fund and the
Distributor before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in effecting
the sale and public distribution of the shares of the Fund through
dealers and to perform its duties in redeeming and repurchasing the
shares of the Fund, but nothing contained in this Agreement shall make
the Distributor or any of its officers and directors or shareholders
liable for any loss sustained by the Fund or any of the Corporation's
officers, directors or shareholders, or by any other person on account
of any act done or omitted to be done by the Distributor under this
Agreement provided that nothing herein contained shall protect the
Distributor against any liability to the Fund or to any of its
shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties as Distributor or by reason of its reckless
disregard of its obligations or duties as Distributor under this
Agreement. Nothing in this Agreement shall protect the Distributor from
any liabilities which it may have under the Securities Act of 1933 or
the Investment Company Act of 1940.
(b) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for The Rightime Social
Awareness Fund Series, and LINCOLN INVESTMENT PLANNING, INC. have caused
this Agreement to be signed by their
duly authorized officers and their corporate seals to be hereunto duly
affixed all on the day and year above written.
Attest: THE RIGHTIME FUND, INC.
______________________________ ______________________________
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, Inc.
______________________________ ______________________________
Secretary Edward S. Forst, Sr.,
President
197947.1
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the day of November, 1991, by and
between THE RIGHTIME FUND, INC., a Maryland corporation with an office
located at 218 Glenside Avenue, Wyncote, Pennsylvania 19095-1594 (the
"Corporation") for The Rightime Mid-Cap Fund Series (the "Fund"), and
LINCOLN INVESTMENT PLANNING INC., a Pennsylvania corporation, with its
principal office located at 218 Glenside Avenue, Wyncote, Pennsylvania
19095-1594 (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation and the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for
the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
though the Distributor; provided, however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all the assets of any investment company or substantially all the
outstanding shares of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the
Fund's capital stock to dealers, as needed (making reasonable allowance
for clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares placed with the
Distributor by dealers. In every case the Distributor shall charge the
public offering price and the Fund shall receive the net asset value for
the shares sold, determined as provided in Paragraph 4 hereof. The
Distributor shall notify the Fund at the close of each business day
(normally 5:00 p.m., New York City time), of the number of shares sold
during each day. Notwithstanding the foregoing, the Fund may sell its
shares to certain affiliated persons at net asset value, as described in
the prospectus.
4. The public offering price consists of the net asset value per
share plus a maximum sales charge of: 4.75% for purchases under $50,000;
3.75% for purchases of $50,000 but less than $100,000; 2.75% for
purchases of $1,000,000 but less than $500,000; 1.75% for purchases of
$500,000 but less than $1,000,000; .75% for purchases of $1,000,000 but
less than $3,000,000; and no sales charges for purchases of $3,000,000
or more; unless otherwise stated in the Fund's currently effective
Prospectus. The net asset value of shares of the Fund shall be
determined by the Fund or the Fund's custodian, or such officer or
officers or other persons as the Board of Directors of the Corporation
may designate. The determination shall be made once each day on which
the New York Stock Exchange is open for a full business day and in
accordance with the method set out in the By-Laws of the Corporation and
the current Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of the
Fund to any officer, director, or partner of either the Distributor or
of the Corporation or any firm or corporation which may be employed by
the Fund or by the Distributor except for investment purposes only and
where the purchaser agrees not to resell the securities to anyone except
the Fund. The Distributor further agrees that it will promptly advise
the Secretary of the Corporation of all sales of shares of the Fund to,
or purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) On behalf of the Fund the Corporation appoints and
designates the Distributor as agent of the Fund and the Distributor
accepts such appointment as such agent, to repurchase shares of the Fund
in accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(b) In connection with such redemptions or repurchases the
Corporation authorizes and designates the Distributor to take any
action, to make any adjustments in net asset value, and to make any
arrangements for the payment of the redemption or repurchase price
authorized or permitted to be taken or made in accordance with the
Investment Company Act of 1940 and as set forth in the Corporation's By-
Laws and then current Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7 may,
with the consent of the Corporation, be re-delegated in whole or in part
to another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended
by the Corporation at any time or from time to time pursuant to the
provisions of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Corporation
shall have the power granted by said provisions. After any such
suspension the authority granted to the Distributor by this Paragraph 7
shall be reinstated only by a written instrument executed on behalf of
the Fund by the Corporation's President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund, except to the extent
that the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The Distributor
may make payments to others from such amounts in accordance with the
Plan or any agreement in effect under such Plan. The Distributor agrees
to comply with the Rule and the Plan in connection with receipt and
disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective November 1991 and shall
continue in effect for a period of more than one year from its effective
date only as long as such continuance is approved, at least annually, by
the Board of Directors of the corporation, including a majority of those
Directors who are not "interested persons" of any party to this
Agreement voting in person at a meeting called for the purpose of voting
on such approval. If payments hereunder are made pursuant to provisions
of a plan adopted by the Fund pursuant to Investment Company Act of 1940
Rule 12b-1, then renewals hereof shall also be made in accordance with
the requirements of such rule. This Agreement may be terminated by
either party hereto upon thirty (30) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor (as the term "assignment" is defined by
the Investment Company Act of 1940, as amended) unless the United States
Securities and Exchange Commission has issued an order exempting the
Fund and the Distributor from the provisions of the Investment Company
Act of 1940, as amended, which would otherwise have effected the
termination of this Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved (a) by a majority of the
directors of the Corporation or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) by a majority of
those directors who are not interested persons of the Fund or of any
party to this Agreement.
13. The Corporation, on behalf of the Fund, and the Distributor
hereby each agree that all literature and publicity issued by either of
them referring directly or indirectly to the Fund or to the Distributor
shall be submitted to and receive the approval of the Fund and the
Distributor before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in
effecting the sale and public distribution of the shares of the Fund
through dealers and to perform its duties in redeeming and repurchasing
the shares of the Fund, but nothing contained in this Agreement shall
make the Distributor or any of its officers and directors or
shareholders liable for any loss sustained by the Fund or any of the
Corporation's officers, directors or shareholders, or by any other
person on account of any act done or omitted to be done by the
Distributor under this Agreement provided that nothing herein contained
shall protect the Distributor against any liability to the Fund or to
any of its shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties as Distributor or by reason of its
reckless disregard of its obligations or duties as Distributor under
this Agreement. Nothing in this Agreement shall protect the Distributor
from any liabilities which it may have under the Securities Act of 1933
or the Investment Company Act of 1940.
(b) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act,of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for The Rightime Mid-Cap
Fund Series, and LINCOLN INVESTMENT PLANNING, INC. have caused this
Agreement to be signed by their duly
authorized officers and their corporate seals to be hereunto duly
affixed all on the day and year above written.
Attest: THE RIGHTIME FUND, INC.
______________________________ ______________________________
- ---------------------- ----------------------------
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, INC.
______________________________ ______________________________
Secretary Edward S. Forst, Sr.,
President
197948.1
CUSTODIAN AGREEMENT
This Agreement, dated as of the _____ day of March, 1988,
made by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Rightime Fund (the "Rightime Series") and the
Rightime Blue Chip Fund (the "Blue Chip Series") are separate
series of Shares; and
WHEREAS, the Fund desires to appoint the Custodian as
custodian of the Securities and principal cash of the Rightime
Series and the Blue Chip Series and the Custodian is willing to
act in such capacity upon the terms and conditions herein set
forth;
WHEREAS, the Custodian in its capacity as custodian
hereunder will also collect and apply the dividends and interest
on said Securities in the manner and to the extent herein set
forth; and
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto, intending
to be legally bound, do hereby agree as follows:
Section 1. The terms as defined in this Section wherever
used in this Agreement, or in any amendment or supplement hereto,
shall have the meanings herein specified unless the context
otherwise requires.
Book-Entry Securities: The term Book-Entry Securities shall
mean securities issued by the Treasury of the United States of
America and federal agencies of the United States of America
which are maintained in the book-entry system ("the book-entry
system") as provided in Subpart 0 of Treasury Circular No. 300,
31 CFR 306, Subpart B of 31 CFR part 350, and the book-entry
regulations of federal agencies substantially in the form of
Subpart 0 and the term Book-Entry Account shall mean an account
maintained by a Federal Reserve Bank in accordance with the
aforesaid Circular and regulations.
Custodian: The term Custodian shall mean The Philadelphia
National Bank in its capacity as custodian under this Agreement.
investment Company Securities: The term Investment Company
Securities shall mean shares of stock or beneficial interest in a
regulated investment company registered under the Investment
Company Act of 1940 as amended.
Investment Company Securities Transaction: The term
Investment Company Securities Transaction shall mean the
purchase, sale or redemption for the account of the Fund of
Investment Company Securities.
Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or
information of any kind transmitted to the Custodian in person or
by telephone, telegram, telecopy or other mechanical or
documentary means lacking original signature, by a person or
persons reasonably believed in good faith by the Custodian to be
a person or persons authorized by a resolution of the Board of
Directors of the Fund to give oral Instructions on behalf of the
Fund.
Securities: The term Securities shall mean bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and
other securities and investments from time to time owned by the
Fund, including but not limited to Investment Company Securities,
options, stock index futures, and options on such stock index
futures.
Securities Depository: The term Securities Depository shall
mean a system for the central handling of securities where all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of the securities.
Series: The term Series shall mean The Rightime Series or
The Blue Chip Series or either or both such Series as the context
may specify or require.
Shareholders: The term Shareholders shall mean the
registered owners from time to time of the Shares of any Series
of the Fund in accordance with the stock registry records of the
Fund.
Shares: The term Shares shall mean the issued and
outstanding shares of common stock of any Series of the Fund.
Stock Index Futures: This term Stock Index Future shall
mean futures contracts on stock indices.
Written Instructions: The term Written Instructions shall
mean an authorization, instruction, approval, item or set of
data, or information of any kind transmitted to the Custodian in
original writing containing original signatures or a copy of such
document transmitted by telecopy including transmission of such
signature, reasonably believed in good faith by the Custodian to
be the signature of a person authorized by a resolution of the
Board of Directors of the Fund to give Written Instructions on
behalf of the Fund.
Section 2. The Fund shall from time to time file with
the Custodian a certified copy of each resolution of its Board of
Directors authorizing execution of Written Instructions and
specifying the number of signatories required, together with
certified signatures of the officers and other signatories
authorized to sign, which shall constitute conclusive evidence of
the authority of the officers and other signatories designated
therein, and shall be considered in full force and effect with
the Custodian fully protected in acting in reliance thereon until
it receives a new certified copy of a resolution adding or
deleting a person or persons with authority to give Written
Instructions. If the certifying officer is authorized to sign
Written Instructions, the certification shall also be signed by a
second officer of the Fund.
The Fund shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Directors
authorizing the transmittal of Oral Instructions and specifying
the person or persons authorized to give Oral Instructions and
the matter or matters which may be the subject of any such
instruction in accordance with this Agreement. Any resolution so
filed with the Custodian shall be considered in full force and
effect and the Custodian shall be fully protected in acting in
reliance thereon until it actually receives a new certified copy
of a resolution adding or deleting a person or persons with
authority to give Oral Instructions or revising matters so
provided. If the certifying officer is authorized to give Oral
Instructions, the certification shall also be signed by a second
officer of the Fund.
Section 3. For all purposes under this Agreement, the
Custodian is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives. In cases where the
first Instruction is an Oral Instruction that is not in the form
of a document or written record, the Fund shall be responsible
for delivering, or having delivered to the .Custodian, a
confirmatory Written Instruction or Oral Instruction in the form
of a document or written record, and in cases where the Custodian
receives an Instruction, whether Written or Oral, with respect to
a portfolio transaction (other than an Investment Company
Securities Transaction or a transaction involving a transfer on
the books of a Securities Depository) the Fund shall cause the
broker or dealer to send a written confirmation to the Custodian.
The Custodian shall be entitled to rely on the first Instruction
received and, for any act or omission undertaken in compliance
therewith, shall be free of liability and fully indemnified and
held harmless by the Fund. The Custodian shall if practicable
act upon and comply with any subsequent Written or Oral Instruc-
tion which modifies such first Instruction. The obligation of
the Custodian with respect to any follow-up or confirmatory
Written Instruction, Oral Instruction in documentary or written
form, or broker-dealer written confirmation shall be to make
reasonable efforts to detect any discrepancy between the original
Instruction and such confirmation and to report such discrepancy
to the Fund. The Custodian shall also be responsible for taking
any action necessary with respect to any timely follow-up Written
or Oral Instruction which countermands or modifies a written or
Oral Instruction. The Fund shall be responsible, at the Fund's
expense, for taking any action, including any reprocessing,
necessary to correct any discrepancy or error and, to the extent
such action requires the Custodian to act, the Fund shall give
the Custodian specific Written Instructions as to the action
required.
Section 4. The Fund hereby appoints the Custodian as
custodian of the Securities and cash of each of The Rightime Fund
Series and The Rightime Blue Chip Fund Series from time to time
on deposit hereunder, to be held by the Custodian and applied as
provided in this Agreement. The Custodian hereby accepts such
appointment subject to the terms and conditions hereinafter
provided. The Securities held by the Custodian shall, unless
payable to bearer or maintained in a Securities Depository or
Book-Entry Account pursuant to Section 5, be registered in the
name of the Custodian or in the name of its nominee. Securities,
excepting bearer securities and Investment Company Securities,
delivered from time to time to the Custodian upon purchase or
otherwise shall in all cases be in due form for transfer or
already registered as above provided. Such Securities and cash of
any Series of the Fund shall, however, be and remain the sole
property of the acquiring Series of the Fund and the Custodian
shall have only the bare custody thereof.
Section 5. The Fund hereby authorizes the Custodian to
deposit with a bank located in the United States assets held in
the Option Account created pursuant to Section 13 or a Futures
Account pursuant to Section 14 and to (a) deposit in its account
(s) with any Securities Depository registered as a Clearing
Agency under Section 17A of the Securities Exchange Act of 1934,
all or any part of the Securities as may from time to time be
held for the Fund, and (b) deposit Book-Entry Securities
belonging to the Fund in a Book-Entry Account which is maintained
for the Custodian by a Federal Reserve Bank and (c) hold
Investment Company Securities in the name of the Custodian or its
nominee in the form of an account on the books of the respective
investment company issuer. So long as any deposit referred to in
(a), (b) or (c) above is maintained for the Fund, the Custodian:
(i) shall deposit the Securities in an account that
includes only assets held by it for customers;
(ii) shall, with respect to Securities transferred to
the account of the Fund, identify as belonging to
the proper Series of the Fund a quantity of
securities in a fungible bulk of securities (i)
registered in the name of the Custodian or its
nominee, or (ii) shown on the Custodian's account
on the books of the Securities Depository, the
Book-Entry System, the Custodian's agent, or the
respective investment company issuer; and
(iii) shall send to the Fund such reports of the systems
of internal accounting control of the Custodian
and its agents through which such Securities are
deposited as are available and as the Fund may
reasonably request from time to time.
The Fund warrants that its Board of Directors has approved
the arrangement for the deposit of Securities in a Securities
Depository and the Book-Entry System and the bolding of
Investment Company Securities in the name of the Custodian or its
nominee in an account on the books of the T Investment Company
issuer.
Section 6. The Fund will initially transfer and deposit
or cause to be transferred and deposited with the Custodian all
of the Securities and cash owned by each Series of the Fund at
the time this Agreement becomes effective. Such deposit shall be
evidenced by appropriate schedules duly executed by the Fund and
the Fund agrees that it is solely responsible for the accuracy of
said schedules. The Fund will cause to be deposited with the
Custodian additional Securities of each Series of the Fund as the
same are purchased or otherwise acquired from time to time, and
any dividends or interest collected on such securities.
Thereafter the Fund will cause to be deposited with the
Custodian hereunder the net proceeds of Securities sold or
redeemed from time to time.
Section 7. The Custodian is hereby authorized and
directed to disburse cash from time to time as follows:
(a) for the purpose of payment for the purchase of
Securities purchased by any Series of the Fund, upon receipt by
the Custodian of both (1) Written or Oral Instructions
identifying the acquiring Series, specifying the Securities and
stating the purchase price, and the name of the broker,
investment banker or other party to or upon whose order the
purchase price is to be paid, and (11) except in respect to
Investment Company Securities, the Securities so purchased in due
form,for transfer or already registered as provided in Section 4,
provided, however, that the Custodian may make payment for
Securities on deposit with a Securities Depository and Book-Entry
Securities at such times as the Custodian enters a credit in the
account it maintains for the proper Series of the Fund to the
effect that it has accepted delivery of such Securities on behalf
of that Series of the Fund;
(b) for the purpose of transferring funds in connection
with a repurchase agreement, upon receipt by the Custodian of
(i) Written or Oral Instructions identifying the Series,
specifying the Securities, the purchase price and the party to
whom the purchase price is to be paid and (ii) written evidence
of the identity of the party obligated to repurchase the
Securities from the Fund;
(c) for the purpose of transferring funds to a duly
designated redemption paying agent to redeem or repurchase
Shares, upon receipt of Written or Oral Instructions identifying
the Series issuing such Shares and stating the applicable
redemption price thereof;
(d) for the purpose of exercising warrants and rights
received upon the Securities, upon timely receipt of Written or
Oral Instructions authorizing the exercise of such warrants and
rights and stating the consideration to be paid by the acquiring
Series;
(e) for the purpose of repaying in whole or in part any
loan of the Fund, upon receipt of Written or Oral Instructions
directing payment and stating the Securities, if any, to be
received against payment;
(f) for the purpose of paying over to a duly designated
Dividend Disbursing Agent such amounts as may be stated in
Written or Oral Instructions, representing proceeds of the sale
of warrants, rights, stock dividends, profit and increases in
values of the Securities of a Series, as the Fund may determine
to include in dividends and/or distribution declared on the
Shares of such Series;
(g) for the purpose of making or reimbursing the Fund for
other corporate expenditures upon receipt of Written or Oral
Instructions stating that such expenditures were authorized by
resolution of the Board of Directors of the Fund and are or were
for proper corporate purposes, and specifying the amount of
payment, the purpose for which such payment is to be made, naming
the person or persons to whom payment is to be made, and
allocating the payment to the Series of the Fund chargeable
therewith in whole or in part;
(h) for the purpose of transferring funds to any Sub-
Custodian, upon receipt of Written or Oral Instructions from the
Fund;
(i) in connection with the purchase or sale by a Series of
Stock Index Futures and puts and calls traded on commodities
exchanges as provided in Section 14;
(j) in connection with puts and calls traded on securities
exchanges as set forth in Section 14;
(k) as set forth in Section 9; or
(l) for the purpose of payment for the purchase of
Investment Company Securities purchased by any Series of the
Fund, upon receipt by the Custodian of Written or Oral
Instructions specifying the Securities and stating the purchase
price and the name of the broker, investment banker or other
party to or upon whose order the purchase price is to be paid.
Section 8. The Custodian is hereby authorized and
directed to deliver Securities of any Series of the Fund from
time to time as follows:
(a) for the purpose of exchanging Investment Company
Securities for other Investment Company Securities within the
same Investment company complex of funds;
(b) for the purpose of redeeming Investment Company
securities owned for the account of any Series of the Fund, upon
receipt by the Custodian of Written or Oral Instructions
specifying the Securities and stating the amounts of the proceeds
to be received for the account of the Series, the approximate
time of receipt and the manner of payments;
(c) for the purpose of completing sales of Securities other
than redemption of Investment Company Securities sold by any
Series of the Fund, upon receipt of both (i) the net proceeds of
sale and (ii) Written or Oral Instructions specifying the
Securities sold and stating the amount to be received and the
broker, investment banker or other party to or upon whose order
the Securities are to be delivered provided, however, that the
Custodian may accept payment owing in connection with the
disposition by the Fund of Securities on deposit with a
Securities Depository and Book-Entry Securities, by means of a
credit in the appropriate amount to the account described in
Section 5 hereof;
(d) for the purpose of exchanging Securities for other
Securities and/or cash upon timely receipt of (i) written or Oral
Instructions stating the Securities to be delivered and the
Securities and/or cash to be received in exchange and the manner
in which the exchange is to be made, and (ii) against receipt of
the other Securities and/or cash as specified in the Written or
Oral Instructions;
(e) for the purpose of exchanging or converting Securities
pursuant to their terms or pursuant to any plan of conversion,
consolidation, recapitalization, reorganization, readjustment or
otherwise, upon timely receipt of (i) Written or Oral
Instructions authorizing such exchange or conversion and stating
the manner in which such exchange or conversion is to be made,
and (ii) the Securities, certificates of deposit, interim
receipts, and/or cash to be received as specified in the Written
or Oral Instructions;
(f) for the purpose of presenting Securities for payment
which have matured or have been called for redemption;
(g) for the purpose of delivery of Securities of a Series
upon redemption of Shares of that Series in kind, upon receipt
(i) of Share Certificates of such Series in due form for
transfer, or proper processing of such Shares for which no Share
Certificates are outstanding, and (ii) appropriate Written or
Oral instructions;
(h) for the purpose of depositing with the lender
Securities of a Series to be held as collateral for a loan to
that Series of the Fund upon receipt of Written or Oral
Instructions directing delivery to the lender;
(i) upon receipt of Written or Oral Instructions stating
(i) the Securities to be delivered and the payment to be received
and (ii) payment, in connection with any repurchase agreement
related to such Securities; or
(j) in connection with puts and calls as set forth in
Section 13.
Section 9. The Custodian will collect from time to time
the dividends and interest on the Securities held by it hereunder
and will deposit the same for the benefit of the proper Series of
the Fund until disbursed as hereinafter provided.
The Custodian is authorized to advance or pay out of the
income account of any Series cash accrued interest on bonds
purchased and dividends on stocks sold and like items.
Subject to proper reserves for dividends owing on stocks
sold and like items, the Custodian will disburse the money from
time to time on deposit for the Fund to or upon the order of the
Fund as it may from time to time direct for the following
purposes:
(a) to pay the proper compensation and expenses of the
Custodian;
(b) to transfer funds to a duly designated Dividend
Disbursing Agent to pay dividends and/or distributions which may
be declared by the Board of Directors of the Fund on any Shares
of any Series upon receipt of appropriate Written or Oral
Instructions;
(c) to pay, or provide the Fund with money to pay taxes
upon receipt of appropriate Written or Oral Instructions;
(d) to transfer funds to a separate checking account
maintained by the Fund pursuant to Section 17(f) of the
Investment Company Act of 1940, as amended;
(e) to pay interest, management or supervisory fees,
administration, dividend and transfer agency fees and costs,
compensation of personnel, or operating expenses (including,
without limitation thereto, fees for legal, accounting and
auditing services), and to disburse cash for other purposes
charging any or all of such amounts against any Series properly
chargeable therewith upon receipt of Written or oral Instructions
requesting such payment or disbursement and identifying the
Series chargeable therewith.
Section 10. The Fund will cause any bank (including the
Custodian) from which it borrows money using Securities as
collateral to deliver to the Custodian a notice or undertaking in
the form currently employed by such bank setting forth the amount
which such bank will loan to the Fund against delivery of a
stated amount of collateral. The Fund shall promptly deliver to
the Custodian written or oral Instructions identifying the
borrowing Series and stating, for each loan: (a) the name of the
bank, (b) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note,
duly endorsed by the Fund, or other loan agreement, (c) the tine
and date, if known, on which the loan is to be entered into (the
"borrowing date"), (d) the date on which the loan becomes due and
payable, (e) the total amount payable to the borrowing Series of
the Fund on the borrowing date, and (f) the market value of
Securities of such Series to be delivered as collateral for such
loan, including the name of the issuer, the title and the number
of shares or the principal amount of any particular Securities.
The Custodian shall deliver on the borrowing date such specified
collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount as
set forth in the Written or Oral Instructions. The Custodian
may, at the option of the lending bank, keep such collateral in
its possession, but such collateral shall be subject to all
rights therein given the lending bank by virtue of any promissory
note or loan agreement.
The Custodian shall deliver from time to time such
securities as additional collateral as may be specified in
Written or Oral Instructions, to collateralize further any
transaction described in this Section. The Fund shall cause all
Securities released from collateral status to be returned
directly to the Custodian.
In the event that Written or Oral Instructions fail to
specify the name of the issuer, the title and number of shares or
the principal amount of any particular Securities to be delivered
as collateral by the Custodian, the Custodian shall not be under
any obligation to deliver any particular Securities.
Section 11. If the Custodian should in its sole
discretion advance funds on behalf of a Series of the Fund which
results in an overdraft because the moneys held by the Custodian
for the account of that Series of the Fund shall be insufficient
to pay the total amount payable upon purchase of securities or
which results in an overdraft for some reason if such Series of
the Fund is for any other reason indebted to the Custodian, such
overdraft or indebtedness shall be deemed to be a loan made by
the Custodian to that Series of the Fund payable on demand and
bearing interest at the current rate charged by the Custodian for
such loans. The Fund hereby agrees that the Custodian shall have
a continuing lien and security interest in and to any property at
any time held by it for the benefit of the Fund or in which that
Series of the Fund may have an interest which is then in the
Custodian's possession or control or in possession or control of
any third party acting on the Custodian's behalf to the extent of
any such overdraft or indebtedness. The Fund authorizes the
Custodian, in its sole discretion, at any time to charge any such
overdraft or indebtedness together with interest due thereon
against any balance of account standing to such Series' credit on
the Custodian's books; provided, however, that the Custodian may
not charge any amounts against the balance of account to the
Series' credit unless it has notified the Fund of the overdraft
prior to the making of such charges.
Section 12. Upon receipt of Written or Oral Instructions,
the Custodian will execute, or cause a sub-custodian or agent to
execute, an escrow receipt relating to any covered call written
by a Series of the Fund, and will deliver such escrow receipt
against payment of the premium therefor. Such Instructions shall
contain all information necessary for the issuance of such
receipt and will authorize the deposit of the Securities
specified therein into an escrow account of the proper Series of
the Fund. Securities so deposited into an escrow account will be
held by the Custodian or sub-custodian or agent subject to the
terms of such escrow receipt. However, the Custodian agrees that
it will not deliver, or cause a sub-custodian or agent to
deliver, any Securities deposited in an escrow account pursuant
to an exercise notice unless it has received Instructions to do
so or (i) it has duly requested the issuance of such
Instructions; (ii) at least two business days have elapsed since
the delivery of such request to the Fund; and (iii) the Fund has
not advised it that the Fund has purchased Securities that are to
be delivered pursuant to the exercise notice. The Fund agrees
that it will not issue any Instructions which shall conflict with
the terms of any escrow receipt executed by the Custodian or a
sub-custodian or agent in relation to the Fund which is then in
effect. The parties agree that the Custodian need not maintain
any written evidence of any call written by the Fund as part of
its duties under this Agreement. The parties also agree that a
Series of the Fund may write calls on Securities ("underlying
securities") which are not owned by that Series of the Fund and
issue Instructions to the Custodian to execute, or cause a sub-
custodian or agent to execute, an escrow receipt on Securities
("convertible securities") which are, or are to be, owned by such
Series and are convertible into the underlying securities. In
such event, the parties agree that any Instructions as to the
execution of the escrow receipt will relate only to such
convertible securities but that any Instructions as to the
delivery of such Securities may instruct the Custodian to convert
the same.
Section 13. a. If a Series of the Fund purchases or sells
(writes) a put option contract ("put") or call option
contract ("call"), which is traded on securities exchanges or
quoted on the automatic quotation system of the National
Association of Securities Dealers, Inc., the Fund will, in
connection with such purchase or sale, deliver to the Custodian
Written or Oral Instructions which identify such Series, describe
the put or call in question including (i) whether the contract in
question is a put or call and whether the put or call has been
purchased or sold by the Fund; (ii) the exercise price, the
expiration date and the amount of premium to be paid or received;
(iii) it- a premium is to be paid by the Fund, the identity of
the broker and the documentation to be provided by such broker
against receipt by the broker of the premium; (iv) if a premium
is to be received by the Fund, the identity of the paying broker;
(v) a description of the investment to which the put or call
relates; (vi) if the transaction is a closing purchase or sale
transaction, the documentation or cash to be delivered to the
broker through which the transaction was made; and (vii) in the
case of a call sold by a Series of the Fund, whether the call is
covered.
b. If the option sold is a put or uncovered call, the
Written or Oral Instructions shall also state either (a) the
amount and kind of collateral required by the broker, which
amount shall be delivered directly to the broker through whom
such option was written in return for both a receipt issued by
such broker and a confirmation by such broker of the option
transaction at such times and in such manner as is in accordance
with the customs prevailing among brokers in such securities and
or (b) the amount and kind of assets of the Series, if any, which
shall be segregated from the general assets of that Series and
shall be held by the Custodian in a segregated option account
(the "Option Account"). The Custodian shall set up and maintain
the Option Account as it shall be directed by Written or Oral
Instructions and shall increase or decrease the assets in such
Option Account only as it shall be so directed by subsequent
Written or Oral Instructions.
c. If an option contract purchased or sold by a Series
expires, the Fund will deliver to the Custodian Written or Oral
Instructions containing the information specified in paragraph a.
above and instruct the Custodian to (a) delete such option
contract from the list of holdings that the Custodian maintains
for the series if it is a put or call held by the Series and (b)
to either remove from the Option Account the assets held therein
with respect to such option (which assets shall be specified in
such Written or Oral Instructions) , or to remove the restriction
on any securities underlying a covered call, as the case may be.
Upon the return and/or cancellation or expiration of any escrow
receipts, the Custodian shall remove such restrictions, delete
the option from the list of holdings maintained by the Custodian,
and transfer such assets to the general account maintained by the
Custodian for the benefit of the Series. Collateral delivered by
a broker with whom it was previously deposited shall, if
identical with the collateral specified in the receipt previously
issued by such broker, be accepted by the Custodian and held in
the general account maintained by the Custodian for the benefit
of the Series. The Custodian shall accept delivery of collateral
not specified in such a receipt only upon receipt of Written or
Oral Instructions.
d. If a call option sold by a Series of the Fund is
exercised, the Fund shall promptly furnish the Custodian with
Written or Oral Instructions stating: (a) that the Custodian
shall deliver the related investments or cash; (b) a description
of the related investments or a statement of the amount of cash
to be delivered; (c) the person to whom the delivery is to be
made; (d) the amount, if any to be received by the Custodian to
hold for the Fund upon such delivery; and (e) the assets, if any,
to be removed from the Option Account or the collateral, if any,
to be returned by a broker with whom it was deposited. Assets of
the Fund freed of restrictions imposed by reason of an option and
collateral returned by a broker shall be held by the Custodian in
the general account of the proper Series of the Fund.
If a put option sold by a Series of the Fund is exercised, the
Fund shall promptly furnish the Custodian with Written or Oral
Instructions stating: (a) that the Custodian shall make payment
for the related investment or a cash payment as the case may be,
subject to the put, (b) a description of the related investment
or a statement of the amount of cash to be delivered, (c) the
identity of the person to whom payment will be made against
delivery of the related investments or to whom the delivery of
cash is to be made; (d) the assets, if any, to be removed from
the Option Account and/or the collateral, if any, to be returned
by a broker with which it was deposited, such assets and
collateral to be held by the Custodian in the general account of
the proper Series of the Fund.
e. If a put sold by a Series of the Fund is exercised, the
Fund shall promptly furnish the Custodian with Written or Oral
Instructions stating (i) that the Custodian shall make payment
for the related investments subject to the put or a cash payment
as the case may be; (ii) a description of the related investment
of a statement of the amount of cash to be delivered; (iii) the
identity of the person to whom payment will be made against
delivery of the related investment or to whom the delivery of
cash is to be made; and (iv) the assets, if any, to be removed
from the Option Account and/or the collateral, if any, to be
returned by a broker with which it was deposited, such assets
and/or collateral to be held by the Custodian in the general
account of the proper Series of the Fund.
f. If the Instructions indicate that the option
transaction in question is a closing purchase transaction, the
Custodian shall, upon (i) payment by it of the premium for the
call purchased (if the closing purchase transaction is as to a
call sold by the Fund) or for the put purchased (if the closing
purchase transaction is as to a put sold by the Fund); (ii) (if
the closing purchase transaction is the purchase of a call to
close out a covered call written by the Fund) the return and/or
cancellation or expiration of any escrow receipts as to such
covered call; and (iii) receipt of Written or Oral Instructions
to do so, take action as to the put or call terminated by the
closing purchase transaction as specified for expired options in
c. above.
g. If any put or call held by a Series of the Fund is to
be exercised by the Fund, such exercise must be the subject of
Written or Oral Instructions received by the Custodian not later
than its close of business of the last business day before the
last day on which the option may be exercised. (This shall not
affect the right of the Fund to sell any put or call held by it
at any time prior to its lapse or to permit any put or call held
by it to lapse unexercised.) Such Instruction shall (i) identify
the put or call held by the Fund being exercised by it including
the exercise price, the related investments and the broker which
is the other party to the transaction; (ii) in the case of the
exercise by the Fund of a put, instruct the Custodian to deliver
the related investments to such broker against receipt of the
exercise price from such broker or to receive cash from such
broker, as the case may be, the amount of such cash to be
specified in such Instructions, and (iii) in the case of the
exercise by the Fund of a call, instruct the Custodian to deliver
the exercise price to such broker against receipt from such
broker of the related investments; the Custodian shall then take
action as to the put or call exercised as specified for expired
options.
h. The Custodian shall be under no duty or obligation to
see that the Fund has deposited or its maintaining adequate
margin, if required, with any broker in connection with an option
nor shall the Custodian be under duty or obligation to present
such option to the broker unless it receives Written or Oral
Instructions from the Fund. The Custodian shall have no
responsibility for the legality of any put or call option
purchased or sold on behalf of the Fund, the propriety of any
such purchase or sale, and the adequacy of any collateral
delivered to a broker in connection with an option or held in the
Option Account. The Custodian specifically, but not by way of
limitation, shall not be under any duty or obligation (i) to
periodically check or notify the Fund that the amount of such
collateral held by a broker or assets held in the Option Account
is sufficient to protect such broker or the Fund against any
loss, (ii) to effect the return of any collateral delivered to a
broker, or (iii) to advise the Fund that any option it holds, has
or is about to expire. Such duties or obligations shall be the
sole responsibility of the Fund.
Section 14. The Custodian is authorized and directed to
take action as to puts, calls, and futures contracts ("Futures")
purchased or sold by the Fund which are traded on commodities
exchanges as set forth in this Section 14.
(a) If a Series of the Fund purchases or sell Futures or a
put or call traded on a commodities exchange, it will, in
connection with such purchase or sale of a Future deliver to the
Custodian Written or Oral Instructions which describe the Future
in question including (i) the investment to which the Future
relates, (the "related investment"); (ii) the nature and amount
of initial margin; and (ill) the identity of the futures
commission merchant ("FCM"); see (c) below as to the-procedures
as to puts and calls. The Custodian shall thereupon establish an
account (the "FCM Account") in the name of such FCM, unless an
FCM Account has already been established for such FCM. The FCM
Account shall contain cash or cash equivalents, including open-
end Investment Company Securities other than Shares, which equal
at least the sum of the aggregate value of the margin required to
be established or maintained on all futures contracts through
such FMC owned by the Fund, marked to market each day. The
Custodian shall permit access to the assets in the FCM Account
only by the FCM (except for payments to the Fund's general
account on Instructions from the Fund) and only if the FCM states
to the Custodian orally with written confirmation that the Fund
is in default on an obligation to perform, that all conditions
precedent to the right of the FCM to direct disposition have been
satisfied and that disposition is for a proper purpose. Upon
receipt of Written or Oral Instructions to do so, the Custodian
shall make deposits in and withdrawals from a specified and
segregated FCM Account in connection with initial and variation
margin and excess margin, including deposits and withdrawals in
connection with the closing out of Futures and the taking or
making of delivery pursuant to any Future. Upon receipt of
Written or Oral Instructions to do so, the Custodian shall make
payments to a clearing corporation if such corporation has made
payments to an FCM on behalf of the Fund.
(b) In connection with the purchase of Futures and calls on
Futures, the Custodian shall, on receipt of Written or Oral
Instructions to do so, segregate from the general assets of the
Fund and hold in a segregated sub-account (the "Futures Account")
an amount and kind of assets indicated in such Instructions and
consistent with the Fund's exemptive order from the United States
Securities and Exchange Commission and shall increase or decrease
the assets in Futures Account or terminate it only as directed in
future Instructions. In absence of such an Instruction to
segregate specific assets in the Futures Account, the Custodian
shall segregate assets of the required value from the Fund's
general custodial accounts equal in value to at least the sum of
the aggregate value of all Futures Contracts of the Fund, market
to market each day, less than amount of margin deposits with
respect thereto, such assets being free of any allocation to
support any other options or Futures obligations of the Fund.
The Fund may direct the substitution of any qualified asset in
its general accounts for any segregated asset in its Future
Account.
(c) The procedures and responsibilities as to puts and
calls as set forth in Section 13 shall also apply to puts and
calls covered by this Section 14 except that (i) references to
brokers shall be deemed to refer to FCMs; and (ii) reference to
collateral shall be deemed to refer to initial and variation
margin, and collateral shall not be delivered or received from a
broker but initial and variation margin shall be deposited to or
withdrawn from the applicable FCM Account; (iii) reference to the
Option Account shall be deemed to refer to the Futures Account.
(d) Nothing herein contained shall prevent the Custodian,
the Fund and any FCM from entering into any agreement or
agreements (to which the Fund's investment adviser may also be a
party) not inconsistent herewith relating to Futures and/or puts
and calls traded on commodities exchanges.
(e) The responsibilities and liabilities of the Custodian
as to Futures, puts and calls traded on commodities exchanges,
any FCM Account and the Futures Account shall be limited as set
forth in paragraph (h) of Section 13 as if such paragraph
referred to an FCM Account, instead of margin, FCMs rather than
brokers, Futures and puts and calls traded on commodities
exchanges rather than puts and calls there covered and the
Futures Account rather than the Option Account.
Section 15. The Custodian assumes no duty, obligation or
responsibility whatsoever to exercise any voting or consent
powers with respect or the Securities held by it from time to
time hereunder, it being understood that the Fund or such person
or persons as it may designate, shall have the right to vote, or
consent or otherwise act with respect to such Securities. The
Custodian will exercise its best efforts to furnish to the Fund
in a timely manner proxies or other appropriate authorizations
with respect to Securities registered in the name of the
Custodian or its nominee so that such voting powers, or powers to
consent to otherwise act may be exercised by the Fund or pursuant
to its direction.
Section 16. The Custodian's compensation shall be as set
forth in Schedule A hereto attached, or as shall be set forth in
amendments to such Schedule approved in writing by the Fund and
the Custodian.
Section 17. The Custodian will exercise its best efforts to
handle, forward, or process in a prompt and timely manner notices
of stockholder meetings, proxy statements, annual reports,
conversion notices, call notices, or other notices or written
materials of any kind sent to the registered owners of securities
(hereinafter referred to as "notices and materials"), it being
understood that the Fund and its investment adviser have primary
responsibility for reviewing such notices and materials, and for
taking action thereon. The Custodian will make reasonable
efforts to promptly forward such notices and materials as it
receives them to the Fund, but makes no warranty or
representation that all notices and materials have not been
timely received by Custodian.
Upon receipt by the Custodian of warrants or rights issued
in connection with the assets of the Fund, the Custodian shall
enter into its ledgers appropriate notations indicating such
receipt and shall notify the fund of such receipt, but shall not
have any obligation to take any action of any kind with respect
to such warrants or rights except upon receipt of written or Oral
Instructions from the Fund.
Section 18. The Custodian assumes no duty, obligation or
responsibility whatsoever with respect to Securities not
deposited with the Custodian, with the exception of Securities
deposited with any sub-custodian appointed by the Custodian.
Common stocks or other Securities exchanged for Shares shall not
be considered deposited with the Custodian until physically
received by Custodian in accordance with the provisions of this
Agreement. Custodian does not warrant the effective transfer of
any Security until registration in the name of the Custodian or
its nominee has been accomplished.
Section 19. The Custodian acknowledges and agrees that all
books and records maintained for the Fund in any capacity under
this Agreement are confidential and the property of the Fund.
They may be inspected by the Fund, or any authorized regulatory
agency, at any reasonable time, and upon request will be
surrendered promptly to the Fund. The Custodian shall provide
the Fund with immediate notice of any request for review of the
Fund's books and records, and no party will be allowed access to
such books and records unless such prior notice has been given
and consent has been received from the Fund unless otherwise
required by law, regulation, or court order; the Custodian will
immediately notify the Fund of any such examination in progress.
The Custodian agrees to make available upon request and to
preserve for the periods prescribed in Rule 3la-2 under the
Investment Company Act of 1940 any records relating to services
provided under t is Agreement which are required to be maintained
by Rule 3la-1 under said Act.
Section 20. The Custodian assumes only the usual duties and
obligations normally performed by custodians of mutual funds. It
specifically assumes no responsibility for the management,
investment or reinvestment of the Securities from time to time
owned by the Fund whether or not on deposit hereunder, it being
understood that the responsibility for the proper and timely
management, investment and reinvestment of said Securities shall
be that of the Fund and its investment advisor.
The Custodian shall not be liable for any taxes, assessments
or governmental charges which may be levied or assessed upon the
Securities held by it hereunder, or upon the income therefrom or
otherwise whatsoever. The Custodian may pay any such tax,
assessment or charge and reimburse itself out of the moneys of
the Fund or out of the Securities held hereunder; provided,
however, the Custodian shall consult the officers of the Fund
before making any such payment.
The Fund shall indemnify the Custodian and save it harmless
from any and against any and all actions, suits and claims
whether groundless or otherwise, arising directly or indirectly
out of or in connection with its performance under this Agreement
and from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities incurred by the
Custodian in connection with any such action, suit, or claim
except as shall arise out of the negligence or willful misconduct
of the Custodian, its officers, agents or employees. The
Custodian shall not be under any obligation to prosecute or to
defend any action, suit or claim arising out of or in connection
with its performance under this Agreement, which, in the opinion
of its counsel, may involve it in expense or liability, and the
Fund shall, so often as reasonably requested, furnish the
Custodian with satisfactory indemnity against such expense or
liability, and upon request of the Custodian the Fund shall
assume the entire defense of any action, suit or claim subject to
the foregoing indemnity; provided, however, that the Custodian
shall give the Fund written notice, and reasonable opportunity to
defend, any such action, suit, or claim, in the name of the Fund
or the Custodian or both.
Without limitation of the foregoing:
(a) The Custodian may rely upon the advice of counsel, who
may be counsel for the Fund or counsel for the Custodian and upon
statements of accountants, brokers and other persons believed by
it in good faith to be expert in the matters upon which they are
consulted and for any actions taken in good faith upon such
statements, the Custodian shall not be liable to anyone.
(b) The Custodian shall not be liable for any action taken
in good faith reliance upon any Written or Oral Instruction or
certified copy of any resolution of the Board of Directors of the
Fund, and the Custodian may rely upon the genuineness of any such
document or copy thereof believed in good faith by the Custodian
to have been validly executed.
(c) The Custodian may rely and shall be protected in acting
upon any signature, instruction, opinion of counsel, statement,
instrument, report, notice, consent, order, authorization or
other paper or document believed by it to be genuine and to have
been signed or presented by the Fund or other proper party or
parties.
Section 21. The Custodian is empowered to appoint one or
more U.S. banking institutions as Sub-Custodian (including but
not limited to, U.S. banks located in foreign countries) of
Securities and moneys at any time owned by the Fund to permit
Custodian to effectively perform the duties called for hereunder.
Upon receipt of Written or Oral Instructions, directing or
approving such appointment, the Custodian shall no liability to
the Fund or any other person by reason of any act or omission of
any Sub-Custodian so approved or appointed by the Fund and the
Fund shall indemnify the Custodian and save it harmless from any
and against any and all actions, suits and claims, whether
groundless or otherwise and from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liabilities arising directly or indirectly out of or in
connection with the performance of any Sub-Custodian approved or
appointed by the Fund. The Custodian shall not be under any
obligation to prosecute or to defend any action, suit or claim
arising out of or in connection with the performance of any Sub-
Custodian approved or appointed by the Fund, which, in the
opinion of its counsel, may involve it in expense or liability,
and the Fund shall, so often as reasonably requested, furnish the
Custodian with satisfactory indemnity against such expense or
liability, and upon request of the Custodian, the Fund shall
assume the entire defense of any action, suit, or claim subject
to the foregoing indemnity.
The Fund shall pay all fees and expenses of any Sub-
Custodian approved or appointed by the Fund, to the extent that
such fees or expenses have not been paid to the Custodian for the
performance of the services so provided by the Sub-Custodian.
Section 22. This Agreement may be amended from time to
time without notice to or approval of the Shareholders by a
written supplemental agreement executed by the Fund and the
Custodian and amending and supplementing this Agreement in a
manner mutually agreed.
Section 23. Either the Fund or the Custodian may give
written notice to the other of the termination of this Agreement,
such termination to take effect at the time specified in the
notice which shall not be earlier than sixty (60) days after the
date of giving such notice. In case such notice of termination
is given either by the Fund or by the Custodian, the Fund shall
use its best efforts to obtain a qualified successor custodian.
If the Fund cannot obtain a qualified successor custodian, then
the Board of Directors of the Fund shall, by resolution duly
adopted, promptly designate the Fund as its own custodian. Each
successor custodian shall be a person qualified to so act under
the Investment Company Act of 1940, as amended. Upon receipt of
written notice from the Fund of the appointment of such successor
and upon receipt of Written or Oral Instructions, the Custodian
shall deliver such Securities and cash as it may then be holding
hereunder directly to and only to the successor custodian.
Unless or until a successor custodian has been appointed as above
provided, the Custodian then acting shall continue to act as
Custodian under this Agreement. Every successor custodian
appointed hereunder shall execute and deliver an appropriate
written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its
predecessor Custodian. The Custodian ceasing to act shall
nevertheless, upon request of the Fund and successor custodian
and upon payment of its charges and disbursements, execute an
instrument in form approved by its counsel transferring to the
successor custodian all the predecessor Custodian's rights,
duties, obligations and custody.
In case the Custodian shall consolidate with or merge into
any other corporation, the corporation remaining after or
resulting from such consolidation or merger shall ipso facto,
without the execution or filing of any papers or documents,
succeed to and be substituted for the Custodian with like effect
as though originally named as such.
Section 24. Nothing contained in this Agreement is
intended to or shall require the Custodian in any capacity
hereunder to perform any functions or duties on any holiday, day
of special observance or any other day on which the Custodian or
the New York Stock Exchange is closed unless required by law, and
functions or duties normally scheduled to be performed on such
days shall be performed on, and as of, the next succeeding
business day on which both the New York Stock Exchange and the
Custodian are open.
Section 25. This Agreement shall take effect on the date
hereof or on such other date as the parties agree to transfer the
Fund's assets to the Custodian.
Section 26. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to
be an original, but such counterparts shall together constitute
but one and the same instrument.
Section 27. This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of its Board of
Directors.
Section 28. This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Fund and the Custodian have caused
this Agreement to be signed by their respective Presidents or
Vice Presidents and their corporate seals hereunto duly affixed,
and attested by their respective Secretaries or Assistant
secretaries, as of the day and year first above written.
THE RIGHTIME FUND, INC.
By
(SEAL) Title:
Attest
THE PHILADELPHIA NATIONAL BANK
By
(SEAL) Title:
Attest
SCHEDULE A
PHILADELPHIA NATIONAL BANK
CUSTODY FEE SCHEDULE
This pricing assumes all compensation in fees which will be billed on a
quarterly basis:
Annual Asset Maintenance
First $100 million $.15/$1,000
next 500 million .10/ 1,000
Subject to an annual minimum of $20,000.
Transaction Charges
Book-Entry (DTC, FED and Statement Accounts)$10
Physical/Repo $26
Futures $10
Options - trip $45
Wires in $10.50
Wires out $ 6.50
DTC and Mutual Fund Dividend Reinvestment$ 5.00
AMENDMENT TO CUSTODIAN AGREEMENT
This Agreement, dated the day of June, 1988, made
by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing-under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Fund and the Custodian entered into an
agreement dated March , 1988 wherein the Custodian agreed to
act as custodian of the Fund's securities and principal cash
("Custodian Agreement"); and
WHEREAS, the parties wish to amend the Custodian
Agreement to provide for the custody of the securities and
principal cash of The Rightime Growth Fund, a separate series of
shares of the Fund; and
WHEREAS, the parties are amending the definition of
"Series" in Section 1 of the Custodian Agreement in accordance
with Section 22 of that Agreement providing for modification of
the Agreement by a writing signed by both parties.
NOW, THEREFORE, the parties hereto with intent to be
legally bound, do hereby agree to amend the definition of
"Series" in Section 1 as follows:
"Series: The term Series shall mean The Rightime
Series, The Blue Chip Series, or The Rightime Growth Fund
Series, or either or all such Series as the context may
specify or require."
IN WITNESS WHEREOF, the Fund and the Custodian have
caused this Agreement to be signed by their respective Presidents
or Vice Presidents and their corporate seals hereunto duly
affixed, and attested by their respective Secretaries or
Assistant Secretaries, as of the day and year above written.
THE RIGHTIME FUND, INC.
Attest:
By:
Title:
THE PHILADELPHIA NATIONAL BANK
Attest:
By:
Title:
AMENDMENT TO CUSTODIAN AGREEMENT
This Agreement, dated the 1st day of March, 1990, made
by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Fund and the Custodian entered into an
agreement dated April 4, 1988 wherein the Custodian agreed to act
as custodian of the Fund's securities and principal cash
("Custodian Agreement"); and
WHEREAS, the parties wish to amend the Custodian
Agreement to provide for the custody of the securities and
principal cash of The Rightime Social Awareness Fund, a separate
series of shares of the Fund; and
WHEREAS, the parties are amending the definition of
"Series" in Section 1 of the Custodian Agreement in-accordance
with Section 22 of that Agreement providing for modification of
the Agreement by a writing signed by both parties.
NOW, THEREFORE, the parties hereto with intent to be
legally bound, do hereby agree to amend the definition of
"Series" in Section 1 as follows:
"Series: The term Series shall mean The Rightime
Series, The Rightime Blue Chip Fund Series, The Rightime
Growth Fund Series, The Rightime Government Fund Series or
The Rightime Social Awareness Fund Series, or either or all
such Series as the context may specify or require."
IN WITNESS WHEREOF, the Fund and the Custodian have
caused this Agreement to be signed by their respective Presidents
or Vice Presidents and their corporate seals hereunto duly
affixed, and attested by their respective Secretaries or
Assistant Secretaries, as of the day and year above written.
THE RIGHTIME FUND, INC.
Attest:
By:
Title:
THE PHILADELPHIA NATIONAL BANK
Attest:
By:
Title:
AMENDMENT TO CUSTODIAN AGREEMENT
This Agreement, dated the ____ day of November, 1991,
made by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland
and The Philadelphia National Bank (the "Custodian"), a national
banking association duly organized and existing under the laws of
the United States of America;
WITNESSETH THAT:
WHEREAS, the Fund and the Custodian entered into an
agreement dated April 4, 1988 wherein the Custodian agreed to act
as custodian of the Fund's securities and principal cash
("Custodian Agreement"); and
WHEREAS, the parties wish to amend the Custodian
Agreement to provide for the custody of the securities and
principal cash of The Rightime Mid-Cap Fund, a separate series of
shares of the Fund; and
WHEREAS, the parties are amending the definition of
"Series" in Section 1 of the Custodian Agreement in accordance
with Section 22 of that Agreement providing for modification of
the Agreement by a writing signed by both parties.
NOW, THEREFORE, the parties hereto with intent to be
legally bound, do hereby agree to amend the definition of
"Series" in Section 1 as follows:
"Series: The term Series shall mean The Rightime
Series, The Rightime Blue Chip Fund Series, The Rightime
Growth Fund Series, The Rightime Social Awareness Fund
Series, The Rightime Mid-Cap Fund Series or The Rightime
Government Fund Series, or either or all such Series as the
context may specify or require."
IN WITNESS WHEREOF, the Fund and the Custodian have
caused this Agreement to be signed by their respective Presidents
or Vice Presidents and their corporate seals hereunto duly
affixed, and attested by their respective Secretaries or
Assistant Secretaries, as of the day and year above written.
THE RIGHTIME FUND, INC.
Attest:
By:
Title:
THE PHILADELPHIA NATIONAL BANK
Attest:
By:
Title:
TRANSFER AND DIVIDEND DISBURSING AGENCY AGREEMENT
This Agreement, dated as of the 25th day of September,
1986, made by and between The Rightime Fund, Inc. (the "Fund"), a
corporation operating as an open-end investment company, duly
organized and existing under the laws of the State of Maryland,
and Lincoln Investment Planning Inc. (the "Transfer Agent"), a
Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Fund desires to retain the Transfer Agent
to render transfer agency and dividend disbursing agency services
to the Fund and the Transfer Agent has agreed to act as Transfer
Agent of the Fund and as its Dividend Disbursing Agent;
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties hereto, intending
to be legally bound, do hereby agree as follows:
Section 1. The Fund hereby appoints the Transfer
Agent as its Transfer, Redemption and Dividend Disbursing Agents
and the Transfer Agent accepts such appointments and agrees to
act in such capacities upon the terms set forth in this
Agreement.
TRANSFER AGENCY
Section 2. The Fund shall furnish to the Transfer
Agent a sufficient supply of blank Share Certificates of each
Series of its Shares currently issued and outstanding and from
time to time will renew such supply upon the request of the
Transfer Agent. Such blank Share Certificates shall be signed
manually or by facsimile signatures of officers of the Fund
authorized by law or the by-laws of the Fund to sign Share
Certificates and, if required, shall bear the corporate seal or a
facsimile thereof.
Section 3. The Transfer Agent shall make original
issues of Shares in accordance with Sections 13 and 14 below and
with the Fund's Prospectus and Statement of Additional
Information upon the written request of the Fund and upon being
furnished with (i) a certified copy of a resolution or
resolutions of the Board of Directors of the Fund authorizing
such issue; (ii) an opinion of counsel as to the validity of such
additional Shares; and (iii) necessary funds for the payment of
any original issue tax applicable to such additional Shares.
Section 4. Except as modified by resolution of the
Board of Directors of the Fund as delivered to and accepted by
the Transfer Agent, Transfers of Shares shall be registered and
new Share Certificates issued by the Transfer Agent upon
surrender of outstanding Share Certificates (i) in form deemed by
the Transfer Agent to be properly endorsed for transfer, (ii)
with all necessary endorsers' signatures guaranteed by a member
firm of a national securities exchange or a commercial bank,
accompanied by (iii) such assurances as the Transfer Agent shall
deem necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement, and (iv)
satisfactory evidence of compliance with all applicable laws
relating to the payment or collection of taxes.
Section 5. When mail is used for delivery of Share
Certificates, the Transfer Agent shall forward Share Certificates
in "non-negotiable" form by first-class mail, and Share
Certificates in "negotiable" form by registered mail, all mail
deliveries to be covered while in transit to the addressee by
insurance arranged for by the Transfer Agent.
Section 6. In registering transfers the Transfer
Agent may rely upon the Uniform Commercial Code ("UCC") or any
other statutes which in the opinion of counsel protect the
Transfer Agent and the Fund in not requiring complete
documentation, in registering transfer without inquiry into
adverse claims, in delaying registration for purposes of such
inquiry, or in refusing registration where in its judgment an
adverse claim requires such refusal. The Transfer Agent shall
comply with the terms of the UCC and other statutes, rules and
regulations, as in effect from time to time to protect rights of
the Fund and its interests under such statutes or rules.
Section 7. The Transfer Agent may issue new Share
Certificates in place of Share Certificates represented to have
been lost, destroyed or stolen, upon receiving indemnity
satisfactory to the Transfer Agent and may issue new Share
Certificates in exchange for, and upon surrender of mutilated
Share Certificates.
Section 8. In case any officer of the Fund who
shall have signed manually or whose facsimile signature shall
have been affixed to blank Share Certificates shall die, resign
or be removed prior to the issuance of such Share Certificates,
the Transfer Agent may issue or register such Share Certificates
as the Share Certificates of the Fund notwithstanding such death,
resignation or removal; and the Fund shall file promptly with the
Transfer Agent such approval, adoption or ratification as may be
required by law.
Section 9. The Transfer Agent will maintain stock
registry records of each Series of the Fund in the usual form in
which it will note the issuance, transfer and redemption of
Shares of each respective Series and the issuance and transfer of
Share Certificates, and is also authorized to maintain for each
Series an account entitled Unissued Certificate Account in which
it will record the Shares and fractions issued and outstanding
from time to time for which issuance of Share Certificates is
deferred. The Fund has retained Rightime Administrators, Inc. to
provide the Transfer Agent with daily reports of Fund Share
purchases and redemptions for each Series. The Transfer Agent
will keep records for each Series, which will be part of the
stock transfer records, as well as its records of the Plans, in
which it will note the names and registered addresses of
Shareholders and Planholders, and the number of Shares and
fractions from time to time owned by them for which no Share
Certificates are outstanding and the total Shares of each Series
outstanding. Each Shareholder or Planholder will be assigned a
single account number for each Series in which Shares are held.
Section 10. The Transfer Agent will issue Share
Certificates for Shares of the Fund, only upon receipt of a
written request from a Shareholder. In all other cases, the Fund
authorizes the Transfer Agent to dispense with the issuance and
countersignature of Share Certificates whenever Shares are
purchased. In such case the Transfer Agent shall merely note on
its stock registry records for the appropriate Series the
issuance of the Shares-and fractions (if any) of such Series,
shall credit the Unissued Certificate Account of such Series with
the Shares and fractions issued and shall credit the proper
number of Shares and fractions to the respective Shareholders.
Likewise, whenever the Transfer Agent has occasion to surrender
for redemption Shares and fractions owned by Shareholders, it
shall be unnecessary to issue Share Certificates for redemption
purposes. The Fund authorizes the Transfer Agent in such cases
to process the transactions by appropriate entries in its stock
transfer records, and debiting of the proper Unissued Certificate
Account and the record of issued Shares outstanding.
Section 11. The Transfer Agent will, in addition to
the duties and functions above-mentioned, perform the usual
duties and functions of a stock transfer agent for a corporation.
It will countersign for issuance or reissuance Share Certificates
representing original issue or reissued treasury Shares as
directed by the,-Written Instructions of the Fund, and will
transfer Share Certificates registered in the name of
Shareholders from one Shareholder to another in the usual manner.
The Transfer Agent may rely conclusively and act without further
investigation upon any list, instruction, certification,
authorization, Share Certificate or other instrument or paper
reasonably believed by it in good faith to be genuine and
unaltered, and to have been signed, countersigned, or executed by
a duly authorized person or persons, or upon the instructions of
any officer of the Fund, or upon the advice of counsel for the
Fund or for the Transfer Agent. The Transfer Agent may record
any transfer of Share Certificates which is reasonably believed
by it in good faith to have been duly authorized or may refuse to
record any transfer of Share Certificates if in good faith the
Transfer Agent deems such refusal necessary in order to avoid any
liability either to the Fund or to the Transfer Agent. The Fund
agrees to indemnify and hold harmless the Transfer Agent from and
against any and all losses, costs, claims, and liability which it
may suffer or incur by reason of so relying or acting or refusing
to act, unless such losses, costs, claims or liability is due to
the Transfer Agent's negligence or willful misconduct.
Section 12. In case of any request or demand for the
inspection of the share records of the Fund, the Transfer Agent
shall immediately notify the Fund and secure instructions as to
permitting or refusing such inspection. The Transfer Agent
agrees that Share records of the Fund are the property of
the.Fund, and shall be made available to the Fund promptly upon
request. All records of the Fund are confidential and will not
be released to any party prior to notice to and authorization by
the Fund unless required by applicable law or regulations,
provided that the Transfer Agent may exhibit such records to any
person in any case where it is advised by its counsel that it may
be held liable for failure so to do pursuant to any valid court
order or decree.
ISSUANCE OF SHARES
Section 13. Upon determination of the net asset
value per Share of a Series in accordance with the Fund's
Prospectus and applicable laws and rules, the Transfer Agent
shall process all purchase orders for such Shares received since
the last determination of the Fund's net asset value per Share
for such Series.
The Transfer Agent shall calculate daily, based on the
amount available for investment in Shares and the net asset value
next determined by the Fund (as of the close of trading on the
New York Stock Exchange or at such other time(s) as may be set by
the Board of Directors of the Fund), the number of Shares and
fractional Shares to be purchased and the aggregate net assets
received for such Shares to be deposited with the Custodian. The
Transfer Agent, as agent for the Shareholders and Planholders,
shall place a purchase order daily with the Fund for the proper
number of Shares and fractional Shares to be purchased and
confirm such number to the Fund in writing.
Section 14. The Transfer Agent, having made the
calculations provided for in Section 13, shall thereupon pay over
the aggregate net asset value of Shares of each Series purchased
to the Fund's Custodian to be deposited in the account maintained
under the Fund's Custodian Agreement for the respective Series.
The proper number of Shares and fractional Shares shall then be
issued by each Series daily and credited by the Transfer Agent to
the Unissued Certificate Account of such Series. The Shares and
fractional Shares purchased for each Shareholder and Planholder
will be credited by the Transfer Agent to each Shareholder's
separate account for such Series. The Transfer Agent shall mail
to each Shareholder and Planholder a confirmation of each
purchase, with copies to the Fund if requested. Such
confirmations will show the prior Share balance, the new Share
balance, the Shares held under a Plan (if any), the Shares for
which Stock Certificates are outstanding (if any), the amount
invested and the price paid for the newly purchased Shares.
REDEMPTIONS
Section 15. Upon determination of the net asset
value per Share of a Series in accordance with the Fund's
Prospectus and applicable laws and rules, the Transfer Agent
shall process all pending requests from Shareholders to redeem
Shares of a Series and determine the number of Shares of each
Series required to be redeemed to make monthly payments,
automatic payments or the like. Thereupon, the Transfer Agent
shall advise the Custodian of the total number of Shares and
fractional Shares of each Series to be redeemed, indicating the
applicable net asset value. The Transfer Agent shall furnish the
Fund with an appropriate confirmation of the redemption, making
the proper distribution and application of the redemption
proceeds in accordance with the Fund's Prospectus. The stock
registry books of each Series recording outstanding Shares, the
Unissued Certificate Account and the individual account of the
Shareholder or Planholder shall be properly debited.
In lieu of carrying out the redemption procedures
hereinabove provided for in this Section 15, the Transfer Agent
may, at the request of the Fund, sell Shares of any Series to the
Fund as repurchases from Shareholders and/or Planholders,
provided that in each such case the sale price shall be not less
than the applicable redemption price. In such case the
redemption procedures shall be appropriately modified.
Section 16. The proceeds of redemption shall be
remitted by the Transfer Agent in accordance with the Fund's
Prospectus by check mailed to the Shareholder or Planholder at
his registered address. If Share Certificates have been issued
for Shares being redeemed, then such Share Certificates and a
stock power with a signature guarantee of a commercial bank, or a
member firm of a national securities exchange shall accompany the
redemption request. If Share Certificates have not been issued
to the redeeming Shareholder, the signature of the Shareholder on
the redemption request must be similarly guaranteed. The Fund
may authorize the Transfer Agent to waive the signature guarantee
in certain cases by Written Instructions.
For the purposes of redemption of Shares which have
been purchased within 15 days of a redemption request, the Fund
shall provide the Transfer Agent, from time to time, with Written
Instructions concerning the time within which such requests may
be honored.
DIVIDENDS
Section 17. Upon the declaration on behalf of any
Series of each dividend and each capital gains distribution by
the Board of Directors of the Fund, the Fund shall notify the
Transfer Agent of the Series paying such dividend or
distribution, the date of such declaration the amount payable per
share, the record date for determining the Shareholders of that
Series entitled to payment, the payment and the reinvestment date
price.
Section 18. On or before each payment date the Fund
will transfer, or cause the Custodian to transfer, to the
Transfer Agent in its capacity as Dividend Disbursing Agent, the
total amount of the dividend or distribution currently payable.
The Transfer Agent will, on the designated payment date,
automatically reinvest all dividends in additional shares of the
Series paying such dividend or distribution except in cases where
Shareholders have elected to receive Shares in cash, in which
case the Transfer Agent will mail distribution checks to the
Shareholders for the proper amounts payable to them.
GENERAL PROVISIONS
Section 19. The Transfer Agent shall maintain
records for each Series (which may be part of the stock transfer
records) in connection with the issuance and redemption of
Shares, the disbursement of dividends and the administration of
the Plans and dividend reinvestments, in which will be noted the
transactions effected for each Shareholder and Planholder and the
number of Shares and fractional Shares owned by each for which no
Share Certificates are outstanding. The Transfer Agent agrees to
make available upon request and to preserve for the periods
prescribed in Rule 3la-2 any records relating to services
provided under this Agreement which are required to be maintained
by Rule 3la-1.
Section 20. In addition to the services as Transfer
Agent and Dividend Disbursing Agent as above set forth, the
Transfer Agent will perform other services for the Fund as agreed
from time to time, including but not limited to, preparation of
and mailing Federal Tax Information Forms, mailing semi-annual
reports of the Fund, preparation of an annual list of
Shareholders, and mailing notices of Shareholders' meetings,
proxies and proxy statements.
Section 21. Nothing contained in this Agreement is
intended to or shall require the Transfer Agent in any capacity
hereunder, to perform any functions or duties on any holiday, day
of special observance or any other day on which the Transfer
Agent or the New York Stock Exchange are closed unless so
required by law, and functions or duties normally scheduled to be
performed on such days shall be performed on, and as of, the next
business day on which both the New York Stock Exchange and the
Transfer Agent are open.
Section 22. The Fund agrees to pay the Transfer
Agent compensation for its services and to reimburse it for
expenses, as set forth in Schedule A attached hereto, or as shall
be set forth in amendments to such Schedule approved by the Fund
and the Transfer Agent.
Section 23. The Transfer Agent, in acting for
Planholders, or in any capacity set forth in this Agreement,
shall not be personally liable for any taxes, assessments, or
governmental charges which may be levied or assessed on any basis
whatsoever in connection with the administration of the Plans,
except for taxes assessed against it in its corporate capacity
arising out of its compensation hereunder.
Section 24. The Fund shall indemnify the Transfer
Agent and save it harmless from any and against any and all
actions, suits and claims brought by any party other than the
Fund arising directly or indirectly out of or in connection with
its performance under this Agreement as Transfer Agent or
Dividend Disbursing Agent and from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities incurred by the Transfer Agent in connection with
any such action, suit, or claim. The Transfer Agent shall not be
under any obligation to prosecute or to defend any action, suit
or claim arising out of or in connection with its performance
under this Agreement as Transfer Agent or Dividend Disbursing
Agent which, in the opinion of its counsel, may involve it in
expense or liability, and the Fund shall furnish the Transfer
Agent with satisfactory indemnity against such expense or
liability, and upon request of the Transfer Agent the Fund shall
assume the entire defense of any action, suit, or claim subject
to the foregoing indemnity. Notwithstanding the foregoing,
however, no indemnification will be provided by the Fund to the
Transfer Agent if the Transfer Agent (1) shall fail to give the
Fund adequate notice of, and reasonable opportunity to assume,
the defense of any such action, suit, or claim, in the name of
the Fund or the Transfer Agent or both; or (2) shall be found to
be liable in such action, suit or claim due to its negligence or
willful misconduct.
Without limitation of the foregoing:
(a) The Transfer Agent may rely upon the advice
of the Fund, or of counsel, who may be counsel for the Fund or
counsel for the Transfer Agent and upon statements of
accountants, brokers and other persons reasonably believed by it
in good faith to be expert in the matters upon which they are
consulted and for any actions taken in good faith upon such
statements, the Transfer Agent shall not be liable to anyone.
(b) The Transfer Agent shall not be liable for
any action taken in good faith reliance upon any Written
Instruction or certified copy of any resolution of the Board of
Directors of the Fund, and the Transfer Agent may rely upon the
genuineness of any such document or copy thereof reasonably
believed in good faith by the Custodian to have been validly
executed.
(c) The Transfer Agent may rely and shall be
protected in acting upon any signature, instruction, request,
letter of transmittal, certificate, opinion of counsel,
statement, instrument, report, notice, consent, order, or other
paper or document reasonably believed by it to be genuine and to
have been signed or presented by the Fund or other proper party
or parties.
Section 25. The Transfer Agent is authorized, upon
receipt of Written Instructions from the Fund, to make payment
upon redemption of Shares without a signature guarantee. The
Fund hereby agrees to indemnify and hold The Transfer Agent, its
successors and assigns, harmless of and from any and all
expenses, damages, claims, suits, liabilities, actions, demands,
losses whatsoever arising out of or in connection with a payment
by the Transfer Agent upon redemption of Shares without a
signature guarantee pursuant to proper Written Instructions if
such expense, damage, claim, suit, etc. is not the result of
negligence or willful misconduct by the Transfer Agent and upon
the request of the Transfer Agent the Fund shall assume the
entire defense of any action, suit or claims subject to the
foregoing indemnity. The Transfer Agent shall notify the Fund of
any such action, suit or claim within 10 days after receipt by
the Transfer Agent of notice thereof.
Section 26. The Fund shall promptly cause to be
turned over to the Transfer Agent (i) an accurate list of
Shareholders of each Series of the Fund showing the proper
registered address and number of Shares of each Series owned and
whether such shares are represented by outstanding Share
Certificates or by non-certificated share accounts, (ii) all
shareholder records, files, and other materials necessary or
appropriate for proper performance of the functions assumed by
the Transfer Agent under this Agreement (hereinafter called
"Materials") (iii) all records relating to the Plan, including
original applications signed by Planholders and original plan
accounts recording payments, deductions, reinvestments,
withdrawals and liquidations and hereby agrees to indemnify and
hold the Transfer Agent, its successors and assigns, harmless of
and from any and all expenses, damages, claims, suits,
liabilities, actions, demand and losses whatsoever arising out of
or in connection with any error, omission, inaccuracy or other
deficiency of such Materials, or out of the failure of the Fund
to provide any portion of such or to provide any information
needed by the Transfer Agent to knowledgeably perform its
functions unless such is due to the negligence or misconduct of
the Transfer Agent.
Section 27. The following terms, for purposes of
this Agreement or any amendment or supplement thereto, shall have
the meanings herein specified unless the context otherwise
requires:
Plan: The term plan shall include such investment
plan, dividends or capital gains reinvestment plans, systematic
withdrawal plans or other types of plans set forth in the
prospectus of the Fund, which the Fund may from time to time
adopt and make available to its Shareholders, including plans or
accounts by self-employed individuals or partnerships.
Planholder: The term Planholder shall mean a
Shareholder who, at the time of reference, is participating in a
Plan, and shall include any underwriter, representative or
broker-dealer.
Section 28. This Agreement may be amended from time
to time by a supplemental agreement executed by the Fund and the
Transfer Agent.
Section 29. Either the Fund or the Transfer Agent
may give 60 days' written notice to the other of the termination
of this Agreement, such termination to take effect at the time
specified in the notice.
Section 30. Any notice or other communication
required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person
or sent by first class mail, postage prepaid, to the respective
parties as follows:
If to the Fund:
The Rightime Fund, Inc.
The Benson East office Plaza
Jenkintown, PA 19046
Attention: David J. Rights
If to the Transfer Agent:
Lincoln Investment Planning Inc.
Dept. F, Suite 1000
The Benson East Office Plaza
Jenkintown, PA 19046
Attention: Thomas Forst
Section 31. The Fund represents and warrants to the
Transfer Agent that the execution and delivery of this Transfer
and Dividend Disbursing Agency Agreement by the undersigned
officers of the Fund has been duly and validly authorized by
resolution of the Board of Directors of the Fund.
Section 32. The Transfer Agent may from time to time
in its sole discretion, delegate some or all of its duties
hereunder to other parties, which shall perform such functions as
the agent of the Transfer Agent. To the extent of such
delegation, the term "Transfer Agent" in this Agreement shall be
deemed to refer to both the Transfer Agent and to such other
parties, or to either of them, as the context may indicate. In
each provision of this Agreement limiting the liabilities or the
delegations of the Transfer Agent, or providing indemnification
or protection of the Transfer Agent, the term "Transfer Agent"
shall include such other parties. The Transfer Agent shall not
be relieved of any liabilities or obligation under the Agreement
in connection with such delegation of duties.
Section 33. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be
deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
Section 34. This Agreement shall extend to and shall
be binding upon the parties hereto and their respective
successors and assigns; provided, however, that this Agreement
shall not be assignable by the Fund without the written consent
of the Transfer Agent or by the Transfer Agent without the
written consent of the Fund, authorized or approved by a
resolution of its Board of Directors.
Section 35. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers and
their corporate seals hereunto duly affixed and attested, as of
the day and year first above written.
THE RIGHTIME FUND, INC.
By:
(SEAL)
Attest
LINCOLN INVESTMENT PLANNING INC.
By:
(SEAL)
Attest
Schedule A
FEE SCHEDULE
Attached to and part of
Transfer Agent/Dividend Disbursing Agent Agreement
dated September 25, 1986
between The Rightime Fund, Inc.
and Lincoln Investment Planning Inc.
Transfer Agent, Dividend Disbursing Agent
$10.00 per Rightime Fund Series Shareholder account annually.
$12.50 per Rightime Government Securities Series Shareholder
account annually.
Opening new accounts
Processing all payments
Issuing and canceling certificates
Processing partial and complete redemptions Regular and
legal transfers of accounts
Mailing up to four reports; quarterly and annually
Processing up to 4 dividends) and 1 capital gain
distribution annually, if any. This includes mailing of
cash dividends and/or preparing statements to shareholders
for reinvested distribution
Blue Sky Reports. This indicates shares sold to investors
in various States. There is also a "warning system" that
informs the Fund when they are within a certain percentage
of the shares registered in the State, or within a certain
time period when the registration statement is up for
renewal.
Account Maintenance:
1. Maintaining shareholder records of whole and fractional
unissued ("Book") shares
2. Changing shareholders' addresses
3. Daily or periodic reports, on number of shares,
accounts
4. Addressing and tabulating annual proxy cards
5. Supplying an annual stockholder list
6. Preparation of Federal Tax Information forms 1042S
7. Replying to shareholder correspondence other than for
Fund performance or Fund-related inquiries
8. Processing each returned exemption certificate
(updating shareholder file and filing the certificate).
In addition, the Fund will reimburse the Transfer Agent
monthly for all out-of-pocket expenses, including, but not
limited to postage, stationery, retention of records, mailings,
insurance, conversion from a prior Transfer Agent and other
expenses as mutually agreed to by the parties.
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this 26th day of March, 1985 between
The Rightime Fund, Inc., a Maryland corporation (the "Fund"), and
Rightime Administrators, Inc., a Pennsylvania corporation (the
"Administrator").
BACKGROUND
The Fund is a diversified open-end management investment company
registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Fund has been organized for the purpose of investing
its funds in securities and has retained an investment advisor for this
purpose. The Fund desires to avail itself of the facilities available
to the Administrator with respect to the administration of its day-to-
day affairs, and the Administrator is willing to furnish such
administrative services on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Fund hereby appoints the Administrator to administer its
affairs, subject to the overall supervision of the Board of Directors of
the Fund, for the period and on the terms set forth in this Agreement.
The Administrator hereby accepts such appointment and agrees during such
period to render the services herein described and to assume the
obligations set forth herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Fund, the Administrator shall administer the Fund's affairs and, in
connection therewith, shall furnish the Fund with office facilities, and
shall be responsible for (i) maintaining the Fund's books and records
(other than financial or accounting books and records or those being
maintained by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing
such applications and reports as may be necessary to register or
maintain the Fund's registration and/or the registration of its shares
under the securities or "blue-sky" laws of the various states (the Fund
agreeing to pay all filing fees or other similar fees in connection
therewith); (v) responding to all inquiries or other communications of
shareholders and broker-dealers, if any, which are directed to the
Administrator, or, if any such inquiry or communication is more properly
to be responded to by the Fund's transfer agent, custodian, distributor,
or accounting services agents, overseeing their response thereto; (vi)
overseeing all relationships between the Fund and its custodian,
transfer agent, distributor, and accounting services agents, including
the negotiation of agreements in relation thereto and the supervision of
the performance of such agreements; and (vii) authorizing and directing
any of the Administrator's directors, officers and employees who may be
elected as directors or officers of the Fund to serve in the capacities
in which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Fund authorizes the Administrator to appoint and contract with other
parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
Officers of the Fund, and any such contract shall be countersigned by
the Fund to confirm such ratification. The Fund represents that it will
cooperate with the Administrator and any other parties retained by the
Administrator under this Agreement in the performance of services to be
rendered by the Administrator or any other parties retained by the
Administrator. The Fund further represents that it will indemnify and
hold the Administrator harmless from and against any loss, liability and
expense, including any legal expenses arising from failure of the Fund
to so cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator
under this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Fund, and (iv) for both mail and wire orders,
the cashiering function in connection with the issuance and redemption
of the Fund's securities and (v) all other expenses related to the
performance of duties by the custodian for the Fund;
(e) The fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and-all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .60 of one percent (.60%)
of the average daily net assets of the Fund (specifically .05% per month
of the average daily net assets)..This fee will be computed daily and
paid monthly within ten (10) business days after the last day of each
month. This fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage
commissions, distribution fees, litigation and indemnification expenses
and other extraordinary expenses not incurred in the ordinary course of
the Fund's business) exceed the limits set by applicable regulation of
state securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of,law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. The Fund agrees to indemnify and hold the Administrator
harmless from any and all loss, liability, and expense, including any
legal expenses, arising out of the Administrator's performance, or
status, or any act or omission of the Administrator, or that of any
party retained by the Administrator to perform services under this
Agreement, unless such loss, liability, or expense is due to the willful
misfeasance, bad faith or gross negligence of the Administrator. The
Fund further agrees to indemnify and hold any party retained by the
Administrator to perform services under this Agreement harmless from any
and all loss, liability, and expense, including any legal expenses
arising out of such party Is performance, or status, or any act or
omission of such party, unless such loss, liability or expense is due to
the willful misfeasance, bad faith or gross negligence of such party.
Any person employed by the Administrator, who may be or become an
employee of and paid by any other entity affiliated with the Fund, such
as the investment advisor, distributor, or custodian for the Fund, shall
be deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is-specifically approved at least annually by the Board of Directors of
the Fund provided, however, that this Agreement may be terminated by:the
Fund 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
securities (as defined in the 1940 Act) of the-Fund, or by the
Administrator at any time, without the payment of any penalty, on not
more than sixty (60) days' nor less than thirty (30) days' written
notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Fund to engage in any other
business or to devote his time and attention in part to the management
or other aspects of any business, whether of a similar or a dissimilar
nature, nor limit or restrict the right of the Administrator to engage
in any other business or to render services of any kind to any other
corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to stockholders, sales literature or other material
provided for distribution to stockholders of the Fund or the public,
which refer in any way to the Administrator, prior to use thereof and
not to use such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as may be
mutually agreed) after receipt thereof. In the event of termination of
this Agreement, the Fund will continue to furnish to the Administrator
copies of any of the above-mentioned materials which refer in any way to
the Administrator. The Fund shall furnish or otherwise make available
to the Administrator such other information relating to the business
affairs of the Fund as the Administrator at any time, or from time to
time, reasonably requests in order to discharge its obligations
hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the panties hereto have caused this instrument to
be executed by their officers designated below as -of the day and year
first above written
THE RIGHTIME FUND, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
199419.1
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this day of 1986 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for the Rightime Government Securities Series (the
"Fund"), and Rightime Administrators, Inc., a Pennsylvania corporation
(the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to Administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker/dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. On behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission,, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .50 of one percent (.50%)
of the average daily net assets of the Fund (specifically .041% per
month of the average daily net assets). This fee will be computed daily
and paid monthly within ten (10) business days after the last day of
each month. This fee shall be prorated for any fraction of a month at
the commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation.of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. On behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually by the Board of Directors of
the Corporation provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund,
or by the Administrator at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
provided for distribution to stockholders of the Fund or the public,
which refer in any way to the Administrator, prior to use thereof, and
not to use such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as may be
mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
199420.1
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this day of , 1987 by
and between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for the Rightime Blue Chip Fund Series (the "Fund"), and
Rightime Administrators, Inc., a Pennsylvania corporation (the
"Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker-dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
Officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. on behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (i.ii) the pricing
of the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .50 of one percent (.50%)
of the average daily net assets of the Fund (specifically 1/24th of 1%
per month of the average daily net assets). This fee will be computed
daily and paid monthly within ten (10) business days after the last day
of each month. This fee shall be prorated for any fraction of a month
at the commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. On behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually by the Board of Directors of
the Corporation provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund,
or by the Administrator at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
provided for distribution to stockholders of the Fund or the public,
which refer in any way to the Administrator, prior to use thereof, and
not to use such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as may be
mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
199421.1
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this 1st day of March, 1990 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for The Rightime Social Awareness Fund Series (the
"Fund"), and Rightime Administrators, Inc., a Pennsylvania corporation
(the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker-dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. On behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders, and directors,
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .50 of one percent (.50%)
of the average daily net assets of the Fund (specifically 1/24th of 1%
per month of the average daily net assets). This fee will be computed
daily and paid monthly within ten (10) business days after the last day
of each month. This fee shall be prorated for any fraction of a month
at the commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. on behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually by the Board of Directors of
the Corporation provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund,
or by the Administrator at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
provided for distribution to stockholders of the Fund or the public,
which refer in any way to the Administrator, prior to use thereof, and
not to use such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as may be
mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
---------------------
President
[Corporate Seal] Attest:
-----------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
President
[Corporate Seal] Attest:
-----------------
Secretary
199426.1
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this day of November, 1991 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for The Rightime Mid-Cap Fund Series (the "Fund"), and
Rightime Administrators, Inc., a Pennsylvania corporation (the
"Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the 111940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of
shareholders and broker-dealers, if any, which are directed to the
Administrator, or, if any such inquiry or communication is more properly
to be responded to by the Fund's transfer agent, custodian, distributor,
or accounting services agents, overseeing their response thereto; (vi)
overseeing all relationships between the Fund and its custodian,
transfer agent, distributor, and accounting services agents, including
the negotiation of agreements in relation thereto and the supervision of
the performance of such agreements; and (vii) authorizing and directing
any of the Administrator's directors, officers and employees who may be
elected as directors or officers of the Corporation to serve in the
capacities in which they are elected. All services to be furnished by
the Administrator under this Agreement may be furnished through the
medium of any such directors, officers or employees of the
Administrator. The Corporation authorizes the Administrator to appoint
and contract with other parties to perform certain of the services to be
furnished by the Administrator under this Agreement, subject to
ratification by the Officers of the Corporation and any such contract
shall be countersigned by the Fund to confirm such ratification. The
Corporation, on behalf of the Fund, represents that it will cooperate
with the Administrator and any other parties retained by the
Administrator under this Agreement in the performance of services to be
rendered by the Administrator or any other parties retained by the
Administrator. On behalf of the Fund, the Corporation further
represents that it will indemnify and hold the Administrator harmless
from and against any loss, liability and expense, including any legal
expenses arising from failure of the Fund to so cooperate with the
Administrator and other parties retained by the Administrator to perform
services under this Agreement, or arising from any error, omission,
inaccuracy or other deficiency in information provided by the Fund, or
the failure of the Fund to provide any portion of such or any
information needed by the Administrator or any parties retained by the
Administrator to perform the services to be rendered under this
Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) The fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .50 of one percent (.50%)
of the average daily net assets of the Fund (specifically 1/24th of 1%
per month of the average daily net assets). This fee will be computed
daily and paid monthly within ten (10) business days after the last day
of each month. This fee shall be prorated for any fraction of a month
at the commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. on behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually by the Board of Directors of
the Corporation provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund,
or by the Administrator at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
provided for distribution to stockholders of the Fund or the public,
which refer in any way to the Administrator, prior to use thereof, and
not to use such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as may be
mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
---------------------
President
[Corporate Seal] Attest:
-----------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
President
[Corporate Seal] Attest:
-----------------
Secretary
199427.1
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103
Direct Dial: (215) 564-8024
December 23, 1996
The Rightime Fund, Inc.
The Forst Pavilion, Suite 3000
218 Glenside Avenue
Wyncote, Pa. 19095-1594
Gentlemen:
You have informed us that, in accordance with Rule 24f-2 (the
"Rule") under the Investment Company Act of 1940, as amended, (the "1940
Act"), The Rightime Fund, Inc. (the "Company") a Maryland corporation,
intends to file a Rule 24f-2 Notice (the "Notice") with the United
States Securities and Exchange Commission. The Notice will recite that
pursuant to the Rule the Fund, during the fiscal year ending October 31,
1996, sold shares of common stock of its Rightime Fund Series, Rightime
Government Securities Fund series, Rightime Blue Chip Fund Series,
Rightime Social Awareness Fund Series, and Rightime MidCap Fund Series
with an aggregate public offering price of $57,551,588 (not including
$93,153,393 of shares issued in connection with dividend reinvestment
plans which are reported on the Notice for purposes of the fee
computation table). The Notice will be filed to make definite the
registration of the shares of common stock sold by each Series of the
Company under the Securities Act of 1933 (the "1933 Act"), pursuant to
the Rule during such period. You have also informed us that all of such
shares were issued in accordance with the provisions relating thereto in
the registration statement of the Company under the 1933 Act as such
registration statement was currently in effect during the period.
We have acted as legal counsel to the Company during the period of
time referred to above and, as such, have reviewed the Articles of
Incorporation of the company; various Articles Supplementary
establishing the series; the By-Laws; the
The Rightime Fund, Inc.
December 30, 1996
Page 2
registration statements under
the 1940 and 1933 Acts and such minutes of the corporate proceedings and
other documents as we deem material to our opinion.
Based on the foregoing, we are of the opinion that all of the
shares of common stock of the company described in the Rule 24f-2 Notice
as having been sold pursuant to the Rule during the period were fully
paid, non-assessable and legally issued shares of common stock of the
Company.
We hereby consent to the filing of this opinion with the United
States Securities and Exchange Commission as an exhibit or accompaniment
to the aforementioned Rule 24f-2 Notice and as an exhibit to the
Company's registration statement under the 1933 Act and to the reference
to us in the prospectus of the Company as legal counsel who have passed
upon the legality of the offering of the company's common stock. We
also consent to the filing of this opinion with the securities
regulatory agencies of any states or other jurisdictions in which the
common stock of the Company is offered for sale.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
Steven M. Felsenstein
By:-------------------------
Steven M. Felsenstein
A Partner
SMF/nk
cc: Mr. David J. Rights, President
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use of our report dated December 2, 1996 on the
financial statements and financial highlights for the periods indicated
thereon of The Rightime Fund, The Rightime Government Securities Fund,
The Rightime Blue Chip Fund, The Rightime Social Awareness Fund, and The
Rightime MidCap Fund, each a series of shares of The Rightime Fund, Inc.
Such financial statements and financial highlights appear in the 1996
Annual Report to Shareholders which is included in the Statement of
Additional Information filed in Post-Effective Amendment Number 22 to
the Registration Statement on Form N-1A of The Rightime Fund, Inc. We
also consent to the references to our firm in such registration
Statement and Prospectus.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 24, 1997
DISTRIBUTION PLAN OF
THE RIGHTIME FUND, INC.
WHEREAS, The Rightime Fund, Inc. (the "Fund") engages in business as
an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund intends to act as a distributor of its shares of
capital stock as defined in Rule 12b-1 under the Act, and desires to
adopt a Distribution Plan pursuant to such Rule, and the Board of
Directors of the Fund has determined that there is a reasonable
likelihood that adoption of this Distribution Plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Fund hereby adopts this Distribution Plan (the
"Plan") in accordance with Rule 12b-1 under the Act and containing the
following terms and conditions:
1. The Fund may finance activities which are primarily intended
to result in the sale of its shares in accordance with this Plan. The
expenses of such activities ("Distribution Expenses") shall not exceed
one point two percent (1.2%) per annum of the Fund's average daily net
assets.
In the event the Board of Directors deems it desirable to allow
Distribution Expenses to exceed such limit the Administrator, Rightime
Administrators, Inc. ("Administrator"), may advance the required funds
to the Fund with the understanding that such advances will be repaid by
the Fund at such time or times deemed appropriate by the Administrator
out of any excess of funds created by Distribution expenses being lower
than one point two percent (1.2%) of net assets during the fiscal year
in which the advance occurred, but that such advances will not otherwise
constitute a liability to the Fund.
2. The Distribution Expenses provided for in paragraph 1 of this
Plan may be spent by the Fund on any activities primarily intended to
result in the sale of the Fund's shares, including, but not limited to,
compensation paid to and expenses incurred by officers, directors,
employees or sales representatives of the Fund, or broker-dealers or
other third parties, in consideration of their promotional and
distributional services, which services may include assistance in the
servicing of shareholder accounts produced by third parties, and may
include promotional, travel, entertainment and telephone expenses, the
printing of prospectuses and reports for other than existing
shareholders, preparation and distribution of sales literature, and
advertising of any type.
3. This Plan shall not take effect until it has been approved by
(a) a vote of at least a majority of the outstanding voting securities
of the Fund and (b) a vote of the Board of Directors of the Fund,
including the affirmative vote of at least a majority of those Directors
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of the
Plan or in agreements related to the Plan (the "Rule 12b-1 Directors"),
cast in person at a meeting called for voting on the Plan.
4. Any agreements related to this Plan shall be in writing, the
form thereof must be approved by the Board of Directors (including the
disinterested Directors), and may be terminated at any time in the
manner provided for termination of this Plan in paragraph 7 below.
5. This Plan and agreements hereunder shall continue in effect
for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph
3(b).
6. The persons authorized to direct the disposition of
Distribution Expenses paid or payable by the Fund pursuant to this Plan
or any related agreement shall be the President of the Fund or his
designee. The President shall provide to the Fund's Directors and the
Directors shall review, at least quarterly, a written report of the
Distribution Expenses so expended and the purposes for which such
expenditures were made.
7. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding
voting securities of the Fund.
8. This Plan may not be amended to increase materially the limit
upon Distribution Expenses provided in paragraph 1 or to materially
change the nature of such Distribution Expenses provided in paragraph 2
hereof unless such amendment is approved in the manner provided for in
paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Fund shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or of such reports, as the case may be, the first two years
in an easily accessible place.
11. It is the opinion of the Fund's Directors and Officers that
the following are not expenses primarily intended to result in the sale
of shares issued by the Fund: Fees and expenses of registering the Fund
as a broker-dealer or of registering an agent of the Fund under federal
or state laws regulating the sale of securities; fees of registering, at
the request of the Fund, agents or representatives of a principal
underwriter of the Fund under federal or state laws regulating the sale
of securities, provided that no sales commission or "load" is charged on
sales of shares of the Fund; and fees and expenses of preparing and
setting in type the Fund's registration statement under the Securities
Act of 1933. Should such expenses be deemed by a court or agency having
jurisdiction to be expenses primarily intended to result in the sale of
shares issued by the Fund, they shall be considered to be expenses
contemplated by and included in this Distribution Plan but not subject
to the limitation prescribed in paragraph 1 hereof.
IN WITNESS WHEREOF, the Fund has executed this Distribution Plan
on the day and year set forth below in Philadelphia, Pennsylvania.
THE RIGHTIME FUND, INC.
By:
----------------------
Date:
--------------------
Attest:
- ------------------------
Secretary
199622.1
AMENDMENT NO. 1
to
DISTRIBUTION PLAN OF
THE RIGHTIME FUND
WHEREAS, The Rightime Fund, Inc. (the "Corporation") has adopted a
Distribution Plan (the "Plan") for The Rightime Fund (the "Fund") in
accordance with Rule 12b-1 under the Investment Company Act of 1940;
WHEREAS, the National Association of Securities Dealers, Inc. has
proposed certain regulations governing mutual fund asset-based sales
charges (the "Regulations"); and
WHEREAS, the Corporation seeks to clarify references in the Plan in
view of defined terms contained in the Regulations;
NOW THEREFORE, the Corporation hereby amends the Plan by deleting the
existing first paragraph of Section 1 and inserting in lieu thereof the
following:
1. The Fund may finance activities which are primarily
intended to result in the sale of its shares in accordance
with this Plan. The expenses of such activities
("Distribution Expenses") shall not exceed one point two
percent (1.2%) per annum of the Fund's average daily net
assets, including any amounts not to exceed one quarter of
one percent (0.25%), paid by the Fund for personal or
account services which are categorized as a service fee as
defined by the National Association of Securities Dealers
(NASD).
IN WITNESS WHEREOF, the Corporation has executed this Amendment No. 1
to the Plan on behalf of the Fund on the day and year set forth below.
THE RIGHTIME FUND, INC.
Attest: By:
------------------------ ---------------------------
Edward S. Forst, Sr. David J. Rights, President
Secretary
------------------------------
(Date)
199626.1
DISTRIBUTION PLAN OF
THE RIGHTIME GOVERNMENT SECURITIES SERIES
WHEREAS, The Rightime Fund, Inc. (the "Corporation") engages in
business as an open-end management investment company and is registered
as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, The Rightime Government Securities Series (the "Fund") is a
series of the Corporation operated as an open-end management investment
company; and
WHEREAS, the Fund intends to act as a distributor of its shares of
capital stock as defined in Rule 12b-1 under the Act, and desires to
adopt a Distribution Plan pursuant to such Rule, and the Board of
Directors of the Corporation has determined that there is a reasonable
likelihood that adoption of this Distribution Plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Corporation hereby adopts this Distribution Plan
for the Fund (the "Plan") in accordance with Rule 12b-1 under the Act
and containing the following terms and conditions:
1. The Fund may finance activities which are primarily intended
to result in the sale of its shares in accordance with this Plan. The
expenses of such activities ("Distribution Expenses") shall not exceed
point six percent (0.5%) per annum of the Fund's average daily net
assets.
In the event the Board of Directors deems it desirable to allow
Distribution Expenses to exceed such limit the Administrator, Rightime
Administrators, Inc. ("Administrator") , may advance the required funds
to the Fund with the understanding that such advances will be repaid by
the Fund at such time or times deemed appropriate by the Administrator
out of any excess of funds created by Distribution expenses being lower
than point six percent (0.5%) of net assets during the fiscal year in
which the advance occurred, but that such advances will not otherwise
constitute a liability to the Fund.
2. Distribution Expenses provided for in paragraph 1 of this
Plan may be spent by the Fund on any activities primarily intended to
result in the sale of the Fund's shares, including, but not limited to,
compensation paid to and expenses incurred by officers, directors,
employees or sales representatives of the Fund, or broker-dealers or
other third parties, in consideration of their promotional and
distributional services, which services may include assistance in the
servicing of shareholder accounts produced by third parties, and may
include promotional, travel, entertainment and telephone expenses, the
printing of prospectuses and reports for other than existing
shareholders, preparation and distribution of sales literature, and
advertising of any type.
3. Plan shall not take effect until it has been approved by (a)
a vote of at least a majority of the outstanding voting securities of
the Fund and (b) a vote of the Board of Directors of the Corporation,
including the affirmative vote of at least a majority of those Directors
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of the
Plan or in agreements related to the Plan (the "Rule 12b-1 Directors"),
cast in person at a meeting called for voting on the Plan.
4. Agreements related to this Plan shall be in writing, the form
thereof must be approved by the Board of Directors (including the
disinterested Directors), and may be terminated at any time in the
manner provided for termination of this Plan in paragraph 7 below.
5. Plan and agreements hereunder shall continue in effect for so
long as such continuance is specifically approved at least annually in
the manner provided for approval of this Plan in paragraph 3(b).
6. The persons authorized to direct the disposition of
Distribution Expenses paid or payable by the Fund pursuant to this Plan
or any related agreement shall be the President of the Corporation or
his designee. The President shall provide to the Corporation's
Directors and the Directors shall review, at least quarterly, a written
report of the Distribution Expenses so expended and the purposes for
which such expenditures were made.
7. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding
voting securities of the Fund.
8. This Plan may not be amended to increase materially the limit
upon Distribution Expenses provided in paragraph 1 or to change
materially the nature of such Distribution Expenses provided in
paragraph 2 hereof unless such amendment is approved in the manner
provided for in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Fund shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or of such reports, as the case may be, the first two years
in an easily accessible place.
11. It is the opinion of the Corporation's Directors and
Officers that the following are not expenses primarily intended to
result in the sale of shares issued by the Fund: fees and expenses of
registering the Fund as a broker-dealer or of registering an agent of
the Fund under federal or state laws regulating the sale of securities;
fees of registering, at the request of the Fund, agents or
representatives of a principal underwriter of the Fund under federal or
state laws regulating the sale of securities, provided that no sales
commission or "load" is charged on sales of shares of the Fund; and fees
and expenses of preparing and setting in type the Fund's registration
statement under the Securities Act of 1933. Should such expenses be
deemed by a court or agency having jurisdiction to be expenses primarily
intended to result in the sale of shares issued by the Fund, they shall
be considered to be expenses contemplated by and included in this
Distribution Plan but not subject to the limitation prescribed in
paragraph 1 hereof.
IN WITNESS WHEREOF, the Corporation has executed this Distribution
Plan on behalf of the Fund on the day and year set forth below in
Philadelphia, Pennsylvania.
THE RIGHTIME FUND, INC.
By:
----------------------
Date:
--------------------
Attest:
- ------------------------
Secretary
199623.1
AMENDMENT NO. 1
to
DISTRIBUTION PLAN OF
THE RIGHTIME GOVERNMENT SECURITIES FUND
WHEREAS, The Rightime Fund, Inc. (the "Corporation") has adopted a
Distribution Plan (the "Plan") for The Rightime Government Securities
Fund (the "Fund") in accordance with Rule 12b-1 under the Investment
Company Act of 1940;
WHEREAS, the National Association of Securities Dealers, Inc. has
proposed certain regulations governing mutual fund asset-based sales
charges (the "Regulations"); and
WHEREAS, the Corporation seeks to clarify references in the Plan in
view of defined terms contained in the Regulations;
NOW THEREFORE, the Corporation hereby amends the Plan by deleting the
existing first paragraph of Section 1 and inserting in lieu thereof the
following:
1. The Fund may finance activities which are primarily
intended to result in the sale of its shares in accordance
with this Plan. The expenses of such activities
("Distribution Expenses") shall not exceed point five
percent (.5%) per annum of the Fund's average daily net
assets, including any amounts not to exceed one quarter of
one percent (0.25%), paid by the Fund for personal or
account services which are categorized as a service fee as
defined by the National Association of Securities Dealers
(NASD).
IN WITNESS WHEREOF, the Corporation has executed this Amendment No. 1
to the Plan on behalf of the Fund on the day and year set forth below.
THE RIGHTIME FUND, INC.
Attest: By:
------------------------ ---------------------------
Edward S. Forst, Sr. David J. Rights, President
Secretary
------------------------------
(Date)
199634.1
DISTRIBUTION PLAN OF
THE RIGHTIME BLUE CHIP FUND SERIES
WHEREAS, The Rightime Fund, Inc. (the "Corporation") engages in
business as an open-end management investment company and is registered
as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, The Rightime Blue Chip Fund Series (the "Fund") is a series
of the Corporation operated as an open-end management investment
company; and
WHEREAS, the Fund intends to act as a distributor of its shares of
capital stock as defined in Rule 12b-1 under the Act, and desires to
adopt a Distribution Plan pursuant to such Rule, and the Board of
Directors of the Corporation has determined that there is a reasonable
likelihood that adoption of this Distribution Plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Corporation hereby adopts this Distribution Plan
for the Fund (the "Plan") in accordance with Rule 12b-I under the Act
and containing the following terms and conditions:
1. The Fund may finance activities which are primarily intended
to result in the sale of its shares in accordance with this Plan. The
expenses of such activities ("Distribution Expenses") shall not exceed
.90% per annum of the Fund's average daily net assets.
In the event the Board of Directors deems it desirable to allow
Distribution Expenses to exceed such limit the Administrator, Rightime
Administrators, Inc. ("Administrator"), may advance the required funds
to the Fund with the understanding that such advances will be repaid by
the Fund at such time or times deemed appropriate by the Administrator
out of any excess of funds created by Distribution expenses being lower
than .90% of net assets during the fiscal year in which the advance
occurred, but that such advances will not otherwise constitute a
liability to the Fund.
2. The Distribution Expenses provided for in paragraph 1 of this
Plan may be spent by the Fund on any activities primarily intended to
result in the sale of the Fund's shares, including, but not limited to,
compensation paid to and expenses incurred by officers, directors,
employees or sales representatives of the Fund, or broker-dealers or
other third parties, in consideration of their promotional and
distributional services, which services may include assistance in the
servicing of shareholder accounts produced by third parties, and may
include promotional, travel, entertainment and telephone expenses, the
printing of prospectuses and reports for other than existing
shareholders., preparation and distribution of sales literature, and
advertising of any type.
3. This Plan shall not take effect until it has been approved by
(a) a vote of at least a majority of the outstanding voting securities
of the Fund and (b) a vote of the Board of Directors of the Corporation,
including the affirmative vote of at least a majority of those Directors
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of-the
Plan or in agreements related to the Plan (the "Rule 12b-1 Directors"),
cast in person at a meeting called for voting on the Plan.
4. Any agreements related to this Plan shall be in writing, the
form thereof must be approved by the Board of Directors (including the
disinterested Directors), and may be terminated at any time in the
manner provided for termination of this Plan in paragraph 7 below.
5. This Plan and agreements hereunder shall continue in effect
for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph
3(b).
6. The persons authorized to direct the disposition of
Distribution Expenses paid or payable by the Fund pursuant to this Plan
or any related agreement shall be the President of the Corporation or
his designee. The President shall provide to the Corporation's
Directors and the Directors shall review, at least quarterly, a written
report of the Distribution Expenses so expended and the purposes for
which such expenditures were made.
7. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding
voting securities of the Fund.
8. This Plan may not be amended to increase materially the limit
upon Distribution Expenses provided in paragraph 1 or to change
materially the nature of such Distribution Expenses provided in
paragraph 2 hereof unless such amendment is approved in the manner
provided for in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Fund shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or of such reports, as the case may be, the first two years
in an easily accessible place.
11. It is the opinion of the Corporation's Directors and
Officers that the following are not expenses primarily intended to
result in the sale of shares issued by the Fund: fees and expenses of
registering the Fund as a broker-dealer or of registering an agent of
the Fund under federal or state laws regulating the sale of securities;
fees of registering, at the request of the Fund, agents or
representatives of a principal underwriter of the Fund under federal or
state laws regulating the sale of securities, provided that no sales
commission or "load" is charged on sales of shares of the Fund; and fees
and expenses of preparing and setting in type the Fund's registration
statement under the Securities Act of 1933. Should such expenses be
deemed by a court or agency having jurisdiction to be expenses primarily
intended to result in the sale of shares issued by the Fund, they shall
be considered to be expenses contemplated by and included in this
Distribution Plan but not subject to the limitation prescribed in
paragraph 1 hereof.
IN WITNESS WHEREOF, the Corporation has executed this Distribution
Plan on behalf of the Fund on the day and year set forth below in
Philadelphia, Pennsylvania.
THE RIGHTIME FUND, INC.
By:
----------------------
Date:
--------------------
Attest:
- -------------------
Secretary
199624.1
AMENDMENT NO. 1
to
DISTRIBUTION PLAN OF
THE RIGHTIME BLUE CHIP FUND
WHEREAS, The Rightime Fund, Inc. (the "Corporation") has adopted a
Distribution Plan (the "Plan") for The Rightime Blue Chip Fund (the
"Fund") in accordance with Rule 12b-1 under the Investment Company Act
of 1940;
WHEREAS, the National Association of Securities Dealers, Inc. has
proposed certain regulations governing mutual fund asset-based sales
charges (the "Regulations"); and
WHEREAS, the Corporation seeks to clarify references in the Plan in
view of defined terms contained in the Regulations;
NOW THEREFORE, the Corporation hereby amends the Plan by deleting the
existing first paragraph of Section 1 and inserting in lieu thereof the
following:
1. The Fund may finance activities which are primarily
intended to result in the sale of its shares in accordance
with this Plan. The expenses of such activities
("Distribution Expenses") shall not exceed point nine
percent (.9%) per annum of the Fund's average daily net
assets, including any amounts not to exceed one quarter of
one percent (0.25%), paid by the Fund for personal or
account services which are categorized as a service fee as
defined by the National Association of Securities Dealers
(NASD).
IN WITNESS WHEREOF, the Corporation has executed this Amendment No. 1
to the Plan on behalf of the Fund on the day and year set forth below.
THE RIGHTIME FUND, INC.
Attest: By:
------------------------ ---------------------------
Edward S. Forst, Sr. David J. Rights, President
Secretary
------------------------------
(Date)
199636.1
DISTRIBUTION PLAN OF
THE
RIGHTIME SOCIAL AWARENESS FUND SERIES
WHEREAS, The Rightime Fund, Inc. (the "Corporation") engages in
business as an open-end management investment company and is registered
as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, The Rightime Social Awareness Fund Series (the "Fund") is a
series of the Corporation operated as an open-end management investment
company; and
WHEREAS, the Fund intends to act as a distributor of its shares of
capital stock as defined in Rule 12b-1 under the Act, and desires to
adopt a Distribution Plan pursuant to such Rule, and the Board of
Directors of the Corporation has determined that there Is a reasonable
likelihood that adoption of this Distribution Plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Corporation hereby adopts this Distribution Plan
for the Fund (the "Plan") in accordance with Rule 12b-i under the Act
and containing the following terms and conditions:
1. The Fund may finance activities which are primarily intended
to result in the sale of its shares in accordance with this Plan. The
expenses of such activities ("Distribution Expenses") shall not exceed
.90% per annum of the Fund's average daily net assets.
In the event the Board of Directors deems it desirable to allow
Distribution Expenses to exceed such limit the Administrator, Rightime
Administrators, Inc. ("Administrator"), may advance the required funds
to the Fund with the understanding that such advances will be repaid by
the Fund at such time or times deemed appropriate by the Administrator
out of any excess of funds created by Distribution expenses being lower
than .90% of net assets during the fiscal year in which the advance
occurred, but that such advances will not otherwise constitute a
liability to the Fund.
2. The Distribution Expenses provided for in paragraph 1 of this
Plan may be spent by the Fund on any activities primarily intended to
result in the sale of the Fund's shares, including, but not limited to,
compensation paid to and expenses incurred by officers, directors,
employees or sales representatives of the Fund, or broker-dealers or
other third parties, in consideration of their promotional and
distributional services, which services may include assistance in the
servicing of shareholder accounts produced by third parties, and may
include promotional, travel, entertainment and telephone expenses, the
printing of prospectuses and reports for other than existing
shareholders, preparation and distribution of sales literature, and
advertising of any type.
3. This Plan shall not take effect until it has been approved by
(a) a vote of at least a majority of the outstanding voting securities
of the Fund and (b) a vote of the Board of Directors of the Corporation,
including the affirmative vote of at least a majority of those Directors
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of the
Plan or in agreements related to the Plan (the "Rule 12b-1 Directors"),
cast in person at a meeting called for voting on the Plan.
4. Any agreements related to this Plan shall be in writing, the
form thereof must be approved by the Board of Directors (including the
disinterested Directors), and may be terminated at any time in the
manner provided for termination of this Plan in paragraph 7 below.
5. This Plan and agreements hereunder shall continue in effect
for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph
3(b).
6. The persons authorized to direct the disposition of
Distribution Expenses paid or payable by the Fund pursuant to this Plan
or any related agreement shall be the President of the Corporation or
his designee. The President shall provide to the Corporation's
Directors and the Directors shall review, at least quarterly, a written
report of the Distribution Expenses so expended and the purposes for
which such expenditures were made.
7. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding
voting securities of the Fund.
8. This Plan may not be amended to increase materially the limit
upon Distribution Expenses provided in paragraph 1 or to change
materially the nature of such Distribution Expenses provided in
paragraph 2 hereof unless such amendment is approved in the manner
provided for in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Fund shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or of such reports, as the case may be, the first two years
in an easily accessible place.
11. It is the opinion of the Corporation's Directors and
officers that the following are not expenses primarily intended to
result in the sale of shares issued by the Fund: fees and expenses of
registering the Fund as a broker-dealer or of registering an agent of
the Fund under federal or state laws regulating the sale of securities;
fees of registering, at the request of the Fund, agents or
representatives of a principal underwriter of the Fund under federal or
state laws regulating the sale of securities, provided that no sales
commission or "load" is charged on sales of shares of the Fund; and fees
and expenses of preparing and setting in type the Fund's registration
statement under the Securities Act of 1933. Should such expenses be
deemed by a court or agency having jurisdiction to be expenses primarily
intended to result in the sale of shares issued by the Fund, they shall
be considered to be expenses contemplated by and included in this
Distribution Plan but not subject to the limitation prescribed in
paragraph 1 hereof.
IN WITNESS WHEREOF, the Corporation has executed this Distribution
Plan on behalf of the Fund on the day and year set forth below in
Philadelphia, Pennsylvania.
THE RIGHTIME FUND, INC.
By:
----------------------
Date:
--------------------
Attest:
- -------------------
Secretary
199625.1
AMENDMENT NO. 1
to
DISTRIBUTION PLAN OF
THE RIGHTIME SOCIAL AWARENESS FUND
WHEREAS, The Rightime Fund, Inc. (the "Corporation") has adopted a
Distribution Plan (the "Plan") for The Rightime Social Awareness Fund
(the "Fund") in accordance with Rule 12b-1 under the Investment Company
Act of 1940;
WHEREAS, the National Association of Securities Dealers, Inc. has
proposed certain regulations governing mutual fund asset-based sales
charges (the "Regulations"); and
WHEREAS, the Corporation seeks to clarify references in the Plan in
view of defined terms contained in the Regulations;
NOW THEREFORE, the Corporation hereby amends the Plan by deleting the
existing first paragraph of Section 1 and inserting in lieu thereof the
following:
1. The Fund may finance activities which are primarily
intended to result in the sale of its shares in accordance
with this Plan. The expenses of such activities
("Distribution Expenses") shall not exceed point nine
percent (.9%) per annum of the Fund's average daily net
assets, including any amounts not to exceed one quarter of
one percent (0.25%), paid by the Fund for personal or
account services which are categorized as a service fee as
defined by the National Association of Securities Dealers
(NASD).
IN WITNESS WHEREOF, the Corporation has executed this Amendment No. 1
to the Plan on behalf of the Fund on the day and year set forth below.
THE RIGHTIME FUND, INC.
Attest: By:
------------------------ ---------------------------
Edward S. Forst, Sr. David J. Rights, President
Secretary
------------------------------
(Date)
199637.1
DISTRIBUTION PLAN OF
THE RIGHTIME MID-CAP FUND SERIES
WHEREAS, The Rightime Fund, Inc. (the "Corporation") engages in
business as an open-end management investment company and is registered
as such under the Investment Company Act of 1940, as amended (the "Act")
;
WHEREAS, The Rightime Mid-Cap Fund Series (the "Fund") is a series of
the Corporation operated as an open-end management investment company;
and
WHEREAS, the Fund intends to act as a distributor of its shares of
capital stock as defined in Rule 12b-1 under the Act, and desires to
adopt a Distribution Plan pursuant to such Rule, and the Board of
Directors of the Corporation has determined that there is a reasonable
likelihood that adoption of this Distribution Plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Corporation hereby adopts this Distribution Plan
for the Fund (the "Plan") in accordance with Rule 12b-1 under the Act
and containing the following terms and conditions:
1. The Fund may finance activities which are primarily intended
to result in the sale of its shares in accordance with this Plan. The
expenses of such activities ("Distribution Expenses") shall not exceed
nine-tenths of one percent (0.9%) per annum of the Fund's average daily
net assets, including any amounts not to exceed one quarter of one
percent (0.25%), paid by the Fund for personal or account services which
are categorized as a service fee as defined by the National Association
of Securities Dealers (NASD).
In the event the Board of Directors deems it desirable to allow
Distribution Expenses to exceed such limit the Administrator, Rightime
Administrators, Inc. ("Administrator"), may advance the required funds
to the Fund with the understanding that such advances will be repaid by
the Fund at such time or times deemed appropriate by the Administrator
out of any excess of funds created by Distribution expenses being lower
than .90% of net assets during the fiscal year in which the advance
occurred, but that such advances will not otherwise constitute a
liability to the Fund.
2. The Distribution Expenses provided for in paragraph 1 of this
Plan may be spent by the Fund on any activities primarily intended to
result in the sale of the Fund's shares, including, but not limited to,
compensation paid to and expenses incurred by officers, directors,
employees or sales representatives of the Fund, or broker-dealers or
other third parties, in consideration of their promotional and
distributional services, which services may include assistance in the
servicing of shareholder accounts produced by third parties, and may
include promotional, travel, entertainment and telephone expenses, the
printing of prospectuses and reports for other than existing
shareholders, preparation and distribution of sales literature, and
advertising of any type.
3. This Plan shall not take effect until it has been approved by
(a) a vote of at least a majority of the outstanding voting securities
of the Fund and (b) a vote of the Board of Directors of the Corporation,
including the affirmative vote of at least a majority of those Directors
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of the
Plan or in agreements related to the Plan (the "Rule 12b-1 Directors"),
cast in person at a meeting called for voting on the Plan.
4. Any agreements related to this Plan shall be in writing, the
form thereof must be approved by the Board of Directors (including the
disinterested Directors), and may be terminated at any time in the
manner provided for termination of this Plan in paragraph 7 below.
5. This Plan and agreements hereunder shall continue in effect
for so long as such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph
3(b).
6. The persons authorized to direct the disposition of
Distribution Expenses paid or payable by the Fund pursuant to this Plan
or any related agreement shall be the President of the Corporation or
his designee. The President shall provide to the Corporation's
Directors and the Directors shall review, at least quarterly, a written
report of the Distribution Expenses so expended and the purposes for
which such expenditures were made.
7. This Plan may be terminated at any time by vote of a majority
of the Rule 12b-1 Directors, or by vote of a majority of the outstanding
voting securities of the Fund.
8. This Plan may not be amended to increase materially the limit
upon Distribution Expenses provided in paragraph 1 or to change
materially the nature of such Distribution Expenses provided in
paragraph 2 hereof unless such amendment is approved in the manner
provided for in paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the
Fund shall be committed to the discretion of the Directors who are not
interested persons.
10. The Fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a
period of not less than six years from the date of this Plan, or the
agreements or of such reports, as the case may be, the first two years
in an easily accessible place.
11. It is the opinion of the Corporation's Directors and
officers that the following are not expenses primarily intended to
result in the sale of shares issued by the Fund: fees and expenses of
registering the Fund as a broker-dealer or of registering an agent of
the Fund under federal or state laws regulating the sale of securities;
fees of registering, at the request of the Fund, agents or
representatives of a principal underwriter of the Fund under federal or
state laws regulating the sale of securities, provided that no sales
commission or "load" is charged on sales of shares of the Fund; and fees
and expenses of preparing and setting in type the Fund's registration
statement under the Securities Act of 1933. Should such expenses be
deemed by a court or agency having jurisdiction to be expenses primarily
intended to result in the sale of shares issued by the Fund, they shall
be considered to be expenses contemplated by and included in this
Distribution Plan but not subject to the limitation prescribed in
paragraph 1 hereof.
IN WITNESS WHEREOF, the Corporation has executed this Distribution
Plan on behalf of the Fund on the day and year set forth below in
Philadelphia, Pennsylvania.
THE RIGHTIME FUND, INC.
By:
----------------------
Date:
--------------------
Attest:
- -------------------
Secretary
199627.1
Schedule for Computation of Performance Quotations
The Rightime Government Securities Fund
Yield Calculation of 2.01%
a = 52,495.96
b = 33,626.48
c = 8,529,862.280
d = 13.28
Average Annual Total Return for each Series:
One Year Five Year Ten Year Inception
The Rightime Fund
P 1000 1000 1000 1000
T 8.96% 10.40% 10.00% 11.48%
n 1 5 10 11.13
ERV $1,089.65 $1,640.34 $2,593.77 $3,353.84
The Rightime Government Securities Fund
P 1000 1000 N/A 1000
T -3.33% 3.61% N/A 4.42%
n 1 5 N/A 9.83
ERV $966.66 $1,193.97 N/A $1,529.95
The Rightime Blue Chip Fund
P 1000 1000 N/A 1000
T 6.92% 9.59% N/A 9.29%
n 1 5 N/A 9.28
ERV $1,069.19 $1,580.77 N/A $2,281.11
The Rightime Social Awareness Fund
P 1000 1000 N/A 1000
T 8.23% 10.25% N/A 8.23%
n 1 5 N/A 6.67
ERV $1082.32 1,629.42 N/A $1,694.78
The Rightime MidCap Fund
P 1000 N/A N/A 1000
T 4.46% N/A N/A 9.64%
n 1 N/A N/A 4.97%
ERV $1044.55 N/A N/A $1,580.81
January 1, 1990 12:00 am F:\DATA27\SECU\MPO\CHRT\199862.1
The following exhibit is the Annual Report to Shareholders
dated October 31, 1996, portions of which are incorporated by
reference into the Statement of Additional Information
contained in this registration statement.
[LOGO]
Family of Funds
The Rightime Fund
The Rightime Government Securities Fund
The Rightime Blue Chip Fund
The Rightime Social Awareness Fund
The Rightime MidCap Fund
Annual Report
October 31, 1996
[LOGO]
Family of Funds
Table of Contents
Portfolios
The Rightime Fund 3
The Rightime Government Securities Fund 5
The Rightime Blue Chip Fund 6
The Rightime Social Awareness Fund 16
The Rightime MidCap Fund 17
Financial Statements
Statement of Assets & Liabilities 18
Statement of Operations 20
Statement of Changes in Net Assets 22
Financial Highlights 24
Notes to Financial Statements
Notes & Schedules 26
Report of Independent
Certified Public Accountants 31
Performance Comparisons
The Rightime Fund 32
The Rightime Government Securities Fund 34
The Rightime Blue Chip Fund 36
The Rightime Social Awareness Fund 38
The Rightime MidCap Fund 40
[LOGO]
Family of Funds
1996
Annual Report
The Rightime Fund, Inc.
Dear Shareholder:
It is a question we hear more frequently these days: Is risk management
still necessary? With the retirement of the baby-boomers under funded
and that generation entering what have typically been the prime saving
years, increased savings could nullify market swings. That is the
theory. It would be wonderful if this turned out to be true. It also
would be unprecedented.
Since the beginning of capitalism, and possibly before, asset values
have oscillated from periods of undervaluation to periods of
overvaluation. Each peak accrues its own rationalizations as to why it
will be different this time. It is the same with each decline. We could
argue the individual points of the baby-boomer theory. Points such as:
the boomers have never done things the same as the preceding generations
- -- why would they start now? They bought their first homes and had
children later. Both spouses worked even after the children were born.
Why will they start saving at age 50 mirroring the generations that came
before them? And even if they do, will those increased savings propel
the market ever higher?
There are other considerations also. And yet, the "age-wave theorists"
could answer each of our arguments. However, the individual points are
not important here. We certainly believe that demographics play a role
in asset values. But they cannot remove the fluctuations in asset
values. What is important is that the more we believe that the market
declines can no longer occur, the more vulnerable we are and the more
likely the drop will be severe. There is a very simple reason for this.
As we lose our fear, the more risk we take. Prices get irrationally bid
up until eventually, someone becomes rational. The selling starts. Our
rationalizations dissolve and the market falls. We believe that until
human nature changes there is a very real need for risk management. The
need is even greater when the perception is that risk no longer exists.
We are in the sixth year of one of the longest bull markets in history.
A slow, steady ascent began in late 1990 only to accelerate in 1995 and
1996. More than $130 billion poured into equity-based mutual funds in
1995, setting an annual record and helping to fuel one of the most
robust rallies of the last 30 years. The record cash flows of 1995 were
quickly eclipsed in 1996 as more than $200 billion flowed into equity
funds through October.
Early in 1996 stocks extended 1995's rally but faltered seriously in
July. In less than two months extreme bullishness deteriorated to
bearishness and fear returned. Some even began to utter the "bear" word
and many readily admitted that this was the long awaited correction.
Just as fears rose the market turned up, and by late summer stocks were
reclaiming earlier losses.
Subtle warnings of growing risk appeared in April. Long term interest
rates had risen from just below 6% to 7%. Corporate earnings growth
slowed markedly. Yet these alerts were barely audible above the frenzy
possessing the equity markets. The Rightime Market Model
(RTMM(registered trademark)) heard those faint alerts and established a
conservative position in all the equity funds of the Rightime Family.
The funds avoided the volatility of the early summer.
Yet by late August equities again rallied. The market seemed to be
betting that inflation fears would dissipate, earnings growth would
stabilize and the economy would continue to grow at a noninflationary
rate. The market turned out to be correct. Our models, however, did not
detect real evidence of this shift until early November when RTE once
again established a fully invested position in stocks.
Earlier this year economists and investors were predicting that months
of steady growth and low unemployment would push inflation higher. This
has not happened. The economy is losing steam and the sluggishness seen
in the third quarter has not been eliminated. The interest rate
environment is favorable as both long and short rates are declining.
Retail sales have been weak; consumer-price and producer-price growth
has been tame. Personal bankruptcies are at record levels, and
agricultural commodity prices have stabilized. Consumer debt levels are
at all-time highs possibly constraining future purchases. We really do
seem to be in a slow-growth without inflation environment.
September and early October were uncomfortable for us and, we are sure,
for our investors as well. However, as uncomfortable as this time had
been, it is not unusual. The model has never been perfect. In fact, in
one sense, our entire history has been a series of imperfect
allocations. Yet each allocation in succession has resulted in a
disciplined investment program that has provided good risk-adjusted
returns. Every market decline of any significance has been characterized
by overvaluation at the outset. Yet not every overvalued market has
resulted in a significant decline. We believe you must invest as if
every period of overvaluation could result in a decline. It is the only
way to protect principal. That is why we established a conservative
position in April and maintained it until November.
The Rightime Market Models (RTMM(registered trademark)) have
successfully directed our investments. Today, equities are showing
strength and the RTMM(registered trademark) has signaled a commitment to
equities. The RTMM(registered trademark) continue to guide our
investment decisions and provide the discipline to manage in today's
environment. We thank you for your continued support.
David J. Rights, President
October 31, 1996
The Rightime Fund
Portfolio of Investments
Value
Shares (Note 1)
- ------------ ------------
EQUITY FUNDS: (9.91%)
18 Alliance Quasar Fund Class A $ 488
16,402 Janus Twenty Fund 523,223
16,969 Janus Venture Fund 969,948
27,349 Lindner Growth Fund 741,160
33,590 Mutual Beacon Fund 1,331,525
81,108 Neuberger Guardian Fund 2,042,301
44,386 Nicholas II Fund 1,440,325
131,020 Pennsylvania Mutual Fund 1,075,672
157,476 Putnam OTC Emerging
Growth Fund 2,574,740
108,893 Putnam Vista Basic Fund 1,188,023
188,179 Putnam Voyager Fund 3,215,972
47,407 SteinRoe Capital Opportunity Fund 1,390,937
------------
Total Equity Funds
(cost $12,743,237) 16,494,314
------------
MONEY MARKET FUNDS: (40.74%)
11,248,035 AIM Money Market Fund 11,248,035
1,381,845 Delaware Group Cash Reserve 1,381,845
12,747,916 Fidelity U.S. Government Reserves 12,747,916
11,558,521 IDS Cash Management
Prime Fund 11,558,521
3,071,039 Janus Money Market Fund 3,071,039
7,991,212 MFS Money Market Fund 7,991,212
6,704,536 New England Money Market Fund 6,704,536
1,536,331 Nicholas Money Market Fund 1,536,331
2,901,496 Oppenheimer Money Market Fund 2,901,496
5,112,400 Putnam Daily Dividend Trust Fund 5,112,400
3,578,032 Seligman Cash Management Fund -
Prime Portfolio 3,578,032
1,903 Value Line Cash Fund 1,903
------------
Total Money Market Funds
(cost $67,833,266) 67,833,266
------------
Principal Value
Amount (Note 1)
- ------------ ------------
SHORT-TERM INVESTMENTS (49.34%)
Repurchase Agreement (4.99%)(b)
$ 8,300,000 Smith-Barney Inc.
5.60%; 11/1/96 (cost $8,300,000;
maturity value $8,301,291) $ 8,300,000
------------
United States Treasury Bills (44.35%)(c)
65,000,000 4.83%; 11/7/96 64,948,433
9,000,000 5.01%; 1/23/97 8,896,354
------------
Total United States Treasury Bills
(cost $73,844,787) 73,844,787
------------
Total Short-term Investments
(cost $82,144,787) 82,144,787
------------
Total Investments
(cost $162,721,290)(99.99%)(a) 166,472,367
Other Assets Less Liabilities (.01%) 17,913
------------
Net Assets (100.00%) $166,490,280
============
(a) Aggregate cost for federal income tax purposes is $162,721,290.
At October 31, 1996 unrealized appreciation (depreciation)
of securities for federal income tax purposes is as follows:
Gross unrealized appreciation $3,751,077
Gross unrealized depreciation 0
----------
Net unrealized appreciation $3,751,077
==========
(b) The Repurchase Agreement is collateralized by obligations
of the United States government and its agencies with a
market value of $8,475,708, which exceeds the value of
the repurchase agreement. It is the Fund's policy to always
receive, as collateral, securities whose value, including
accrued interest, will be at least equal to 102% of the
dollar amount to be paid to the Fund under each agreement
at its maturity. The value of the securities are monitored
daily. If the value falls below 101% of the amount to be
paid at maturity, additional collateral is obtained. The
Fund makes payment for such securities only upon physical
delivery or evidence of book entry transferred to the
account of its custodian.
(c) At October 31, 1996, the market value of $988,484 of the U.S.
Treasury Bills were pledged to cover margin requirements for
futures contracts.
Futures contracts at October 31, 1996:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
-------------
S&P 500 Stock Index
55/Dec/Sell $(1,111,000)
===========
See accompanying notes to financial statements
October 31, 1996
The Rightime
Government Securities Fund
Portfolio of Investments
Principal Value
Amount (Note 1)
- ------------ ------------
U.S. GOVERNMENT OBLIGATIONS (47.73%)
$5,000,000 U.S. Treasury Bond 6.875%;
8/15/25 $ 5,113,550
-----------
Total U.S. Government Obligations
(cost $4,853,125) 5,113,550
-----------
SHORT-TERM INVESTMENTS (51.27%)
Repurchase Agreements (4.67%)(b)
500,000 Smith Barney Inc.
5.60%; 11/1/96 (cost $500,000;
maturity value $500,078) $ 500,000
-----------
United States Treasury Bills (46.60%)(c)
4,500,000 4.83%; 11/7/96 4,496,430
500,000 5.41%; 1/9/97 495,256
-----------
Total United States Treasury Bills
(cost $4,991,686) 4,991,686
-----------
Total Short-term Investments
(cost $5,491,686) 5,491,686
-----------
Total Investments
(cost $10,344,811)(99.00%)(a) 10,605,236
Other Assets Less Liabilities (1.00%) 107,375
-----------
Net Assets (100.00%) $10,712,611
===========
(a) Aggregate cost for federal income tax purposes is
$10,334,811. At October 31, 1996 unrealized appreciation
(depreciation) of securities for federal income tax
purposes is as follows:
Gross unrealized appreciation $ 260,425
Gross unrealized depreciation 0
----------
Net unrealized appreciation $ 260,425
==========
(b) The Repurchase Agreement is collateralized by obligations
of the United States government and its agencies with a
market value of $510,585, which exceeds the value of the
repurchase agreement. It is the Fund's policy to always
receive, as collateral, securities whose value, including
accrued interest, will be at least equal to 102% of the
dollar amount to be paid to the Fund under each agreement
at its maturity. The value of the securities are monitored
daily. If the value falls below 101% of the amount to be
paid at maturity, additional collateral is obtained. The
Fund makes payment for such securities only upon physical
delivery or evidence of book entry transferred to the
account of its custodian.
(c) At October 31, 1996, the market value of $495,256 of the
U.S. Treasury Bill was pledged to cover margin requirements
for futures contracts.
Futures contracts at October 31, 1996:
(Contracts-$1000 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
U.S. Treasury Bonds:
51/Dec/Sell $ (333,094)
===========
See accompanying notes to financial statements
October 31, 1996
The Rightime Blue Chip Fund
Portfolio of Investments
Value
Shares (Note 1)
- ------------ ------------
COMMON STOCK (48.89%)
INDUSTRIALS (36.80%)
Aerospace/Defense (1.05%)
8,920 Boeing Company $ 850,745
1,704 General Dynamics Corp. 116,937
5,218 Lockheed Martin Corp. 467,663
5,796 McDonnell Douglas Corp. 315,882
1,428 Northrop Grumman Corp. 115,311
6,443 Raytheon Company 317,318
5,815 Rockwell International Corp. 319,825
3,258 United Technologies Corp. 419,467
------------
2,923,148
------------
Aluminum (0.17%)
4,939 Alcan Aluminium Ltd. 162,370
3,928 Aluminum Co. of America 230,279
1,302 Reynolds Metals Co. 73,237
------------
465,886
------------
Automobiles (0.92%)
19,738 Chrysler Corp. 663,690
27,688 Ford Motor Co. 865,250
19,301 General Motors Corp. 1,039,841
------------
2,568,781
------------
Auto Parts After Market (0.16%)
2,186 Cooper Tire & Rubber Corp. 42,900
1,375 Echlin, Inc. 44,859
3,503 Genuine Parts Co. 153,256
4,362 Goodyear Tire & Rubber Co. 200,107
------------
441,122
------------
Beverages (Alcoholic) (0.39%)
12,820 Anheuser-Busch Companies, Inc. 493,570
2,520 Brown-Forman Corp. Class B 108,990
984 Coors (Adolph) Co. Class B 19,188
12,164 Seagram Co. Ltd. 460,711
------------
1,082,459
------------
Beverages (Soft Drinks) (1.59%)
63,402 Coca-Cola Co. 3,201,801
40,904 PepsiCo, Inc. 1,211,781
------------
4,413,582
------------
Broadcast Media (0.11%)
6,851 Comcast Corp. Class A Spl 101,052
16,841 Tele-Communications,
Inc. Class A* 209,460
------------
310,512
------------
Building Materials (0.10%)
3,446 Masco Corp. 108,118
1,342 Owens-Corning Fiberglass Corp.* 52,003
2,409 Sherwin-Williams Co. 120,751
------------
280,872
------------
Chemicals (1.19%)
3,995 Applied Materials, Inc.* 105,618
3,626 Air Products & Chemicals, Inc. 217,560
7,791 Dow Chemical Co. 605,750
12,640 Du Pont (E.I.) de Nemours
and Company 1,172,360
1,773 Goodrich (B.F.) Co. 75,131
2,517 Hercules, Inc. 119,872
14,855 Monsanto Company 588,629
3,526 Praxair, Inc. 156,026
1,370 Rohm & Haas Co. 97,784
3,595 Union Carbide Corp. 153,237
------------
3,291,967
------------
Chemicals (Diversified) (0.25%)
1,557 Avery Dennison Corp. 102,567
3,692 Englehard Corp. 67,379
1,182 FMC Corp.* 87,025
2,580 Mallinckrodt Inc. 112,230
5,845 PPG Industries, Inc. 333,165
------------
702,366
------------
Chemicals (Specialty) (0.19%)
2,502 Fresenious Medical Care - ADR 74,434
2,385 Grace (W.R.) & Co. 126,405
1,785 Great Lakes Chemical Corp. 93,043
4,369 Morton International, Inc. 172,029
1,865 Nalco Chemical Co. 67,839
------------
533,750
------------
Commercial Services (0.05%)
1,418 Ecolab, Inc. 51,757
1,410 National Service Industries Inc. 48,645
1,206 Ogden Corp. 21,859
857 Safety-Kleen Corp. 13,391
------------
135,652
------------
Communication (Equipment/
Manufacturers) (0.67%)
1,476 Andrew Corp.* 71,955
5,011 Bay Networks 101,473
1,768 Cabletron Systems* 110,279
14,009 Cisco Systems, Inc.* 866,807
2,964 DSC Communications Corp.* 41,125
7,226 Northern Telecom Ltd. 470,593
1,968 Scientific-Atlanta, Inc. 28,536
2,041 Tellabs, Inc.* 173,740
------------
1,864,508
------------
Computer Software & Services (1.69%)
5,840 Alltel Corp. 178,120
1,196 Autodesk, Inc. 27,359
7,505 Automatic Data Processing, Inc. 312,396
8,944 Computer Associates
International, Inc. 528,814
1,336 Computer Sciences Corp.* 99,198
2,628 First Data Corp. 209,583
16,041 Microsoft Corp.* 2,201,627
9,425 Novell, Inc.* 87,181
16,821 Oracle Corp.* 711,739
641 Shared Medical Systems Corp. 30,928
4,148 Silicon Graphics Inc.* 76,738
3,670 Sun Microsystems Corp.* 223,870
------------
4,687,553
------------
Computer Systems (1.14%)
3,342 Amdahl Corp.* 34,255
3,097 Apple Computer, Inc. 71,231
1,216 Ceridian Corp.* 60,344
6,759 Compaq Computer Corp.* 470,595
732 Data General Corp.* 10,889
3,802 Digital Equipment Corp.* 112,159
1,123 Intergraph Corp.* 10,528
14,317 International Business
Machines Corp. 1,846,893
3,237 LSI Logic Corp. 85,781
5,277 Micron Technology Inc. 133,904
3,031 Tandem Computers, Inc.* 38,266
3,795 3 Com Corporation* 256,637
4,995 Unisys Corp.* 31,219
------------
3,162,701
------------
Conglomerates (0.32%)
2,408 Allegheny Teledyne Inc. 51,471
2,854 IIT Hartford Group, Inc. 179,802
2,958 ITT Corp. 124,236
2,497 ITT Industries, Inc. 58,055
5,302 Tenneco, Inc. 262,449
2,409 Textron, Inc. 213,799
------------
889,812
------------
Containers (Metal & Glass) (0.08%)
590 Ball Corp. 14,234
2,532 Crown Cork & Seal Co., Inc.* 121,536
1,263 Willamette Industries, Inc. 85,253
------------
221,023
------------
Containers (Paper) (0.06%)
1,483 Bemis Company, Inc. 51,905
2,386 Stone Container Corp. 36,387
1,482 Temple-Inland, Inc. 75,953
------------
164,245
------------
Cosmetics (0.44%)
708 Alberto-Culver Co. Class B 32,391
3,538 Avon Products, Inc. 191,936
11,538 Gillette Co. 862,466
3,173 International Flavors &
Fragrances, Inc. 131,283
------------
1,218,076
------------
Electrical Equipment (2.00%)
6,956 AMP, Inc. 235,635
5,639 Emerson Electric Co. 501,871
42,764 General Electric Co. 4,137,417
2,805 General Instrument 56,451
1,483 Grainger (W.W.), Inc. 109,927
3,278 Honeywell, Inc. 203,646
1,050 Raychem Corp. 82,031
1,112 Thomas & Betts Corp. 47,121
11,186 Westinghouse Electric Corp. 191,560
------------
5,565,659
------------
Electronics (Defense) (0.03%)
1,415 E G & G, Inc. 24,939
4,460 Loral Space &
Communications Ltd* 70,803
------------
95,742
------------
Electronics (Instrumentation) (0.46%)
26,614 Hewlett-Packard Co. 1,174,343
1,135 Perkin-Elmer Corp. 60,864
844 Tektronix, Inc. 33,022
------------
1,268,229
------------
Electronics (Semiconductors) (1.22%)
2,440 Advanced Micro Devices, Inc.* 43,310
21,427 Intel Corp. 2,354,292
15,293 Motorola, Inc. 703,478
3,164 National Semiconductor Corp.* 60,907
4,785 Texas Instruments, Inc. 230,278
------------
3,392,265
------------
Engineering & Construction (0.07%)
2,248 Fluor Corp. 147,244
1,148 Foster Wheeler Corp. 47,068
------------
194,312
------------
Entertainment (0.38%)
15,548 Walt Disney Company 1,024,224
769 King World Productions, Inc.* 27,684
------------
1,051,908
------------
Foods (1.14%)
18,650 Archer Daniels Midland Co. 405,637
3,675 CPC International, Inc. 289,866
6,036 ConAgra, Inc. 301,046
4,240 Darden Restaurants, Inc. 35,510
4,551 General Mills, Inc. 259,976
9,595 Heinz (H.J.) Co. 340,623
4,410 Hershey Foods Corp. 213,334
5,522 Kellogg Co. 350,647
4,256 Quaker Oats Co. 151,088
2,684 Ralston Purina Co. 177,480
12,373 Sara Lee Corp. 439,242
3,307 Wrigley, (Wm) Jr. Co. 199,247
------------
3,163,696
------------
Food Wholesalers (0.09%)
965 Fleming Companies, Inc. 16,767
2,034 Super Valu Stores 60,511
5,214 Sysco Corp. 177,276
------------
254,554
------------
Gold Mining (0.28%)
9,158 Barrick Gold Corp. 239,253
5,200 Battle Mountain Gold Co. 39,650
2,805 Echo Bay Mines Ltd. 21,914
4,706 Freeport McMoran Copper &
Gold, Inc. Class B 142,945
3,595 Homestake Mining Co. 51,229
2,101 Newmont Mining Corp. 97,171
6,128 Placer Dome Group, Inc. 147,072
3,383 Santa Fe Pacific Gold Corp. 40,173
------------
779,407
------------
Hardware & Tools (0.08%)
2,497 Black & Decker Corp. 93,325
2,014 Snap-On Tools Corp. 64,700
2,322 Stanley Works 65,596
------------
223,621
------------
Health Care (Diversified) (2.03%)
19,998 Abbott Laboratories 1,012,399
16,854 American Home Products Corp. 1,032,307
12,718 Bristol-Myers Squibb Co. 1,344,929
33,226 Johnson & Johnson 1,636,380
4,533 United Healthcare Corp. 171,687
6,930 Warner-Lambert Co. 440,921
------------
5,638,623
------------
Health Care (Drugs) (1.95%)
13,803 Lilly (Eli) & Co. 973,112
31,161 Merck & Co., Inc. 2,309,809
5,585 Pharmacia & Upjohn, Inc. 201,060
15,772 Pfizer, Inc. 1,305,133
9,775 Schering-Plough Corp. 625,600
------------
5,414,714
------------
Health Care (Miscellaneous) (0.04%)
1,968 ALZA Corp.* 50,922
1,575 Beverly Enterprises, Inc.* 19,491
1,154 Manor Care, Inc. 45,294
------------
115,707
------------
Heavy Duty Trucks & Parts (0.11%)
892 Cummins Engine Co., Inc. 37,129
2,267 Dana Corp. 67,160
2,262 Eaton Corp. 135,154
1,974 Navistar International Corp.* 18,259
831 PACCAR, Inc. 46,328
------------
304,030
------------
Hospital Management Companies (0.27%)
16,866 Columbia Healthcare Corp. 602,959
1,488 Community Psychiatric Centers* 13,206
6,384 Tenet Healthcare Corp.* 133,266
------------
749,431
------------
Homebuilding (0.02%)
595 Centex Corp. 17,924
765 Kaufman & Broad Home Corp. 9,180
711 Pulte Corp. 18,841
------------
45,945
------------
Hotel/Motel (0.12%)
2,678 Harrah's Entertainment, Inc.* 44,856
3,384 Hilton Hotels Corp. 102,789
3,237 Marriott International Corp. 184,104
------------
331,749
------------
Household Furnishings & Appliances (0.07%)
769 Armstrong World Industries, Inc. 51,331
2,653 Maytag Corp. 52,728
1,909 Whirlpool Corp. 90,200
------------
194,259
------------
Household Products (1.06%)
1,655 Clorox Company 180,602
3,826 Colgate-Palmolive Co. 351,992
17,908 Procter & Gamble Co. 1,772,892
4,173 Unilever N.V. 637,947
------------
2,943,433
------------
Housewares (0.15%)
5,210 Newell Co. 147,834
2,044 Premark International, Inc. 42,668
4,684 Rubbermaid, Inc. 108,903
2,044 Tupperware Corp. 105,011
------------
404,416
------------
Insurance Brokers (0.09%)
954 Alexander & Alexander Services, Inc. 14,549
2,204 Marsh & McLennan Cos., Inc. 229,492
------------
244,041
------------
Leisure Time (0.04%)
1,196 Bally Entertainment Corp.* 36,030
2,386 Brunswick Corp. 56,071
415 Outboard Marine Corp. 6,432
------------
98,533
------------
Machine Tools (0.01%)
648 Cincinnati Milacron, Inc. 12,393
707 Giddings & Lewis Co. 8,307
------------
20,700
------------
Machinery (Diversified) (0.37%)
724 Briggs & Stratton Corp. 28,960
5,852 Caterpillar, Inc. 401,593
2,380 Cooper Industries Inc. 95,795
6,650 Deere & Co. 277,637
1,196 Harnischfeger Industries, Inc. 47,840
2,952 Ingersoll-Rand Co. 122,877
1,138 Lucasvarity Plc - ADR 45,805
------------
1,020,507
------------
Manufacturing (Diversified Industries) (0.34%)
1,419 Case Corp. 65,984
657 Crane Company 30,551
2,517 Dover Corp. 129,311
2,460 Illinois Tool Works, Inc. 172,815
1,168 Johnson Controls, Inc. 85,264
1,129 Millipore Corp. 39,515
241 Nacco Industries, Inc. 11,146
3,356 Pall Corp. 85,997
1,569 Parker Hannifin Corp. 59,426
785 Timken Co. 35,031
595 Trinova Corp. 19,561
4,180 Tyco International Ltd. 207,432
------------
942,033
------------
Medical Products & Supplies (0.50%)
1,443 Allegiance Corp. 27,056
1,575 Bard (C.R.), Inc. 44,494
1,860 Bausch & Lomb, Inc. 62,775
7,218 Baxter International, Inc. 300,449
3,870 Becton, Dickinson & Co. 168,345
3,728 Biomet, Inc.* 60,114
3,293 Boston Scientific Corp.* 179,057
6,016 Medtronic, Inc. 387,280
1,843 St. Jude Medical, Inc.* 72,799
1,403 Sigma Aldrich Corp. 82,426
------------
1,384,795
------------
Metals Miscellaneous (0.09%)
954 ASARCO, Inc. 25,042
2,082 Cyprus Amax Minerals Co. 47,105
2,621 Inco Ltd. 83,217
1,487 Phelps Dodge Corp. 93,495
------------
248,859
------------
Miscellaneous (1.97%)
3,501 Alco Standard Corp. 162,359
2,036 Allergan, Inc. 62,098
7,162 Allied-Signal, Inc. 469,111
1,667 American Greetings Corp. 48,864
6,858 Amgen Corp.* 420,481
3,468 Block (H.R.), Inc. 85,833
6,623 Corning, Inc. 256,641
7,416 CUC International, Inc. * 181,692
2,335 Deluxe Corp. 76,179
3,108 Dial Corp. 42,735
4,362 Donnelley (R.R.) & Sons Co. 132,496
333 Eastern Enterprises 12,821
2,193 Eastman Chemical Co. 115,681
8,920 Eastman Kodak Co. 711,370
1,077 General Signal Corp. 43,888
1,901 Harcourt General Corp. 94,575
785 Harland (John H.) Co. 24,433
695 Harris Corp. 43,524
934 Imation Corp. 25,568
2,056 Interpublic Group 99,716
808 Jostens, Inc. 17,372
1,087 Kerr-McGee Corp. 68,209
3,452 Loews Corp. 285,221
9,344 Minnesota Mining &
Manufacturing Co. 715,984
2,115 Pioneer Hi-Bred International Corp. 141,969
949 Polaroid Corp. 38,553
5,084 Price / Costco Inc.* 101,045
5,222 Service Corp. International 148,827
544 Springs Industries, Inc. 24,548
1,785 TRW, Inc. 161,542
1,396 U S Surgical Corp. 58,457
10,273 Viacom, Inc. Class B* 335,157
3,108 Viad Corp. 45,066
3,868 Whitman Corp. 93,799
2,444 The Williams Cos., Inc. 127,699
------------
5,473,513
------------
Office Equipment & Supplies (0.29%)
2,205 Moore Corp. Ltd. 44,651
4,784 Pitney Bowes, Inc. 267,306
10,380 Xerox Corp. 481,372
------------
793,329
------------
Oil & Gas Drilling (0.03%)
511 Helmerich & Payne, Inc. 27,658
2,656 Rowan Companies, Inc.* 59,428
------------
87,086
------------
Oil (Exploration & Production) (0.17%)
2,684 Burlington Resources, Inc. 135,206
742 Louisiana Land & Exploration Co. 42,201
2,959 Oryx Energy Co.* 56,961
1,947 Santa Fe Energy Resources, Inc.* 27,745
5,013 Union Pacific Resources Group 137,858
1,196 Western Atlas, Inc.* 82,973
------------
482,944
------------
Oil (Domestic Integrated) (0.69%)
3,075 Amerada Hess Corp. 170,278
1,316 Ashland Inc. 55,930
4,590 Atlantic Richfield Co. 608,175
9,106 Occidental Petroleum Corp. 223,097
909 Pennzoil Co. 46,359
7,475 Phillips Petroleum Co. 306,475
2,255 Sun Co. Inc. 50,456
8,569 USX-Marathon Group 187,447
6,999 Unocal Corp. 256,338
------------
1,904,555
------------
Oil (International Integrated) (3.12%)
10,501 Amoco Corp. 795,451
16,323 Chevron Corp. 1,073,237
31,225 Exxon Corp. 2,767,316
9,858 Mobil Corp. 1,150,921
13,501 Royal Dutch Petroleum Co. 2,232,728
6,459 Texaco, Inc. 656,396
------------
8,676,049
------------
Oil Well Equipment & Services (0.38%)
4,046 Baker Hughes, Inc. 144,139
5,207 Dresser Industries, Inc. 171,180
3,268 Halliburton Co. 185,051
1,324 McDermott International, Inc. 23,501
5,389 Schlumberger Ltd. 534,185
------------
1,058,056
------------
Paper & Forest Products (0.69%)
1,196 Boise Cascade Corp. 37,076
1,794 Champion International Corp. 78,039
2,320 Georgia-Pacific Corp. 174,000
6,883 International Paper Co. 294,248
2,034 James River Corp. 64,071
7,988 Kimberly-Clark Corp. 744,881
1,996 Louisiana Pacific Corp. 41,667
1,190 Mead Corp. 67,532
662 Potlatch Corp. 28,300
1,549 Union Camp Corp. 75,514
2,267 Westvaco Corp. 64,609
5,211 Weyerhaeuser Co. 239,055
------------
1,908,992
------------
Pollution Control (0.24%)
4,837 Browning-Ferris Industries, Inc. 126,971
6,064 Laidlaw, Inc. Class B 71,252
13,857 WMX Technologies, Inc. 476,334
------------
674,557
------------
Publishing (0.31%)
4,737 Dun & Bradstreet Corp. 274,154
2,806 McGraw-Hill, Inc. 131,531
711 Meredith Corp. 35,728
11,059 Time Warner, Inc. 411,948
------------
853,361
------------
Publishing (Newspapers) (0.31%)
2,717 Dow Jones & Co., Inc. 89,661
3,966 Gannett Co., Inc. 300,920
2,966 Knight-Ridder, Inc. 110,854
2,211 New York Times Co. Class A 79,872
2,838 Times Mirror Co. Class A 131,258
1,872 Tribune Co. 153,036
------------
865,601
------------
Restaurants (0.32%)
606 Luby's Cafeterias, Inc. 12,726
18,048 McDonald's Corp. 800,880
1,409 Ryan's Family Steak Houses, Inc.* 10,391
1,209 Shoney's, Inc.* 8,916
2,520 Wendy's International, Inc. 51,975
------------
884,888
------------
Retail Stores (Department) (0.30%)
2,805 Dillard Dept. Stores, Inc. Class A 89,059
6,486 May Department Stores Co. 307,274
756 Mercantile Stores Co., Inc. 37,517
2,193 Nordstrom, Inc. 79,085
6,001 J.C. Penney Co. 315,052
------------
827,987
------------
Retail Stores (Drugs) (0.12%)
644 Longs Drug Stores Corp. 28,900
2,186 Rite Aid Corp. 74,324
6,413 Walgreen Co. 242,091
------------
345,315
------------
Retail Stores (Food Chains) (0.29%)
7,321 Albertson's, Inc. 251,659
4,281 American Stores Co. 177,126
1,711 Giant Food, Inc. Class A 57,746
898 Great Atlantic & Pacific
Tea Co., Inc. 26,940
3,185 Kroger Co.* 142,131
4,435 Winn-Dixie Stores, Inc. 148,018
------------
803,620
------------
Retail Stores (General Merchandise) (0.86%)
5,721 Dayton-Hudson Corp. 198,090
13,417 K Mart Corp. 130,816
10,003 Sears, Roebuck & Co. 483,895
59,622 Wal-Mart Stores, Inc. 1,587,436
------------
2,400,237
------------
Retail Stores (Specialty) (0.55%)
2,539 Circuit City Stores, Inc. 83,152
769 Footstar Inc. 16,924
12,256 Home Depot, Inc. 671,016
4,709 Lowes Companies, Inc. 190,126
2,672 Melville Corp. 99,532
1,037 Payless Shoesource Inc 35,128
1,628 Pep Boys -Manny, Moe & Jack 56,980
1,615 Tandy Corp. 60,764
7,185 Toys R Us, Inc.* 243,392
3,462 Woolworth Corp. 72,702
------------
1,529,716
------------
Retail Stores (Specialty-Apparel) (0.15%)
2,758 Charming Shoppes, Inc. 12,756
8,443 Gap (The), Inc. 244,847
4,528 Limited, Inc. 83,202
1,828 TJX Companies, Inc. 73,120
------------
413,925
------------
Shoes (0.17%)
7,798 NIKE, Inc. Class B 459,107
1,031 Stride Rite Corp. 8,506
------------
467,613
------------
Steel (0.09%)
3,142 Armco, Inc.* 11,783
2,374 Bethlehem Steel Corp.* 19,289
876 Inland Steel Industries, Inc. 14,126
2,489 Nucor Corp. 117,916
1,785 USX-U.S. Steel Group 48,641
2,026 Worthington Industries, Inc. 42,040
------------
253,795
------------
Telecommunications (Long Distance) (1.10%)
39,731 A T & T Co. 1,385,619
12,876 Lucent Technologies Inc. 605,172
16,926 MCI Communications Corp. 425,266
9,092 Sprint Corp. 356,861
11,328 WorldCom, Inc. 276,120
------------
3,049,038
------------
Textile (Apparel Manufacturers) (0.09%)
1,755 Fruit of the Loom, Inc. Class A * 63,838
1,469 Liz Claiborne, Inc. 62,065
898 Russell Corp. 25,480
1,503 V.F. Corp. 98,259
------------
249,642
------------
Tobacco (0.87%)
5,536 American Brands, Inc. 264,344
21,209 Philip Morris Cos., Inc. 1,964,484
6,492 UST, Inc. 187,457
------------
2,416,285
------------
Toys (0.11%)
2,489 Hasbro, Inc. 96,760
7,014 Mattel, Inc. 202,529
------------
299,289
------------
Total Industrial 102,168,576
------------
TRANSPORTATION (0.72%)
Airlines (0.13%)
2,047 AMR Corp.* 171,948
1,342 Delta Air Lines, Inc. 95,114
3,656 Southwest Airlines Co. 82,260
1,384 USAir Group, Inc.* 24,047
------------
373,369
------------
Railroads (0.51%)
3,611 Burlington Northern Santa Fe Corp. 297,456
5,992 CSX Corp. 258,405
1,968 Conrail, Inc. 187,206
3,738 Norfolk Southern Corp. 333,149
5,919 Union Pacific Corp. 332,204
------------
1,408,420
------------
Truckers (0.02%)
898 Caliber System 15,154
1,050 Consolidated Freightways, Inc. 25,200
662 Yellow Corp. 8,647
------------
49,001
------------
Transportation (Miscellaneous) (0.06%)
1,482 Federal Express Corp.* 119,301
2,174 Ryder System, Inc. 64,677
------------
183,978
------------
Total Transportation 2,014,768
------------
UTILITIES (4.02%)
Electric Companies (1.46%)
5,237 American Electric Power Co., Inc. 217,336
4,205 Baltimore Gas & Electric Co. 114,586
3,804 Carolina Power & Light Co. 137,419
4,683 Central & South West Corp. 124,100
4,357 Cinergy Corp. 144,326
4,122 Consolidated Edison Co. of N.Y., Inc. 120,568
3,745 DTE Energy Co. 112,818
4,278 Dominion Resources, Inc. 161,495
5,099 Duke Power Co. 249,214
11,147 Edison International 220,153
6,404 Entergy Corp. 179,312
5,237 FPL Group, Inc. 240,902
3,026 GPU Inc. 99,480
7,371 Houston Industries, Inc. 168,612
4,284 Niagara Mohawk Power Corp. 36,414
1,859 Northern States Power Co. 87,373
3,810 Ohio Edison Co. 79,534
5,580 PECO Energy Co. 140,895
10,679 Pacific Gas & Electric Co. 250,957
7,139 PacifiCorp 150,811
6,119 Public Service Enterprise Group, Inc. 164,448
16,586 Southern Co. 366,965
5,721 Texas Utilities Co. 231,700
5,375 Unicom Corp. 139,750
2,821 Union Electric Corp. 108,961
------------
4,048,129
------------
Natural Gas (0.40%)
3,391 Coastal Corp. 145,813
1,500 Columbia Gas Systems, Inc.* 91,125
1,273 Consolidated Natural Gas Co. 67,628
6,401 Enron Corp. 297,647
1,361 ENSERCH Corp. 29,261
1,028 NICOR, Inc. 35,852
4,588 Noram Energy Corp. 70,540
511 ONEOK, Inc. 13,733
2,110 Pacific Enterprises 64,882
3,739 Panenergy Corp. 143,952
962 Peoples Energy Corp. 33,911
2,104 Sonat, Inc. 103,622
------------
1,097,966
------------
Telephone (2.16%)
12,449 Airtouch Communications Corp. 325,230
13,879 Ameritech Corp. 759,875
11,025 Bell Atlantic Corp. 664,256
26,705 BellSouth Corp. 1,088,229
24,276 GTE Corp. 1,022,626
10,673 NYNEX Corp. 474,949
10,749 Pacific Telesis Group 365,466
15,233 SBC Communications, Inc. 740,705
13,468 U S West Media Group 210,438
11,763 U.S. West Communication Group 357,301
------------
6,009,075
------------
Total Utilities 11,155,170
------------
FINANCIAL (7.35%)
Financial Miscellaneous (1.43%)
12,746 American Express Co. 599,062
6,660 American General Corp. 248,085
4,294 Dean Witter Discover & Co. 252,809
4,719 Federal Home Loan Mortgage 476,619
28,259 Federal National Mortgage
Association 1,105,633
3,377 Green Tree Financial Corp. 133,814
5,812 MBNA Corp. 219,403
5,772 Merrill Lynch & Co., Inc. 405,483
4,424 Morgan Stanley Group 222,306
2,745 Salomon, Inc. 123,868
2,520 Transamerica Corp. 191,205
------------
3,978,287
------------
Life Insurance (0.16%)
1,770 Jefferson-Pilot Corp. 100,669
2,508 Lincoln National Corp. 121,638
3,108 Providian Corp. 146,076
1,292 Torchmark Corp. 62,501
345 USLIFE Corp. 10,781
------------
441,665
------------
Major Regional Banks (2.27%)
12,237 Banc One Corp. 518,543
10,996 Bank of New York, Inc. 364,243
5,610 Barnett Banks, Inc. 213,881
3,788 Boatmen's Bancshares, Inc. 230,121
4,624 CoreStates Financial Corp. 224,842
3,108 Fifth Third Bancorp 194,639
4,388 First Bank System, Inc. 289,608
4,496 First Union Corp. 327,084
7,312 Fleet Financial Group 364,686
6,448 Keycorp 300,638
4,288 National City Corp. 185,992
7,766 NationsBank Corp. 731,946
10,264 Norwest Corp. 450,333
6,356 PNC Financial Corp. 230,405
6,536 Suntrust Banks, Inc. 304,741
2,600 U.S. Bancorp, Inc. 104,000
5,519 Wachovia Corp. 296,646
3,674 Wells Fargo & Co. 981,417
------------
6,313,765
------------
Money Center Banks (1.25%)
2,580 Bankers Trust N.Y. Corp. 218,010
12,379 Chase Manhattan 1,061,499
12,068 Citicorp 1,194,732
8,966 First Chicago NBD Corp. 457,266
5,375 Morgan (J.P.) & Co., Inc. 464,266
1,067 Republic New York Corp. 81,359
------------
3,477,132
------------
Multi-Line Insurance (1.15%)
3,808 Aetna Inc 254,660
10,950 Allstate Corp. 614,569
11,939 American International Group, Inc. 1,296,874
1,764 CIGNA Corp. 230,202
12,420 Travelers, Inc. 673,785
1,764 Unum Corp. 110,912
------------
3,181,002
------------
Other Major Banks (0.53%)
2,891 Bank of Boston Corp. 185,024
10,831 BankAmerica Corp. 991,037
4,376 Mellon Bank Corp. 284,987
------------
1,461,048
------------
Personal Loans (0.12%)
1,784 Beneficial Corp. 104,364
2,763 Household International, Inc. 244,526
------------
348,890
------------
Property-Casualty Insurance (0.33%)
4,348 The Chubb Corp. 217,400
2,040 General Re Corp. 300,390
1,400 Mgic Investment Corp. 96,075
3,206 SAFECO Corp. 121,026
2,110 St. Paul Companies, Inc. 114,731
3,135 USF&G Corp. 59,565
------------
909,187
------------
Savings & Loans Companies (0.11%)
3,110 Ahmanson (H.F.) & Co. 97,576
1,549 Golden West Financial Corp. 100,491
3,529 Great Western Financial Corp. 98,812
------------
296,879
------------
Total Financial 20,407,855
------------
Total Common Stock
(cost $93,547,320) 135,746,369
------------
[CAPTION]
Principal Value
Amount (Note 1)
- ------------ ------------
SHORT-TERM INVESTMENTS (51.52%)
Repurchase Agreement (5.15%)(b)
$14,300,000 Smith Barney Inc.
5.60%; 11/1/96 (cost $14,300,000 ;
maturity value $14,302,224) $ 14,300,000
------------
United States Treasury Bills (46.37%)(c)
115,000,000 4.83%; 11/7/96 114,908,767
14,000,000 5.01%; 1/23/97 13,838,772
------------
Total United States Treasury Bills
(cost $128,747,539) 128,747,539
------------
Total Short-term Investments
(cost $143,047,539) 143,047,539
------------
Total Investments (cost $236,594,859)(a)
(100.41%)(a) 278,793,908
Liabilities Less Other Assets (-0.41%) (1,154,825)
------------
Net Assets (100.00%) $277,639,083
============
* Non-income producing security.
(a) Aggregate cost for federal income tax purposes is
$236,594,859. At October 31, 1996 unrealized appreciation
(depreciation) of securities for federal income tax
purposes is as follows:
Gross unrealized appreciation $44,160,534
Gross unrealized depreciation (1,961,485)
-----------
Net unrealized appreciation $42,199,049
===========
(b) The Repurchase Agreement is collateralized by obligations
of the United States government and its agencies with a
market value of $14,602,951 which exceeds the value of the
repurchase agreement. It is the Fund's policy to always
receive, as collateral, securities whose value, including
accrued interest, will be at least equal to 102% of the dollar
amount to be paid to the Fund under each agreement at its
maturity.The value of the securities are monitored daily. If
the value falls below 101% of the amount to be paid at maturity,
additional collateral is obtained.The Fund makes payment for such
securities only upon physical delivery or evidence of book entry
transferred to the account of its custodian.
(c) At October 31, 1996, the market value of $5,930,903 of the U.S.
Treasury Bills were pledged to cover margin requirements for
futures contracts.
Futures contracts at October 31, 1996:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
S&P 500 Stock Index:
385/Dec/Sell $(7,134,125)
===========
See accompanying notes to financial statements
October 31, 1996
The Rightime
Social Awareness Fund
Portfolio of Investments
Principal Value
Amount (Note 1)
- ------------ ------------
SHORT-TERM INVESTMENTS (99.93%)
Repurchase Agreement (8.05%)(b)
$700,000 Smith Barney Inc.
5.60%; 11/1/96 (cost $700,00;
maturity value $700,109) $700,000
----------
United States Treasury Bills (91.88%)
7,500,000 4.83%;11/7/96 7,494,050
500,000 5.01%;1/23/97 494,242
----------
Total United States Treasury Bills
(cost $7,988,292) 7,988,292
----------
Total Investments
(cost $8,688,292)(99.93%)(a) 8,688,292
Other Assets Less Liabilities (0.07%) 5,956
----------
Net Assets (100.00%) $8,694,248
==========
(a) Aggregate cost for federal income tax purposes is $8,688,292.
(b) The Repurchase Agreement is collateralized by obligations
of the United States government and its agencies with a
market value of $714,819 which exceeds the value of the
repurchase agreement. It is the Fund's policy to always
receive, as collateral, securities whose value, including
accrued interest, will be at least equal to 102% of the
dollar amount to be paid to the Fund under each agreement
at its maturity. The value of the securities are monitored
daily. If the value falls below 101% of the amount to be
paid at maturity, additional collateral is obtained.
The Fund makes payment for such securities only upon
physical delivery or evidence of book entry transferred
to the account of its custodian.
See accompanying notes to financial statements
October 31, 1996
The Rightime
The Rightime MidCap Fund
Portfolio of Investments
Principal Value
Amount (Note 1)
- ------------ ------------
SHORT-TERM INVESTMENTS (99.99%)
Repurchase Agreement (5.48%)(b)
$4,400,000 Smith Barney Inc.
5.60%; 11/1/96 (cost $4,400,000;
maturity value $4,400,684) $ 4,400,000
-----------
United States Treasury Bills (94.51%)
72,000,000 4.83%;11/7/96 71,942,880
4,000,000 5.01%;1/23/97 3,953,935
-----------
Total United States Treasury Bills
(cost 75,896,815) 75,896,815
-----------
Total Investments
(cost $80,296,815)(99.99%)(a) 80,296,815
Other Assets Less Liabilities (0.01%) 7,145
-----------
Net Assets (100.00%) $80,303,960
===========
(a) Aggregate cost for federal income tax purposes is $80,296,815.
(b) The Repurchase Agreement is collateralized by obligations of
the United States government and its agencies with a market
value of $4,493,147 which exceeds the value of the repurchase
agreement. It is the Fund's policy to always receive, as
collateral, securities whose value, including accrued interest,
will be at least equal to 102% of the dollar amount to be paid
to the Fund under each agreement at its maturity. The value of
the securities are monitored daily. If the value falls below
101% of the amount to be paid at maturity, additional collateral
is obtained. The Fund makes payment for such securities only
upon physical delivery or evidence of book entry transferred to
the account of its custodian.
See accompanying notes to financial statements
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
The Rightime
Government The Rightime
The Rightime Securities Blue Chip
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value
(Identified cost $162,721,290, $10,344,811 and
$236,594,859, respectively) (Note 1) $166,472,367 $10,605,236 $278,793,908
Cash 115 59,067 56,016
Receivables:
Dividends and interest 266,585 72,938 197,346
Fund shares sold 42,120 1,947 100,261
Prepaid expenses and other assets 38,106 3,127 61,900
------------ ----------- ------------
Total assets 166,819,293 10,742,315 279,209,431
------------ ----------- ------------
LIABILITIES
Payables:
Fund shares repurchased 95,768 6,900 177,114
Variation margin 148,500 20,719 1,270,500
Accrued expenses 75,637 227 109,272
Other liabilities 9,108 1,858 13,462
------------ ----------- ------------
Total liabilities 329,013 29,704 1,570,348
------------ ----------- ------------
NET ASSETS (applicable to 5,188,887; 847,040; and
8,707,798 outstanding shares, respectively) (Note 4) $166,490,280 $10,712,611 $277,639,083
============ =========== ============
Net asset value and redemption price per share $32.09 $12.65 $31.88
====== ====== ======
Maximum offering price per share $32.09 $13.28(1) $33.47(1)
====== ====== ======
NET ASSETS
At October 31, 1996 net assets consisted of:
Paid-in capital $156,135,531 $16,296,737 $231,408,544
Undistributed net investment income 1,930,596 2,088 3,408,045
Undistributed net realized gains
(losses) on investments 5,784,076 (5,513,545) 7,757,570
Net unrealized appreciation of investments 3,751,077 260,425 42,199,049
Net unrealized depreciation of futures contracts (1,111,000) (333,094) (7,134,125)
------------ ----------- ------------
$166,490,280 $10,712,611 $277,639,083
============ =========== ============
(1) Net asset value, plus 4.99% of net asset value or 4.75% of offering price.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
October 31, 1996
The Rightime
Social The Rightime
Awareness MidCap
Fund Fund
---------- ----------
<S> <C> <C>
ASSETS
Investments in securities, at market value
(Identified cost $8,688,292 and $80,296,815 respectively) (Note 1) $8,688,292 $80,296,815
Cash 13,513 11,825
Receivables:
Dividends and interest 109 744
Fund shares sold 2,620 16,648
Prepaid expenses and other assets 1,812 18,004
Deferred organization costs -- 557
---------- -----------
Total assets 8,706,346 80,344,593
---------- -----------
LIABILITIES
Payables:
Fund shares repurchased 3,301 634
Accrued expenses 8,375 37,474
Other liabilities 422 2,525
---------- -----------
Total liabilities 12,098 40,633
---------- -----------
NET ASSETS (applicable to 298,882 and 2,766,945
outstanding shares, respectively) (Note 4) $8,694,248 $80,303,960
========== ===========
Net asset value and redemption price per share $29.09 $29.02
====== ======
Maximum offering price per share $30.54(1) $30.47(1)
====== ======
NET ASSETS
At October 31, 1996 net assets consisted of:
Paid-in capital $8,273,326 $76,311,319
Undistributed net investment income 123,444 1,334,681
Undistributed net realized gains on investments 297,478 2,657,960
---------- -----------
$8,694,248 $80,303,960
========== ===========
(1) Net asset value, plus 4.99% of net asset value or 4.75% of offering price.
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Operations
The Rightime
Government The Rightime
The Rightime Securities Blue Chip
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income
Dividends $ 4,928,304 $ -- $ 4,148,564
Interest 4,316,558 898,074 4,891,982
------------ ---------- ------------
Total income 9,244,862 898,074 9,040,546
------------ ---------- ------------
EXPENSES
Administrative services (Note 2) 1,578,643 108,234 2,312,884
Investment advisory fees (Note 2) 830,865 57,725 1,360,520
Distribution costs -- 12b-1 (Notes 2 and 3) 830,865 -- 680,260
Distribution costs -- service charge (Notes 2 and 3) 415,432 36,078 680,260
Transfer agent fees (Note 2) 186,844 49,375 339,537
Accounting services (Note 2) 60,183 24,226 77,360
Legal and audit fees 41,140 9,343 48,947
Custody fees 23,498 5,729 32,635
Reports to shareholders 25,366 2,223 33,703
Registration fees 12,314 10,825 10,930
Insurance 24,324 4,711 28,470
Directors fees 14,534 1,406 18,652
Miscellaneous 25,044 -- 25,694
------------ ---------- ------------
Total expenses 4,069,052 309,875 5,649,852
------------ ---------- ------------
Net investment income 5,175,810 588,199 3,390,694
------------ ---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain from security transactions 28,372,193 169,582 37,947,305
Capital gain distribution from regulated
investment companies 7,461,168 -- --
Net realized gain (loss) on futures contracts 61,593 593,236 (1,450,289)
Decrease in unrealized appreciation of investments (25,822,507) (769,653) (2,218,293)
Decrease in unrealized appreciation of
futures contracts (1,181,000) (344,438) (7,174,125)
------------ ---------- ------------
Net gain (loss) on investments 8,891,447 (351,273) 27,104,598
------------ ---------- ------------
Net increase in net assets resulting
from operations $ 14,067,257 $ 236,926 $ 30,495,292
============ ========== ============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
For The Year Ended October 31, 1996
The Rightime
Social The Rightime
Awareness MidCap
Fund Fund
---------- ----------
<S> <C> <C>
INVESTMENT INCOME
Income
Dividends $ 61,393 $ 568,250
Interest 259,921 2,532,943
---------- -----------
Total income 321,314 3,101,193
---------- -----------
EXPENSES
Administrative services (Note 2) 69,383 673,888
Investment advisory fees (Note 2) 40,814 396,405
Distribution costs -- 12b-1 (Notes 2 and 3) 20,407 198,202
Distribution costs -- service charge (Notes 2 and 3) 20,407 198,202
Transfer agent fees (Note 2) 10,586 117,769
Accounting services (Note 2) 12,643 46,055
Legal and audit fees 5,163 21,180
Custody fees 3,673 14,520
Reports to shareholders 991 12,312
Registration fees 7,244 11,565
Insurance 886 12,147
Directors fees 543 7,042
Organization costs -- 6,797
Miscellaneous 5,130 17,736
---------- -----------
Total expenses 197,870 1,733,820
---------- -----------
Net investment income 123,444 1,367,373
---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain from security transactions 1,911,874 15,611,628
Net realized gain on futures contracts 57,305 181,498
Decrease in unrealized appreciation of investments (1,099,843) (10,246,725)
Increase (decrease) in unrealized appreciation of
futures contracts (375) 270,000
---------- -----------
Net gain on investments 868,961 5,816,401
---------- -----------
Net increase in net assets resulting
from operations $ 992,405 $ 7,183,774
========== ============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of
Changes in Net Assets
The Rightime Fund The Rightime Government Securities Fund The Rightime Blue Chip Fund
-------------------------------- ---------------------------------------- -------------------------------
For Year Ended For Year Ended For Year Ended For Year Ended For Year Ended For Year Ended
October 31, 1996 October 31, 1995 October 31, 1996 October 31, 1995 October 31, 1996 October 31, 1995
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment
income (loss) $ 5,175,810 $ (406,446) $ 588,199 $ 1,210,877 $ 3,390,694 $ 2,641,195
Net realized gain
from security
transactions 28,372,193 615,857 169,582 1,255,938 37,947,305 4,771,678
Capital gain
distributions from
regulated investment
companies 7,461,168 1,472,323 -- -- -- --
Net realized gain
(loss) on futures
contracts 61,593 2,701,095 593,236 (2,616,264) (1,450,289) 2,009,198
Net increase
(decrease) in
unrealized
appreciation
of investments (25,822,507) 26,783,886 (769,653) 2,240,062 (2,218,293) 37,365,574
Net increase
(decrease) in
unrealized
appreciation of
futures contracts (1,181,000) 195,550 (344,438) (772,625) (7,174,125) 290,850
------------ ------------ ----------- ----------- ------------ ------------
Net increase in
net assets
resulting
from operations 14,067,257 31,362,265 236,926 1,317,988 30,495,292 47,078,495
Undistributed
investment income
included in price
of shares sold
and repurchased -- -- (18,607) (50,176) -- --
DISTRIBUTIONS TO
SHAREHOLDERS
Distributions
from net realized
gains on investments (34,013,909) (19,759,638) -- -- (35,771,172) (38,462,845)
Distributions
from net investment
income (3,245,214) (1,232,709) (694,855) (1,105,663) (2,047,018) (3,055,769)
CAPITAL SHARE
TRANSACTIONS
Increase (decrease)
in net assets
resulting from
capital share
transactions
(Note 4) 30,716,107 (611,445) (7,443,712) (7,275,667) 35,342,710 22,377,451
------------ ------------ ----------- ----------- ------------ ------------
Total increase
(decrease) 7,524,241 9,758,473 (7,920,248) (7,113,518) 28,019,812 27,937,332
NET ASSETS
Beginning of year 158,966,039 149,207,566 18,632,859 25,746,377 249,619,271 221,681,939
------------ ------------ ----------- ----------- ------------ ------------
End of year * $166,490,280 $158,966,039 $10,712,611 $18,632,859 $277,639,083 $249,619,271
============ ============ =========== =========== ============ ============
* Including
undistributed
net investment
income of: $ 1,930,596 $ -- $ 2,088 $ 127,351 $ 3,408,045 $ 2,064,369
============ ============ =========== =========== ============ ============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
The Rightime Social Awareness Fund The Rightime MidCap Fund
----------------------------------- -----------------------------------
For Year Ended For Year Ended For Year Ended For Year Ended
October 31, 1996 October 31, 1995 October 31, 1996 October 31, 1995
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 123,444 $ 22,498 $ 1,367,373 $ 596,646
Net realized gain from security transactions 1,911,874 219,958 15,611,628 1,342,029
Net realized gain on futures contracts 57,305 88,781 181,498 1,296,140
Net increase (decrease) in unrealized
appreciation of investments (1,099,843) 1,099,843 (10,246,725) 10,106,255
Net increase (decrease) in unrealized
appreciation of futures contracts (375) 375 270,000 (275,150)
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations 992,405 1,431,455 7,183,774 13,065,920
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gains
on investments (1,799,322) -- (15,773,543) (1,242,938)
Distributions from net investment income -- (121,786) (328,544) (1,037,360)
CAPITAL SHARE TRANSACTIONS
Increase (decrease) in net assets resulting from
capital share transactions (Note 4) 2,123,102 (1,153,378) 14,135,978 (951,411)
----------- ----------- ----------- -----------
Total increase 1,316,185 156,291 5,217,665 9,834,211
NET ASSETS
Beginning of year 7,378,063 7,221,772 75,086,295 65,252,084
----------- ----------- ----------- -----------
End of year * $ 8,694,248 $ 7,378,063 $80,303,960 $75,086,295
=========== =========== =========== ===========
* Including undistributed net investment
income of: $ 123,444 $ -- $ 1,334,681 $ 295,852
=========== =========== =========== ===========
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial
Highlights
(For a Share Outstanding Throughout the Period)
Net
Realized
Net and Distributions Distributions Net
Asset Net Unrealized from from Asset
Value Investment Gain Total Net Realized Value
Beginning Income (Loss) on From Investment Capital Total End Total
of Period (Loss) Investments Operations Income Gains Distributions of Period Return (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
The Rightime Fund
1996 $37.55 $1.14 $2.11 $3.25 $(0.77) $(7.94) $(8.71) $32.09 8.96%
1995 35.50 (0.10) 7.21 7.11 (0.30) (4.76) (5.06) 37.55 23.38
1994 37.42 0.29 (0.49) (0.20) -- (1.72) (1.72) 35.50 (0.48)
1993 34.70 (0.32) 5.47 5.15 (0.05) (2.38) (2.43) 37.42 15.49
1992 37.33 0.06 2.16 2.22 (0.17) (4.68) (4.85) 34.70 6.15
- -----------------------------------------------------------------------------------------------------------------------------
The Rightime Government Securities Fund
1996 $13.06 $0.52 $(0.32) $0.20 $(0.61) $ -- $(0.61) $12.65 1.48%
1995 12.93 0.68 0.08 0.76 (0.63) -- (0.63) 13.06 6.00
1994 14.31 0.61 (1.34) (0.73) (0.65) -- (0.65) 12.93 (5.15)
1993 13.16 0.66 1.21 1.87 (0.72) -- (0.72) 14.31 14.60
1992 12.86 0.71 0.19 0.90 (0.60) -- (0.60) 13.16 7.20
- -----------------------------------------------------------------------------------------------------------------------------
The Rightime Blue Chip Fund
1996 $32.84 $0.40 $3.52 $3.92 $(0.28) $(4.60) $(4.88) $31.88 12.26%
1995 33.08 0.35 5.66 6.01 (0.46) (5.79) (6.25) 32.84 22.31
1994 33.14 0.39 (0.04) 0.35 (0.23) (0.18) (0.41) 33.08 1.06
1993 29.70 0.26 3.41 3.67 (0.23) -- (0.23) 33.14 12.41
1992 28.22 0.25 1.55 1.80 (0.32) -- (0.32) 29.70 6.41
- -----------------------------------------------------------------------------------------------------------------------------
The Rightime Social Awareness Fund
1996 $32.37 $0.41 $3.88 $4.29 $ -- $(7.57) $(7.57) $29.09 13.62%
1995 26.84 0.08 5.91 5.99 (0.46) -- (0.46) 32.37 22.70
1994 29.07 0.33 (0.72) (0.39) -- (1.84) (1.84) 26.84 (1.27)
1993 29.64 (0.02) 1.76 1.74 (0.04) (2.27) (2.31) 29.07 5.82
1992 25.56 0.12 4.30 4.42 (0.23) (0.11) (0.34) 29.64 17.43
- -----------------------------------------------------------------------------------------------------------------------------
The Rightime MidCap Fund
1996 $32.95 $0.49 $2.56 $3.05 $(0.14) $(6.84) $(6.98) $29.02 9.65%
1995 28.44 0.26 5.25 5.51 (0.45) (0.55) (1.00) 32.95 (1.38)
1993 27.08 (0.03) 4.80 4.77 (0.05) (0.73) (0.78) 31.07 17.93
1992(1) 25.00 0.03 2.07 2.10 (0.02) -- (0.02) 27.08 8.40
- -----------------------------------------------------------------------------------------------------------------------------
(1) Inception of fund was November 11, 1991
(2) Excludes sales charge
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
October 31, 1996
RATIOS
--------------------------------------------------------------------------------------------------------
Net Assets At The Expenses to Average Net Investment Income (loss) Portfolio Average
End Of Period Net Assets To Average Net Assets Turnover Commission Rate Paid
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1996 $166,490,280 2.45% 3.11% 15.40% --
1995 158,966,039 2.47 (0.27) 9.45 --
1994 149,207,566 2.51 0.78 11.50 --
1993 172,178,587 2.52 (0.83) 1.86 --
1992 170,955,840 2.56 0.15 72.63 --
- --------------------------------------------------------------------------------------------------------------------------------
The Rightime Government Securities Fund
1996 $10,712,611 2.15% 4.08% 109.47% --
1995 18,632,859 1.90 5.29 77.98 --
1994 25,746,377 1.90 4.62 216.70 --
1993 33,934,808 1.98 4.72 120.80 --
1992 30,312,806 2.03 5.53 126.25 --
- --------------------------------------------------------------------------------------------------------------------------------
The Rightime Blue Chip Fund
1996 $277,639,083 2.08% 1.25% 1.30% $0.03
1995 249,619,271 2.17 1.13 17.52 --
1994 221,681,939 2.22 1.16 0.98 --
1993 223,687,834 2.16 0.72 1.97 --
1992 211,481,090 2.25 0.87 -- --
- --------------------------------------------------------------------------------------------------------------------------------
The Rightime Social Awareness Fund
1996 $8,694,248 2.42% 1.51% 46.57% $0.05
1995 7,378,063 2.75 0.32 36.49 --
1994 7,221,772 2.56 1.04 54.85 --
1993 10,556,506 2.40 (0.19) 238.52 --
1992 6,525,545 2.49 0.45 276.62 --
- --------------------------------------------------------------------------------------------------------------------------------
The Rightime MidCap Fund
1996 $80,303,960 2.19% 1.72% 3.59% $0.02
1995 75,086,295 2.19 0.84 24.67 --
1994 65,252,084 2.28 1.14 0.75 --
1993 62,124,470 2.28 (0.19) 38.79 --
1992(1) 31,311,779 2.34* 0.17* 35.10 --
- --------------------------------------------------------------------------------------------------------------------------------
* Annualized
See accompanying notes to financial statements
</TABLE>
[LOGO]
Family of Funds
October 31, 1996
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The Rightime Fund, The Rightime Government Securities Fund, The Rightime
Blue Chip Fund, The Rightime Social Awareness Fund, and The Rightime
MidCap Fund (the "Funds") are each a series of shares of common stock of
The Rightime Fund Inc., which is registered under the Investment Company
Act of 1940, as amended, as a diversified open-end management company.
The company was incorporated in the state of Maryland on November 15,
1984.
The investment objective of The Rightime Fund, The Rightime Blue Chip
Fund and The Rightime MidCap Fund is to achieve high total return
consistant with reasonable risk. The Rightime Fund seeks to achieve this
objective by concentrating in shares of registered investment companies.
The Rightime Blue Chip Fund seeks to achieve this objective by investing
in securities of well known and established companies ("Blue Chips").
The Rightime MidCap Fund seeks to achieve this objective by investing in
securities of companies with medium-size market capitalization
("MidCaps").
The investment objective of The Rightime Social Awareness Fund is to
achieve growth of capital and its second objective is current income,
consistent with reasonable risk. The Rightime Social Awareness Fund
seeks to achieve its objective by investing in securities of companies
with prospects for above average capital growth which, in the opinion of
the fund's advisor, show evidence in the conduct of their business,
relative to other companies in the same industry, of contributing to the
enhancement of the quality of human life.
The investment objective of The Rightime Government Securities Fund is
to achieve high current income consistent with safety and liquidity of
principal. The fund seeks to achieve this objective by investing in
securities that are issued or guaranteed as to principal and interest by
the U.S. government, its agencies, authorities or instrumentalities or
secured by such securities.
The following is a summary of significant accounting policies followed
by the Funds.
SECURITY VALUATION
The Funds' investments in securities are carried at market value.
Securities listed on an exchange or quoted on a national market system
are valued at the last sales price. Other securities are valued at the
most recent bid price. Investments in regulated investment companies are
valued at the net asset value per share as quoted by the National
Association of Securities Dealers on the last business day of the fiscal
period. Investments in money market funds are valued at cost which
approximates market value. Short-term investments are valued at
amortized cost which approximates market value.
FUTURES CONTRACTS
Initial margin deposits required upon entering into futures contracts
are satisfied by the segregation of specific securities or cash, and/or
by securing a standby letter of credit from a major commercial bank, as
collateral, for the account of the broker (the Fund's agent in acquiring
the futures position). During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains
or losses by "marking to market" on a daily basis to reflect the market
value of the contract at the end of each day's trading. Variation margin
payments are made or received depending upon whether unrealized gains or
losses are incurred. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the proceeds from
(or cost of) the closing transaction and the Fund's basis in the
contract.
The Rightime Government Securities Fund may purchase or sell future
contracts which are based on government securities, including any index
of government securities in order to protect itself against the adverse
effects of fluctuations in interest rates. Risks of entering into these
future contracts include the possibility that there may be an illiquid
market and that if the advisor's investment judgement about the general
direction of interest rates is incorrect the fund's overall performance
may be poorer than if it had not entered into any such contracts. The
other four Rightime Funds may purchase or sell stock index future
contracts as a hedge against changes in market conditions. Risks include
the possibility of an illiquid market and that a change in the value of
the contract may not correlate with changes in the securities being
hedged.
FEDERAL INCOME TAXES
No provision has been made for federal income taxes since it is the
policy of the Fund to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies and to make sufficient
distributions of taxable income to relieve it from all federal income
taxes.
At October 31, 1996, The Rightime Government Securities Fund had
$5,846,639 in capital loss carryovers available to offset future capital
gains, if any, which expire from 1998 to 2003.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND OTHER
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for net operating losses, wash sales and futures
transactions.
DEFERRED ORGANIZATION EXPENSE
All of the Funds' expenses in connection with its organization and the
public offering of its shares of common stock have been paid by the
Funds. Such expenses have been deferred and are being amortized as
charges against net investment income over a period of five years.
EQUALIZATION
The Rightime Government Securities Fund follows the accounting practice
of "equalization" whereby part of the proceeds from the capital share
transactions, equivalent to a proportionate share of the distributable
investment income on the date of the transaction, is transferred to or
from the undistributed net investment income account. Undistributed net
investment income is therefore unaffected by capital share transactions.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that
effect the reported amounts of assets and liabilities at the date of the
financial statements, as well as the reported amounts of income and
expenses during the period. Actual results may differ from the
estimates.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Advisor, Rightime Econometrics, Inc., is paid a monthly
fee based on an annual rate (summarized below) of the Funds' average
daily net assets. In the event the expenses of the Fund for any fiscal
year (including the advisory and administrative fees, but excluding
interest, taxes, brokerage commissions, distribution fees, litigation
and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Funds' business) exceed the
limits set by applicable regulation of state securities commissions, if
any, the compensation due to the Advisor will be reduced by the amount
of such excess.
The Funds' Administrator, Rightime Administrators, Inc., is paid a
monthly fee based on an annual rate (summarized below) of the Funds'
average daily net assets for providing office facilities and certain
administrative services.
The Funds' Distributor, Lincoln Investment Planning, Inc., is paid a
monthly fee based on an annual rate (summarized below) of the Funds'
average daily net assets for costs incurred in connection with the sale
of the Funds' capital stock (see Note 3).
A summary of annual fee rates applied to average daily net assets are as
follows:
Advisory Administration Distribution
Fee Fee Costs
------ ---------- --------
The Rightime Fund .50% .95% .75%
The Rightime
Government
Securities Fund .40% .75% .25%
The Rightime
Blue Chip Fund .50% .85% .50%
The Rightime
Social Awareness
Fund .50% .85% .50%
The Rightime
MidCap Fund .50% .85% .50%
During the year ended October 31, 1996, the Distributor received
commissions as an underwriter and a retail dealer of Fund shares as
follows:
The Rightime Government Securities Fund $ 32,842
The Rightime Blue Chip Fund $919,999
The Rightime Social Awareness Fund $ 28,839
The Rightime MidCap Fund $254,686
Lincoln Investment Planning, Inc., also provides the Funds with transfer
agent and accounting and recordkeeping services. Aggregate transfer
agent and accounting services fees received by Lincoln Investment
Planning, Inc. were $618,551 and $220,467, respectively. During the year
ended October 31, 1996, Lincoln Investment Planning, Inc. waived fees of
$9,537 and $12,643, respectively, for transfer agent and accounting
services provided to the Rightime Social Awareness Fund.
Certain officers and directors of the company are also officers and/or
directors of the Advisor, Administrator, Transfer Agent and/or
Distributor.
NOTE 3 - DISTRIBUTION COSTS
The Fund's Board of Directors, including a majority of the Directors who
are not "interested persons" of the Funds as defined in the Investment
Company Act of 1940, have adopted a distribution plan pursuant to Rule
12b-1 of the Act. The Plan regulates the manner in which a regulated
investment company may assume costs of distributing and promoting the
sales of its shares.
The Plan provides that the Funds may incur certain costs which may not
exceed the rates detailed above per annum of the Funds' average daily
net assets for payments to the Distributor for items such as advertising
expenses, selling expenses, commissions or travel reasonably intended to
result in sales of shares of the Funds and for commissions for Fund
shares sold by representatives of the Distributor or other broker-
dealers. The distribution costs include a service charge based on an
annual rate of .25% of the Funds' average daily net assets.
NOTE 4 - CAPITAL SHARES
The Rightime Fund, Inc. has 500,000,000 shares of $.01 par value stock
authorized which may be allocated to any series. Currently 50,000,000
shares have been allocated to The Rightime Fund and 20,000,000 shares to
each of the other four Funds. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
The Rightime Fund The Rightime Government Securities Fund
------------------------------------------------ -------------------------------------------------
1996 1995 1996 1995
--------------------- ----------------------- --------------------- -----------------------
Shares Value Shares Value Shares Value Shares Value
-------- ----------- -------- ---------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 468,508 $ 16,805,846 409,374 $ 13,557,231 70,161 $ 905,052 153,514 $ 1,974,518
Shares issued
in reinvestment
of distributions 1,129,061 37,071,501 685,260 20,831,897 50,386 655,134 79,761 1,029,755
--------- ------------ --------- ------------ ------- ----------- ------- -----------
1,597,569 53,877,347 1,094,634 34,389,128 120,547 1,560,186 233,275 3,004,273
Shares redeemed (641,747) (23,161,240) (1,064,345) (35,000,573) (699,840) (9,003,898) (798,905) (10,279,940)
--------- ------------ --------- ------------ ------- ----------- ------- -----------
Net increase
(decrease) 955,822 $ 30,716,107 30,289 $ (611,445) (579,293) $(7,443,712) (565,630) $(7,275,667)
========= ============ ========= ============ ======= =========== ======= ===========
<CAPTION>
The Rightime Blue Chip Fund The Rightime Social Awareness Fund
------------------------------------------------ -------------------------------------------------
1996 1995 1996 1995
--------------------- ----------------------- --------------------- -----------------------
Shares Value Shares Value Shares Value Shares Value
-------- ----------- -------- ---------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 891,634 $ 30,005,701 940,978 $ 27,663,228 43,737 $ 1,472,939 28,167 $ 796,038
Shares issued
In reinvestment
of distributions 1,175,013 37,609,632 1,532,344 41,281,332 60,687 1,764,746 4,339 114,769
--------- ------------ --------- ------------ ------- ----------- ------- -----------
2,066,647 67,615,333 2,473,322 68,944,560 104,424 3,237,685 32,506 910,807
Shares redeemed (959,181) (32,272,623) (1,573,784) (46,567,109) (33,480) (1,114,583) (73,654) (2,064,185)
--------- ------------ --------- ------------ ------- ----------- ------- -----------
Net increase
(decrease) 1,107,466 $ 35,342,710 899,538 $ 22,377,451 70,944 $ 2,123,102 (41,148) $(1,153,378)
========= ============ ========= ============ ======= =========== ======= ===========
<CAPTION>
The Rightime MidCap Fund
---------------------------------------------------------
1996 1995
---------------------- -------------------------
Shares Value Shares Value
-------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 261,155 $ 8,362,050 364,901 $ 10,596,768
Shares issued
in reinvestment
of distributions 547,119 16,052,380 82,517 2,270,886
------- ------------ ------- -------------
808,274 24,414,430 447,418 12,867,654
Shares redeemed (320,085) (10,278,452) (463,073) (13,819,065)
------- ------------ ------- -------------
Net increase
(decrease) 488,189 $ 14,135,978 (15,655) $ (951,411)
======= ============ ======= =============
</TABLE>
NOTE 5 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities other than short-term investments during
the year ended October 31, 1996 were as follows:
Purchases Sales
----------- --------------
The Rightime Fund $12,399,592 $147,225,565
The Rightime Government
Securities Fund $10,184,875 $ 22,305,317
The Rightime Blue Chip Fund $ 2,337,369 $147,371,544
The Rightime Social
Awareness Fund $ 3,351,920 $ 10,856,514
The Rightime MidCap Fund $ 2,528,379 $ 75,051,779
[LOGO]
Report of Independent
Certified Public Accountants
To the Shareholders
and Board of Directors
of The Rightime Fund, Inc.
We have audited the accompanying statements of assets and liabilities of
The Rightime Fund, The Rightime Government Securities Fund, The Rightime
Blue Chip Fund, The Rightime Social Awareness Fund and The Rightime
MidCap Fund, each a series of shares of common stock of The Rightime
Fund, Inc., including the portfolios of investments, as of October 31,
1996 and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for the periods indicated
thereon. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1996 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of The Rightime Fund, The Rightime Government
Securities Fund, The Rightime Blue Chip Fund, The Rightime Social
Awareness Fund and The Rightime MidCap Fund as of October 31, 1996, the
results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended and
the financial highlights for the periods referred to above, in
conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
December 2, 1996
October 31, 1996
The Rightime Fund
Performance Comparison
The fiscal year ending October 31, 1996 surprised many investment
experts and novices alike. Few expected 1996 to generate returns
anywhere near the numbers we are seeing today after posting outstanding
gains in 1995. Yet the returns have been remarkable although the path
has been bumpy. Large capitalization stocks have led the market while
small caps trailed the market. Companies with consistent, reliable
earnings have also been favored.
Rightime Fund navigated the difficulties of 1996 well as the market
wavered midyear. January's early cautiousness gave way to the dual force
of favorable interest rates and solid earnings driven by renewed
productivity. Stocks were propelled to record highs. The spring and
early summer reintroduced investors to equity volatility. Economic
strength, rising agricultural and energy prices, and labor tightness all
fueled a rise in inflationary fears. Long-term interest rates vaulted
from just below six percent to over seven by May. Stocks endured a
turbulent period as prices suffered their worst declines in more than
five years. Equities staged a rally, beginning in August that has
continued through November. Under the guidance of the Rightime Market
Model (RTMM(registered trademark) ), the fund participated in the year's
early rally then established a conservative position in April. This
allowed the fund to avoid June and July's decline. The fund stayed in
the conservative position as stocks recovered in the late summer and
early fall. The fund is currently fully invested in a well diversified
portfolio of equity mutual funds. It continues to adhere to the
allocations established by the RTMM.(registered trademark)
- --------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------
Since Inception
1 Year 5 Years 10 Years Sept. 17, 1985
- --------------------------------------------------------------------
8.96% 10.40% 10.00% 11.48%
- --------------------------------------------------------------------
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Fund's
performance against the Lipper Growth Fund Index, a broad based index.
The "Risk Adjusted Performance Comparison" more closely reflects the
fund's performance as compared to a consistent risk level.
The Rightime Fund utilizes a modeled approach to investing which
attempts to minimize risk by moving assets to money market equivalent
investments during periods in which the market appears to be overvalued.
This approach, over full market cycles, tends to invest in low risk, or
money market-like securities approximately half of the time. In order to
provide an equivalent risk level this comparison assumes that assets are
invested half in the Lipper Growth Fund Index and half in a money market
fund index. This balanced index approaches the risk level of each fund
that has been in existence for at least one full market cycle and
therefore provides a more meaningful performance comparison.
The performance shown represents past performance and is not a guarantee
of future results. A mutual fund's share price and investment return
will vary with market conditions, and the principal value of shares,
when redeemed, may be more or less than the original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
Performance Comparison
Rightime Fund
Lipper Growth Fund Index
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Comparison of change in value of $10,000 investment in the Rightime
Fund, Lipper Growth Fund Index and Money Market Fund Index.
Risk-adjusted Performance Comparison
Rightime Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Risk-adjusted comparison of change in value of $10,000 investment in the
Rightime Fund, Balanced Reference Index (50% Lipper/50% Money Market),
and Money Market Fund Index.
The Rightime Government Securities Fund
Performance Comparison
The fiscal year ending October 31, 1996 has been difficult for Rightime
Government Securities Fund. The year started off with a significant rise
in long-term interest rates resulting in substantial declines for long-
term treasury prices. The fund, although sustaining losses, avoided a
portion of the principal decline suffered by long-term bonds in general.
After holding steady for most of the summer, bond prices rallied as
rates fell. The initial rise in rates was a result of rising
agricultural and oil prices, a strengthening economy, and tight labor
markets. All contributed to inflationary fears. Those fears were never
realized. As the economy softened in the second half bonds rallied yet
much of the inflation concerns did not subside until much later. The
Rightime Market Model (RTMM(registered trademark)), being a multi factor
model, did not trade on one piece of evidence. However, the bonds did
and we missed much of the late year rally. Our conservative position
did, however, result in a risk level that has been significantly lower
than the average long-term bond. The fund continues to adhere to the
allocations determined by the RTMM.(registered trademark)
- --------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------
Since Inception
1 Year 5 Years Jan. 2. 1987
- --------------------------------------------------------------------
-3.33% 3.61% 4.42%
- --------------------------------------------------------------------
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Government
Securities Fund's performance against the Shearson Lehman Hutton U.S.
Treasury Intermediate Index, a broad based fixed income index.
The performance shown represents past performance and is not a guarantee
of future results. A mutual fund's share price and investment return
will vary with market conditions, and the principal value of shares,
when redeemed, may be more or less than the original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends reflecting the 4.75% sales charge.
(At inception, the Government Securities Fund was no load.)
Performance Comparison
Rightime Government Securities Fund
Shearson Lehman Hutton U.S. Treasury Intermediate Index
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Comparison of change in value of $10,000 investment in the Rightime
Government Securities Fund, Shearson Lehman Hutton U.S. Treasury
Intermediate Index and Money Market Fund Index.
October 31, 1996
The Rightime Blue Chip Fund
Performance Comparison
The fiscal year ending October 31, 1996 surprised many investment
experts and novices alike. Few expected 1996 to generate returns
anywhere near the numbers we are seeing today after posting outstanding
gains in 1995. Yet the returns have been remarkable although the path
has been bumpy. Large capitalization stocks have led the market.
Rightime Blue Chip Fund navigated the difficulties of 1996 well as the
market wavered midyear. January's early cautiousness gave way to the
dual force of favorable interest rates and solid earnings driven by
renewed productivity. Stocks were propelled to record highs. The spring
and early summer reintroduced investors to equity volatility. Economic
strength, rising agricultural and energy prices, and labor tightness all
fueled a rise in inflationary fears. Long-term interest rates vaulted
from just below six percent to over seven by May. Stocks endured a
turbulent period as prices suffered their worst declines in more than
five years. Equities staged a rally, beginning in August that has
continued through November. Under the guidance of the Rightime Market
Model (RTMM(registered trademark)), the fund participated in the year's
early rally then established a conservative position in April. This
allowed the fund to avoid June and July's decline. The fund stayed in
the conservative position as stocks recovered in the late summer and
early fall. The fund established a fully invested position in November
partaking in some of the curent rally. It continues to adhere to the
allocations established by the RTMM.(registered trademark)
- --------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------
Since Inception
1 Year 5 Years July 22, 1987
- --------------------------------------------------------------------
6.92% 9.59% 9.29%
- --------------------------------------------------------------------
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Blue Chip
Fund's performance against the S&P 500 Index, an unmanaged index of
common stock prices. The "Risk Adjusted Performance Comparison" more
closely reflects the fund's performance as compared to a consistent risk
level.
The Rightime Blue Chip Fund utilizes a modeled approach to investing
which attempts to minimize risk by moving assets to money market
equivalent investments during periods in which the market appears to be
overvalued. This approach, over full market cycles, tends to invest in
low risk, or money market-like securities approximately half of the
time. In order to provide an equivalent risk level this comparison
assumes that assets are invested half in the S&P 500 Index and half in a
money market fund index. This balanced index approaches the risk level
of each fund that has been in existence for at least one full market
cycle and therefore provides a more meaningful performance comparison.
The performance shown represents past performance and is not a guarantee
of future results. A mutual fund's share price and investment return
will vary with market conditions, and the principal value of shares,
when redeemed, may be more or less than the original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Performance Comparison
Rightime Blue Chip Fund
S&P 500 Index
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Comparison of change in value of $10,000 investment in the Rightime Blue
Chip Fund, S&P 500 Index and Money Market Fund Index.
Risk-adjusted Performance Comparison
Rightime Blue Chip Fund
Balanced Reference Index (50% S&P 500/50% Money Market)
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Risk-adjusted comparison of change in value of $10,000 investment in the
Rightime Blue Chip Fund, Balanced Reference Index (50% S&P/50% Money
Market), and Money Market Fund Index.
October 31, 1996
The Rightime
Social Awareness Fund
Performance Comparison
The fiscal year ending October 31, 1996 surprised many investment
experts and novices alike. Few expected 1996 to generate returns
anywhere near the numbers we are seeing today after posting outstanding
gains in 1995. Yet the returns have been remarkable although the path
has been bumpy. Large capitalization, growth stocks have led the market.
Rightime Social Awareness Fund navigated the difficulties of 1996 well
as the market wavered midyear. January's early cautiousness gave way to
the dual force of favorable interest rates and solid earnings driven by
renewed productivity. Stocks were propelled to record highs. The spring
and early summer reintroduced investors to equity volatility. Economic
strength, rising agriculture and energy prices, and labor tightness all
fueled a rise in inflationary fears. Long-term interest rates vaulted
from just below six percent to over seven by May. Stocks endured a
turbulent period as prices suffered their worst declines in more than
five years. Equities staged a rally, beginning in August that has
continued through November. Under the guidance of the Rightime Market
Model (RTMM(registered trademark)), the fund participated in the year's
early rally then established a conservative position in April. This
allowed the fund to avoid June and July's decline. The fund stayed in
the conservative position as stocks recovered in the late summer and
early fall. The fund established a fully invested position in November
partaking in some of the current rally. It continues to adhere to the
allocations established by the RTMM.(registered trademark)
- --------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------
Since Inception
1 Year 5 Year March 1, 1990
- --------------------------------------------------------------------
8.23% 10.25% 8.23%
- --------------------------------------------------------------------
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Social
Awareness Fund's performance against the Lipper Growth Fund Index, a
broad based index. The "Risk Adjusted Performance Comparison" more
closely reflects the fund's performance as compared to a consistent risk
level.
The Social Awareness Fund utilizes a modeled approach to investing which
attempts to minimize risk by moving assets to money market equivalent
investments during periods in which the market appears to be overvalued.
This approach, over full market cycles, tends to invest in low risk, or
money market-like securities approximately half of the time. In order to
provide an equivalent risk level this comparison assumes that assets are
invested half in the Lipper Growth Fund Index and half in a money market
fund index. This balanced index approaches the risk level of each fund
that has been in existence for at least one full market cycle and
therefore provides a more meaningful performance comparison.
The performance shown represents past performance and is not a guarantee
of future results. A mutual fund's share price and investment return
will vary with market conditions, and the principal value of shares,
when redeemed, may be more or less than the original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Performance Comparison
Rightime Social Awareness Fund
Lipper Growth Fund Index
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Comparison of change in value of $10,000 investment in the Rightime
Social Awareness Fund, Lipper Growth Fund Index and Money Market Fund
Index.
Risk-adjusted Performance Comparison
Rightime Social Awareness Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Risk-adjusted comparison of change in value of $10,000 investment in the
Rightime MidCap Fund, Balanced Reference Index (50% Lipper/50% Money
Market), and Money Market Fund Index.
October 31, 1996
The Rightime MidCap Fund
Performance Comparison
The fiscal year ending October 31, 1996 surprised many investment
experts and novices alike. Few expected 1996 to generate returns
anywhere near the numbers we are seeing today after posting outstanding
gains in 1995. Yet the returns have been remarkable although the path
has been bumpy. Large capitalization stocks have led the market while
small and midcap stocks have trailed.
Rightime MidCap Fund navigated the difficulties of 1996 well as the
market wavered midyear. January's early cautiousness gave way to the
dual force of favorable interest rates and solid earnings driven by
renewed productivity. Stocks were propelled to record highs. The spring
and early summer reintroduced investors to equity volatility. Economic
strength, rising agricultural and energy prices, and labor tightness all
fueled a rise in inflationary fears. Long-term interest rates vaulted
from just below six percent to over seven by May. Stocks endured a
turbulent period as prices suffered their worst declines in more than
five years. Equities staged a rally, beginning in August that has
continued through November. Under the guidance of the Rightime Market
Model (RTMM(registered trademark)), the fund participated in the year's
early rally then established a conservative position in April. This
allowed the fund to avoid June and July's decline. The fund stayed in
the conservative position as stocks recovered in the late summer and
early fall. The fund established a fully invested position in November
partaking in some of the current rally. It continues to adhere to the
allocations established by the RTMM.(registered trademark)
- --------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------
Since Inception
1 Year 5 Years Nov. 11, 1991
- --------------------------------------------------------------------
4.46% N/A 9.64%
Performance Comparison
The "Performance Comparison" chart assesses the Rightime MidCap Fund's
performance against the Lipper Growth Fund Index, a broad based index.
The "Risk Adjusted Performance Comparison" more closely reflects the
fund's performance as compared to a consistent risk level.
The MidCap Fund utilizes a modeled approach to investing which attempts
to minimize risk by moving assets to money market equivalent investments
during periods in which the market appears to be overvalued. This
approach, over full market cycles, tends to invest in low risk, or money
market-like securities approximately half of the time. In order to
provide an equivalent risk level this comparison assumes that assets are
invested half in the Lipper Growth Fund Index and half in a money market
fund index. This balanced index approaches the risk level of each fund
that has been in existence for at least one full market cycle and
therefore provides a more meaningful performance comparison.
The performance shown represents past performance and is not a guarantee
of future results. A mutual fund's share price and investment return
will vary with market conditions, and the principal value of shares,
when redeemed, may be more or less than the original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Performance Comparison
Rightime MidCap Fund
Lipper Growth Fund Index
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Comparison of change in value of $10,000 investment in the Rightime
MidCap Fund, Lipper Growth Fund Index and Money Market Fund Index.
Risk-adjusted Performance Comparison
Rightime MidCap Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
[GRAPHIC WORM CHART TO BE INSERTED BY PRINTER]
Risk-adjusted comparison of change in value of $10,000 investment in the
Rightime MidCap Fund, Balanced Reference Index (50% Lipper/50% Money
Market), and Money Market Fund Index.
Officers and Directors
of The Rightime Fund, Inc.
- -----------------------------------------------------------------------
Name Principal Occupation
and Address Position and Office During the past five years
- ----------------- ---------------------- --------------------------
David J. Rights* Chairman of the Board, President of Rightime
1095 Rydal Road President, and Econometrics, Inc., a
Rydal, PA 19046 Treasurer registered investment
advisor. Consultant
to and registered
representative of Lincoln
Investment Planning, Inc.,
a registered investment
advisor and broker dealer.
Edward S. Forst Sr.* Director,
The Forst Pavilion Vice-President Chairman of the Board,
218 Glenside Avenue and Secretary Lincoln Investment Planning
Wyncote, PA 19095 Inc., a registered
investment advisor
and broker dealer.
Francis X. Barrett Director Director and Member of the
Reading, PA 19805 Finance and
Pension Committee, Sacred
Heart Hospital, Formerly,
Executive Director,
National Catholic Education
Association, Pastor, Church
of Holy Guardian Angels,
Reading, PA.
Dr. Winifred L. Director Superintendent of Schools,
Tillery Camden County, New Jersey.
Mt. Laurel, NJ
08054
Dr. Carol A. Wacker Director Former Assistant
Encinitas, CA 92024 Superintendent for Senior
High Schools, the
Philadelphia School
District.
- ------------
* "Interested" director as defined
in the Investment Company Act
of 1940 (the "1940 ACT").
The Rightime Family of Funds
The Forst Pavilion
218 Glenside Ave.
Wyncote, PA 19095-1594
Client Services Department
215-887-8111, Press 1
800-242-1421
Administrator
Rightime Administrators Inc.
The Forst Pavilion
218 Glenside Ave.
Wyncote, PA 19095-1594
Investment Advisor
Rightime Econometrics Inc.
1095 Rydal Road
Rydal, PA 19046
Distributor
Lincoln Investment Planning, Inc.
The Forst Pavilion
218 Glenside Ave.
Wyncote, PA 19095-1595
Custodian
CoreStates Bank N.A.
Broad & Chestnut Streets
Philadelphia, PA 19101
Transfer Agent
Lincoln Investment Planning, Inc.
The Forst Pavilion
218 Glenside Ave.
Wyncote, PA 19095-1595
Legal Counsel
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, PA 19103
Auditors
Tait, Weller & Baker
Two Penn Center, Suite 700
Philadelphia, PA 19102
Printed on recycled paper
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