<PAGE>
As filed with the Securities and Exchange Commission on April 23, 1999
1940 Act Registration No. 811-6187
1933 Act File No. 33-36454
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_/
Pre-Effective Amendment No. /_/ /_/
Post-Effective Amendment No. 12 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /_/
Amendment No. 12 /X/
(Check appropriate box or boxes)
ASM INDEX 30 FUND, INC.
(Exact Name of Registrant as Specified in Charter)
410 PARK AVENUE, 18TH FLOOR, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
(212) 891-7900
Registrant's Telephone Number, Including Area Code
M. FYZUL KHAN, ESQ., 410 PARK AVENUE, 18TH FLOOR, NEW YORK, NEW YORK 10022
(Name and Address of Agent for Service)
Please send copies of communications to
Steven M. Felsenstein, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
It is proposed that this filing will become effective (check appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/x/ on April 24, 1999 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.
If appropriate, check the following box:
/_/ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
[LOGO]
ASM INDEX 30 FUND, INC.
410 PARK AVENUE
18TH FLOOR
NEW YORK, NEW YORK 10022
(800) 333-4276
PROSPECTUS
DATED APRIL 24, 1999
A DIVERSIFIED, PURE NO-LOAD MUTUAL FUND
Everything you need to open your account is inside, including:
Current Prospectus
New Account Application
New Account Information
How to Contact ASM Index 30 Fund
AS WITH ALL MUTUAL FUNDS, THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR
COMPLETENESS OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
COMPANIES THAT COMPRISE THE DOW JONES INDUSTRIAL AVERAGE:
ALLIED SIGNAL, INC.
ALUMINUM COMPANY OF AMERICA
AMERICAN EXPRESS CO.
AT&T CORP.
BOEING CO.
CATERPILLAR, INC.
CHEVRON CORP.
CITIGROUP INC.
COCA-COLA CO.
E.I. DUPONT DE NEMOURS & CO.
EASTMAN KODAK CO.
EXXON CORP.
GENERAL ELECTRIC CO.
GENERAL MOTORS CORP.
GOODYEAR TIRE & RUBBER CO.
HEWLETT-PACKARD CO.
INTERNATIONAL BUSINESS MACHINES CORP.
INTERNATIONAL PAPER CO.
JOHNSON & JOHNSON
McDONALD'S CORP.
MERCK & CO.
MINNESOTA MINING & MANUFACTURING CO.
J.P. MORGAN & CO.
PHILIP MORRIS COMPANIES, INC.
PROCTER & GAMBLE CO.
SEARS ROEBUCK & CO.
UNION CARBIDE CORP.
UNITED TECHNOLOGIES CORP.
WAL-MART STORES, INC.
WALT DISNEY CO.
2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- ------------------------------------ -----
<S> <C>
About the Fund...................... 4
Performance Information............. 5
Fees and Expenses................... 6
Management of the Fund.............. 6
Shareholder Investment Accounts..... 7
Buying Shares....................... 7
<CAPTION>
TABLE OF CONTENTS PAGE
- ------------------------------------ -----
<S> <C>
Selling Shares...................... 9
Portfolio Turnover.................. 10
Distributions and Taxes............. 11
Year 2000........................... 11
Recent Developments................. 11
Legal Proceedings................... 11
Financial Highlights................ 13
</TABLE>
3
<PAGE>
ABOUT THE FUND
INVESTMENT OBJECTIVE--
The investment objective of the ASM Index 30 Fund, Inc.(the "Fund") is to
achieve total return through a combination of capital appreciation and current
income. The investment objective of the Fund may not be changed without
shareholder approval.
INVESTMENT APPROACH--
The Fund limits its investments to the common stocks of the 30 companies
that make up the well-known Dow Jones Industrial Average ("DJIA")*, all of which
are listed on the New York Stock Exchange. The stocks of these companies are
widely known and represent major American corporations engaged in a variety of
industries.
The Fund invests at least 95% of the Fund's assets in an equal number of
shares of each of these 30 companies, without regard to the share prices of the
individual stocks, with the goal of tracking the total return of the DJIA. The
balance of any assets not invested in these companies is normally held in cash
or cash equivalents.
- ------------------------
* "Dow Jones Industrial Average" and "DJIA" are the property of Dow Jones &
Company. The ASM Index 30 Fund, Inc. is neither affiliated with, nor endorsed
by, Dow Jones & Company.
PRINCIPAL INVESTMENT RISKS--
There is no guarantee that the Fund will achieve its investment objective.
Since the Fund limits its investments to the 30 widely followed stocks of the
DJIA which are listed on the inside of the front cover of this prospectus, any
number of factors, including market and economic conditions, can cause the
Fund's performance to be lower or greater than that of other funds which invest
in similar stocks. Because the prices of stocks fluctuate, your investment in
the Fund will fluctuate, which means that you could lose money. However, stocks
have historically been a popular choice of long term investors with specific
investment goals.
Some of the principal risks of investing in the Fund include:
Market Risk--Market risk is the risk that all or a majority of the
securities in a certain market like the stock or bond market--will decline
in value because of factors such as economic conditions, investor confidence
and future expectations.
Industry and Security Risk--Generally, this is the risk that the value
of securities in a particular industry or the value of an individual stock
or bond will decline because of changing expectations for the performance of
that industry or for the individual company issuing the stock or bond.
The risks make it possible that one or more of the stocks held by the Fund
may go down in value, which will affect the Fund's goal of increasing the total
value of Fund shares. However, by limiting the stocks held by the Fund to 30
well-known, major American corporations, the potential for risk, while not
eliminated, may be somewhat reduced. Please see the Statement of Additional
Information for further discussion of these risks and other risk factors.
THE FUND MAY NOT ACHIEVE ITS INVESTMENT GOALS AND IT IS NOT INTENDED TO
SERVE AS A COMPLETE INVESTMENT PROGRAM. AN INVESTMENT IN THE FUND IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC") OR ANY OTHER GOVERNMENT AGENCY
4
<PAGE>
PERFORMANCE INFORMATION
The charts that follow help to show the returns and risks of investing in
the Fund. They show changes in the Fund's yearly performance over the life of
the Fund and compare the Fund's average annual returns for the past one-year,
five-year, and the life of the Fund to those of the DJIA during each period.
Investment performance also often reflects the risks associated with the
Fund's investment objective and policies. These factors should be considered
when comparing the Funds to other funds. You should keep in mind that the Fund's
past performance is not necessarily an indication of the Fund's future
performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
ASM INDEX 30 FUND, INC. TOTAL RETURN AS OF 12/31 EACH YEAR
1991 -8.90%*
1992 5.70%
1993 13.33%
1994 1.04%
1995 29.05%
1996 24.78%
1997 24.51%
1998 16.78%
Best Calendar Quarter: Q2 1997 17.08%
Worst Calendar Quarter: Q3 1998 -11.72%
</TABLE>
- ------------------------
* Not annualized. Shares of the Fund were first sold on March 4, 1991.
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
SINCE
COMMENCEMENT OF
OPERATIONS
PAST ONE YEAR PAST FIVE YEARS MARCH 4, 1991
--------------- --------------- -------------------
<S> <C> <C> <C>
ASM Index 30 Fund, Inc. 16.78% 18.79% 12.88%
Dow Jones Industrial Average++ 18.00% 22.06% 17.94%
</TABLE>
- ------------------------
++ The DJIA is a composite of the common stocks of 30 widely held, well-known
large capitalization domestic corporations. The DJIA's performance assumes
reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other expenses.
5
<PAGE>
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay in
connection with an investment in the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<S> <C> <C>
Maximum Sales Charge (load) on Purchases
(as a percentage of offering price) None
Sales Charge on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<S> <C> <C>
Advisory Fee 0.08%
Other Expenses 0.83%
Total Annual Fund Operating Expenses 0.91%(1)
</TABLE>
- ------------------------
1 Extraordinary non-recurring expenses arising from recent events are expected
to result in a materially higher expense ratio during the current period.
EXPENSE EXAMPLE--
This is an example of what you might pay in expenses over various time
periods and will help you to compare the cost of investing in the Fund with the
cost of investing in other mutual funds. It is based on the same hypothetical
factors used by other funds in their prospectuses: a $10,000 investment, 5%
total return each year and no change in Fund expense levels. This example is the
same whether you sold your shares at the end of the period or kept them. This
example is for comparison only since actual returns and expenses will be
different.
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- ------------- ------------- ----------- -----------
<S> <C> <C> <C>
$ 93 $ 290 $ 504 $ 1,120
</TABLE>
MANAGEMENT OF THE FUND
The Fund is managed by the Board of Directors (the "Board") which is
responsible for protecting the interests of shareholders. The members of the
Board are experienced business persons who meet throughout the year to oversee
the Fund's activities, review contractual arrangements with companies that
provide services to the Fund, and review Fund performance.
The Board appoints an investment adviser to manage the day-to-day operations
of the Fund. The basis for this arrangement is detailed in an Investment
Management Agreement between the Fund and the investment adviser.
The Fund's investment adviser is required to manage the Fund in accordance
with its fundamental policy, which limits the Fund's investments primarily to
the common stocks of the 30 companies that comprise the DJIA. In doing so, the
investment adviser is responsible for purchases and sales of the securities held
by the Fund, including the reinvestment of the Fund's assets. As such, the
investment adviser conducts the daily business affairs of the Fund and oversees
investments in the Fund in keeping with its investment objective, policies and
restrictions.
On February 26, 1999, the Board appointed ORBITEX Management, Inc.
("ORBITEX"), 410 Park Avenue, New York, N.Y. 10022 to serve as the investment
adviser to the Fund for an interim period of up
6
<PAGE>
to 120 days. The Board also recommended that shareholders approve (at a meeting
to be called to consider this proposal) a tax-free reorganization of the Fund as
a new series of an existing fund managed by ORBITEX.
ORBITEX is a registered investment adviser under the Investment Advisers Act
of 1940, as amended. ORBITEX is currently organized as a New York corporation.
ORBITEX is affiliated with ORBITEX Management Ltd., a Canadian corporation and
investment adviser, which provides investment services to individuals and
institutions including Canadian unit trusts. ORBITEX is a majority-owned
subsidiary of Capital Management Ltd., a Bahamian corporation and an investment
management firm. Mr. Thomas Bachmann is the sole controlling person of Capital
Management Ltd. ORBITEX is the parent corporation of ORBITEX Capital Strategies,
Inc., an investment adviser. ORBITEX acts as investment adviser to the ORBITEX
Group of Funds, a U.S. registered investment company. As of April 6, 1999,
ORBITEX, its subsidiary ORBITEX Capital Strategies, Inc. and its affiliate
ORBITEX Management Ltd. have an aggregate of approximately $1.2 billion in
investment company and other portfolio assets under management.
Courtney D. Smith is the Portfolio Manager for the Fund and assumed primary
responsibility for the day-to-day management of the Fund's portfolio on March 1,
1999. Mr. Smith joined ORBITEX in 1996. Formerly, commencing in 1990, he was
President and Chief Investment Officer of Pinnacle Capital Management, Inc.,
which provides managed futures accounts. Commencing in 1993, he was also
President and Chief Executive Officer of Quantum Financial Services, Inc., a
futures and stock brokerage firm. Mr. Smith also manages the Orbitex Growth Fund
and the Orbitex Health & Biotechnology Fund.
Under an interim Investment Management Agreement dated as of February 28,
1999 (the "Agreement") between the Fund and ORBITEX, which is effective for no
more than 120 days pending a shareholder meeting and vote regarding a new
investment management agreement, ORBITEX is entitled to receive a monthly fee at
an annual rate of 0.08% of the Fund's average daily net assets for services
provided to the Fund. On February 28, 1999, the Fund replaced the Fund's
previous investment adviser with ORBITEX. The Fund's previous investment adviser
had served as its investment adviser since the Fund commenced operations on
March 4, 1991. For the fiscal year ended 1998, pursuant to a fee waiver and
expense reimbursement agreement, the Fund's previous investment adviser waived
all of its management fees of $26,302 and reimbursed the Fund for certain
expenses.
SHAREHOLDER INVESTMENT ACCOUNTS
BUYING SHARES
You may purchase shares of the Fund without any sales charge directly from
the Fund or through an investment adviser, financial planner, broker, dealer or
other investment professional. You may buy shares at the Fund's Net Asset Value
("NAV"), next computed after the close of business (currently 4:00 pm Eastern
time) each day that the New York Stock Exchange ("NYSE") is open. The NAV is
determined by dividing the value of the Fund's securities, cash and other
assets, minus all expenses and liabilities, by the number of shares outstanding.
The Fund's securities are valued each day at their market value, which usually
means the last quoted sale price on the security's principal exchange on that
day. The Fund reserves the right to reject (and will return) large purchase
orders it receives after 3:00 p.m. for purchases on that day.
The following chart shows the minimum investments required to open an
account:
<TABLE>
<CAPTION>
MINIMUM
MINIMUM INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENT INVESTMENT
- ------------------------------------------------------------------------- ----------------- -------------
<S> <C> <C>
Regular Accounts......................................................... $ 1,000 $ 100
Automatic Investment Plan................................................ $ 1,000 $ 100
Regular, Spousal, Roth and Educational IRAs+............................. $ 500 $ 100
</TABLE>
7
<PAGE>
Only investments in U.S. dollars are accepted. Third party checks are not
acceptable. A fee may be charged for a check that does not clear and the Fund
reserves the right to refuse any investment.
- ------------------------
+ For IRA accounts--Please call us at 1-800-333-4276 to obtain the required
forms to establish any of the IRAs currently available.
SHARE EXCHANGE PRIVILEGE--
You may exchange shares you own (minimum, $2,500 initial, $100 per
subsequent investment) for shares of the Flex-Funds Money Market Fund, provided
such shares are offered in your state of residence. The exchange request may be
made by phone or by mail. Be sure to obtain and read the current prospectus of
the Flex-Funds Money Market Fund before you make the exchange. All new accounts
resulting from a share exchange will be subject to the same privileges as your
original account. Currently, there is no charge applicable for share exchanges.
Such exchange of shares, however, is considered a taxable event for IRS
purposes. The Fund may change, discontinue or temporarily suspend this exchange
privilege during unusual market conditions or upon 60 days' notice to
shareholders.
AUTOMATIC INVESTMENT PLAN--
Shareholders may elect to automatically make investments in the Fund ($100
minimum per transaction) by completing the section of the account application
for this purpose. There is no charge for this service. However, the transfer
agent will impose a fee if sufficient funds are not available in your account at
the time of the automatic transaction.
ACCOUNT STATEMENTS AND REPORTS--
Every Shareholder will receive an account statement that describes
transactions processed in an account. In addition, every Shareholder will
receive a statement whenever the Fund declares a dividend or distribution.
Shareholders will also receive a year-end statement providing information for
tax purposes as well as Annual and Semi-Annual Reports for the Fund.
8
<PAGE>
HOW TO OPEN AN ACCOUNT--
<TABLE>
<CAPTION>
NEW ACCOUNTS ADD TO EXISTING ACCOUNTS
<S> <C>
In Writing:
On the investment slip, fill in the
Complete and sign the application amount you are enclosing, write
and mail the application along with your account number on your check
your check to: and mail to:
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
P. O. Box 7177, 6000 Memorial Drive
Dublin, OH 43017
By Phone--Federal Funds Wire:
Call first to obtain an account
number. Complete the required
information on the application and Instruct your bank to send your
mail it to the above address. investment by wire as follows:
Instruct your bank to wire your
investment to:
Star Bank, N.A., Cinti/Trust, ABA # 0420-0001-3
Attn: ASM Index 30 Fund, Inc., Credit Account # 480389436
Name(s) of registered Shareholder(s)
Personal Account Number (Your ASM Index 30 Fund, Inc. account number)
Automatically:
Complete the required information
on the application and send it with Call us to request the appropriate
your initial investment to: forms and instructions.
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
P. O. Box 7177, 6000 Memorial Drive
Dublin, OH 43017
</TABLE>
SELLING SHARES
You may sell shares of the Fund that you own back to the Fund at any time.
The price per share will be the next NAV determined after your request is
accepted in good order by the Fund's transfer agent. Good order means that a
written request must be signed by the shareholder(s) and, when required, the
signature(s) must be guaranteed by an eligible guarantor institution (a bank,
broker-dealer, credit union, securities exchange, clearing agency or savings
association). A request for a sale of shares will be processed promptly and you
can generally expect to receive a check for the proceeds within a week (7 days).
No fees are imposed by the Fund when shares are sold unless you have purchased
and redeemed shares six times within the last year. You may redeem by telephone
up to 3:00 p.m. EST. You may redeem shares only on days when the NYSE is open,
which is normally weekdays except for certain holidays. Currently, the NYSE
observes the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
9
<PAGE>
HOW TO SELL YOUR SHARES--
<TABLE>
<CAPTION>
IN WRITING: MAIL TO:
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Send a written letter of instruction signed by all
registered owners indicating:
Your name(s) on the account
Your Account number ASM Index 30 Fund, Inc.
The dollar amount or the number of shares you wish to c/o Mutual Fund Service Co., Inc.
sell How and where to send the proceeds (including P.O. Box 7177
signature guarantee(s) and other documentation, if 6000 Memorial Drive
required) Dublin, OH 43017
Please include signature(s) and other documentation, if
required.
</TABLE>
By Phone:
Call us at 1-800-333-4276 with your request and a check will be sent to the
address of record. All telephone calls are recorded for your protection and
reasonable procedures are taken to verify the identity of the caller (such as
providing your account number and taxpayer identification number). If such
measures are followed to ensure against unauthorized transactions, the Fund,
ORBITEX and the Fund's Transfer Agent will not be responsible for any losses.
By Wire:
Call us at 1-800-333-4276 with your request and a federal funds wire will be
transmitted to your bank based on the information you gave us on your account
application.
Certain written requests to sell shares require a signature guarantee. A
signature guarantee is used to help protect you and the Fund from fraud. A
signature guarantee for all registered owners is required under the following
circumstances: redemptions of $25,000 or more, all requests where the address of
record on the account was changed within the last 30 days, and when the proceeds
are to be sent to a different payee or address of record.
You can obtain a signature guarantee from a bank, broker-dealer, credit
union, securities exchange, clearing agency, or savings association but not from
a notary public. Please call the Fund to learn if a signature guarantee is
needed or to make sure that it is completed appropriately in order to avoid any
processing delays.
ADDITIONAL INVESTMENT INFORMATION
The Fund reserves the right to make a "redemption in kind" (payment in
portfolio securities rather than cash) if the amount to be redeemed is large
enough to possibly affect Fund operations or if the redemption would otherwise
disrupt the Fund. For example, the Fund may redeem shares in-kind if the amount
represents more than 5% of the Fund's assets.
If you are selling shares recently purchased, payment of your proceeds may
be delayed until payment for those shares has been confirmed by the transfer
agent, but not in excess of 15 days.
PORTFOLIO TURNOVER
The Fund's portfolio turnover rate for each of the fiscal years ending
October 31, 1997 and 1998 was 265% and 196%, respectively. The Fund continues to
be invested almost entirely in equities. Almost all Fund portfolio turnover is a
result of purchases and sales of securities necessary for settlement of
purchases and redemptions of Fund shares requested by Fund shareholders and
stock splits of the portfolio
10
<PAGE>
securities held by the Fund. High portfolio turnover involves additional
brokerage expense and may involve increased tax consequences to the Fund and its
shareholders.
DISTRIBUTIONS AND TAXES
In general, Fund distributions are taxable to you as either ordinary income
or capital gains. This is true whether you reinvest your distributions in
additional shares of the Fund or receive them in cash. Any capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares.
Every January you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
October, November and December but paid in January are taxable as if they were
paid in December.
When you sell your shares of the Fund, you may have a capital gain or loss.
For tax purposes, an exchange of your shares of the Fund for shares of The
Flex-Funds Money Market Fund is the same as a sale. The individual tax rate on
any gain from the sale or exchange of your shares depends on how long you have
held your shares.
By law, the Fund must withhold 31% of your taxable distributions and
proceeds if you do not provide your correct taxpayer identification number
(TIN), or certify that your TIN is correct, or if the IRS instructs the Fund to
do so.
Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. YOU SHOULD CONSULT WITH YOUR TAX
ADVISER ABOUT THE FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF YOUR
INVESTMENT IN THE FUND.
YEAR 2000
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate data-related information on or after January 1, 2000. This is commonly
referred to as the "Year 2000 Issue." The Fund is taking steps to obtain
satisfactory assurances that the Fund's major service providers are taking steps
reasonably designed to address the Year 2000 Issue with respect to the computer
systems that such service providers use. There can be no assurance that these
steps will be sufficient to avoid any adverse impact on the business of the
Fund. ORBITEX has reviewed the types of securities and debt obligations held as
investments by the Fund to determine the impact of the Year 2000 Issue on the
returns and relative safety of principal of such securities and debt
obligations. Based on this review, ORBITEX does not believe the Year 2000 Issue
poses any substantial risk for such returns and safety of principal.
RECENT DEVELOPMENTS
The appointment of ORBITEX as the Fund's investment adviser was approved by
the Board to assure continuity of management upon the termination of the
previous adviser as of the close of business on February 28, 1999. The Board has
also proposed that shareholders approve a tax-free reorganization of the Fund
with another fund advised by ORBITEX.
LEGAL PROCEEDINGS
On February 8, 1999, a suit was filed in the Thirteenth Judicial Circuit
Court, Hillsborough County, Florida, against Steven H. Adler, a former director
and officer of the Fund, Vector Index Advisors, Inc., the former investment
adviser of the Fund, and the Fund, alleging that the former director and officer
of the Fund failed to invest in the Fund amounts purportedly paid by the
plaintiffs to the former investment
11
<PAGE>
adviser of the Fund. The relief sought is the recovery of the investment amounts
and interest thereon, additional general, consequential and incidental damages,
legal costs and disbursements, and declaratory and injunctive relief to preclude
the Fund from transferring or permitting the dissipation of its assets. With the
possible exception of the former director and officer of the Fund, the Fund had
no knowledge that the amounts purportedly paid by the plaintiffs to the former
investment adviser were, as the plaintiffs have alleged, to be invested in the
Fund. The Fund and its counsel are investigating this matter and the possibility
that other unasserted claims or improprieties exist. At the present time, the
liability of the Fund, if any, is not readily determinable.
12
<PAGE>
FINANCIAL HIGHLIGHTS
The table below provides details of the Fund's performance for the fiscal
years ended October 31 from 1994 to the present. Certain information reflects
financial results for a single Fund share. The line at the end of the first
section, "Total Return", shows the actual performance results experienced by the
Fund for each period and the percentage by which an investment in the Fund would
have increased (or decreased), assuming all dividends and distributions were
reinvested each year. All of these figures were audited by the Fund's
independent auditors, PricewaterhouseCoopers LLP, or other accounting firms
previously engaged by the Fund. The report of PricewaterhouseCoopers LLP, for
the most recent fiscal year and the Fund's financial statements, are included in
the Fund's Statement of Additional Information, which is available upon request.
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-----------------------------------------------------
1998 1997 1996 1995(A) 1994(A)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR......................... $ 17.21 $ 14.13 $ 11.37 $ 9.78 $ 10.07
INVESTMENT OPERATIONS:
Net investment income.................................. 0.32 0.18 0.08 0.00 0.56
Net gains (losses) from investments (realized and
unrealized).......................................... 2.54 3.34 2.76 1.77 (0.16)
--------- --------- --------- --------- ---------
Total from investment operations......................... 2.86 3.52 2.84 1.77 0.40
--------- --------- --------- --------- ---------
DISTRIBUTIONS:
From net investment income............................. (0.27) (0.18) (0.07) (0.05) (0.52)
In excess of net investment income..................... 0.00 (0.11) (0.01) (0.13) 0.00
From net realized gains................................ (0.78) (0.15) 0.00 0.00 0.00
Tax return of capital.................................. 0.00 0.00 0.00 0.00 (0.17)
--------- --------- --------- --------- ---------
Total Distributions...................................... (1.05) (0.44) (0.08) (0.18) (0.69)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR............................. $ 19.02 $ 17.21 $ 14.13 $ 11.37 $ 9.78
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN............................................. 17.13% 25.18% 25.01% 18.10% 3.97%
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000).......................... $ 29,535 $ 21,127 $ 9,315 $ 9,704 $ 7,277
Ratio of expenses to average net assets*............... 0.18% 0.42% 1.86% 3.01%** 0.75%
Ratio of net investment income to average net
assets*.............................................. 1.60% 1.51% 0.53% 0.04% 2.17%
Portfolio turnover rate***............................. 196% 265% 391% 340% 1193%
</TABLE>
- ------------------------
* Ratios are presented net of fees voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as follows: ratio of
expenses to average net assets would have been 0.91%, 1.05%, 2.59%, 5.77%
and 2.94% for 1998, 1997, 1996, 1995, and 1994, respectively; ratio of net
investment income (loss) to average net assets would have been 0.87%, 0.88%,
(0.20%), (2.72%) and (0.02%) for 1998, 1997, 1996, 1995 and 1994,
respectively. As a result of certain tax adjustments necessitated by the
Fund's failure to qualify as a regulated investment company for the years
ended October 31, 1995 and 1994, as well as other adjustments, the gross
expense ratios previously reported for these periods have been restated.
** Includes $50,460 of interest expense not subject to the expense
reimbursement agreement.
*** The Fund continues to be as fully invested in equities as possible.
Therefore, portfolio turnover is higher than most equity mutual funds
because purchases and sales of portfolio securities are necessary for
settlement of transactions requested by Fund shareholders and stock splits
by the companies in the DJIA require the Fund to purchase and sell portfolio
securities to maintain the Fund's investment in an equal number of shares of
such companies.
(a) Audited by predecessor auditor.
13
<PAGE>
[LOGO]
A Statement of Additional Information ("SAI") contains additional
information about the Fund and is incorporated by reference into this
Prospectus. The Fund's Annual and Semi-Annual Reports to shareholders contain
additional information about the Fund's investments. In the Fund's Annual
Report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the last
fiscal year.
You may obtain a free copy of these documents, or make other shareholder
inquiries, by calling or writing the Fund:
BY TELEPHONE: 1-800-333-4276
BY MAIL: ASM Index 30 Fund, Inc.
410 Park Avenue
18th Floor,
New York, NY 10022
ASM Index 30 Fund, Inc.
c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive
P. O. Box 7177
Dublin, OH 43017
You may review and copy the SAI and other information about the Fund by
visiting the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. or by visiting the Commission's Internet site at
http://www.sec.gov. Copies of this information may also be obtained, upon
payment of a duplicating fee, by writing to the Public Reference Section of the
Commission, Washington, D.C. 20549-6009. You may call the Commission at
1-800-SEC-0330 for information about the operation of the public reference room.
(Investment Company Act File No. 811-6187)
14
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
APRIL 24, 1999
This Statement of Additional Information ("SAI") relates to the ASM Index 30
Fund, Inc., (the "Fund") which is a registered open-end management investment
company, commonly known as a mutual fund. This SAI is not a prospectus and
should be read in conjunction with the prospectus of the Fund dated April 24,
1999. You may obtain the prospectus by calling 1-800-333-4276 or by writing to
the Fund at:
ASM INDEX 30 FUND, INC.
410 Park Avenue
18th Floor,
New York, NY 10022
ASM INDEX 30 FUND, INC.
c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive
P. O. Box 7177
Dublin, OH 43017
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Fund History 3
Description of the Fund and Its
Investments and Risks 3
Investment Restrictions 5
Portfolio Turnover 7
Management of the Fund 7
Control Persons and Principal Holders of Securities 9
Investment Advisory and Other Service Providers 10
Brokerage Allocation and Other Practices 11
Capital Stock 12
Purchases, Redemptions and
Pricing of Shares 13
Taxation of the Fund 13
Underwriters 15
Calculation of Performance Data 15
Financial Statements 18
Appendix A - Standard & Poor's
Bond Ratings 31
Appendix B - Moody's Bond Ratings 32
</TABLE>
<PAGE>
FUND HISTORY
The Fund was organized in the State of Maryland on April 25, 1990. The Fund is a
diversified, open-end management investment company.
It is not contemplated that regular annual meetings of shareholders will be
held. There normally will be no meetings of shareholders for the purpose of
electing directors unless and until such time as less than a majority of the
directors holding office have been elected by shareholders, at which time the
directors then in office will call a shareholders' meeting for the election of
directors. The Fund has undertaken to afford shareholders certain rights,
including the right to call a meeting of shareholders for the purpose of voting
on the removal of one or more directors. Such removal can be effected upon the
action of two-thirds of the outstanding shares of the Fund. The directors are
required to call a meeting of shareholders for the purpose of voting on the
question of removal of any director when requested in writing to do so by
shareholders of record of not less than 10% of the Fund's outstanding shares. In
addition, ten of the Fund's shareholders holding the lesser of $25,000 worth or
one percent of the Fund's shares may advise the directors in writing that they
wish to communicate with other shareholders for the purpose of requesting a
meeting to remove a director. The directors will then, if requested by the
Applicants, mail at the Applicants' expense the Applicants' communication to all
other shareholders.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
The following information supplements the discussion of the Fund's investment
objectives and policies.
The investment objective of the Fund is to provide total return through a
combination of capital appreciation and current income. The Fund's principal
investment strategies are described in the Fund's prospectus.
SHORT-TERM INVESTMENTS
With respect to no more than 5% of the Fund's total assets, the Fund may invest
in the following:
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed-upon date and price reflecting
a market rate of interest unrelated to the coupon rate or maturity of the
purchased security. The Fund maintains custody of the underlying securities
prior to their repurchase; thus the obligation of the bank or dealer to pay the
repurchase price on the date agreed to is, in effect, secured by such underlying
securities. If the value of such securities is less than the repurchase price,
the other party to the agreement will provide additional collateral so that at
all times the collateral is at least equal to the repurchase price.
3
<PAGE>
Although repurchase agreements carry certain risks not associated with direct
investments in securities, the Fund intends to enter into repurchase agreements
only with banks and dealers believed by ORBITEX Management, Inc. (the "Adviser")
to present minimum credit risks in accordance with guidelines established by the
Board. The Adviser will review and monitor the creditworthiness of such
institutions under the Board's general supervision. To the extent that the
proceeds from any sale of collateral upon a default in the obligation to
repurchase were less than the repurchase price, the Fund would suffer a loss. If
the other party to the repurchase agreement petitions for bankruptcy or
otherwise becomes subject to bankruptcy or other liquidation proceedings, there
might be restrictions on the Fund's ability to sell the collateral and the Fund
could suffer a loss. However, with respect to financial institutions whose
bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy Code,
the Fund intends to comply with provisions under such Code that would allow it
immediately to resell the collateral.
COMMERCIAL PAPER
The Fund may invest in commercial paper which are short-term promissory notes
issued by companies to finance their, or their affiliates', current obligations.
The Fund may purchase only high quality obligations that the Adviser believes
present minimal credit risks. To be considered high quality, a security must be
(i) an obligation issued by the U.S. government; (ii) with respect to commercial
paper other than obligations issued by the U.S. government, rated in accordance
with applicable rules in one of the two highest rating categories for short-term
obligations by at least two nationally recognized statistical rating
organizations (each referred to as an "NRSRO") (or by one NRSRO, if only one has
rated the security); or (iii) if unrated, judged by the Adviser to be of
equivalent quality to short-term obligations rated in one of the two highest
rating categories for short-term obligations by at least two NRSROs. The rating
categories of two NRSROs are included in Appendices to this SAI.
U.S. GOVERNMENT SECURITIES AND OBLIGATIONS
The Fund may invest in U.S. government securities, which include direct
obligations of the U.S. Treasury (such as U.S. Treasury bills, notes and bonds)
and obligations directly issued or guaranteed by U.S. government agencies or
instrumentalities. Some obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government are backed by the full faith and credit
of the U.S. government (such as Government National Mortgage Association bonds),
others are backed only by the right of the issuer to borrow from the U.S.
Treasury (such as securities of Federal Home Loan Banks), and others are backed
only by the credit of the instrumentality.
EURODOLLAR BANK OBLIGATIONS
The Fund may invest in Eurodollar bank obligations that the Adviser believes
present minimal credit risks. Eurodollar bank obligations are dollar-denominated
certificates of deposit or time deposits issued outside the U.S. capital markets
by foreign branches of U.S. banks and by foreign banks. The Eurodollar bank
obligations are subject to certain sovereign risks. One such risk is the
possibility that a foreign government might prevent dollar-denominated funds
from flowing across its borders. Other risks include: adverse political and
economic developments in a foreign
4
<PAGE>
country; the extent and quality of government regulation of financial markets
and institutions; the imposition of foreign withholding taxes; and expropriation
or nationalization of foreign issuers.
STAR TREASURY FUND SHARES
The Fund may also invest in shares of the Star Treasury Fund. Star Treasury Fund
is a series of a Massachusetts business trust registered as an open-end
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and is managed by the Fund's custodian, Star Bank. The
Fund's investments in such shares shall be limited to investments pursuant to
sweep arrangements for the overnight investment of assets of the Fund that are
not otherwise invested at the end of a given day.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions (in addition to those indicated
in its prospectus) as fundamental policies, which may not be changed without the
favorable vote of the holders of a "majority," as defined in the 1940 Act, of
the Fund's outstanding voting securities. Under the 1940 Act, the vote of the
holders of a majority of a Fund's outstanding voting securities means the vote
of the holders of the lesser of (i) 67% of the shares of the Fund represented at
a meeting at which the holders of more than 50% of its outstanding shares are
Represented or (ii) more than 50% of the outstanding shares.
The Fund may not:
1. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of transactions.
2. Make short sales of securities or maintain a short position.
3. Issue senior securities, borrow money or pledge its assets, except that the
Fund may borrow on an unsecured basis from banks for temporary or emergency
purposes or for the clearance of transactions in amounts not exceeding 10%
of its total assets (not including the amount borrowed) and will not make
investments while borrowings in excess of 5% of the value of the Fund's
total assets are outstanding.
4. Buy or sell commodities or commodity futures contracts, or buy or sell real
estate, real estate limited partnership interests or other interests in
real estate (although it may purchase and sell securities which are secured
by real estate and securities of companies which invest or deal in real
estate).
5. Make loans (except for purchases of publicly-traded debt securities
consistent with the Fund's investment policies).
6. Make investments for the purpose of exercising control or management.
7. Act as underwriter (except to the extent the Fund may be deemed to be an
underwriter in connection with the sale of securities in the Fund's
investment portfolio).
5
<PAGE>
8. Invest 25% or more of its total assets (calculated at the time of purchase
and taken at market value) in any one industry.
9. As to 75% of the value of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer (other than
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities), or purchase more than 10% of all outstanding voting
securities of any one issuer.
The Fund observes the following restrictions as a matter of operating but not
fundamental policy, pursuant to positions taken by federal and state regulatory
authorities:
The Fund may not:
10. Purchase any security if as a result the Fund would then hold more than 10%
of any class of securities of an issuer (taking all common stock issues as
a single class, all preferred stock issues as a single class, and all debt
issues a single class).
11. Invest in securities of any issuer if, to the knowledge of the Fund, any
officer or director of the Fund or of the Adviser owns more than 1/2 of 1%
of the outstanding securities of such issuer, and such directors who own
more than 1/2 of 1% own in the aggregate more than 5% of the outstanding
securities of such issuer.
12. Invest more than 5% of the value of its net assets in warrants (included in
that amount, but not to exceed 2% of the value of the Fund's net assets,
may be warrants which are not listed on the New York or American Stock
Exchange).
13. Invest in any security if as a result the Fund would have more than 5% of
its total assets invested in securities of companies which together with
any predecessor have been in continuous operation for fewer than three
years.
14. Invest in oil, gas or mineral related programs, partnerships or leases.
The Fund and the Adviser have informally adopted guidelines of the staff of the
U.S. Securities and Exchange Commission limiting the value of the Fund's
investments in illiquid investments to no more than 15% of the Fund's net asset
value. Illiquid investments are generally investments for which market
quotations are not readily available or that the Fund could not sell or dispose
of in the ordinary course of business within seven calendar days at
approximately the price at which the Fund has valued the investment. Because the
Fund has a policy of investing at least 95% of the Fund's assets in the equity
securities of 30 large capitalization companies trading on the New York Stock
Exchange and its other investments are generally not illiquid, it is unlikely
that the Fund would ever approach exceeding this limitation.
PORTFOLIO TURNOVER
The Fund's portfolio turnover rate for each of the fiscal years ending October
31, 1997 and 1998 was 265% and 196%, respectively. The Fund continues to be
almost entirely invested in equities. Almost all Fund portfolio turnover is a
result of purchases and sale of securities necessary for settlement of purchases
and redemptions requested by Fund shareholders and stock splits of the portfolio
securities held by the Fund. High portfolio turnover involves additional
6
<PAGE>
brokerage expense and may involve increased tax consequences to the Fund and its
shareholders. See "Taxation of the Fund" below.
MANAGEMENT OF THE FUND
The overall management of the business and affairs of the Fund is vested with
its Board of Directors (the "Board"). The Board approves all significant
agreements between the Fund and persons or companies furnishing services to it,
including the Fund's agreement with its Adviser, Custodian, Transfer Agent,
Accounting and Administrative providers. The day to day operations of the Fund
are delegated to its officers, subject to the investment objectives and policies
of the Fund and to general supervision by the Board. The directors and officers
of the Fund and of the Adviser, their age, business addresses and principal
occupations during the past five years are:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTORS & OFFICERS POSITION WITH FUND THE PAST 5 YEARS
-------------------- ------------------ ----------------
<S> <C> <C>
W. Keith Schilit Director; Chair, Audit Faculty Member, Univ. of South
Age 44 Committee Florida;
Catalyst Ventures President, Catalyst Ventures
4928 Bay Way Drive (Venture capital and
Tampa, FL 33629 consulting).
Daniel Calabria, Director Retired; formerly Executive
Age 62 Vice President, Wm. R. Hough &
7068 So. Shore Drive So. Co. (mutual funds); formerly
South Pasadena, FL 33707 President, Templeton Fund
Management Corp. (mutual
funds); Trustee, IDEX Mutual
Funds (mutual funds); Trustee,
Florida Tax-Free Funds (mutual
funds).
Jerome P. Feltenstein, Director President, American Business
Age 64 Associates, Inc. (umbrella
61 Mimosa Drive manufacturer).
Cos Cob, CT 06807
Arthur Salzfass, Director Consultant, Micro Info; (computer
Age 64 consulting) Director, SBM Inc.;
98 Paulding Drive President, Rutledge Books, Inc.
Chappaqua, NY 10514 (publishing); Chief Operating
Officer, Honi-Corp,
Inc. (computer software); Chief
Executive Officer and
President, U.S. Fibercom, Inc.
(international telephone service
company).
M. Fyzul Khan (1), (2) Acting Chief Executive Legal Counsel and 1940 Act
Age 27 Officer; Compliance Officer Compliance Officer, and
and Secretary currently Corporate Secretary,
of the Adviser, March 1998 to
present; Corporate Secretary of
ORBITEX Group of Funds
(investment adviser); formerly
in-house attorney at CIBC
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTORS & OFFICERS POSITION WITH FUND THE PAST 5 YEARS
-------------------- ------------------ ----------------
<S> <C> <C>
Oppenheimer from August 1997 to
March 1998 (hedge fund); and
law student at Widener
University School of Law from
September 1994 to June 1997.
Keith D. Kemp (1), (3) Acting Chief Financial Vice President of Operations of
Officer the Adviser, 1999 to present; formerly,
Vice President of Mutual Fund
Accounting and Administration, The
Bank of New York from 1998 to 1999
(banking); formerly, Senior Manager,
Forum Financial Group from 1996 to
1998 (investment services); and formerly,
Business Unit Controller and Assistant
Treasurer, First Data Investor Services
Group from 1992 to 1996 (investment services).
</TABLE>
(1) Interested person of the Fund under the 1940 Act.
(2) On March 6, 1999, the Board acted to appoint M. Fyzul Khan as the only
officer of the Fund beginning on April 1, 1999. On April 12, 1999, the Board
acted to appoint M. Fyzul Khan as the Acting Chief Executive Officer
beginning on April 12, 1999.
(3) On April 12, 1999, the Board acted to appoint Keith D. Kemp as the Acting
Chief Financial Officer beginning on April 12, 1999.
THE FOLLOWING TABLE SHOWS THE COMPENSATION PAID BY THE FUND TO THE DIRECTORS OF
THE FUND DURING THE FISCAL YEAR ENDED OCTOBER 31, 1998:
COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------ ---------------- -------------------- -------------- ------------------
PENSION OR ESTIMATED TOTAL
RETIREMENT ANNUAL COMPENSATION
AGGREGATE BENEFITS ACCRUED BENEFITS FROM FUND AND
COMPENSATION AS PART OF FUND UPON FUND COMPLEX
NAME OF PERSON, POSITION FROM FUND EXPENSES RETIREMENT PAID TO DIRECTORS
- ------------------------------ ---------------- -------------------- -------------- ------------------
<S> <C> <C> <C> <C>
Steven H. Adler* Former None None None None
President
W. Keith Schilit, Director $5,500 None None $5,500
Daniel Calabria, Director $5,500 None None $5,500
Jerome P. Feltenstein, $5,500 None None $5,500
Director
Arthur Salzfass, Director $5,500 None None $5,500
</TABLE>
The Fund pays fees of $4,000 per year plus $500 for each meeting attended by
directors who are not "interested persons" of the Fund. Such directors are
reimbursed for any expenses incurred in attending meetings. During the fiscal
period ended October 31, 1998, directors' fees and expenses totaled $22,000.
* In connection with the termination of Vector Index Advisors, Inc. ("Vector")
as investment adviser of the Fund, the Board of the Fund accepted as of February
28, 1999, the resignation of Steven H. Adler, Chairman and Present of Vector as
a director and officer of the Fund.
8
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) As of April 9, 1999, there were no control persons of the Fund.
(b) Principal Holders
As of April 9, 1999, the following persons held of record 5% or more of the
outstanding shares of common stock of the Fund:
<TABLE>
<CAPTION>
NAME & ADDRESS % OWNERSHIP
-------------- -----------
<S> <C>
Donaldson Lufkin & Jenrette 6.3%
Pershing Division
P.O. Box 2052
Jersey City, NJ 7303-2052
National Financial Services Corp. 12.5%
Church Street Station, 5th Floor
P.O. Box 3908
New York, NY 10008-3908
National Investor Services 7.8%
For the Exclusive Benefit of Our Customers
55 Water Street
New York, NY 10041
FTC & Co. 17.1%
Attn: Datalynx
House Account
P.O. Box 173736
Denver, CO 80217-3736
</TABLE>
As of April 9, 1999, the officers and directors of the Fund owned less than 1%
of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
THE MANAGEMENT AGREEMENT
Subject to the supervision of the Board, current investment advisory and
management services are provided to the Fund by ORBITEX Management, Inc., (the
"Adviser") pursuant to an Investment Management Agreement dated as of February
28, 1999 (the "Agreement").
9
<PAGE>
The Agreement was approved by the Board and by a majority of the directors who
neither are interested persons of the Fund nor have any direct or indirect
financial interest in the Agreement or any other agreement related thereto
("Independent Directors") on February 26, 1999. The Agreement will continue in
effect until the earlier of July 1, 1999 or the vote of shareholders either
approving or disapproving a new management agreement with the Adviser.
Under the Agreement, the Adviser provides a continuous investment program for
the Fund and makes decisions and places orders to buy, sell or hold particular
securities. The Adviser also supervises all matters relating to the operation of
the Fund and obtains for it corporate officers, clerical staff, office space,
equipment and services. Under the Agreement, the Adviser is entitled to receive
a monthly fee at an annual rate of 0.08 of 1% of the Fund's average daily net
assets for services provided to the Fund. In addition to the fee payable to the
Adviser, the Fund is responsible for its operating expenses, including: (i)
interest and taxes; (ii) brokerage and futures commissions; (iii) insurance
premiums; (iv) compensation and expenses of Directors other than those
affiliated with the Adviser; (v) legal and audit expenses; (vi) fees and
expenses of the custodian, shareholder, service or transfer agent; (vii) fees
and expenses for registration or qualification of the Fund and its shares under
federal or state securities laws; (viii) expenses of preparing, printing and
mailing reports and notices and proxy material to shareholders; (ix) other
expenses incidental to holding any shareholder meetings; (x) dues or assessments
of or contributions to the Investment Company Institute or any successor; and
(xi) such non-recurring expenses as may arise, including litigation affecting
the Fund and the legal obligations with respect to which the Fund may have to
indemnify its officers and Directors.
The Adviser will not continue the waiver of fees and reimbursement of expenses
arrangements that the previous investment adviser had with the Fund.
For the fiscal year ended 1998, the Fund's previous adviser waived fees and
reimbursed the Fund for expenses in the amount of $242,280 which included
management fees of $26,302. For fiscal years ended 1996 and 1997 the previous
adviser was not entitled to any fees, and reimbursed the Fund for expenses in
the amount of $89,199 and $180,781, respectively.
Under the terms of the Agreement, the Adviser will continue to use the
administrative services of the present administrator for the Fund. The services
provided under the Agreement are subject to the supervision of the officers and
directors of the Fund, and include the day-to-day administration of matters
related to the corporate existence of the Fund, maintenance of its records,
preparation of reports, and assistance in the preparation of the Fund's
registration statements under Federal and state laws. In addition to the duties
described in the Prospectus, the Adviser, in furtherance of such duties and
responsibilities, is authorized in its discretion to engage in the following
activities on behalf of the Fund: (i) develop a continuing program for the
management of the assets of each Fund; (ii) buy, sell, exchange, convert, lend,
or otherwise trade in portfolio securities and other assets; (iii) place orders
and negotiate the commissions for the execution of transactions in securities
with or through broker-dealers, underwriters, or issuers; (iv) prepare and
supervise the preparation of shareholder reports and other shareholder
communications; and (v) obtain and evaluate business and financial information
in connection with the exercise of its duties.
10
<PAGE>
The cost of distributing shares of the Fund is borne by the Adviser.
Unaffiliated registered broker-dealers act as, or will act as, distributor of
Fund shares at no cost to the Fund.
The Agreement is terminable by vote of the Board or by the holders of a majority
of the outstanding voting securities of the Fund at any time without penalty, on
60 days' written notice to the Adviser. The Agreement may also be terminated by
the Adviser on 60 days written notice to the Fund. On December 23, 1998, the
Board voted to approve the termination of the previous adviser effective at the
close of business on February 28, 1999. The previous adviser served as
investment adviser to the Fund until that date.
OTHER SERVICE PROVIDERS
PricewaterhouseCoopers LLP, 200 South Biscayne Boulevard, Suite 1900, Miami,
Florida 33131 have been chosen to be independent auditors for the Fund.
The Fund employs Mutual Funds Service Co., P.O. Box 7177, 6000 Memorial Drive,
Dublin, OH 43017 to provide fund administrative, accounting,
dividends/distributions paying agency and transfer agency services. For the
services provided, Mutual Funds Service Co., received $36,409, $52,791 and
$76,464 for 1996, 1997, and 1998, respectively.
In addition, Star Bank, N.A., located at 425 Walnut Street, Cincinnati, Ohio
45201, serves as the Fund's Custodian.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Agreement states that in connection with its duties to arrange for the
purchase and the sale of securities held in the portfolio of the Fund by placing
purchase and sale orders for the Fund, the Adviser shall select such
broker-dealers ("brokers") as shall, in its judgment, achieve the policy of
"best execution," i.e., prompt and efficient execution at the most favorable
securities price. In making such selection, the Adviser is authorized in the
Agreement to consider the reliability, integrity and financial condition of the
broker. The Adviser also is authorized by Agreement to consider whether the
broker provides research or statistical information to the Fund and/or other
accounts of the Adviser.
The Agreement states that the commissions paid to brokers may be higher than
another broker would have charged if a good faith determination is made by the
Adviser that the commission is reasonable in relation to the services provided,
viewed in terms of either that particular transaction or the Adviser's overall
responsibilities as to the accounts as to which it exercises investment
discretion and that the Adviser shall use its judgment in determining that the
amount of commissions paid are reasonable in relation to the value of brokerage
and research services provided and need not place or attempt to place a specific
dollar value on such services or on the portion of commission rates reflecting
such services. The Agreement provides that to demonstrate that such
determinations were in good faith, and to show the overall reasonableness of
commissions paid, the Adviser shall be prepared to show that commissions paid
(i) were for
11
<PAGE>
purposes contemplated by the Agreement; (ii) were for products or services
which provide lawful and appropriate assistance to its decision-making process;
and (iii) were within a reasonable range as compared to the rates charged by
brokers to other institutional investors as such rates may become known from
available information.
The research services discussed above may be in written form or through direct
contact with individuals and may include information as to particular companies
and securities as well as market, economic or institutional areas and
information assisting the Fund in the valuation of its investments. The research
which the Adviser receives for the Fund's brokerage commissions, whether or not
useful to the Fund, may be useful to it in managing the accounts of its other
advisory clients, if any. Similarly, the research received for the commissions
of such accounts may be useful to the Fund.
During the fiscal years ended October 31, 1996, 1997 and 1998, the Fund paid a
total of $124,142, $83,760 and $77,797 in brokerage commissions, respectively.
CAPITAL STOCK
The Fund is authorized to issue 1,000,000,000 shares of common stock, $.001 per
value (the "Common Stock"). Shares of the Fund, when issued, are fully
transferable and redeemable at the option of the holder. Shares are also
redeemable at the option of the Fund in certain circumstances as described in
the Fund's Prospectus under "Selling Shares." All Fund shares are equal as to
earnings assets and voting privileges. There are no conversion, preemption or
other subscription rights. Under the Fund's Articles of Incorporation, the Board
may authorize the creation of additional series of common stock, with such
preferences, privileges, limitations and voting and dividend rights as the Board
may determine. Each share of the Fund outstanding is entitled to share equally
in dividends and other distributions and in the net assets of the Fund on
liquidation. Accordingly, in the event of liquidation, each share of the Fund's
common stock is entitled to its portion of all the Fund's assets after all debts
and expenses have been paid. The shares of the Fund do not have cumulative
voting rights for the election of Directors.
PURCHASES, REDEMPTIONS AND PRICING OF SHARES
NET ASSET VALUE
The net asset value of the Fund's shares will fluctuate and is determined as of
the close of trading on the New York Stock Exchange ("NYSE") (currently 4:00
p.m. Eastern time) on each day the NYSE is open. The Fund is open for business
on days when the NYSE is open. Currently, the NYSE observes the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. However, the Exchange may close on days not included above.
The net asset value per share is computed by dividing the value of the
securities held by the Fund plus any cash or other assets (including interest
and dividends accrued but not yet received)
12
<PAGE>
minus all liabilities (including accrued expenses) by the total number of Fund
shares outstanding at such time.
Portfolio securities that are principally traded on a national securities
exchange are valued at their last sale on the exchange on which they are
principally traded prior to the close of the NYSE or, in the absence of recorded
sales, at their current bid price on such exchanges. Securities listed on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
are valued at the last available sale price on NASDAQ prior to the time of
valuation. Securities that are principally traded in securities markets, but not
principally traded on securities exchanges or NASDAQ, are valued at the current
bid price prior to the close of the NYSE. Other securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith using methods approved by the Board.
REDEMPTION IN KIND
If the Board determines that it would be detrimental to the best interests of
the remaining shareholders of the Fund to make payment wholly in cash, the Fund
may pay the redemption price in part by a distribution in kind of securities
from the portfolio of the Fund, in lieu of cash. The Fund has elected to be
governed by Rule 18f-1 under the 1940 Act pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or one
percent of the net asset value of the Fund during any 90 day period for any one
shareholder. Should redemptions by any shareholder exceed such limitation, the
Fund will have the option of redeeming the excess in cash or in kind. If shares
are redeemed In kind, the redeeming shareholder would incur brokerage costs in
converting the assets into cash.
TAXATION OF THE FUND
DISTRIBUTION OF NET INVESTMENT INCOME. The Fund receives income generally in the
form of dividends and interest on its investments. This income, less expenses
incurred in the operation of the Fund, constitutes the Fund's investment income
from which dividends may be paid to you. Any distributions by the Fund from such
income will be taxable to you as ordinary income, whether you take them in cash
or in additional shares. The Fund distributes dividends to you on a quarterly
basis.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund may derive capital gains and losses in
connection with the sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as long-term capital gain, regardless of how long you have held your
shares in the Fund. Any net capital gains realized by the Fund generally will be
distributed once each year, and may be distributed more frequently, if
necessary, in order to reduce or eliminate excise or income taxes on the Fund.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS. The Fund will inform you of
the amount of your ordinary income dividends and capital gains distributions at
the time they are paid, and will advise you of their tax status for federal
income tax purposes shortly after the close of each calendar year. If you have
not held Fund shares for a full year, the Fund may designate and
13
<PAGE>
distribute to you as ordinary income or capital gain a percentage of income
that is not equal to the actual amount of such income earned during the period
of your investment in the Fund.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY. The Fund has elected to
be treated as a regulated investment company under Subchapter M of the Internal
Revenue Code, has qualified as such for its most recent fiscal year, and intends
to so qualify during the current fiscal year. As a regulated investment company,
the Fund generally pays no federal income tax on the income and gains it
distributed to you. The Board reserves the right not to maintain the
qualification of the Fund as a regulated investment company if it determined
such course of action to be beneficial to shareholders. In such case, the Fund
will be subject to federal, and possibly state, corporate taxes on its taxable
income and gains, and distributions to you will be taxed as ordinary dividend
income to the extent of the Fund's earnings and profits.
EXCISE TAX DISTRIBUTIONS REQUIREMENTS. To avoid federal excise taxes, the
Internal Revenue Code requires the Fund to distribute to you by December 31 of
each year, at a minimum, the following amounts: 98% of its taxable ordinary
income earned during the calendar year; 98% of its capital gain net income
earned during the twelve month period ending October 31; and 100% of any
undistributed amounts from the prior year. The Fund intends to declare and pay
these amounts in December (or in January that are treated by you as received in
December) to avoid these excise taxes, but can give no assurances that its
distributions will be sufficient to eliminate all taxes.
REDEMPTION OF FUND SHARES. Redemptions and exchanges of Fund shares are taxable
transactions for federal and state income tax purposes. If you redeem your Fund
shares, or exchange your Fund shares for shares of The Flex-Funds Money Market
Fund, the IRS will require that you report a gain or loss on your redemption or
exchange. If you hold your shares as a capital asset, the gain or loss that you
realize will be capital gain or loss and will be long-term or short-term,
generally depending on how long you hold your shares. Any loss incurred on the
redemption or exchange of shares held for six months or less will be treated as
a long-term capital loss to the extent of any long-term capital gains
distributed to you by the Fund on those shares.
All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS. As a corporate shareholder, you
should note that 19.6% of the dividends paid by the Fund for the most recent
fiscal year qualified for the dividends-received deduction. You will be
permitted in some circumstances to deduct these qualified dividends, thereby
reducing the tax that you would otherwise be required to pay on these dividends.
The dividends-received deduction will be available only with respect to
dividends designated by the Fund as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculations.
UNDERWRITERS
14
<PAGE>
The costs of distributing shares of the Fund is borne by the Adviser.
Unaffiliated registered broker-dealers act as, or will act as, distributor of
Fund shares at no cost to the Fund.
CALCULATION OF PERFORMANCE DATA
From time to time the Fund may quote its average annual total return
("standardized return") in advertisements or promotional materials.
Advertisements and promotional materials reflecting standardized return
("performance advertisements") will show percentage rates reflecting the average
annual change in the value of an assumed initial investment in the Fund of
$1,000 at the end of one, five and ten year periods. If such periods have not
yet elapsed, data will be given as of the end of a shorter period corresponding
to the duration of the Fund. Standardized return assumes the reinvestment of all
dividends and capital gain distributions.
The Fund also may refer in advertising and promotional materials to its yield.
The Fund's yield shows the rate of income that it earns on its investments,
expressed as a percentage of the net asset value of Fund shares. The Fund
calculates yield by determining the interest income it earned from its portfolio
investments for a specified thirty day period (net of expenses), dividing such
income by the average number of Fund shares outstanding, and expressing the
result as an annualized percentage based on the net assets value at the end of
that thirty day period. Yield accounting methods differ from the methods used
for other accounting purposes; accordingly, the Fund's yield may not equal the
dividend income actually paid to investors or the income reported in the Fund's
financial statements.
In addition to standardized return, performance advertisements may also include
other total return performance data ("non-standardized return").
Non-standardized return may be quoted for the same or different periods as those
for which standardized return is quoted and may consist of aggregate or average
annual percentage rate of return, actual year by year rates or any combination
thereof.
All data included in performance advertisements will reflect past performance
and will not necessarily be indicative of future results. The investment return
and principal value of an investment in the Fund will fluctuate, and an
investor's proceeds upon redeeming Fund shares may be more or less than the
original cost of the shares.
TOTAL RETURN. Average annual total return quotations used in the Fund's
advertising and promotional materials are calculated according to the following
formula:
n
P (1 + T) = ERV
Where:
P = a hypothetical initial payment of $1000.
15
<PAGE>
T = average annual total return.
n = the number of years.
ERV = the ending redeemable value at the end of the period 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).
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication. Average annual total
return, or "T" in the above formula, is computed by finding the average annual
compounded rates of return over the period that would equate the initial amount
invested to the ending redeemable value. Average annual total return assumes the
reinvestment of all dividends and distributions.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
FROM MARCH 4, 1991 TO
PAST ONE YEAR PAST 5 YEARS OCTOBER 31, 1998
------------- ------------ ----------------
<S> <C> <C>
17.13% 17.70% 12.29%
</TABLE>
YIELD. Annualized yield quotations used in the Fund's advertising and
promotional materials are calculated by dividing the Fund's interest income for
a specified thirty-day period, net of expenses, by the average number of shares
outstanding during the period, and expressing the result as an annualized
percentage (assuming semi-annual compounding) of the net asset value per share
at the end of the period. A portfolio's yield is a way of showing the rate of
income the portfolio earns on its investments as a percentage of the portfolio's
share price. Yield quotations are calculated according to the following formula:
6
YIELD = 2 [ ( a-b + 1 ) - 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 are
entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
16
<PAGE>
Except as noted below, in determining net investment income earned during the
period ("a" in the above formula), the Fund calculates interest earned on each
debt obligation held by it during the period by (1) computing the obligation's
yield to maturity, based on the market value of the obligation (including actual
accrued interest) on the last business day of the period or, if the obligation
was purchased during the period, the maturity by 360 and multiplying the
resulting quotient by the market value of the obligation (including actual
accrued interest). Once interest earned is calculated in this fashion for each
debt obligation held by the Fund, net investment income is then determined by
totaling all such interest earned.
For purposes of these calculations, the maturity of an obligation with one or
more call provisions is assumed to be the next date on which the obligation
reasonably can be expected to be called or, if none, the maturity date. For the
30-day period ended October 31, 1998, the yield of the Fund was 1.7625%.
OTHER INFORMATION. The Fund's performance data quoted in advertising and other
promotional materials represents past performance and is not intended to predict
or indicate future results. The return and principal value of an investment in
the Fund will fluctuate, and an investor's redemption proceeds may be more or
less than the original investment amount. In advertising and promotional
materials the Fund may compare its performance with data published by Lipper
Analytical Services, Inc. ("Lipper") or CDA Investment Technologies, Inc.
("CDA"). The Fund also may refer in such materials to mutual fund performance
rankings and other data, such as comparative asset, expense and fee levels,
published by Lipper or CDA. Advertising and promotional materials also may refer
to comparisons of the Fund and comparative mutual fund data and ratings reported
in independent periodicals including, but not limited to, The Wall Street
Journal, Money Magazine, Forbes, Business Week, Financial World, and Barron's.
17
<PAGE>
FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP serves as independent public accountants for the
Fund, and in its capacity as such, audits the Fund's financial statements. The
Fund's Statement of Assets and Liabilities, Statement of Operations, Statement
of Changes in Net Assets, Financial Highlights and Notes to Financial
Statements, as well as the report of PricewaterhouseCoopers LLP for
the fiscal year ended October 31, 1998 are included in the Fund's Annual Report
to shareholders. You may request a copy of the Annual Report, without charge, by
writing to the Fund or calling (800) 333-4276. The foregoing financial
statements, as supplemented by the addition of Notes 6 and 7 and the
Report of Independent Accountants, dated December 30, 1998, except for Notes 6
and 7, as to which the date is March 9, 1999, are included on the following
pages of this SAI.
18
<PAGE>
ASM INDEX 30 FUND, INC,
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS:
AEROSPACE
Boeing Co. 13,900 $ 521,250
United Technologies Corp. 13,900 1,323,975
6.2% 1,845,225
ALUMINUM
Aluminum Company of America 3.7% 13,900 1,101,575
AUTO AND TRUCK
General Motors Corp. 3.0% 13,900 876,569
BANKING
J. P. Morgan Corp. 4.4% 13,900 1,310,075
BEVERAGE
Coca-Cola Co. 3.2% 13,900 939,988
CHEMICAL
E.I. du Pont Nemours & Co. 13,900 799,250
Union Carbide Corp. 13,900 535,150
4.5% 1,334,400
COMPUTER & PERIPHERALS
International Business Machines Corp. 7.0% 13,900 2,063,281
CONSUMER PRODUCTS
Procter & Gamble Co. 4.2% 13,900 1,235,362
DIVERSIFIED
AlliedSignal, Inc. 13,900 541,231
Minnesota Mining & Manufacturing Co. 13,900 1,112,000
5.6% 1,653,231
DRUG
Merck & Co, Inc. 6.4% 13,900 1,879,975
ELECTRICAL EQUIPMENT
General Electric Corp. 4.1% 13,900 1,216,250
FINANCIAL SERVICES
American Express Co. 4.2% 13,900 1,228,413
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
HEALTH
Johnson & Johnson 3.8% 13,900 1,132,850
INSURANCE
Citigroup, Inc. 2.2% 13,900 654,169
MACHINERY
Caterpillar Inc. 2.1% 13,900 625,500
MULTIMEDIA
The Walt Disney Co. 1.3% 13,900 374,431
OFFICE AUTOMATION & EQUIPMENT
Hewlett-Packard Co. 2.8% 13,900 836,606
OIL/GAS
Chevron Corp. 13,900 1,132,850
Exxon Corp. 13,900 990,375
7.2% 2,123,225
PAPER & FOREST PRODUCTS
International Paper Co. 2.2% 13,900 645,481
PHOTOGRAPHIC EQUIPMENT AND SUPPLIES
Eastman Kodak Co. 3.6% 13,900 1,077,250
RESTAURANT
McDonald's Corp. 3.1% 13,900 929,563
RETAIL STORE
Sears, Roebuck & Co. 13,900 624,631
Wal-Mart Stores, Inc. 13,900 959,100
5.4% 1,583,731
TELECOMMUNICATION SERVICES
American Telephone & Telegraph Corp. 2.9% 13,900 865,275
TIRE AND RUBBER
The Goodyear Tire & Rubber Co. 2.5% 13,900 748,863
TOBACCO
Philip Morris Companies, Inc. 2.4% 13,900 710,637
----------
TOTAL COMMON STOCKS
(Cost $26,626,247) 98.2%* 28,991,925
----------
REPURCHASE AGREEMENT:
Star Bank
4.70%, entered into 10/30/98, due 11/02/98 $591,000 591,000
Collateralized by $605,000 GNMA 6.625%, 9/20/22
with market value of $607,620
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NET ASSETS SHARES VALUE
<S> <C> <C> <C>
TOTAL REPURCHASE AGREEMENT 2.0% 591,000
----------
(Cost $591,000)
TOTAL INVESTMENTS 100.2% 29,582,925
-----------
(Cost $27,217,247)
LIABILITIES IN EXCESS OF OTHER ASSETS -0.2% (47,864)
-----------
TOTAL NET ASSETS 100.0% $29,535,061
-----------
-----------
</TABLE>
*Total consists of individual percentages which have been rounded.
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
Assets:
Investments in common stocks, at market value $ 28,991,925
(cost $26,626,247)
Repurchase agreements, at cost 591,000
Cash 531
Interest and dividends receivable 20,808
Receivable from adviser 92,872
Prepaid expense and other assets 34,602
-------------
Total Assets 29,731,738
-------------
Liabilities:
Payable for capital shares redeemed 129,780
Accrued expenses 66,897
-------------
Total Liabilities 196,677
-------------
Net Assets $ 29,535,061
-------------
-------------
Components of Net Assets:
Capital paid-in $ 26,449,017
Accumulated undistributed net realized gains from
investment transactions 720,366
Net unrealized appreciation of investments 2,365,678
-------------
Total Net Assets $ 29,535,061
-------------
-------------
Capital Shares Outstanding
($0.001 par value, 1,000,000,000 shares authorized) 1,552,908
Net Asset Value - - Offering and Redemption Price Per Share $ 19.02
-------------
-------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
22
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF OPERATIONS
OCTOBER 31, 1998
<TABLE>
<S> <C>
Investment Income:
Dividends $ 547,620
Interest 37,229
------------
Total investment income 584,849
------------
Expenses:
Management fees 26,302
Professional fees 45,900
Custodian fees 33,291
Trustee fees 24,000
Legal expense 42,822
Administrative fees 24,167
Registration and filing fees 30,016
Transfer agent and accounting fees 52,297
Printing and postage 14,084
Other expenses 7,154
------------
Total expenses 300,033
------------
Less: Reimbursement of expenses by adviser (242,280)
-------------
Total expenses - net 57,753
------------
Investment income - net 527,096
------------
Realized and Unrealized Gains from Investments:
Net realized gains from investment transactions 3,568,516
Change in unrealized appreciation of investments 592,550
Net realized and unrealized gains from investments 4,161,066
------------
Net Increase in Net Assets Resulting from Operations $ 4,688,162
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
ASM INDEX 30 FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
---- ----
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income $ 527,096 $ 430,876
Net realized gains from investment transactions 3,568,516 5,534,868
Change in unrealized appreciation of investments 592,550 1,680,860
------------- -------------
Net increase in net assets resulting from operations 4,688,162 7,646,604
------------- -------------
Distributions to shareholders:
From net investment income (453,542) (430,876)
In excess of net investment income --- (63,140)
From net realized gains (1,846,825) (208,768)
------------ ------------
Net decrease in net assets resulting from distribution
to shareholders (2,300,367) (702,784)
------------ ------------
Capital share transactions:
Proceeds from shares issued 79,003,347 77,870,255
Reinvestment of distributions 1,766,644 590,838
Cost of shares redeemed (74,749,547) (73,593,574)
------------ ------------
Net increase in net assets resulting from capital
share transactions 6,020,444 4,867,519
------------ ------------
Total increase in net assets 8,408,239 11,811,339
------------ ------------
Net assets - beginning of period 21,126,822 9,315,483
------------ ------------
Net assets - end of period $ 29,535,061 $ 21,126,822
------------ ------------
------------ ------------
Changes in shares outstanding:
Shares issued 4,211,829 4,853,861
Shares issued in connection with reinvestment
of distributions 99,745 36,286
Shares redeemed (3,986,563) (4,321,722)
------------ ------------
Net increase in shares outstanding 325,011 568,425
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
ASM INDEX 30 FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
1998 1997 1996 1995(a) 1994(a)
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $17.21 $14.13 $11.37 $9.78 $10.07
INVESTMENT OPERATIONS:
Net investment income 0.32 0.18 0.08 0.00 0.56
Net gains (losses) from investments
(realized and unrealized) 2.54 3.34 2.76 1.77 -0.16
---- ---- ---- ---- -----
Total from investment operations 2.86 3.52 2.84 1.77 0.40
---- ---- ---- ---- ----
DISTRIBUTIONS:
From net investment income -0.27 -0.18 -0.07 -0.05 -0.52
In excess of net investment income 0.00 -0.11 -0.01 -0.13 0.00
From net realized gains -0.78 -0.15 0.00 0.00 0.00
Tax return of capital 0.00 0.00 0.00 0.00 -0.17
------- ------- ------ ------ ------
Total Distributions -1.05 -0.44 -0.08 -0.18 -0.69
------- ------- ------ ------ ------
NET ASSET VALUE, END OF YEAR $19.02 $17.21 $14.13 $11.37 $9.78
------- ------- ------ ------ ------
------- ------- ------ ------ ------
TOTAL RETURN 17.13% 25.18% 25.01% 18.10% 3.97%
------- ------- ------ ------ ------
------- ------- ------ ------ ------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $29,535 $21,127 $9,315 $9,704 $7,277
Ratio of expenses to average
net assets* 0.18% 0.42% 1.86% 3.01%** 0.75%
Ratio of net investment
income to average net assets* 1.60% 1.51% 0.53% 0.04% 2.17%
Portfolio turnover rate*** 196% 265% 391% 340% 1193%
</TABLE>
* Ratios are presented net of fees voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as follows: ratio of
expenses to average net assets would have been 0.91%, 1.05%, 2.59%, 5.77%, and
2.94% for 1998, 1997, 1996, 1995, and 1994, respectively; ratio of net
investment income (loss) to average net assets would have been 0.87%, 0.88%,
(0.20%), (2.72%) and (0.02%) for 1998, 1997, 1996, 1995 and 1994, respectively.
As a result of certain tax adjustments necessitated by the Fund's failure to
qualify as a regulated investment company for the years ended October 31, 1995
and 1994, as well as other adjustments, the gross expense ratios previously
reported for these periods have been restated.
** Includes $50,460 of interest expense not subject to the expense reimbursement
agreement.
*** The Fund continues to be as fully invested in equities as possible.
Therefore, portfolio turnover is higher than most equity mutual funds because
purchases and sales of securities are necessary for settlement of transactions
requested by Fund shareholders.
(a) Audited by predecessor auditor.
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998
ASM Index 30 Fund, Inc. (the "Fund") was incorporated in Maryland on April 25,
1990 and is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a no-load, diversified, open-end management investment company.
The Fund has an investment objective of providing total return through a
combination of capital appreciation and current income.
1. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. Preparation of the
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period.
SECURITY VALUATION
Portfolio securities are listed on a national securities exchange and
are stated at the last reported sales price on the day of valuation.
SECURITY TRANSACTIONS
The Fund records purchases of investments one business day after trade
date and sales of investments on the trade date. Realized gains and losses from
sales of investments are calculated on the specific identification basis.
Interest income is recognized on the accrual basis, and dividend income is
recorded on the ex-dividend date.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases
securities from a bank or recognized securities dealer and simultaneously
commits to resell that security to the bank or dealer at an agreed-upon date and
price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased security. The Fund may invest in repurchase agreements
with institutions believed by Vector Index Advisors, Inc. (the "Adviser") to
present minimum credit risk. Each repurchase agreement is recorded at cost. The
Fund requires that the securities purchased in a repurchase agreement be
transferred to the custodian in a manner sufficient to enable the Fund to obtain
those securities in the event of a counterparty default. The seller, under the
repurchase agreement, is required to maintain the value of the securities at
least equal to the repurchase price, including accrued interest.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on deposit with the
custodian.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date. On
a quarterly basis, the Fund declares and pays dividends from net investment
income, if any. On an annual basis, the Fund declares and pays net capital gain
dividends, if any.
Dividends from net investment income and net capital gain dividends
are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to deferrals of certain losses and the Fund's use of the
accounting practice of tax equalization, whereby a portion of the costs of
capital shares redeemed is
<PAGE>
attributable to distributions to shareholders. Permanent book and tax basis
differences have been reclassified among the components of net assets.
FEDERAL INCOME TAXES
The Fund intends to continue to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders.
2. INVESTMENT ADVISORY FEES
The Fund operates under an investment management agreement (the
"Agreement") with the Adviser. The Agreement provides for compensation to the
Adviser at an annual rate of 0.08% of the Fund's average daily net assets.
Pursuant to the Agreement, the Adviser provides continuous supervision of the
investment portfolio and pays the cost of compensation of the officers of the
Fund, and occupancy and certain clerical and administrative costs involved in
portfolio management. The Fund bears all other costs and expenses.
Certain officers and directors of the Fund are also officers and
directors of the Adviser. Commencing January 15, 1997, the Adviser voluntarily
agreed to limit expenses of the Fund to 0.18% of the Fund's average daily net
assets. Pursuant to commitments made to the Fund by the Adviser, the Adviser
reimbursed the Fund $242,280 for the year ended October 31, 1998. The Board of
Directors of the Fund has obtained confirmation that the Adviser has made
arrangements to assure availability of funds to discharge the Fund's
obligations. All amounts due under statutory and voluntary expense limitations
were paid by the Adviser within 30 days of the end of the fiscal year.
3. INVESTMENT TRANSACTIONS
For the year ended October 31, 1998, purchases and sales of investment
securities (excluding short-term securities) were $65,649,422 and $61,747,953,
respectively. As of October 31, 1998, the aggregate cost basis of investments
for Federal income tax purposes was $28,005,998 and net unrealized appreciation
of investments for Federal income tax purposes was comprised of the following:
Gross unrealized appreciation of investments $ 3,162,749
Gross unrealized depreciation of investments (1,585,822)
-----------
Net unrealized appreciation of investments $ 1,576,927
-----------
-----------
4. FINANCIAL HIGHLIGHTS RESTATEMENT
During the year ended October 31, 1996, the Fund, in consultation with
its auditors and legal counsel, determined, based on information available at
the time, that the Fund did not qualify as a regulated investment company under
the Internal Revenue Code for the years ended October 31, 1995 and 1994. As
such, the Fund would be subject to accrued Federal income taxes and interest of
approximately $1,312. The Adviser has agreed to pay these costs.
Also, advisory fees in the amount of $23,443 for the period from April
16, 1995 to October 31, 1995 should not have been accrued by the Fund nor
reimbursed by the Adviser. As a result, the expense ratios before reimbursement
in the Financial Highlights have been restated to reflect these changes. Prior
to restatement, such ratios were 5.94% and 2.55% for the years ended October 31,
1995 and 1994, respectively. All amounts discussed above as well as amounts due
under statutory and voluntary expense limitations are reflected in the
receivable from adviser on the Statement of Assets and Liabilities.
5. INVESTMENT ADVISER EVENTS
27
<PAGE>
The Fund had received a commitment from its Adviser (the "expense
commitment") that the Adviser would waive payment of its advisory fee, or would
otherwise pay to the Fund amounts by which the actual expenses of the Fund
exceed eighteen basis points of the Fund's average net assets. Subsequent to
October 31, 1998, the Fund was reimbursed by the Adviser for all expenses owed
through that date. Recently, the Board of Directors of the Fund was advised by
its Adviser of financial information which required the Board to consider
whether the Adviser would be able to continue to fulfill the expense commitment
in the future. Absent the expense commitment, the expense ratio for the Fund
would be materially higher than the Fund had to bear under the terms of the
expense commitment.
The Chairman and President of the Adviser, who is also a Director and
Officer of the Fund, requested and has received approval for a leave of absence
for personal reasons from all positions with the Fund, and from the day to day
operation of the Adviser with respect to the Fund. Other officers and employees
of the Adviser and the Fund continue to operate the Fund under the supervision
of the independent directors of the Fund.
On December 23, 1998, at a meeting of the independent members of the
Board of Directors, the directors voted to notify the Adviser of the termination
of the present investment advisory agreement effective sixty days after delivery
of notice of termination of the agreement. During this sixty-day period, the
Board will solicit proposals from other funds and advisers, and will consider
alternative arrangements. Such alternatives include a recommendation that
shareholders vote to approve a new investment advisory relationship with another
adviser, or vote to reorganize the Fund with another fund in a tax free
reorganization or, in the absence of such options, vote to terminate the Fund
and distribute its assets to the shareholders. Subsequent to October 31, 1998,
the Board has established a reserve for the expense of implementing such
alternatives.
Pending resolution of these concerns, the Board is confident that the
custodian bank, transfer agent, accounting services agent, independent
accountants and counsel for the Fund can continue to provide the services
required for the conduct of the Fund's business.
6. LEGAL PROCEEDINGS
On February 8, 1999, a suit was filed against a former director and
officer of the Fund; the investment adviser of the Fund; and the Fund alleging
that the former officer of the Fund failed to invest in the Fund amounts
purportedly paid by the plaintiffs to the investment adviser of the Fund. The
relief sought is the recovery of the investment amounts and interest thereon,
additional general, consequential and incidental damages, legal costs and
disbursements, and declaratory and injunctive relief to preclude the Fund from
transferring or permitting the dissipation of its assets. With the possible
exception of Steven H. Adler, the former officer and director of the Fund, the
Fund had no knowledge that the amounts purportedly paid by the plaintiffs to the
former investment adviser were, as the plaintiffs have alleged, to be invested
in the Fund. The Fund and its counsel are investigating this matter and the
possibility that other unasserted claims or improprieties exist. At the present
time, the liability of the Fund, if any, is not readily determinable.
7. NEW INVESTMENT ADVISER AND REORGANIZATION
On February 26, 1999, the Board of Directors of the Fund approved an
interim investment management contract ("Interim Contract") naming ORBITEX
Management, Inc. ("ORBITEX") as the new investment adviser of the Fund. The Fund
and ORBITEX entered into the Interim Contract effective on March 1, 1999,
following the termination of the previous investment adviser. The terms and
conditions of the Interim Contract are substantially the same as the management
contract that was terminated, but that ORBITEX will not limit the Fund's
expenses to 0.18% of the average daily net assets of the Fund beginning on March
1, 1999. The Interim Contract will remain in effect until the earlier of July 1,
1999 or the vote of the shareholders at a special shareholder meeting approving
or disapproving a new investment management contract between the Fund and
ORBITEX. The Board has also recommended that the shareholders of the Fund
approve a tax-free reorganization between the Fund and an investment company
managed by ORBITEX.
28
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For the taxable year ended October 31, 1998, 19.6% of the income
dividends paid by the Fund qualified for the dividends received deduction
available to corporations, and distributions from long-term capital gains for
the Fund were $4,126,336.
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
ASM Index 30 Fund, Inc. (the "Fund")
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Fund at October 31, 1998, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years then ended and the financial highlights for each of
the five years then ended, in conformity with generally accepted accounting
principals. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. The financial highlights before restatement for
the years ended October 31, 1995 and 1994 were audited for other auditors, whose
report dated December 27, 1995 expressed an unqualified opinion. We also audited
the adjustments described in Note 4 that were applied to restate the expense
ratios included in the financial highlights for the years ended October 31, 1995
and 1994. In our opinion such adjustments are appropriate and have been properly
applied. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principals used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe our audits, which include confirmation of securities owned at October
31, 1998 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
As disclosed in Notes 5 and 7 to the financial statements, the Board of
Directors of the Fund voted to notify the Fund's investment adviser of the
termination of the present investment advisory agreement and has entered into
alternative arrangements for managing the Fund under a new investment advisory
agreement. Pursuant to the new investment advisory agreement, the Fund's annual
expenses, effective March 1, 1999, will not be limited to .18% of the average
daily net assets of the Fund. In addition, the Board has recommended that
shareholders approve reorganizing the Fund with another fund in a tax-free
reorganization. In the absence of such a reorganization, the Board would
consider terminating the Fund and distributing its assets to the shareholders.
Any of these alternatives could result in further material changes in the Fund's
future investment objectives, operations, or expense ratios. No adjustments have
been made to the financial statements as a result of this matter.
As disclosed in Note 6 to the financial statements, on February 8, 1999 a suit
was filed alleging that a former officer of the Fund failed to invest in the
Fund amounts paid by the plaintiffs to the former investment adviser of the
Fund. The relief sought is recovery of the investment amounts and interest
thereon, other consequential and incidental damages, and declaratory and
injunctive relief to preclude the Fund from transferring or permitting the
dissipation of its assets. At the present time, the liability of the Fund, if
any, is not readily determinable nor is it readily determinable whether other
individuals may file additional suits or make additional claims alleging similar
improprieties. No adjustments have been made to the financial statements as a
result of this matter.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
December 30, 1998, except for Note 6 and Note 7
as to which the date is March 9, 1999
30
<PAGE>
APPENDIX A
DEFINITIONS OF STANDARD & POOR'S BOND RATINGS
Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
The Fund may invest in bonds with ratings of CC above. Definitions of these
ratings are set forth below.
AAA Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.
A Debt rated A has a strong capacity to pay interest and principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
BB, B, CCC, CC
Debt rated BB, B, CCC and CC is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and the highest degree of speculation.
While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
D Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
31
<PAGE>
APPENDIX B
MOODY'S BOND RATINGS
Moody's Investors Service, Inc. give ratings to bonds that range from Aaa to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any ratings of Caa or better.
Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
Aa - These bonds are judged to be of high quality by all standards. They
are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in
Aaa securities.
A - These are bonds which possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa - These bonds are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.
B - These bonds generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa - These are bonds of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.
Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.
C - These are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
32
<PAGE>
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) (1) Articles of Incorporation is filed herewith as Exhibit EX-99B(1).
(2) Articles of Amendment dated January 11, 1991 is filed herewith as
Exhibit EX-99B(2).
(3) Articles of Amendment to Articles of Incorporation dated
August 26, 1997 is filed herewith as Exhibit EX-99B(3).
(b) By-laws are filed herewith as Exhibit EX-99B(4).
(c) Not Applicable.
(d) Management Agreement between ASM Index 30 Fund, Inc. and ORBITEX
Management, Inc. dated February 28, 1999 is incorporated by reference
to Post-Effective Amendment No. 11 to the Registration Statement on
Form N-1A filed on March 12, 1999.
(e) Not Applicable.
(f) Not Applicable.
(g) Custodian Agreement is filed herewith as Exhibit EX-99.B(5).
(h) (1) Administration Agreement (Transfer Agency) is filed herewith as
Exhibit EX-99.B(6).
(2) Accounting Services Agreement is filed herewith as Exhibit
EX-99.B(7).
(3) Administration Services Agreement is filed herewith as
Exhibit EX-99.B(8).
(i) (1) Opinion concerning the legality of shares is filed herewith as
Exhibit EX-99.B(9).
(2) Consent concerning the legality of shares is filed herewith as
Exhibit EX-99.B(10).
(j) Consent of auditors is filed herewith as Exhibit No. EX-99.B(11).
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) Financial Data Schedule for the ASM Index 30 Fund is incorporated by
reference to Post-Effective Amendment No. 11 to the Registration
Statement on Form N-1A filed on March 12, 1999.
<PAGE>
(o) Not Applicable.
(p) Power of Attorney granted by Jerome Feltenstein; Daniel Calabria; and
Arthur Salzfass is filed herewith as Exhibit EX-99.B(12).
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
See "Management of the Fund" in Part A of this Registration Statement.
ITEM 25. INDEMNIFICATION.
As permitted by Section 17(h) and (i) of the Investment Company Act of 1940 (the
"1940 Act") and pursuant to Article Tenth of the Fund Articles of Incorporation
(Exhibit 1 to the Registration Statement) and section 2-418 of the Maryland
General Corporation Law, officers and directors of the Registrant may be
indemnified against liabilities in connection with the Registration, unless it
is proved that (i) the act or omission of the director or officer was material
to the cause of action adjudicated in the proceeding and was committed in bad
faith or with active and deliberate dishonesty, (ii) the director actually
received an improper personal benefit in money, property or services, or (iii)in
the case of a criminal proceedings, the director had reasonable cause to believe
that the act of omission was unlawful. As permitted by Section 17(i) of the 1940
Act, pursuant to the Distribution Agreement (Exhibit 6 to the Registration
Statement), the Distributor of the Registrant may be indemnified against
liabilities which it may incur except liabilities arising from bad faith, gross
negligence, willful misfeasance or reckless disregard of duties.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 ("Securities Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of the
Registrant in connection with the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the shares being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Section 2(d) of the Management Agreement limits the liability of ORBITEX
Management, Inc. to losses resulting from a breach of fiduciary duty with
respect to their receipt of compensation for services (in which case any award
of damages shall be limited to the period and amount set forth in section 36(b)
of the 1940 Act) or losses
<PAGE>
resulting from willful misfeasance, bad faith or gross negligence in
performance of its duties and obligation under the Management Agreement.
The Registrant undertakes to apply the indemnification provisions of its
Articles of Incorporation and the Investment Management Agreement in a manner
consistent with the provisions of Sections 17(h) and (i) of the Investment
Company Act.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Reference is made to Part A of this Registration Statement and to Form ADV filed
under the Investment Advisers Act of 1940, as amended, by ORBITEX Management,
Inc. (File No. 801-52312).
ITEM 27. PRINCIPAL UNDERWRITER
Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and rules
promulgated thereunder are in the possession of Registrant and Registrant's
custodian and shareholder service agent, as follows: the documents required to
be maintained by paragraphs (4), (5), (6), (7), (10) and (11) of Rule 31a-1(b)
will be maintained by the Registrant, and all other records will be maintained
by the Custodian and Shareholder Service Agent.
ITEM 29. MANAGEMENT SERVICES.
All management-related service contracts are discussed in Parts A or B of this
Registration Statement.
ITEM 30. UNDERTAKINGS.
Registrant hereby undertakes to conduct its operations in accord with the
director removal and shareholder assistance provisions of Section 16(c) of the
Investment Company Act of 1940.
Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest Annual Report to shareholders upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
under Rule 485(b) under the Securities Act of 1933, as amended, and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of New York and State of New York on
the 12th day of April, 1999.
ASM Index 30 Fund, Inc.
Registrant
By:/s/ M. Fyzul Khan
----------------------------------
M. Fyzul Khan
Acting Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Jerome Feltenstein Director April 12, 1999
Jerome Feltenstein
/s/ W. Keith Schilit Director April 9, 1999
W. Keith Schilit
/s/ Daniel Calabria Director April 12, 1999
Daniel Calabria
/s/ Arthur Salzfass Director April 12, 1999
Arthur Salzfass
M. Fyzul Khan Acting Chief April 12, 1999
M. Fyzul Khan Executive Officer
Keith D. Kemp Acting Chief April 12, 1999
Keith D. Kemp Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
FORM N-1A EDGAR
EXHIBIT NO. EXHIBIT NO.
<S> <C> <C>
23(a)(1) Articles of Incorporation EX-99.B(1)
23(a)(2) Articles of Amendment EX-99.B(2)
23(a)(3) Articles of Amendment EX-99.B(3)
23(b) By-laws EX-99.B(4)
23(g) Custodian Agreement EX-99.B(5)
23 (h)(1) Administration Agreement (Transfer Agency) EX-99.B(6)
23 (h)(2) Accounting Services Agreement EX-99.B(7)
23 (h)(3) Administration Services Agreement EX-99.B(8)
23 (i)(1) Opinion Concerning the
Legality of Shares EX-99.B(9)
23 (i)(2) Consent Concerning the
Legality of Shares EX-99.B(10)
23 (j) Consent of Auditors EX-99.B(11)
23 (p) Power of Attorney EX-99.B(12)
</TABLE>
<PAGE>
ARTICLES OF INCORPORATION
OF
KEY FUND, INC.
ARTICLE FIRST
I, the incorporator, Steven J. Paggioli, whose post office address
is 479 West 22nd Street, New York, New York 10011, being at least eighteen
years of age, do, under and by virtue of the General Laws of the State of
Maryland authorizing the formation of corporations, form a corporation.
ARTICLE SECOND
NAME
The name of the corporation (which is hereinafter called -the
"Corporation") is KEY FUND, INC.
ARTICLE THIRD
PURPOSES
The purposes for which the Corporation is formed are to act as an
open-ended investment company of the management type registered as such with
the Securities and Exchange Commission pursuant to the Investment Company Act
of 1940 (the "1940 Act") and to exercise and generally to enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations by
the General Laws Of the State of Maryland now or hereafter in force. In the
event the Corporation shall cease to be registered under the 1940 Act, it
shall have all of the powers to invest and reinvest its assets which it would
have if so registered, but without the restrictions on such powers imposed by
or under the 1940 Act or by any "fundamental policy" (as that term is used in
the 1940 Act) adopted by the Corporation pursuant to the 1940 Act. In the
event the Corporation shall cease to be so registered, all references in
these Articles of Incorporation or in the Corporation's By-Laws which limit
the powers of the Corporation pursuant to or under the 1940 Act or which
affect the manner in which action may be taken by the Board of Directors or
stockholders shall cease to be in affect.
<PAGE>
ARTICLE FOURTH
ADDRESS IN MARYLAND
The address of the place at which the principal office of the
Corporation in the State of Maryland is located is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202.
The name of the Corporation's resident agent is The Corporation
Trust Incorporated, and its mailing address is 32 South Street, Baltimore,
Maryland 21202. Said resident agent is a corporation of the State of
Maryland.
ARTICLE FIFTH
CAPITAL STOCK
Section 1. The total number of shares of all classes of stock which
the Corporation has authority to issue is 1,000,000,000 shares of capital
stock ("Shares") of the par value of $.001 each, having an aggregate par
value of $1,000,000 (any class(es) of Shares from time to time created by the
Board of Directors being herein referred to individually as a "Class" and
collectively as "Classes" and which may be referred to in other documents as
"Portfolios" or "Funds" or "Series"). The Board of Directors of the
Corporation shall have the power and authority to further classify or
reclassify any unissued Shares from time to time by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemptions of such unissued Shares, including, without limitation, the power
to reclassify unissued Shares of any Class as authorized shares of any other
Class.
Section 2. A description of the relative preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of all Classes is as
follows, unless otherwise set forth in Articles Supplementary or Articles of
Amendment filed with the Maryland State Department of Assessments and
Taxation describing any further Class or Classes from time to time created by
the Board of Directors:
<PAGE>
(a) All consideration received by the Corporation for the issue or
sale of Shares of a particular Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably belong
to that Class for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds, including any
proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, together with any General Items (as
hereinafter defined) allocated to that Class as provided in the following
sentence, are herein referred to as "assets belonging to" that Class. In the
event that there are any assets, income, earnings, profits or proceeds
thereof, funds or payments which are not readily identifiable as belonging to
any particular Class (collectively "General Items"), the Board of Directors
shall allocate such General Items to and among any one or more of the Classes
created from time to time in such manner and on such basis as it, in its sole
discretion, deems fair and equitable; and any General Items so allocated to a
particular Class shall belong to that Class. Each such allocation by the
Board of Directors shall be conclusive and binding upon the stockholders of
all Classes for all purposes.
(b) The assets belonging to any particular Class shall be charged
with the liabilities of the Corporation in respect of that Class and with all
expenses, costs, charges and reserves attributable to that Class, and shall
be so recorded upon the books of account of the Corporation. Such
liabilities, expenses, costs, charges and reserves, together with any General
Items (as hereinafter defined) allocated to that Class, are herein referred
to as "liabilities belonging to" that Class. In the event there are any
general liabilities, expenses, costs, charges or reserves of the Corporation
which are not readily identifiable as belonging to any particular Class
(collectively
<PAGE>
"General Items"), the Board of Directors shall allocate such General Items to
and among any one or more of the Classes created from time to time in such
manner and on such basis as it, in its sole discretion, deems fair and
equitable; and any General Items so allocated to a particular Class shall
belong to that Class. Each such allocation by the Board of Directors shall
be conclusive and binding upon the stockholders of all Classes for all
purposes.
(c) Dividends or distributions on Shares of a particular Class,
whether payable in Shares or cash, may be paid to the holders of Shares of
that Class at such times, in such manner and from such of the income capital
gains, accrued or realized, from the assets belonging to that Class, after
providing for actual and accrued liabilities belonging to that Class, as the
Board of Directors may determine.
(d) In the event of the liquidation or dissolution of the
Corporation, the stockholders of each Class that has been created shall be
entitled to receive, as a Class, when and as declared by the Board of
Directors, the excess of the assets belonging to that Class over the
liabilities belonging to that Class. The assets so distributable to the
stockholders of any particular Class shall be distributed among such
stockholders in proportion to the number of Shares of that Class held by them
and recorded on the books of the Corporation.
(e) On each matter submitted to vote of the stockholders, each
stockholder of a Share shall entitled to one vote for each Share standing in
such holder's name on the books of the Corporation, irrespective of the Class
thereof, and all Shares of all Classes shall vote as a single class ("Single
Class Voting"); provided, however, that (i) as to any matter with respect to
which a separate vote of any Class is required by the 1940 Act and/or
Maryland Law, such requirements as to a separate vote by the Class shall
apply in lieu of Single Class Voting as described above; (ii) in the event
that the separate vote requirements referred to in (i) above apply with
respect to one or more Classes, then, subject to (iii) below, the Shares of
all other Classes shall vote as a single Class; and (iii) as to any matter
which does not affect the interest of a particular Class,
<PAGE>
including but not limited to any proposal to liquidate any other Class, only
the holders of Shares of the one or more affected Classes shall be entitled
to vote.
(f) All Shares of each particular Class shall represent an equal and
proportionate interest in the assets belonging to that Class (subject to the
liabilities belonging to that Class), and each Share of any particular Class
shall be equal to each other Share of that Class; but the provisions of this
sentence shall not restrict any distinctions permissible pursuant to
subsection (c) of Section 2 of this Article or otherwise under these Articles
of Incorporation that may exist with respect to stockholder elections to
receive dividends or distributions in cash or Shares of the same Class or
that may otherwise exist with respect to dividends and distributions on
Shares of the same Class.
Section 3. No holder of Shares shall be entitled as such, as a
matter of right, to purchase or subscribe for any part of any now or
additional issue of Shares or securities of the Corporation.
Section 4. All Shares now or hereafter authorized, and of any Class,
shall be "subject to redemption" and "redeemable," in the sense used in the
General Laws of the State of Maryland authorizing the formation of
corporations as amended from time to time (the "Maryland Corporation Law"),
at the redemption or repurchase price for Shares of that Class, determined in
the manner set out in these Articles of Incorporation or in any amendment
thereto. In the absence of any contrary specification as to the. purpose
for which Shares are repurchased by it, all Shares so repurchased shall be
deemed to be "retired automatically in the sense contemplated by the Maryland
Corporation law. Shares retired by repurchase or retired by redemption shall
thereafter have the status of authorized but unissued Shares of the
Corporation.
Section 5. All persons who shall acquire Shares shall acquire the
same subject to the provisions of these Articles of Incorporation.
<PAGE>
ARTICLE SIXTH
DIRECTORS
The initial number of Directors of the corporation shall be two, and
the names of those who shall act as such until the first meeting of
stockholders at which Directors are to be elected and until their successors
are duly elected and qualify are as follows: A. Byrne Litschgi, Gail Hirsch.
However, the By-Laws of the Corporation may fix the number of Directors at a
number other than two and may authorize the Board of Directors, by the vote
of a majority of the entire Board of Directors, to increase or decrease the
number of Directors within a limit specified in the By-Laws, provided that in
no case shall the number of Directors be less than two, and to fill the
vacancies created by any such increase in the number of Directors. Unless
otherwise provided by the By-Laws of the Corporation, the Directors of the
Corporation need not be stockholders.
ARTICLE SEVENTH
PROVISIONS FOR DEFINING, LIMITING AND REGULATING
THE POWERS OF THE CORPORATION, DIRECTORS AND STOCKHOLDERS
Section 1. The Board of Directors shall have the general management
and control of the business and property of the Corporation, and may exercise
all the powers of the Corporation, except such as are by statute or by these
Articles of Incorporation or by the By-Laws conferred upon or reserved to the
stockholders. In furtherance and not in limitation of the powers conferred
by statute, and Board of Directors is hereby empowered:
(a) To authorize the issuance and sale, from time to time, of Shares
of any Class whether for cash at not less than the par value thereof or
for such other considerations as the Board of Directors may deem
advisable, in the manner and to the extent now or hereafter permitted by
the laws of Maryland; provided, however, the consideration (or the value
thereof as determined by the Board of Directors) per Share to be received
by the Corporation upon the sale of Shares of any Class (including
treasury Shares) shall not be less than the net asset value
<PAGE>
(determined as provided in Article NINTH hereof) per Share of that Class
outstanding at the time (determined by the Board of Directors) as of
which the computation of such net asset value shall be made.
(b) To specify, in instances in which it may be desirable, that
Shares of any Class repurchased by the Corporation are not acquired for
retirement and to specify the purposes for which such Shares are
repurchased.
(c) To increase or decrease the aggregate number of Shares of stock
or the number of Shares of stock of any Class that the Corporation has
authority to issue.
The Corporation may in its By-Laws confer powers on the Board of
Directors in addition to the powers expressly conferred by statute.
Section 2. The presence in person or by proxy of the holders of
one-third of the Shares of all Classes issued and outstanding and entitled to
vote thereat shall constitute a quorum for the transaction of any business at
all meetings of the stockholders except as otherwise provided by law or in
these Articles of Incorporation and except that where the holders of the
Shares of any Class are entitled to a separate vote as a Class (a "Separate
Class") or where the holders of Shares of two or more (but not all) Classes
are required to vote as a single Class (a "Combined Class"), the presence in
person or by proxy of the holders of one-third of the Shares of that Separate
Class or Combined Class, as the case may be, issued and outstanding and
entitled to vote thereat shall constitute a quorum for such vote. If,
however, a quorum with respect to all Classes, a Separate Class or a Combined
Class, as the case may be, shall not be present or represented at any meeting
of the stockholders, the holders of a majority of the Shares of all Classes,
such Separate Class or such Combined Class, as the case may be, present in
person or by proxy and entitled to vote shall have power to adjourn the
meeting from time to time as to all Classes, such Separate Class or such
Combined Class, as the case may be, without notice other than announcement at
the meeting, until the holders of a requisite number of Shares
<PAGE>
entitled to vote at such meeting shall be present in person or by proxy. At
such adjourned meeting at which the requisite number of Shares entitled to
vote at such meeting shall be represented, any business may be transacted
which might have been transacted at the meeting as originally notified. The
absence from any meeting of stockholders of the number of Shares in excess of
one-third of the Shares of all Classes or of the affected Class or Classes,
as the case may be, which may be required by the laws of the State of
Maryland, the 1940 Act, any other applicable law or these Articles of
Incorporation, for action upon any given matter shall not prevent action of
such meeting upon any other matter or matters which may properly come before
the meeting, if there shall be present thereat, in Person or by proxy,
holders of the number of Shares required for action in respect of such other
matter or matters. Notwithstanding any provision of law requiring any action
to be taken or authorized by the holders or a greater proportion than the
majority of the Shares of all Classes or of the Shares of a particular Class
or Classes, as the case may be, entitled to vote thereon, such action shall
be valid and effective if taken or authorized by the affirmative vote of the
holders of a majority of the Shares of all Classes or of such Class or
Classes, as the case may be, outstanding and entitled to vote thereon.
Section 3. The By-Laws of the Corporation may divide the Directors of
the Corporation into classes and prescribe the term of office of the several
classes, but the term of office of a Director may not be longer than five
years, or, except in the case of an initial or substitute Director, shorter
than the period between meetings of stockholders at which Directors are to be
elected, and the term of office of at least one class shall expire each year.
Section 4. The holders of Shares of any Class of the Corporation shall
have only such rights to inspect the records, documents, accounts and books
of the Corporation as are provided by the Maryland Corporation Law, subject
to reasonable regulations of the Board of Directors, not contrary to the
Maryland Corporation Law, as to whether and to what extent, and at what times
and places, and under what conditions and regulations such rights shall be
exercised.
<PAGE>
Section 5. Any officer elected or appointed by the Board of
Directors or by any committee of said Board or by the Stockholders or
otherwise, may be removed at any time with or without cause, in such lawful
manner as may be provided in the By-Laws of the Corporation.
Section 6. If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold its meetings, to have an office or
offices and, subject to the provisions of the Maryland Corporation Law, to
keep the books of the Corporation outside of said State at such places as may
from time to time be designated by the Directors.
Section 7. Subject to the provisions of the 1940 Act, any Director,
officer or employee individually, or any partnership of which any Director,
officer or employee may be a member, or any Corporation or association of
which any Director, officer or employee may be an officer, director.,
trustee, employee or stockholder, may be a party to, or may be pecuniarily or
otherwise interested in, any contract or transaction of the Corporation, and
in the absence of fraud no contract or other transaction shall be thereby
affected or invalidated; provided that in case a Director, or a partnership,
corporation or association of which a Director is a member, officer,
director, trustee, employee or stockholder is so interested,, such fact
shall. be disclosed or shall have been known to the Board of Directors, or a
majority thereof; and any Director of the Corporation who is so interested,
or who is also a Director, officer, trustee, employee or stockholder of such
other corporation or association or a member of such partnership which is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Board of Directors of the Corporation which shall authorize
any such contract or transaction, and may vote thereat to authorize any such
contract or transaction, with like force and effect as if he were not such
Director, officer, trustee, employee or stockholder of such other corporation
or association or not so interested or a member of a partnership so
interested.
Section 8. Specifically, but without limitation of the foregoing,
the Corporation may enter into management or investment advisory contracts or
underwriting contracts and other contracts with, and may otherwise do
business with, any manager or investment adviser for the
<PAGE>
Corporation and/or principal underwriter of the Shares of the Corporation or
any subsidiary or affiliate of any such manager or investment adviser and/or
principal underwriter and may permit any such firm or corporation to enter
into any contracts or other arrangements with any other firm or corporation
relating to the Corporation notwithstanding that the Board of Directors of
the Corporation may be composed in part of partners, directors, officers or
employees of any such firm or corporation, and officers of the Corporation
may have been or may be or become partners, directors, officers or employees
of any such firm or corporation, and in the absence of fraud the Corporation
and any such firm or corporation may deal freely with each other, and no such
contract or transaction between the Corporation and any such firm or
corporation shall be invalidated or in any wise affected thereby, nor shall
any Director or officer of the Corporation be liable to the Corporation or to
any stockholder or creditor thereof or to any other person for any loss
incurred by it or him solely because of the existence of any such contract or
transaction; provided that, so long as the Corporation is registered under
the 1940 Act, nothing herein shall protect any Director or officer of the
Corporation against any liability to the Corporation or to its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE EIGHTH
REDEMPTIONS AND REPURCHASES
Section 1. The Corporation shall under some circumstances redeem, and
may under other circumstances redeem, and may under other circumstances
repurchase or redeem, Shares as follows:
(a) Each holder of Shares of any Class shall be entitled at such
holder's option to require the Corporation to redeem all or any part of
the Shares of that Class owned by such holder, upon written or
telegraphic request to the Corporation or its designated agent, or such
other form of request as is determined by the Board of Directors,
accompanied by surrender of the certificate or certificates for such
Shares, or such other evidence of ownership as shall be
<PAGE>
specified by the Board of Directors, for the proportionate interest per
Share in the assets of the Corporation belonging to that Class, or the
cash equivalent thereof (being the net asset value per Share of that
Class determined as provided in Article NINTH hereof), subject to and in
accordance with the provisions of Section 2 of this Article.
(b) In addition, the Board of Directors may, from time to time in
its discretion, authorize the Corporation to require the redemption of
all or any part of the outstanding Shares of any Class, for the
proportionate interest per Share in the assets of the Corporation
belonging to that Class, or the cash equivalent thereof (being the net
asset value per Share of that Class determined as provided in Article
NINTH hereof), subject to and in accordance with the provisions of
Section 2 of this Article, upon the sending of written notice thereof to
each stockholder any of whose shares are so redeemed and upon such terms
and conditions as the Board of Directors shall deem advisable.
(c) In addition, the Board of Directors may, from time to time in
its discretion, authorize the officers of the Corporation to repurchase
Shares of any Class, either directly or through an agent, subject to and
in accordance with the provisions of Section 2 of this Article. The
price to be paid by the Corporation upon any such repurchase shall be
determined in accordance with any provision of the 1940 Act or any rule
or regulation thereunder, including any rule or regulation made or
adopted pursuant to Section 22 of the 1940 Act by the Securities and
Exchange Commission or any securities association registered under the
Securities Exchange Act of 1934.
(d) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of Shares of any or all
Classes to require the Corporation to redeem such Shares or may suspend
any voluntary repurchase of such Shares:
<PAGE>
(i) for any period (A) during which the New York Stock Exchange
closed other than customary weekend and holiday closings, or (B)
which trading on the New York Stock Exchange is restricted;
(ii) for any period during which an emergency, as defined by
the rules of the Securities and Exchange Commission or any other
successor thereto, exists as a result of which (A) disposal by the
Corporation of securities owned by it and belonging to the affected
Class or Classes is not reasonably practicable, or (B) it is not
reasonably practicable for the Corporation fairly to determine the
value of the net assets of the affected Class or Classes; or
(iii) for such periods as the Securities and Exchange
Commission or any successor thereto may be order permit for the
protection of security holders of the Corporation.
Section 2. The following provisions shall be applicable with respect
to redemptions and repurchases of Shares of any Class pursuant to Section 1
hereof:
(a) The day on which and time as of which the net asset value per
share of a particular Class applicable to any redemption pursuant to
Section 1 of this Article shall be computed and shall be such days and
time as may be determined by or pursuant to the direction of the Board of
Directors (which days and time may differ from Class to Class).
(b) Certificates, if any, for Shares of any Class to be redeemed or
repurchased shall be surrendered in proper form, or such other form as
the Board of Directors may determine, together with such proof, if any,
of the authenticity of signatures as may be required by the Board of
Directors.
(c) Payment of the redemption or repurchase price by the Corporation
or its designated agent shall be made within seven days after the time
used for determination of the reunion or repurchase price, plus such-
additional period as may be permitted by or under the 1940 Act, but
<PAGE>
in no event prior to delivery to the Corporation or its designated agent of
the certificate or certificates for the Shares of the particular Class so
redeemed r repurchased, or of such other evidence of ownership as shall
be specified by the Board of Directors; except that any payment may be
made in whole or in part in securities or other assets of the Corporation
belonging to that Class if the Board of Directors shall determine that
payment in cash would be prejudicial to the best interests of the
remaining stockholders of that Class. In making any such payment in
whole or in part in securities or other assets of the Corporation
belonging to that Class, the Corporation shall, as nearly as may be
practicable, deliver securities or other assets of a gross value
(determined in the manner provided in Article NINTH hereof) representing
the same proportionate interest in the securities and other assets of the
Corporation belonging to that Class as is represented by the Shares of
that Class so to be paid for. Delivery of the securities included in any
such payment shall be made as promptly as any necessary transfers on the
books of the several corporations whose securities are to be delivered
may be made.
(d) The right of the holder of Shares of any Class redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to
such Shares shall forthwith cease and terminate from and after the time
as of which the redemption or repurchase price of such Shares has been
determined (except as otherwise determined by the Board of Directors and
except for the right of such holder to receive (a) the redemption or
repurchase price of such Shares from the Corporation or its designated
agent, in cash and/or in securities or other assets of the Corporation
belonging to that Class, and (b) any dividend to which such holder had
previously become entitled as the record holder of such Shares on the
record date for such dividend, and, with respect to Shares otherwise
entitled to vote, except for the right of such holder to vote at a
meeting of stockholders such Shares owned of record by him on the record
date for such meeting).
ARTICLE NINTH
<PAGE>
DETERMINATION OF NET ASSET VALUE
Section 1. Such net asset value per Share of each Class on any day
shall be computed as follows:
(a) The net asset value per Share of each Class shall be the
quotient obtained by dividing the "net value of the assets" of the
Corporation belonging to that Class by the total number of Shares of that
Class at the time deemed to be outstanding (including Shares sold whether
paid for and issued or not, and excluding Shares redeemed or repurchased
on the basis of previously determined values, whether paid for, received
and held in treasury, or not).
(b) The "net value of the assets" of the Corporation belonging to a
particular Class shall be the "gross value" of the assets belonging to
that Class after deducting the amount of all expenses incurred and
accrued and unpaid belonging to that Class, such reserves belonging to
that Class as may be set up to cover taxes and any other liabilities, and
such other deductions belonging to that Class as in the opinion of the
officers of the Corporation are in accordance with accepted accounting
practice.
(c) The "gross value" of the assets belonging to a particular Class
shall be the amount of all cash and receivables and the market value of
all securities and other assets held by the Corporation and belonging to
that Class at the time as of which the determination is made. Securities
held shall be valued at market value or, in the absence of readily
available market quotations, at fair value, both as determined pursuant
to methods approved by the Board of Directors and in accordance with
applicable statutes and regulations.
Section 2. The Board of Directors is empowered, in its absolute
discretion, to establish other methods for determining such net asset value
whenever such other methods are deemed by it to be necessary or desirable and
are consistent with the provisions of the 1940 Act and the rules and
regulations thereunder.
ARTICLE TENTH
<PAGE>
INDEMNIFICATION
Section 1. As used in this Article TENTH, the following terms shall
have the meanings set forth below:
(a) The term "indemnitee" shall mean any present or former Director,
officer, employee or agent of the Corporation (which term as used in this
Article TENTH shall include a "corporation" as defined in the applicable
provisions of the Maryland Corporation Law) and any person who while a
Director, officer, employee or agent of the Corporation is or was serving
at the request of the Corporation as a director, officer, partner,
trustee or employee or agent of another corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan, any present or
former investment adviser, sub-adviser or principal underwriter of the
Corporation and the heirs, executors, administrators, successors and
assigns of any of the foregoing, however, whenever conduct by an
indemnitee is referred to, the conduct shall be that of the original
indemnitee rather than that of the heir, executor, administrator,
successor or assignee.
(b) The term "covered proceeding" shall mean any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which an indemnitee is or was a party
or is threatened to be made a party by reason of the fact or facts under
which he or it is an indemnitee as defined above.
(c) The term "disabling conduct" shall willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of the office in question.
(d) The -term "covered expenses" shall mean judgments, penalties,
fines, settlements and reasonable expenses (including attorneys' fees)
actually incurred by an indemnitee in connection with a covered
proceeding.
(e) The term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse determination as
to the indemnitee whether by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent.
<PAGE>
Section 2. The Corporation shall indemnify each indemnitee to the
fullest extent permitted by law, including the 1940 Act, as currently in
effect or as the same may hereafter be amended, but shall not indemnify any
indemnitee for any covered expenses in any covered proceeding if there has
been an adjudication of liability against such indemnitee expressly based on
a finding of disabling conduct.
Section 3. Except as set forth in Section 2 above or as otherwise
provided in the applicable provisions on indemnification contained in the
Maryland Corporation Law, the Corporation shall indemnify any indemnitee for
covered expenses in any covered proceeding, whether or not there is an
adjudication of liability as to such indemnitee, if a determination has been
made that the indemnitee was not liable by reason of disabling conduct by (i)
a final decision of the court or other body before which the covered
proceeding was brought; or (ii) in the absence of such decision, a reasonable
determination, based on a review of the facts, by either (A) the vote of a
majority of a quorum of Directors who are neither "interested Persons, as
defined in the 1940 Act, nor parties to the covered proceeding or (B) an
independent legal counsel in a written opinion. In voting on such matter, or
in giving such opinion, such Directors or counsel may consider that the
dismissal of a covered proceeding against an indemnitee for insufficiency of
evidence of any disabling conduct with which the indemnitee has been charged
would provide reasonable assurance that the indemnitee was not liable by
reason of disabling conduct.
Section 4. Covered expenses incurred by an indemnitee in connection
with a covered proceeding shall be advanced by the Corporation to such
indemnitee prior to the final disposition of such proceeding upon the request
of such indemnitee for such advance, upon receipt by the Corporation of the
written undertaking by or on behalf of the indemnitee to repay the advance
unless it is ultimately decided that the indemnitee is entitled to
indemnification hereunder; furthermore such expenses may be advanced only if
one or more of the following occurs: (i) the indemnitee provides security
for such undertaking; (ii) the Corporation is insured against losses arising
out of any lawful
<PAGE>
advances; or (iii) there shall have been a determination made in accordance
with either review process provided in Section 3(ii)(A) or (B) above, based
on a review of the readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that the indemnitee ultimately will
be found entitled to indemnification.
Section 5. Nothing herein shall be deemed to affect the right of the
Corporation and/or any indemnitee to acquire and pay for any insurance covering
any or all indemnitees to the extent permitted by the 1940 Act or to affect any
other indemnification rights to which any indemnitee may be entitled to extent
permitted by the 1940 Act and the laws of Maryland.
ARTICLE ELEVENTH
DETERMINATION BINDING
Any determination made by or pursuant to the direction of the Board
of Directors in good faith, and so far as accounting matters are involved in
accordance with accredited accounting practices as to the amount of the
assets, obligations or liabilities of the Corporation belonging to any Class,
as to the amount of the net income of the Corporation belonging to any Class
for any period or amounts that are any time legally available for the payment
of dividends of shares of any Class, as to the amount of any reserves or
charges set up with respect to any Class and the propriety thereof, as to the
time of or purpose for creating any reserves or charges with respect to any
Class, as to the use, alteration or cancellation of any reserves or charges
with respect to any Class (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been paid
for or discharged or shall be then or thereafter required to be paid or
discharged), as to the price or the closing bid or asked price of any
security owned or held by the Corporation and belonging to any Class, as to
the market value of any security or fair value of any other asset owned by
the Corporation and belonging to any Class, as to the number of Shares of any
Class outstanding or deemed to be outstanding, as to the impracticability or
impossibility of liquidating securities in orderly fashion, as to the extent
to which it is practicable to deliver the proportionate interest in the
securities and other assets of the Corporation belonging to any Class
<PAGE>
represented by any Shares belonging to any Class redeemed or repurchases in
payment for any such Shares, as to the method of payment for any such Shares
redeemed or repurchased, or as to any other matters relating to the issue,
sale, redemption, repurchase and to other acquisition or distribution of
securities or Shares of the Corporation shall be final and conclusive and
shall be binding upon the and all holders of Shares of all Classes past,
present and future, and Shares of all Classes are issued and sold on the
condition and understanding that any and all such, determinations shall be
binding as aforesaid. No provision of these Articles of Incorporation shall
be effective to bind any on to waive compliance with any provision of the
Securities Act of 1933 (the "1933 Act") or the 1940 Act or of any valid rule,
regulation or order of the Securities Exchange Commission thereunder.
ARTICLE TWELFTH
MISCELLANEOUS
Section 1. In the event that any person advances the organizational
expenses of the Corporation or any Class, such advances shall become an
obligation of the Corporation or such Class, subject to such terms and
conditions as may be fixed by, or on a date fixed by, or determined in
accordance with criteria fixed by the Board of Directors, to be amortized
over a period or periods to be fixed by the Board and allocated to such Class
or Classes as may be determined by the Board of Directors.
Section. 2. Whenever any action is taken under these Articles of
Incorporation under any authorization to take action which is permitted by
the 1940 Act, such action shall be d to have been properly taken if such
action is in accordance with the construction of the 1940 Act then in effect
as expressed in "no actions" letters of the staff of the Securities and
Exchange Commission or any release, rule, Station or o under the 1940 Act or
any decision of a court of competent jurisdiction notwithstanding that any of
the foregoing shall later be found to be invalid or otherwise reversed or
modified by any of the foregoing.
<PAGE>
Section 3. Each prospectus of the Corporation (which term
"prospectus" as herein shall include any related statement of additional
information) which is in effect from time to time relating to its Shares
under the 1933 Act and each proxy statement of the Corporation shall be
considered as part of the minutes of the proceedings of the Board of
Directors of the Corporation and as reflective of action required or
permitted to be taken by such Board under these Articles of Incorporation or
by the By-Laws of the Corporation, whether or not copies of such prospectus
or proxy statement are included in the minute books of the Corporation.
Section 4. Whenever under these Articles of Incorporation, the Board
of Directors of the Corporation is permitted or required to place a value on
assets of the Corporation, such action may be delegated by the Board, and/or
determined in accordance with a formula determined by the Board, to the
extent permitted by the 1940 Act.
Section 5. The Corporation shall have the right, at any time and
without prior notice to the stockholder in question, to redeem Shares of any
Class held in any account registered in the name of such stockholder for
their current net asset value, if and to the extent that such redemption is
necessary to reimburse either the Corporation or its principal underwriter
for any loss either sustained by reason of (i) the failure of such
stockholder to make timely and good payment for Shares (whether of the same
Class or any other Class or Classes) purchased or subscribed for by such
stockholder, regardless of whether such stockholder was a stockholder at the
time of such purchase or subscription; and/or (ii) the cancellation by such
stockholder of a redemption or repurchase order; and/or (.iii) the failure of
such stockholder to provide necessary and timely documentation as to a
redemption or repurchase order, necessitating the cancellation of the same;
subject in each case to and upon such terms and conditions as the Board of
Directors may from time to time prescribe.
<PAGE>
ARTICLE THIRTEENTH
AMENDMENTS
The Corporation reserves the right to take any lawful action and to
make any amendment of these Articles of Incorporation, including the right to
make any amendment which changes the terms of any Shares of any Class now or
hereafter authorized by classification, reclassification, or otherwise, and
to make any amendment authorizing any sale, lease, exchange or transfer of
the property and assets of the Corporation or belonging to any Class or
Classes as an entirety, or substantially as an entirety, with or without its
good will and franchise, if the holders of a majority of all the Shares of
all Classes or of the affected Class or Classes, as the case may be, at the
time issued and outstanding and entitled to vote, vote in favor of any such
action or amendment, or consent thereto in writing, and reserves the right to
may any amendment of these Articles of Incorporation in any form, manner or
substance now or hereafter authorized or permitted by law.
I acknowledge this to be my act, and state under the penalties
of perjury that with respect to all matters and facts therein, to the best of
my knowledge, information and belief such matters and facts are true in all
material respects that this statement is made under the penalties of perjury.
DATE:
----------------------------- -------------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This is to certify that on this day of , 1990,
before me, the subscriber, a Notary Public of the State of New York, personally
appeared Steven J. Paggioli, and he acknowledged the foregoing Articles of
Incorporation to be his act.
Witness my hand and Notarial Seal the day and year above written.
-------------------------------------
Notary Public
<PAGE>
KEY FUND, INC.
ARTICLES OF AMENDMENT
Key Fund, Inc., a Maryland corporation having its principal
office in Baltimore City, Maryland (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:
FIRST: The Articles of Incorporation of the Corporation is
hereby amended by striking out Article SECOND of the Articles of
Incorporation and inverting in lien thereof the following:
ARTICLE SECOND
NAME
The name of the Corporation (which is hereinafter called the
"Corporation") is ASM FUND, INC.
SECOND: The Board of Directors of the Corporation by a
unanimous written consent dated January 9, 1991 duly adopted a resolution in
which was set forth the foregoing amendment to the Articles of Incorporation.
THIRD: The remaining Articles of the Articles of
Incorporation shall remain in full force and effect.
FOURTH: The amendment of the Articles of Incorporation of
the Corporation as hereinabove set forth has been duly advised, approved and
adopted by the Board of Directors of the Corporation there being no stock
outstanding or subscribed for at the time of approval.
FIFTH: The authorized capital of the Corporation has not
been increased by these Articles of Amendment.
IN WITNESS WHEREOF, the officers of the Corporation who
executed on behalf of said corporation these Articles of Amendment hereby
acknowledge, in the name and on behalf of said corporation these Articles of
Amendment to be the corporate act of said corporation and further certify,
under the penalties of perjury, that, to the best of their knowledge,
information and belief, the matters and facts set forth therein with respect
to the approval thereof are true in all material respects, all on this 11th
day of January, 1991.
Attest: Key Fund, Inc.
/s/ William C. Tapella /s/ Gail R. Herick
- ------------------------ --------------------
William C. Tapella Gail R. Herick
Treasurer President and Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
ASM FUND, INC.
Pursuant to the provisions of the Maryland General
Corporation Law, as amended (the "GCL"), ASM FUND, INC., a Maryland
corporation registered as an open-end investment company under the Investment
Company Act of 1940, having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: ARTICLE SECOND of the Corporation's Articles of
Incorporation is hereby amended to rename the Corporation "ASM Index 30 Fund,
Inc."
SECOND: The entire Board of Directors of the Corporation on
March 20, 1997 unanimously approved the foregoing amendment.
THIRD: The foregoing amendment is limited to a change
expressly permitted by Section 2-605(4) of the GCL to be made without action
by stockholders.
IN WITNESS WHEREOF, ASM Fund, Inc. has caused these Articles
of Amendment to be signed by its President and attested by its Secretary on
August 26, 1997.
Attest: ASM FUND, INC.
/s/ S. Cash Ulmer /s/ Steven H. Adler
- ----------------- -------------------
S. Cash Ulmer Steven H. Adler
Secretary President
THE UNDERSIGNED, President of ASM FUND, INC., who executed on
behalf of said corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles of Amendment to be the corporate act
of said corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect
to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/ Steven H. Adler
-------------------
Steven H. Adler
President
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KEY FUND, INC. [ASM INDEX 30 FUND, INC.]
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. PLACE OF MEETING. All meetings of the
shareholders shall be held at the principal office of the Corporation (which
term as used herein shall, together with all other terms defined in the
Articles of Incorporation, have the same meaning is in the Articles of
Incorporation) in the State of Maryland or at such other place as may from
time to time be designated by the Board of Directors and stated in the notice
of meeting.
Section 2. ANNUAL MEETINGS. Except as provided below, an
annual meeting of shareholders shall be held in the fourth month following
the close of the Corporation's fiscal year on such date and at such hour as
may from time to time be designated by the Board of Directors and stated in
the notice of such meeting, to elect directors and transact any other
business within the powers of the Corporation; provided, however, that an
annual meeting shall not be held in any year in which none of the following
is required to be acted on by shareholders under the Investment Company Act
of 1940 (the "1940 Act"): election of Directors, approval of the investment
advisory agreement, ratification of the selection of independent public
accountants, and approval of a distribution agreement.
Section 3. SPECIAL MEETINGS. Special meetings of the
shareholders for any purpose or purposes (including the election of
Directors) may be called by the Chairman of the Board, if any, or by the
President or by a majority of the Board of Directors and shall be called when
required by the Articles of Incorporation or the Maryland Corporation Law.
Section 4. NOTICE OF MEETINGS. Not less than ten days'
and not more than ninety days' written or printed notice of every meeting of
shareholders, stating the time and place thereof (and the general nature of
the business proposed to be transacted at any special meeting), shall be
given to each shareholder entitled to vote thereat by leaving the same with
him or at his
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residence or usual place of business or by mailing it, postage prepaid and
addressed to him at his address as it appears upon the books of the
Corporation. If mailed, notice shall be deemed to be given when deposited in
the United States mail addressed to the shareholder as aforesaid.
No notice of the time, place or purpose of any meeting of shareholders
need be given to any shareholder who attends in person or by proxy or to any
shareholder who, in writing executed and filed with the records of the
meeting, either before r after the holding thereof, waives such notice.
Section 5. RECORD DATES. In order that the Corporation
may determine the shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of rights, to
exercise any rights in respect of any stock or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date
which shall not be less than the minimum nor more than the maximum number of
days prior to the scheduled date of such meeting or prior to such action, as
the case may be, permitted by the Maryland Corporation Law. A determination
of shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting, unless the Board
of Directors fixes a new record date for the adjourned meeting.
Section 6. QUORUM, ADJOURNMENT OF MEETINGS. The presence
in person or by proxy of the holders of record of one-third of the Shares of
the stock of the Corporation issued and outstanding and entitled to vote
thereat, shall constitute a quorum at all meetings of the shareholders except
as o se provided by law or in the Articles of Incorporation and except that
where the holders of Shares of any Class are entitled to a separate vote as a
Class (a "Separate Class") or where the holders of Shares of two or more (but
not all) Classes are required to vote as a single Class (a "Combined Class"),
the presence in person or by proxy of the holders of one-third of the Shares
of that Separate Class or Combined Class, as the case may be, issued and
outstanding and entitled to vote thereat shall constitute a quorum for such
vote. If, however, a quorum with respect to all Classes, a Separate Class or
a Combined Class, as the case may be,
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shall not be present or represented at any meeting of the shareholders, the
holders of a majority of the Shares of all Classes, such Separate Class or
Comb Class, as the case may be, present in person or by proxy and entitled to
vote shall have .r to adjourn the meeting from time to time as to all
Classes, such separate Class or such Combined Class, as the case may be,
without notice other than announcement at the meeting, until the requisite
number of Shares entitled to vote at such meeting shall be present. At such
adjourned meeting at which the requisite number of Shares entitled to vote
thereat shall be represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The absence from any
meeting of holders of the number of Shares in excess of one-third of the
Shares of all Classes or of the affected Class or Classes, as the case may
be, which may be required by the Maryland Corporation Law, the Investment
Company Act of 1940 or any other applicable law, the Articles of
Incorporation, for action upon any given matter shall not prevent action of
such meeting upon other matter or matters which may properly come before the
meeting, if there shall be present thereat, in person or by proxy, holders of
the number of Shares required for action in respect of such other matter or
matters.
Section 7. VOTING AND INSPECTORS. At all meetings,
shareholders of record entitled to vote thereat shall have one vote for each
share standing in his name in the books of the Corporation (and such
shareholders of record holding fractional Shares, if any, shall have
proportionate voting rights) on the date for the determination of
shareholders entitled to vote at such meeting, either in person or by proxy
appointed by instrument in writing subscribed by such shareholder or his duly
authorized attorney-in-fact.
All elections of Directors shall be by a plurality of the votes cast and
all questions shall be decided by a majority of the votes cast, in each case
at a duly constituted meeting, except as otherwise provided by statute or by
the Articles of Incorporation or by these By-Laws.
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At any election of Directors, the Board of Directors prior thereto may,
or, if they have not so acted, the Chairman of the meeting may, and upon the
request of the holders of ten percent (10%) of the Shares entitled to vote at
such election shall, appoint two inspectors of election who shall first
subscribe an oath of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and according to the
best of their ability, and shall after the election make a certificate of the
result of the vote taken. No candidate for the office of Director shall be
appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken upon
any election or matter, and such vote shall be taken upon request of the
holders of ten percent (10%) of the Shares entitled to vote on such election
or matter.
Section 8. CONDUCT OF SHAREHOLDERS' MEETINGS. The
meetings of the shareholders shall be Presided over by the Chairman of the
Board, if any, or if he is not present, by the President, or if he is not
present, by a Vice-President, or if neither Chairman of the Board, the
President nor any Vice-President is present, by a chairman to be elected at
the meeting. The Secretary of the Corporation, if present, shall act as
Secretary of such meetings, or if he is not present, an Assistant Secretary
shall so act; if neither the Secretary nor an Assistant Secretary is present,
then the meeting shall elect its secretary.
Section 9. CONCERNING VALIDITY OF PROXIES, BALLOTS, ETC.
At every meeting of the shareholders, all proxies shall be received and taken
in charge of and all ballots shall be received and canvassed by the secretary
of the meeting, who shall decide all questions touching the qualification of
voters, the validity of the proxies, and the acceptance or rejection of
votes, unless inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall decide all such
questions.
ARTICLE II
BOARD OF DIRECTORS
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Section 1. NUMBER AND TENURE OF OFFICE. The business and
affairs of the Corporation shall be conducted and managed by a Board of
Directors consisting of the number of initial Directors, which number may be
increased or decreased as provided in Section 3 of this Article. Directors
shall serve until the next meeting of shareholders at which Directors are to
be elected and until their successors are elected and qualify. Directors not
be shareholders.
Section 2. VACANCIES. In case of any vacancy in the
Board of Directors through death, resignation or other cause, other than an
increase in the number of Directors, a majority of the remaining Directors,
although a majority is less than a quorum, by an affirmative vote, may elect
a successor to hold office until the next meeting of shareholders at which
Directors are to be elected or until his successor is chosen and qualifies.
Section 3. INCREASE OR DECREASE IN NUMBER OF DIRECTORS.
The Board of Directors, by the vote of a majority of -the entire Board, may
increase the number of Directors to a number not exceeding fifteen, and may
elect Directors to fill the vacancies created by any such increase in the
number of directors until the next meeting of shareholders at which Directors
are to be elected or until their successors are duly chosen and qualified.
The Board of Directors, by the vote of a majority of the entire Board, may
likewise decrease the number of Directors to a number not less than three .
In the event that after proxy material has been printed for a meeting of
shareholders at which Directors are to be elected any one or more management
nominees becomes incapacitated, the authorized number of Directors shall be
automatically reduced by the number of such nominees, unless the Board of
Directors prior to the meeting shall otherwise determine.
Section 4. PLACE OF MEETING. The Directors may hold
their meetings, have one or more offices, and keep the books of the
Corporation outside the State of Maryland, at any office or offices of e
Corporation or at any other place as they may from time to time by resolution
determine, or, in the case of meetings, as they may from time to time by
resolution determine or as shall be specified or fixed in the respective
notices or waivers of notice thereof.
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Section 5. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held at such time and on such notice, if any, as
the Directors may from time to time determine.
Section 6. SPECIAL MEETINGS. Special times of the Board
of Directors may be held from time to time upon call of the Chairman of the
Board, if any, the President, the Secretary or two or more of the Directors,
by oral or telegraphic or written notice duly served on or sent or mailed to
each Director not less than one day before such meeting. No notice need be
given to any Director who attends in person or to any Director who, in
writing executed and filed with the records of the meeting either before or
after the holding thereof, waives such notice. Such notice or waiver of
notice not state the purpose or purposes of such meeting.
Section 7. QUORUM. One-third of the Directors then in
office shall constitute a quorum for the transaction of business provided
that a quorum shall in no case be less than two Directors. If at any meeting
of the Board there shall be less than a quorum present (in person or by open
telephone line, to the extent permitted by the 1940 Act), a majority of those
present may adjourn the meeting from time to time until a quorum shall have
been obtained. The act of the majority of the Directors present at any meting
at which there is a quorum shall be the act of the Directors, except as may
be otherwise specifically provided by statute, by the Articles of
Incorporation or by these By-Laws.
Section 8. EXECUTIVE COMMITTEE. The Board of Directors
may, by the affirmative vote of a majority of the entire Board, appoint from
the Directors an Executive Committee to consist of such number of Directors
(not less than two) as the Board may from time to time determine. The Board
of Directors by such affirmative vote shall have power at any time to change
the members of such Committee and may fill vacancies in the Committee by
election from the Directors. When the Board of Directors is not in session,
to the extent permitted by law, the Executive Committee shall have and may
exercise any or all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation (including the power
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to authorize the seal of the Corporation to be affixed to all papers which
may require it) except as provided by law and except the power to increase or
decrease the size of, or fill vacancies on the Board. The Executive Committee
may fix its own rules of procedure, and may meet when and as provided by such
rules or by resolution of the Board of Directors, but in every case the
presence of a majority shall be necessary to constitute a quorum. In the
absence of any member of the Executive Committee, the members thereof present
at any meeting, whether or not they constitute a quorum, may appoint a member
of the Board of Directors to act in the place of such absent member.
Section 9. OTHER COMMITTEES. The Board of Directors, by
the affirmative vote of a majority of the entire Board, may appoint from the
Directors other committees which shall in each case consist of such number of
Directors (not less than two) and shall have and may exercise such powers as
the Board may determine in the resolution appointing them. A majority of all
members of any such committee may determine its action, and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
The Board of Directors shall have power at any time to change the members and
powers of any such committee, to fill vacancies and to discharge any such
committee.
Section 10. INFORMAL ACTION BY AND TELEPHONE MEETINGS OF
DIRECTORS AND COMMITTEES. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken
without a meeting, if a written consent to such action is signed by all
members of the Board, or of such committee, as the case may be. Directors or
members of a committee of the Board of Directors may participate in a meeting
by means of a conference telephone or similar communications equipment; such
participation shall, except as otherwise required by the 1940 Act, have the
same effect as presence in person.
Section 11. COMPENSATION OF DIRECTORS. Directors shall
be entitled to receive such compensation from the Corporation for their
services as may from time to time be voted by the Board of Directors.
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Section 12. DIVIDENDS. Dividends or distributions
payable on any Class of Shares may, but need not be, declared by specific
resolution of the Board as to each dividend or distribution; in lieu of such
specific resolutions, the Board may, by general resolution, determine the
method of computation thereof, the method of determining the shareholders to
which they are payable and the methods of determining whether and to which
shareholders they are to be paid in cash or in additional Shares.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The executive officers of
the Corporation shall be chosen by the Board of Directors to serve for
indefinite terms. These may include a Chairman of the Board of Directors (who
shall be a Director) and shall include a President (who may be a Director),
one or more Vice-Presidents (the number thereof to be determined by the Board
of Directors), a Secretary and a Treasurer. The Board of Directors or the
Executive Committee may also in its discretion appoint Assistant Secretaries,
Assistant Treasurers, and other officers, agents and employees, who shall
have such authority and perform such duties as the Board or the Executive
Committee may determine. The Board of Directors may fill any vacancy which
may occur in any office. Any two offices, except those of President and
Vice-President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity, if such
instrument is by law or these By-Laws to be executed, acknowledged or
verified by two or more officers.
Section 2. TERM OF OFFICE. Any officer may be removed
from office at any time with or without cause by the vote of a majority of
the entire Board of Directors.
Section 3. POWERS AND DUTIES. The office of the
Corporation shall have such powers and duties as generally pertain to their
respective offices, as well as such powers and duties as may from time to
time be conferred by the Board of Directors or the Executive Committee.
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ARTICLE IV
SHARES
Section 1. CERTIFICATES OF SHARES. Each shareholder of
the Corporation shall be entitled to a certificate or certificates for the
full Shares of the Class owned by him in such form as the Board of Directors
may from time to t prescribe.
Section 2. TRANSFER OF SHARES. Shares of the Corporation
shall be transferable on the books of the Corporation by the holder thereof
in person or by his duly authorized attorney or legal representative, upon
surrender and cancellation of certificates, if any, for the same number of
Shares, duly endorsed or accompanied by proper instruments of assignment and
transfer, with such proof of the authenticity of the signature as the
Corporation or its agent may reasonably require; in the case of shares not
represented by certificates, the same or similar requirements may be imposed
by the Board of Directors.
Section 3. STOCK LEDGERS. The stock ledgers of the
Corporation, containing the name and address of the shareholders and the
number of shares held by them respectively, shall be kept at the principal of
f ices of the Corporation or, if the Corporation employs a Transfer Agent, at
the offices of the Transfer Agent of the Corporation.
Section 4. LOST, STOLEN OR DESTROYED CERTIFICATES. The
Board of Directors or the Executive Committee may determine the conditions
upon which a new certificate of stock of the Corporation of any Class may be
issued in place of a certificate which is alleged to have been lost, stolen
or destroyed; and may, in their discretion, require the owner of such
certificate or his legal representative to give bond, with sufficient surety,
to the Corporation and the Transfer Agent, if any, to indemnify it and such
Transfer Agent against any and all loss or claims which may arise by reason
of the issue of a new certificate in the place of the one so lost, stolen or
destroyed.
ARTICLE V
CORPORATE SEAL
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The Board of Directors shall provide a suitable seal of the Corporation,
in such form and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Corporation may be altered, amended, added to or reed
by the shareholders or by majority vote of the entire Board of Directors, but
any such alteration, amendment, addition or repeal of the By-Laws by action
of the Board of Directors may be altered or led by the shareholders.
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CUSTODIAN AGREEMENT
THIS AGREEMENT made on January 14, 1994, between ASM Fund, Inc., a
Maryland corporation (hereinafter called the "Fund"), and STAR BANK, N.A.,
a national banking association with its principal office and place of business
at 425 Walnut Street, Cincinnati, Ohio, (hereinafter called the "Custodian"),
W I T N E S S E T H
WHEREAS, the Fund desire that its securities and cash shall be hereafter
held and administered by Custodian pursuant to the terms of this Agreement,
and in accordance with the Star Bank Standards of Service Guide, in effect from
time to time, a copy of which is attached and made a part hereto:
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Fund and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
President, a Vice President, the Secretary and the Treasurer of the Fund, or
any other persons duly authorized to sign by the Board of Directors.
The word "Board" shall mean Board of Directors of ASM Fund, Inc.
2. NAMES, TITLES AND SIGNATURES OF THE FUND'S OFFICERS
Those persons who are initially authorized to sign the officers'
certificates described in Section 1 hereof, and the names of the members of
the Board of Directors are listed in Exhibit A or such other Certificate as may
be received by Custodian from time to time, subject in each case to any
limitations on the authority of such person as set forth in Exhibit A or any
such Certificate.
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts in
the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund. Custodian shall make payments of cash to, or for
the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund
upon the delivery of such securities to Custodian, registered in
the name of the Fund or of the nominee of Custodian referred to
in Section 7 or in proper form for transfer;
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(b) for the purchase or redemption of shares of the common stock of
the Fund upon delivery thereof to Custodian, or upon proper
instructions from the ASM Fund, Inc.;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
Custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held
by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Directors of the Fund.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c) or (d) of this
Subsection A, and also in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is
to be made, provided, however, that an officers' certificate need not precede
the disbursement of cash for the purpose of purchasing a money market
instrument, or any other security with the same or next-day settlement, if
the President, Vice President, the Secretary or the Treasurer of the Fund
issues appropriate oral or facsimile instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two
business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
C. Custodian shall, upon receipt of proper instructions, make
federal funds available to the Fund as of specified times agreed upon from time
to time by the Fund and the Custodian in the amount of checks received in
payment for shares of the Fund which are deposited into the Fund's account.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities. The Custodian will be
responsible for assets of the Fund only upon actual receipt.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities
of the Fund held by it pursuant to this Agreement. Custodian agrees to
transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefore;
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(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of
the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this Section 5 and
also, in respect to item (i), upon receipt of an officer's certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not
precede any such transfer, exchange or delivery of a money market instrument,
or any other security with same or next-day settlement, if the President, a
Vice President, the Secretary or the Treasurer of the Fund issues appropriate
oral or facsimile instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of the Fund, which call for payment
upon presentation and hold the cash received by it upon such payment for the
account of the Fund; (b) collect interest and cash dividends received, with
notice to the Fund for the account of the Fund; (c) hold for the account of
the Fund hereunder all stock dividends, rights and similar securities issued
with respect to any securities hereunder; and (d) execute, as agent on behalf
of the Fund, all necessary ownership certificates required by the Internal
Revenue Code or the Income Tax Regulations of the Unites States Treasury
Department or under the laws of any state now or hereafter in effect,
inserting the
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Fund's name on such certificates as the owner of the securities covered
thereby, to the extent it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name
of a registered nominee of Custodian as defined in the Internal Revenue Code
and any Regulations of the Treasury Department issued hereunder or in any
provision of any subsequent federal tax law exempting such transactions from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. Custodian shall use its best
efforts to the end that the specific securities held by it hereunder shall be
at all times identifiable in its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation
to such securities, such proxies to be executed by the registered holder or
such securities (if registered otherwise than in the name of the Fund), but
without indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall executed and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws
of any state, to exempt from taxation any exemptable transfers and/or
deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in a written agreement,
executed by both parties and approved by the Board of Directors of the Fund,
such compensation shall be as set forth in Exhibit B attached hereto.
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The Custodian shall be entitled to charge against any money held by
it for the account of the Fund the amount of any loss, damage, liability or
expense, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement as determined by
agreement of the Custodian and the Fund or by the final order of any court or
arbitrator having jurisdiction and as to which all rights to appeal have
expired.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of
the Board, and may rely on the genuineness of any such document which it may
in good faith believe to have been validly executed. Custodian shall be
liable for no loss or damage, including counsel fees, resulting from its
action or omission to act, or otherwise, except for any such loss or damage
arising out of its own negligence or willful misconduct.
The Fund agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, losses, claims and
liabilities (including counsel fees) incurred or assessed against it by its
nominee in connection with the performance of this Agreement, except such as
may arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct. Custodian is authorized to charge any account
of the Fund for such items. In the event of any advance of cash for any
purpose made by Custodian resulting from orders or instructions of the Fund,
or in the event that Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection
with the performance of this Agreement, except such as may arise from its or
its nominees own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall
be security therefore. The Custodian may, with respect to questions of law,
apply for and obtain the advice and opinion of counsel to the Fund at the
expense of the Fund, or of its own counsel at its own expense and shall be
fully protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the
Fund shall, within a reasonable time after notification, have a differing
opinion of such question of law.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the Fund's assets, so long
as any such bank or trust company is a bank or trust company organized under
the laws of any state of the United States, having an aggregate capital,
surplus and undivided profit, as shown by its last published report, of not
less than Two Million Dollars ($2,000,000) and provided further that, if the
Custodian utilizes the services of a Subcustodian, the Custodian shall remain
fully liable and responsible for any losses caused to the Fund by the
Subcustodian as fully as if the Custodian was directly responsible for any
such losses under the terms of the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund require the
Custodian to engage specific Subcustodians for the safekeeping and/or
clearing of assets, the Fund agree to indemnify and hold harmless Custodian
from all claims, expenses and liabilities incurred or assessed against it in
connection with the use of such Subcustodian in regard to the Fund's assets,
except as may arise from its own negligent action, negligent failure to act
or willful misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Fund.
Custodian shall furnish to the
<PAGE>
Fund, at the end of every month, a list of the portfolio securities showing
the aggregate cost of each issue. The books and records of Custodian
pertaining to its actions under this Agreement shall be open to inspection
and audit at reasonable times by officers of, and of auditors employed by,
the Fund.
13. TERMINATION OR AMENDMENT OF ASSIGNMENT
This Agreement may be terminated by the Funds, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at 425 Walnut Street, Mail Location 5127, Cincinnati, Ohio 45201,
or to the Funds at 100 South Ashley Drive, Tampa, Florida 33602, as the case
may be. Upon any termination of this Agreement, pending appointment of a
successor to Custodian or a vote of the shareholders of the Fund to dissolve
or to function without a custodian of its cash, securities and other
property, Custodian shall not deliver cash, securities or other property of
the Fund to the Fund, but may deliver them to a bank or trust company of its
own selection, having an aggregate capital, surplus and undivided profits, as
shown by its last published report of not less than Two Million Dollars
($2,000,000) as a Custodian for the Fund to be held under terms similar to
those of this Agreement, provided, however, that Custodian shall not be
required to make any such delivery or payment until full payment shall have
been made by the Fund of all liabilities constituting a charge on or against
the properties then held by Custodian or on or against Custodian, and until
full payment shall have been made to Custodian of all of its fees,
compensation, costs and expenses, subject to the provisions of Section 10 of
this Agreement, in addition to reasonable costs of the Custodian in
connection with the termination of this Agreement.
This Agreement may not be assigned by Custodian without the consent
of the Fund, authorized or approved by a resolution of its Board of
Directors. This Agreement may be amended or modified only by a written
agreement executed by both parties and approved by the Board of Directors of
the Fund.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency
or securities depository meet all applicable federal and state laws and
regulations.
15. RECORDS
To the extent that Custodian in any capacity prepares or maintains
any records required to be maintained and preserved by the Funds pursuant to
the provisions of the Investment Company Act of 1940, as amended, or the
rules and regulations promulgated thereunder, Custodian agrees to make any
such records available to the Fund upon request and to preserve such records
for the periods prescribed in Rule 31a-2 under the Investment Company Act of
1940, as amended.
16. AGREEMENT BINDING ONLY ON FUND PROPERTY
Star Bank, N.A., understands that the obligations of this Agreement
are not binding upon any shareholder to the Trust personally, but bind only
upon the Trust property. Star
<PAGE>
Bank, N.A., represents that it has notice of the provisions of the Trust's
declaration of Trust disclaiming shareholder liability for the acts or
obligations of the Trust.
This Agreement shall be governed by the laws of the of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of
the date first above written by their respective officers thereunto duly
authorized.
Executed in several counterparts, each of which is an original.
Attest: STAR BANK, N.A.
/s/ Cheri Scott Geraci /s/ Lynette C. Gibson
- --------------------------- BY:-------------------------
Attest: ASM Fund, Inc.
/s/ William C. Tapella /s/ Steven H. Adler
- --------------------------- BY:-------------------------
Exhibit A -- Authorized Signatures
Exhibit B - Fees
<PAGE>
APPENDIX A
<TABLE>
<CAPTION>
AUTHORIZED PERSONS SPECIMEN SIGNATURES
------------------ -------------------
<S> <C> <C>
President: STEVEN H. ADLER /s/ Steven H. Adler
------------------ ----------------------
Vice President: JOEL JACOBS /s Joel Jacobs
------------------ ----------------------
Secretary: BRADLEY ADLER /s/ Bradley E. Adler
------------------ ----------------------
Treasurer: ANDREW ADLER /s/ Andrew L. Adler
------------------ ----------------------
Adviser Employees: SEEMA KADIWALA /s/ Seema Kadiwala
------------------ ----------------------
MFSCo.
Employees: DONALD F. MEEDER /s/ Donald F. Meeder
------------------ ----------------------
STEVEN T. MCCADE /s/ Steven T. McCade
------------------ ----------------------
LINDA LENAHAN /s/ Linda S. Lenahan
------------------ ----------------------
MICHAEL ACOCK /s/ Michael Acock
------------------ ----------------------
CONNIE KNOECHEL /s/ Connie G. Knoechel
------------------ ----------------------
</TABLE>
<PAGE>
EXHIBIT B
STAR BANK, N.A.
CUSTODY FEE SCHEDULE
FOR THE ASM FUND, INC.
Star Bank, N.A., as Custodian, will receive monthly compensation for services
according to the terms of the following Schedule:
I. PORTFOLIO TRANSACTION FEES:
<TABLE>
<S> <C> <C>
(a) For each repurchase agreement transaction $ 7.00
(b) For each portfolio transaction processed through
DTC or Federal Reserve $ 7.00
(c) For each portfolio transaction processed through
our New York custodian $25.00
(d) For each GNMA/Amortized Security Purchase $25.00
(e) For each GNMA Prin/Int Paydown, GNMA Sales $ 8.00
(f) For each option/future contract written,
exercised or expired $40.00
(g) For each Cedel/Euro clear transaction $80.00
(h) For each Disbursement (Fund expenses only) $ 5.00
</TABLE>
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. MONTHLY MARKET VALUE FEE
------------------------
<TABLE>
<CAPTION>
Based upon Month-end at a rate of: MILLION
-------
<S> <C>
.0005 (5 Basis Points) on First $10
.0003 (3 Basis Points) on Next $10
.0002 (2 Basis Points) on Next $20
.0001.5 (1.5 Basis Points) on Balance
</TABLE>
III. OUT-OF-POCKET EXPENSES
The only out-of-pocket expenses charged to your account will be shipping fees
or transfer fees.
IV. IRA DOCUMENTS
Per Shareholder/year to hold each IRA Document $8.00
V. EARNINGS CREDITS
On a monthly basis any earnings credits generated from uninvested custody
balances will be applied against any cash management service fees generated.
Earnings credits are
<PAGE>
based on the average yield on the 91 day U.S. Treasury Bill for the preceding
thirteen weeks less the 10% reserve.
<PAGE>
ADMINISTRATION AGREEMENT
ASM FUND, INC.
and
MUTUAL FUNDS SERVICE CO.
This Agreement dated as of the 31st day of December, 1993, made by and
between ASM Fund, Inc. (the "Fund"), a Maryland corporation operating as an
open-end investment company, and Mutual Funds Service Co. ("Agent"), an Ohio
corporation.
WITNESSETH
WHEREAS, Agent has agreed to act as Transfer, Dividend Disbursing and
Redemption Agent for the Fund; and
WHEREAS, pursuant to a separate agreement (the "Custodian Agreement"),
Star Bank, N.A. (the "Bank") performs the duties of Custodian of the
securities and cash of the Fund;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto do hereby agree as follows:
SECTION 1. The Fund hereby appoints Agent as its Transfer, Redemption
---------
and Dividend Disbursing Agent, and Agent accepts such appointments and agrees
to act in such capacities upon the terms set forth in this Agreement.
TRANSFER AGENCY
SECTION 2. Agent will maintain current and accurate registry records in
----------
the usual form in which it will note the issuance, transfer and redemption of
Shares and the issuance and transfer of Share Certificates. Agent is also
authorized to maintain an account entitled Unissued Certificate Account in
which it will record the Shares and fractions of Shares issued and
outstanding from time to time for which issuance of Share Certificates was
not requested. The Agent shall provide the Fund with current and accurate
reports of Fund Share purchases, redemptions and total Shares outstanding on
the next business day after each net asset valuation. Agent is authorized to
keep records in which it will note the names and registered addresses of
Shareholders, and the number of Shares and fractions of Shares from time to
time owned by them for which no Share Certificates are outstanding.
<PAGE>
SECTION 3. 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 Agent to dispense with the issuance and
countersignature of Share Certificates whenever Shares are purchased. In
such case Agent, as Transfer Agent, shall merely note on its stock registry
records the issuance of the Shares and fractions thereof, if any; shall
credit the Unissued Certificate Account with the Shares and fractions thereof
issued; and shall credit the proper number of Shares and fractions thereof to
the respective Shareholders. Likewise, whenever Agent has occasion to
surrender for redemption Shares and fractions thereof to the respective
Shareholders, it shall be unnecessary to issue Share Certificates for
redemption purposes. The Fund authorizes Agent in such cases to process the
transactions by appropriate entries in its stock transfer records, and
debiting of the unissued Certificate Account and the record of issued Shares
outstanding.
SECTION 4. Agent in its capacity as 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. When applicable, 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, upon receipt of a written request from a
Shareholder, will transfer Share Certificates registered in the name of
Shareholders from one Shareholder to another in the usual manner. Agent may
rely conclusively and act without further investigation upon any list,
instruction, certification, authorization, Share Certificate or other
instrument or paper believed by it in good faith to be genuine and unaltered,
and to have been signed, countersigned, or executed by a duty 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 Agent. Agent may record any
transfer of Share Certificates which is 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 Agent deems such refusal necessary in order to
avoid any liability to any person.
SECTION 5. In case of any request or demand for the inspection of the
----------
Share records of the Fund, Agent, as Transfer Agent, shall endeavor to notify
the Fund and to secure instructions from the Fund as to permitting or
refusing such inspection. However, Agent may disclose, permit inspection or
copying, or surrender such records to any person in any case where it is
required by law or it is advised by its counsel that it may be held liable
for failure to do so.
ISSUANCE OF SHARES
SECTION 6. Prior to the daily determination of net asset value in
---------
accordance with the Fund's prospectus, Agent shall process all purchase
orders received since the last determination of the Fund's net asset value.
For the purposes of this Section 6, the Fund hereby instructs Agent to
consider Shareholder payments according to the following schedule:
a. Purchase orders received prior to 4:00 p.m. on a business day,
Eastern Standard Time -- on the same day;
b. Purchase orders received after 4:00 p.m., Eastern Standard Time --
on the second or following business day.
Immediately after 4:00 p.m., Eastern Standard Time, on each day that
the Fund and Agent are open for business or on any other day on which there
is sufficient degree of trading in the Fund's portfolio securities that the
current net asset value of the Fund's Shares might be
<PAGE>
materially affected, Agent shall obtain from the Fund a quotation (on which
it may conclusively rely) of the net asset value per Share determined as of
4:00 p.m., Eastern Standard Time, on that day. Agent shall proceed to
calculate the amount available for investment in Shares at the quoted net
asset value, the number of Shares and fractional Shares to be purchased and
the net asset value to be deposited with the Bank. Agent, as agent for the
Shareholders, 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 7. Agent, having made the calculations provided for in Section
---------
6, shall thereupon pay over the net asset value of Shares purchased to the
Bank. The payment shall then be deposited in the account maintained under
the Custodian Agreement. The proper number of Shares and fractional Shares
shall then be issued daily and credited by Agent to the Unissued Certificate
Account. The Shares and fractional Shares purchased for each Shareholder
will be credited by Agent to the Shareholder's separate account. Agent shall
mail to each Shareholder a confirmation of each purchase, the new Share
balance, the Shares held under a plan (if any), the amount invested and the
price paid for the newly purchased Shares.
REDEMPTIONS
SECTION 8. Agent shall, prior to the daily determination of net asset
---------
value in accordance with the Fund's prospectus, process all requests from
Shareholders to redeem Shares and determine the number of Shares required to
be redeemed to make monthly payments, automatic payments or the like.
Thereupon, Agent shall advise the Fund of the total number of Shares
available for redemption and the number of Shares and fractional Shares
requested to be redeemed. The Fund shall then quote to Agent the applicable
net asset value, whereupon Agent shall furnish the Fund with an appropriate
confirmation of the redemption and process the redemption by filing with the
Bank an appropriate statement and making the proper distribution and
application of the redemption proceeds in accordance with the Fund's
prospectus. The stock registry books recording outstanding Shares, the
Unissued Certificate Account and the individual account of the Shareholder
shall be promptly and properly debited.
In lieu of carrying out the redemption procedures provided for above in
this Section 8, Agent may, at the request of the Fund, sell Shares to the
Fund as repurchases from Shareholders, 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 9. The proceeds of redemption shall be remitted by Agent in
--------
accordance with the Fund's prospectus as follows:
(j) When applicable, by check mailed to Shareholder at his registered
address. The request and stock certificates, if any, for Shares being
redeemed, must (when applicable) be duly endorsed in blank or accompanied by
an appropriate instrument of transfer reasonably satisfactory to Agent.
(k) When applicable, by wire to a designated batik or broker. The
request and stock certificates, if any, for Shares being redeemed, must (when
applicable) be duly endorsed in blank or accompanied by an appropriate
instrument of transfer reasonably satisfactory to Agent.
DIVIDENDS
<PAGE>
SECTION 10. It is mutually understood by the parties that the Fund
----------
intends to declare dividends to Shareholders, and that all dividends are to
be automatically reinvested in additional Shares or remitted in accordance
with the Fund's currently effective prospectus. The Agent shall compute the
dividends per Share payable with respect to the account of each Shareholder
and the number of additional Shares and fractional Shares to be issued as
dividends. The Agent shall notify the Fund of the total number of additional
Shares and fractional shares which have been issued as dividends. The Agent
shall maintain records as to the additional Shares and fractional Shares
issued as dividends with respect to the account of each Shareholder.
If the Fund changes its dividend policy or orders the distribution of
any long-term gains, the Fund shall notify the Agent of each resolution of
its Directors declaring a dividend or other distribution, the amount payable
per Share, the record date for determining Shareholders entitled to payment,
the net asset value to be used for reinvestments of dividends and the payment
date. The Agent shall, on the designated payment date, calculate the amount
to be reinvested in Shares and fractional Shares for each Shareholder.
GENERAL PROVISIONS
SECTION 11. Agent shall maintain current and accurate records (which may
-----------
be part of the stock transfer records) in connection with the issuance and
redemption of Shares, the disbursement of dividends and dividend
reinvestments, in which will be noted the transactions effected for each
Shareholder and the number of Shares and fractional Shares owned by each
Shareholder for which no Share Certificates are outstanding.
SECTION 12. Agent agrees to make available upon request and to
-----------
preserve for the periods prescribed in Rule 3la-2 under the Investment Fund
Act of 1940 any records relating to services provided under this Agreement
which are required to be maintained by Rule 3 1 a- I under said Act.
Subject to the provisions of Section 5 hereof, accounts, records and other
information shall belong to the Fund and be considered confidential, Section
13. In addition to service as Transfer Agent and Dividend Disbursing Agent
as above set forth, Agent will perform other services for the Fund upon terms
mutually agreeable to Agent and the Fund, including but not limited to,
preparation of and mailing Federal Tax Information Forms, mailing semi-annual
reports of the Fund, preparation of lists of Shareholders, and mailing
notices of Shareholders' meetings, proxies and proxy statements.
SECTION 13. In addition to service as Transfer Agent and Dividend
-----------
Disbursing Agent as above set forth, Agent will perform other services for
the Fund upon terms mutually agreeable to Agent and the Fund, including but
not limited to, preparation of and mailing Federal Tax Information Forms,
mailing semi-annual reports of the Fund, preparation of lists of
Shareholders, and mailing notices of Shareholders' meeting, proxies and proxy
statements.
SECTION 14. Except as set forth 'in Section 6, nothing contained in
this Agreement is intended to or shall require Agent in any capacity
hereunder, to perform any functions or duties on any holiday, day of special
observance or any other day on which Agent or the New York Stock Exchange is
closed. 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 Agent are open.
<PAGE>
SECTION 15. Agent shall not be personally liable for any taxes,
-----------
assessments, or governmental charges which may be levied or assessed on any
basis whatsoever, excepting only for taxes assessed against it in its
corporate capacity arising out of its compensation hereunder.
SECTION 16. Except as set forth below in this Section 16, the Fund shall
-----------
indemnify Agent and save it harmless from and against 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, attorney and
accountant's fees, payments, expenses and liabilities incurred by Agent in
connection with any such action, suit, or claim unless caused by Agent's
breach of this Agreement, negligence or willful misconduct. 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,
which, in the opinion of its counsel, may involve it in expense or liability,
and the Fund shall, so often as reasonably requested, furnish Agent with
satisfactory indemnity against such expense or liability, and upon request of
Agent the Fund shall assume the entire defense of any action, suit, or claim
subject to the foregoing indemnity; provided, however, that Agent shall give
the Fund notice of any such action, suit, or claim brought against Agent.
Without limiting the foregoing:
(i) Agent may rely upon the advice of the Fund, or of
counsel, who may be counsel for the Fund or counsel for Agent, 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, Agent shall not be liable.
(ii) Agent 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
Agent may rely upon the genuineness of any such document or copy
thereof believed in good faith by Agent to have been validly
executed.
(iii) 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 believed by it
to be genuine and to have been signed or presented by the
Shareholder, Fund or other proper party or parties.
Agent shall indemnify and hold harmless the Fund from all claims and
liabilities (including reasonable Counsel expenses) incurred or assessed
against the Fund arising from the Agent's negligence, willful misconduct or
breach of this Agreement.
SECTION 17. Agent is authorized, upon receipt of specific written
-----------
instructions from the Fund, to make payment upon redemption of Shares without
a signature guarantee. The Fund hereby agrees to indemnify and hold Agent,
its successors and assigns, harmless of and from any and all expenses
(including without limitation, attorney and accountant's fees), damages,
claims, suits, liabilities, actions, demands and losses whatsoever arising
out of or in connection with a payment by Agent upon redemption of Shares
without a signature guarantee and upon the request of Agent the Fund shall
assume, at its sole expense, the entire defense of any action, suit or claims
subject to the foregoing indemnity. Agent shall notify the Fund of any such
action, suit or claim.
<PAGE>
SECTION 18. The Fund shall promptly cause to be turned over to Agent
-----------
all records, files, and other materials necessary or appropriate for proper
performance of the obligations of Agent under this Agreement.
SECTION 19. The Fund shall file with Agent a certified copy of each
-----------
resolution of its Board of Directors authorizing the execution of written
instructions or the transmittal of oral instructions.
SECTION 20. The Fund agrees to pay the 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 written amendments to such
Schedule approved by the Fund and the Agent.
SECTION 21. This Agreement may be amended from time to time by a
----------
written agreement executed by the Fund and the Agent.
SECTION 22. This Agreement may be terminated by either party upon 60
-----------
days' prior written notice.
SECTION 23. 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 certified mail, postage prepaid, return
receipt requested, to the respective parties as follows:
IF TO THE FUND:
ASM Fund, Inc.
15438 North Florida Avenue, Suite 107
Tampa, FL 33613
ATTN: President
IF TO THE AGENT:
Mutual Funds Service Co.
Attention: Donald F. Meeder, President
6000 Memorial Drive
Dublin, OH 43017
SECTION 24. The Fund represents and warrants to Agent that the execution
----------
and delivery of this Agreement by the undersigned officers of the Fund have
been duly and validly authorized by resolution of the Directors of the Fund.
SECTION 25. 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 26. 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 Agent or by Agent without the written consent of the Fund, in each
case authorized or approved by a resolution of its Directors.
<PAGE>
SECTION 27. This Agreement shall be governed by and construed in
- ----------
accordance with the laws of the State of Ohio, without reference to
its choice of law rules.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ASM FUND, INC.
By: /s/ Steven H. Adler
--------------------------------------
Its: President
--------------------------------------
ATTEST: /s/ William Tapella
-----------------------------------
MUTUAL FUNDS SERVICE CO.
By: /s/ Donald F. Meeder
--------------------------------------
Its: President
--------------------------------------
ATTEST: /s/ Wesley F. Hoag
-----------------------------------
<PAGE>
ACCOUNTING SERVICES AGREEMENT
ASM FUND, INC.
and
MUTUAL FUNDS SERVICE CO.
This Agreement, dated the 31st day of December 1993, made by and between
ASM Fund, Inc., a Maryland corporation (the "Fund"), and Mutual Funds
Service Co., an Ohio corporation ("Agent").
WITNESSETH THAT:
WHEREAS, the Fund desires to appoint the Agent as its Accounting Services
Agent to perform certain accounting and recordkeeping functions required of a
duly registered investment company; to file certain financial reports; to
maintain and preserve certain books, accounts, and records as the basis for
such reports; and to perform certain daily functions in connection with such
accounts and records;
WHEREAS, the Agent is willing to perform such functions upon the terms
and conditions herein set forth; and
WHEREAS, pursuant to a separate agreements, the Agent will perform the
duties of administrator, transfer agent, and dividend disbursing agent for
the Fund.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Section 1. The Fund shall turn over to the Agent the accounts and
records previously maintained by or for the Fund. The Agent shall be
entitled to rely exclusively on the completeness and correctness of the
accounts and records turned over to it by the Fund, and the Fund shall
indemnify and hold the Agent harmless of and from any and all expenses
(including without limitation, attorneys and accountants' fees), damages,.
claims, suits, liabilities, actions, demands, and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy, or other
deficiency of such accounts and records or in connection with the failure of
the Fund to provide any portion of such accounts and records or to provide
any information to the Agent necessary or appropriate to perform its
functions hereunder.
<PAGE>
Accounts, records and other information shall belong to the Fund and be
considered confidential. Accounts, records and other information will not be
disclosed to other than federal and state regulators without permission from
the Fund.
Section 2. The Agent shall examine and review the Fund's existing
accounts, records, pertinent documents and systems in order to determine or
recommend how such accounts, records, documents and systems shall be
maintained.
Section 3. Upon receipt of necessary and appropriate information and
instructions from the Fund, the Agent shall maintain and keep current and
accurate the following books, accounts, records, journals, or other records
of original entry, relating to the business of the Fund, and necessary or
appropriate for compliance with applicable regulations, including Rules
31(a)-1 and 31(a)-2, of the Investment Company Act of 1940, as amended, and
as may be mutually agreed to between the Fund and the Agent:
(a) Cash Receipts
(b) Cash Disbursements
(c) Dividend Record
(d) Purchase and Sales of Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledger
(g) Broker Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and collateral therefor
(l) Trial Balances
Unless appropriate information necessary to perform the above functions
is furnished to the Agent in a timely manner, the Agent shall incur no
liability to the Fund or any other person. The Agent shall promptly notify
the Fund in writing of any discrepancy, error or non-compliance in items (a)
through (l) above of which it has knowledge.
The Agent shall maintain all accounts and records mentioned above as
required by regulation and as agreed upon between the Fund and the Agent.
Section 4. Upon receipt by the Agent of written or oral instructions from
the Fund, the Agent shall make proper accounting entries in accordance with
G.A.A.P. and SEC regulations. The Fund shall direct that each broker-dealer,
or other person through whom a transaction has occurred, shall send a
confirmation thereof to the Agent. The Agent shall verify this confirmation
against the written or oral instructions when received from the Fund and
forward the confirmation to the Custodian. The Agent shall promptly notify
the Fund of any discrepancy between the confirmation and the Fund's written
instructions when received from the Fund but shall incur no responsibility or
liability for such discrepancy. The Fund shall cause any necessary
corrections to be made and shall advise the Agent and the Custodian
accordingly.
Section 5. The Agent shall calculate the Fund's net asset value per share
in accordance with the Fund's currently effective prospectus, once daily.
The Agent shall prepare and maintain a daily evaluation of Securities for
which market quotations are available by the Agent's use of Bloomberg and ILX
quotation services; all other Securities shall be
<PAGE>
evaluated in accordance with the Fund's written instructions, and the Agent
shall have no responsibility or liability for the accuracy of the information
supplied by the Fund or provided in the written instructions.
The Fund assumes all responsibility for computation of "amortized
cost", valuation of securities, and all valuations not ascertainable solely
by mechanical procedures.
Section 6. At the end of each month, the Agent shall obtain from the
Custodian a monthly statement of cash and portfolio transactions, which shall
be reconciled with the Agent's accounts and records maintained for the Fund.
The Agent shall report any discrepancies to the Custodian, and report any
unreconciled items to the Fund.
Section 7. The Agent shall supply daily and periodic reports to the Fund,
as required by law or regulation, and as requested by the Fund and agreed
upon by the Agent.
Section 8. The Fund shall report and confirm to the Transfer Agent all
Share purchases and redemptions of which it is aware. The Agent shall obtain
from the Transfer Agent daily reports of Share purchases, redemptions, and
total shares outstanding.
The Agent shall reconcile outstanding Shares with the Transfer Agent
periodically and certify at least monthly to the Fund the reconciled Share
balance outstanding.
Section 9. The accounts and records of the Fund maintained by the Agent
shall be the property of the Fund, and shall be made available to the Fund,
within a reasonable period of time, upon demand. The Agent shall assist the
Fund's independent auditors, and upon approval of the Fund, or upon demand by
any governmental or quasi-governmental entity, assist any such entity in any
requested review of the Fund's accounts and records but shall be reimbursed
for all expenses and employee time invested in any such review outside of
routine and normal periodic reviews. Upon receipt from the Fund of the
necessary information, the Agent shall supply the necessary data for the
Fund's completion of any necessary tax returns, questionnaires, periodic
reports to Shareholders, and such other reports and information requests as
the Fund and the Agent shall agree upon from time to time.
Section 10. The Agent and the Fund may from time to time adopt uniform or
standard procedures, and the Agent may conclusively assume that any procedure
approved by the Fund, or directed by the Fund, does not conflict with or
violate any requirements of its prospectus, Articles of Incorporation,
By-Laws, or other governing documents, or any rule or regulation of any
regulatory body or governmental agency. The Fund shall be responsible to
notify the Agent of any changes in regulations or rules which might
necessitate changes in the Agent's procedures.
Section 11. The Agent may rely upon the advice of the Fund and upon
statements of the Fund's accountants and other persons believed by it in good
faith to be expert in matters upon which they are consulted, and the Agent
shall not be liable for any actions taken in good faith upon such statements.
Section 12. The Agent shall not be liable for any action taken in good
faith reliance upon any authorized oral instructions, any written
instructions, any certified copy of any resolution of the Board of Directors
of the Fund or any other document reasonably believed by the Agent to be
genuine and to have been executed or signed by the proper person or persons.
The Fund will send written instructions to confirm oral instructions, and the
Agent will compare the written instructions against the oral instructions
previously furnished. The Agent will inform the Fund promptly of any noted
discrepancy.
<PAGE>
The Agent shall not be held to have notice of any change or lack of
authority of any officer, employee, or agent of the Fund until receipt of
written notification thereof by the Fund.
In addition to indemnification expressly provided elsewhere in this
Agreement, the Fund shall indemnify Agent and save it harmless from and
against 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, attorney and accountant's fees, payments, expenses and liabilities
incurred by Agent in connection with any such action, suit, or claim unless
caused by Agent's breach of this Agreement, negligence or willful misconduct.
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, which, in the opinion of its counsel, may involve it in expense or
liability, and the Fund shall, so often as reasonably requested, furnish
Agent with satisfactory indemnity against such expense or liability, and upon
request of Agent, the Fund shall assume the entire defense of any action,
suit, or claim subject to the foregoing indemnity; provided, however, that
Agent shall give the Fund notice of any such action, suit, or claim brought
against Agent.
Agent shall indemnify and hold harmless the Fund from all claims and
liabilities (including reasonable attorneys' and accountants' expenses)
incurred or assessed against the Fund arising from the Agent's negligence,
willful misconduct or breach of this Agreement.
Section 13. The shareholders, directors, officers, employees and agents
of the Fund shall not be personally bound by or liable hereunder, nor shall
resort be had to their private property for the satisfaction of any
obligation or claim hereunder as provided for in the Articles of
Incorporation.
Section 14. The Fund agrees to pay the 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 Agent.
Section 15. Nothing contained in this Agreement is intended to or shall
require the Agent, in any capacity hereunder, to perform any functions or
duties on any holiday or other day of special observance on which the New
York Stock Exchange is closed. 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 Agent are open.
Section 16. This Agreement may be terminated by either party upon 60
days' prior written notice.
Section 17. 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:
ASM Fund, Inc.
15438 North Florida Avenue, Suite 107
Tampa, FL 33613
ATTN: President
IF TO THE AGENT:
<PAGE>
Mutual Funds Service Co.
Attention: Donald F. Meeder, President
6000 Memorial Drive
Box 7177
Dublin, OH 43017
Section 18. 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 18. This Agreement 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 Agent, or by the Agent without the written consent of the Fund, in each
case authorized or approved by a resolution of its Directors.
Section 20. This Agreement shall be governed by the laws of the State of
Ohio, without reference to its choice of law rules.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ASM FUND, INC.
By /s/ Steven H. Adler
------------------------------
Its: President
----------------------------
ATTEST: /s/ William Tapella
-------------------------
MUTUAL FUNDS SERVICE CO.
By /s/ Donald F. Meeder
------------------------------
Its: President
----------------------------
ATTEST: /s/ Wesley F. Hoag
-------------------------
<PAGE>
MUTUAL FUNDS SERVICE CO.
FEE SCHEDULE FOR ACCOUNTING SERVICES
ASM FUND, INC.
A. MINIMUM ANNUAL FEE - $20,000 (Based upon average net assets - payable
monthly)
BASIS POINT FEE
8 Basis Points on first $30 million of assets
3 Basis Points on next $20 million of assets
1 Basis Points on next $50 million of assets
.6 Basis Points on assets over $100 million
B. In addition, all out-of-pocket expenses shall be separately charged,
shall include but not be limited to: printed forms, postage, overnight
mail and telephone expense.
<PAGE>
ADMINISTRATION SERVICES AGREEMENT
ASM FUND, INC.
and
MUTUAL FUNDS SERVICE CO.
This Agreement dated as of the 31st day of December, 1993, made by and
between ASM Fund, Inc., a Maryland corporation operating as an open-end
investment company (the "Fund"), and Mutual Funds Service Co., an Ohio
corporation ("Administrator").
WITNESSETH
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively
with the rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, the Fund wishes to engage the Administrator to provide certain
administrative and management services, and the Administrator is willing to
provide such administrative and management services to the Fund, on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements of the parties,
hereto as herein set forth, the parties agree as follows:
1. DUTIES OF THE ADMINISTRATOR. Subject to the direction and control of
the Board of Directors of the Fund, the Administrator shall perform such
administrative services as may from time to time be reasonably requested by
the Fund. The types of services which may be called for hereunder include
without limitation: (a) providing equipment and clerical personnel necessary
for performing the administrative and management functions herein set forth;
(b) arranging, if desired by the Fund, for Directors, officers and employees
of the Administrator to serve as Directors, officers or agents of the Fund if
duly elected or appointed to such positions and subject to their individual
consent and to any limitations imposed by law; (c) supervising the overall
administration of the Fund, including negotiation of contracts and fees with
and the monitoring of performance and billings of the Fund's custodian and
other independent contractors or agents; (d) assisting in preparing and, if
applicable, filing all documents required for compliance by the Fund with
applicable federal laws and regulations, including registration statements,
semi-annual
<PAGE>
and annual reports to shareholders and proxy statements; (e) preparing
supporting documents for meetings of Directors and committees of Directors;
and (f) maintaining current and accurate books and records of the Fund.
Notwithstanding the foregoing, the Administrator shall not be deemed to have
assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto, nor shall the Administrator be deemed to
have assumed or have any responsibility with respect to functions
specifically assumed by any custodian of the Fund or any person or agent
responsible for state registration or renewal functions of the Fund.
Accounts, records and other information shall belong to the Fund and be
considered confidential. Accounts, records and other information will not be
disclosed to other than federal and state regulators without permission from
the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES. The Administrator shall pay the
entire salaries and wages of its officers and employees who devote part or
all of their time to the affairs of the Administrator, and the wages and
salaries of such persons shall not be deemed to be expenses incurred by the
Fund for purposes of this Section 2. Except as provided in the foregoing
sentence, the Fund will pay all of its own expenses including, without
limitation, compensation of Directors not affiliated with the Administrator;
governmental fees; interest charges; taxes; membership dues in the Investment
Company Institute allocable to the Fund; fees and expenses of the Fund's
independent auditors, legal counsel and any transfer agent or registrar of
the Fund; expenses of preparing, printing and mailing reports, notices, proxy
statements and reports to investors and governmental agencies and
commissions; expenses of preparing and mailing agendas and supporting
documents for meetings of Directors and committees of Directors; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums, fees and expenses of the Fund's custodian
for all services to the Fund, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of shares of the Fund; expenses of meetings of shareholders of
the Fund; and expenses relating to the issuance, registration and
qualification of shares of the Fund.
3. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered and
the facilities to be provided by the Administrator hereunder, the Fund shall
pay to the Administrator an administrative fee computed and paid in
accordance with Schedule A hereto.
4. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The Administrator and
its directors, officers, employees and agents shall not be liable for any
error of judgment or mistake of law or for any act or omission in the
administration of the Fund or the performance of its duties hereunder, unless
caused by the Administrator's negligence, willful misfeasance, or breach of
this Agreement.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to
the Fund are not to be deemed to be exclusive, the Administrator being free,
to render administrative and/or other services to other parties.
6. TERMINATION. This Agreement may be terminated by either party upon 60
days' prior written notice.
7. DELEGATION BY THE ADMINISTRATOR. The Administrator may delegate any or
all of its obligations hereunder to any one or more entities or persons;
PROVIDED, HOWEVER, that the Administrator shall not make any such delegation
unless the Directors of the Fund shall have approved such delegation; and
PROVIDED, FURTHER, that, unless the Fund otherwise expressly agrees in
writing, the Administrator shall
<PAGE>
be as fully responsible to the Fund for the acts and omissions of the entity
or person to whom the Administrator has made such delegation as it would be
for its own acts or omissions.
8. NOTICES. 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 certified mail, postage prepaid, return
receipt requested, to the respective parties as follows:
IF TO THE FUND:
ASM Fund, Inc.
1543 8 North Florida Avenue, Suite 107
Tampa, FL 33613
Attention: President
IF TO THE ADMINISTRATOR:
Mutual Funds Service Co.
Attention: Donald F. Meeder, President
6000 Memorial Drive
Box 7177
Dublin, OH 43017
9. COUNTERPARTS. 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.
10. ASSIGNMENT. This Agreement 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 Administrator, or by the Administrator without the written consent of the
Fund, in each case authorized or approved by a resolution of its Directors.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to its
choice of law rules.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ASM FUND, INC.
By /s/ Steven H. Adler
------------------------------
Its: President
----------------------------
ATTEST: /s/ William Tapella
-------------------------
<PAGE>
MUTUAL FUNDS SERVICE CO.
By /s/ Donald F. Meeder
------------------------------
Its: President
----------------------------
ATTEST: /s/ Wesley F. Hoag
-------------------------
<PAGE>
MUTUAL FUNDS SERVICE CO.
ADMINISTRATIVE SERVICES FEE SCHEDULE
SCHEDULE A
<TABLE>
<CAPTION>
ASSETS FEE
------ ---
<S> <C>
$7.5 million - 14.99 million $7,500
$15.0 million - 24.99 million $15,000
$25 million and up $25,000
</TABLE>
Fees would be divided into twelve monthly payments based upon Net Assets on
the last business day of the preceding month.
In addition, all out-of-pocket expenses shall be separately charged. Shall
include but not be limited to: printed/copied material, postage, overnight
mail, courier service, transportation and lodging.
<PAGE>
GARDNER, CARTON & DOUGLAS
SUITE 3400 QUAKER TOWER WASHINGTON, D.C.
321 NORTH CLARK STREET DENVER, COLORADO
CHICAGO, ILLINOIS 60610-4795 SOUTHFIELD, MICHIGAN
(312) 644-3000
TELEX: 25-3626
TELECOPIER: (312) 644-3381
FEBRUARY 15, 1991
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: A S M FUND, INC. INDEFINITE NUMBER OF
SHARES OF COMMON STOCK, $.001 PAR VALUE
Ladies and Gentlemen:
As counsel for A S M Fund, Inc., a Maryland corporation (the "Fund"), we
have examined the proceedings taken and being taken for the registration by
the Fund on Form N-1A of an indefinite number of shares of its Common Stock,
$.001 par value.
We have examined all instruments, documents and records which, in our
opinion, were necessary of examination for the purpose of rendering this
opinion. Based upon such examination, we are of the opinion that the
above-described shares of Common Stock will be, if and when issued by the
Fund in the manner and upon the terms set forth in said Form N-1A, validly
authorized and issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Fund's Registration Statement on Form N-1A, as it may amended.
Very truly yours,
/s/ Gardner, Carton & Douglas
-------------------------------
<PAGE>
Law Offices
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8074
April 20, 1999
ASM Index 30 Fund, Inc.
410 Park Avenue, 18th Floor
New York, New York 10022
Re: SECURITIES OF ASM INDEX 30 FUND, INC.
Ladies and Gentlemen:
You have informed us that, in accordance with Rule 485(b) under the
Securities Act of 1993, as amended (the "1933 Act"), ASM Index 30 Fund, Inc.
(the "Company"), a Maryland corporation, intends to file with the U.S.
Securities and Exchange Commission (the "Commission") a post-effective
amendment (the "Amendment") to its registration statement (the "Registration
Statement") under the 1933 Act and the Investment Company Act of 1940, as
amended (the "1940 Act") (File Nos. 033-36454 and 811-6187).
We have examined the Company's Articles of Incorporation, as amended to
date, the By-Laws of the Company, and the Company's minute books and such
other certificates and documents as we deem material for the purpose of this
consent. We have examined the Registration Statement, as amended to date, and
the prospectus and statement of additional information included therein (the
"Prospectus") relating to the issuance of share of capital stock of the
Company. We have assisted in the preparation of the Amendment to be filed
with the Commission.
We have acted as general counsel to the Company and we are familiar with
the actions taken by its Directors. We have previously provided our opinion,
dated December 23, 1996, filed with the Commission on December 23, 1996, in
connection with the Notice filed pursuant to Rule 24f-2 under the 1940 Act
that shares of capital stock of the Company identified therein were duly
authorized and, when sold, issued and paid for as contemplated by the
Prospectus, were validly issued, fully paid and nonassessable.
We hereby consent to the reference to such opinion in the Registration
Statement.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: _________________________________
Steven M. Felsenstein, A Partner
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of ASM Index 30 Fund, Inc.
We hereby consent to the inclusion in Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A (File No. 33-36454, hereafter the
"Registration Statement") of ASM Index 30 Fund, Inc. (the "Fund") of our
report dated December 30, 1998, except for Note 6 and Note 7 as to which the
date is March 9, 1999, on our audit of the financial statements and financial
highlights of the Fund appearing in the October 31, 1998 Annual Reports to
Shareholders of the Fund, which financial statements and financial highlights
and report of independent accountants are included in Post-Effective
Amendment No. 12 to the Registration Statement. We also consent to the
reference to our Firm under the caption "Financial Highlights" in the
Prospectus and "Financial Statements" in the Fund's Statement of Additional
Information.
/S/ PRICEWATERHOUSECOOPERS LLP
Miami, Florida
April 22, 1999
<PAGE>
Exhibit 99.B(12)
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints W. Keith Schilit as the true and lawful attorney-in-fact and agent,
with full and several power of substitution, of such undersigned person with
authority to take any appropriate action to execute in the name of and on
behalf of such undersigned person, and to file with the U.S. Securities and
Exchange Commission (the "Commission"), any and all amendments (including
without limitation post-effective amendments) to a registration statement,
any and all applications for exemptive relief from state or federal
regulations, and any and all amendments thereto, or any other forms of
documents, including without limitation, any registration statement on Form
N-14, and any and all amendments thereto, and to perform any and all such
acts as such attorney-in-fact may deem necessary or advisable to enable the
ASM Index 30 Fund, Inc., which is registered with the Commission (the
"Registrant"), to comply with the applicable laws of the United States, any
individual state or similar jurisdiction of the United States, and in
connection therewith to execute and file all requisite papers and documents,
including but not limited to, applications, reports, notices, surety bonds,
irrevocable consents and appointments of attorneys for service of process;
granting to such attorney-in-fact and agent full power and authority to do
and perform each and every act requisite and necessary to be done in
connection therewith, as fully as the Registrant and undersigned person might
or could do himself or in person, hereby ratifying and confirming all that
such attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Each of the undersigned persons has executed this Power of Attorney in
the capacity and on the date indicated opposite the name of the undersigned
person.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Daniel Calabria
- ------------------- Director April 9, 1999
Daniel Calabria
/s/ Jerome P. Feltenstein
- ------------------------- Director April 12, 1999
Jerome P. Feltenstein
/s/ Arthur Salzfass
- ------------------- Director April 12, 1999
Arthur Salzfass
</TABLE>
