As filed with the Securities and Exchange Commission on
November 26, 1997
Registration No. 33-________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. ___
POST-EFFECTIVE AMENDMENT NO. ___
(Check appropriate box or boxes)
------------------------------
IMG MUTUAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
2203 GRAND AVENUE
DES MOINES, IOWA 50312-5338
(Address of Principal Executive Offices)
(515) 244-5426
(Area Code and Telephone Number)
MARK A. McCLURG, PRESIDENT
IMG Mutual Funds, Inc.
2203 Grand Avenue
Des Moines, Iowa 50312-5338
(Name and Address of Agent for Service)
----------------------------
Copies of all communications to:
John C. Miles, Esq.
Cline, Williams, Wright, Johnson & Oldfather
1900 First Bank Building, 233 So. 13th Street
Lincoln, NE 68508
---------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on January 5, 1998,
pursuant to Rule 488 under the Securities Act of 1933.
An indefinite amount of the Registrant's Common Stock has been registered under
the Securities Act of 1933, pursuant to Rule 24f-2 under the Investment Company
Act of 1940. In reliance upon such Rule, no filing fee is being paid at this
time.
<PAGE>
IMG MUTUAL FUNDS, INC.
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Proxy Statement/
Form N-14 Item No. Prospectus Caption
- ------------------ ------------------
Part A
- ------
Item 1. Beginning of Registration Outside front cover
Statement and Outside Front
Cover Page of Prospectus
Item 2. Beginning and Outside Back Table of Contents
Cover Page of Prospectus
Item 3. Fee Table, Synopsis Information Synopsis; Risk Factors; Proposal 1:
Agreement and Plan of Reorganization
and Risk Factors
Item 4. Information About the Transaction Outside Front Cover; Synopsis;
Proposal 1: Agreement and Plan of
Reorganization
Item 5. Information About the Registrant IMG Mutual Funds, Inc.
Item 6. Information About the Company Liquid Assets Fund and
Being Acquired Municipal Assets Fund
Item 7. Voting Information Outside Front Cover; Synopsis;
Information Relating
to Voting Matters
Item 8. Interest of Certain Persons and Proposal 2: Approval of
Experts Investment Advisory Agreement
Item 9. Additional Information Required Not Applicable
For Re-offering by Persons Deemed
To be Underwriters
Statement of Additional
Part B Information Caption
- ------ -------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information Cover Page
About Registrant
Item 13. Additional Information About Not Applicable
The Company Being Acquired
Item 14. Financial Statements Not Applicable
Part C
The information required in Part C is included therein under the appropriate
heading for the item.
<PAGE>
January 5, 1998
Dear Shareholder:
I am writing to ask you for your vote on important questions that affect your
investment in Liquid Assets Fund and Municipal Assets Fund (the "Funds"). While
you are, of course, welcome to join us at the Funds' Special Shareholder
Meeting, most shareholders cast their vote by filling out and signing the
enclosed proxy card.
As you may be aware, Investors Management Group, which provides investment
services to the Funds, has signed a definitive agreement to be acquired by
AMCORE Financial, Inc., of Rockford, Illinois. This transaction will not result
in any change to your Funds' advisory services or the high quality shareholder
services that you have come to expect over the years.
As required by the Investment Company Act of 1940, the transaction will result
in the automatic termination of the agreements under which Investors Management
Group provides investment advisory services to the Funds. This transaction thus
requires the approval by the holders of shares of each Fund of a new investment
advisory agreement--which will be substantially identical to the agreement
currently in effect.
As part of our continuing effort to maximize the benefits to shareholders of
investing in the Funds, the Board of Directors of your Funds has recently
reviewed and unanimously endorsed a proposal for the reorganization of the
Funds, which they have determined to be in the best interest of the
shareholders. This proposal calls for acquisition of the Funds' assets by two
new portfolios of IMG Mutual Funds, Inc. Each of the new portfolios will have
comparable investment objectives and substantially identical investment policies
as Liquid Assets Fund and Municipal Assets Fund.
As a result of this transaction, the Funds will be combined with IMG Mutual
Funds, Inc., and you will become a shareholder of IMG Mutual Funds, Inc. You
will own the same class of shares of IMG Mutual Funds, Inc., as you currently
own of the Funds and the aggregate net asset value of your shares of the Funds
will be equal to the aggregate net asset value of IMG Mutual Funds, Inc. that
you will receive as a result of the reorganization. No sales charge will be
imposed in the transaction.
Investors Management Group currently serves as investment advisor to IMG Mutual
Funds, Inc., so consistency of portfolio management will be maintained following
the transaction.
The Directors of Liquid Assets Fund and Municipal Assets Fund recommend that the
shareholders of the Funds approve the reorganization. The Directors believe the
transaction would benefit the Funds and their shareholders by enhancing their
capacity to attract and retain investors. In making their determination, the
Directors reviewed several factors, including the qualifications and
capabilities of the service providers of IMG Mutual Funds, Inc. If, as expected,
the distributor of IMG Mutual Funds, Inc., is able to distribute IMG Mutual
Funds, Inc. shares successfully, growth in assets would make possible the
realization of economies of scale and attendant savings in costs to IMG Mutual
Funds, Inc. and its shareholders. Of course, achievement of these goals cannot
be assured.
Detailed information about the proposed transaction and the reasons for it is
contained in the enclosed combined Proxy Statement/Prospectus. The enclosed
proxy card is, in essence, a ballot. It tells us how to vote on your behalf on
important issues relating to your Fund. If you complete and sign the proxy,
we'll vote it exactly as you tell us. If you simply sign the proxy card, we'll
vote it according to the Directors' recommendation. We urge you to review
carefully the Proxy Statement/Prospectus, fill out your proxy card, and return
it to us. A self-addressed, postage-paid envelope has been enclosed for your
convenience. It is very important that you vote and that your voting
instructions be received no later than January 23, 1998.
NOTE: You may receive more than one proxy package if you hold shares in more
than one account in a Fund, or if you hold shares in more than one Fund. You
must return ALL proxy cards you receive. We have provided postage-paid return
envelopes for each. If you have any questions, please call Investors Management
Group at (515) 244-5426 or 1-800-798-1819.
Sincerely,
David W. Miles, President
Liquid Assets Fund, Inc.
Municipal Assets Fund, Inc.
<PAGE>
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON JANUARY 26, 1998
TO THE SHAREHOLDERS OF LIQUID ASSETS FUND AND MUNICIPAL ASSETS FUND :
You are cordially invited to attend the Special Meetings of Shareholders of
Liquid Assets Fund and Municipal Assets Fund, each of which is currently a
registered investment company, which will be held at 2203 Grand Avenue, Des
Moines, Iowa 50312-5338, on January 26, 1998, at 10:00 a.m., for the following
purposes:
1. To consider and vote on a proposed Agreement and Plan of Reorganization
(the "Plan") providing for (a) the transfer of all the assets of Liquid
Assets Fund and Municipal Assets Fund to IMG Mutual Funds, Inc., in
exchange for shares of two newly created portfolios of IMG Mutual
Funds, Inc.; (b) the assumption by IMG Mutual Funds, Inc., of all of
the liabilities of Liquid Assets Fund and Municipal Assets Fund; and
(c) the distribution of such shares of IMG Mutual Funds, Inc., to the
shareholders of Liquid Assets Fund and Municipal Assets Fund in
complete liquidation of Liquid Assets Fund and Municipal Assets Fund.
2. To consider and vote on a proposed Investment Advisory Agreement with
Investors Management Group ("IMG") to be in effect after a proposed
change of ownership of IMG.
3. To act upon such other matters as may properly come before the
Meetings or any adjournments thereof.
The Board of Directors has fixed the close of business on Friday,
January 2, 1998, as the record date for determination of shareholders entitled
to notice of, and to vote at, the Special Shareholders Meetings. As of the
record date, there were _______ shares of Liquid Assets Fund and _____ shares of
Municipal Assets Fund outstanding and eligible to vote at the Special
Shareholders Meeting. A list of such shareholders will be maintained at the
offices of Investors Management Group at 2203 Grand Avenue, Des Moines, Iowa
50312-5338, during the ten day period preceding the Special Shareholders
Meetings. Please read the Proxy Statement/Prospectus carefully before telling
us, through your proxy card, how you wish your shares to be voted. THE BOARD OF
DIRECTORS OF EACH FUND UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF EACH OF THE
PROPOSALS.
WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY
RETURN IT IN THE ENVELOPE PROVIDED. No postage is required. Prompt return of
your proxy card will be appreciated. Your vote is important no matter how many
shares you own.
Des Moines, Iowa BY ORDER OF THE BOARDS OF DIRECTORS
January 5, 1998
Ruth Prochaska, Secretary
<PAGE>
PROXY STATEMENT/PROSPECTUS
RELATING TO THE ACQUISITION OF THE ASSETS OF
LIQUID ASSETS FUND
AND
MUNICIPAL ASSETS FUND
2203 GRAND AVENUE
DES MOINES, IOWA 50312-5338
TELEPHONE 1-800-798-1819
BY AND IN EXCHANGE FOR SHARES OF
IMG MUTUAL FUNDS, INC.
2203 GRAND AVENUE
DES MOINES, IOWA 50312-5338
TELEPHONE 1-800-798-1819
This Proxy Statement/Prospectus is being furnished to shareholders of
Liquid Assets Fund and Municipal Assets Fund in connection with the solicitation
by the Boards of Directors of proxies to be used at the Special Meetings of
Shareholders of Liquid Assets Fund and Municipal Assets Fund to be held at 2203
Grand Avenue, Des Moines, Iowa 50312-5338 at 10:00 a.m. on January 26, 1998, and
any adjournments thereof. Liquid Assets Fund and Municipal Assets Fund are
currently diversified registered open-end investment companies. Shareholders of
record as of the close of business on January 2, 1998 are entitled to vote at
the Special Meetings. It is expected that this Proxy Statement/Prospectus will
be mailed to shareholders of Liquid Assets Fund and Municipal Assets Fund on or
about January 5, 1998.
This Proxy Statement/Prospectus relates to the proposed Reorganization
in which all of the assets and liabilities of Liquid Assets Fund and Municipal
Assets Fund will be acquired by IMG Mutual Funds, Inc., in exchange for shares
of IMG Mutual Funds, Inc. The shares of IMG Mutual Funds, Inc., thereby received
will then be distributed to shareholders of Liquid Assets Fund and Municipal
Assets Fund, and Liquid Assets Fund and Municipal Assets Fund will be
terminated. As a result of the proposed Reorganization, each shareholder of
Liquid Assets Fund and Municipal Assets Fund will receive that number of full
and fractional shares of the corresponding class and series of shares of IMG
Mutual Funds, Inc., having a net asset value equal to the net asset value of
such shareholder's shares of Liquid Assets Fund and Municipal Assets Fund held
as of the date of the proposed Reorganization.
IMG Mutual Funds, Inc., is a diversified registered open-end
investment company that issues its shares in separate portfolios or series, each
with its own investment objectives and policies. The investment objectives,
policies and restrictions of the two newly created portfolios of IMG Mutual
Funds, Inc., (and, consequently, the risks of investing in them) are
substantially identical to those of Liquid Assets Fund and Municipal Assets
Fund. For a comparison of the investment objectives, policies and restrictions
of Liquid Assets Fund, Municipal Assets Fund and IMG Mutual Funds, Inc., see
"Proposal 1: Agreement and Plan of Reorganization--Investment Objectives,
Policies and Restrictions." Investors Management Group ("IMG") serves as the
investment advisor for IMG Mutual Funds, Inc., as well as Liquid Assets Fund and
Municipal Assets Fund.
This Proxy Statement/Prospectus also relates to the proposal to
continue the Investment Advisory Agreements between IMG and, respectively,
Liquid Assets Fund and Municipal Assets Fund after a change of ownership of IMG.
See "Proposal 2: Approval of Investment Advisory Agreement."
This Proxy Statement/Prospectus, which should be retained for future
reference, sets forth concisely the information about IMG Mutual Funds, Inc.,
that a prospective investor should know before investing. This document will
give you the information you need to vote on the proposed Reorganization and the
other matters described herein. Much of the information is required under rules
of the Securities and Exchange Commission and some of it is technical in nature.
If there is anything you do not understand, please contact us at our toll-free
number, 1-800-798-1819. Shareholders should return proxies and any
correspondence to Investors Management Group, 2203 Grand Avenue, Des Moines,
Iowa 50312-5338.
The following documents have been filed with the Securities and
Exchange Commission and are incorporated into this Proxy Statement/Prospectus by
reference: (i) a Statement of Additional Information dated the date hereof and
relating to this Proxy Statement/Prospectus; (ii) the Prospectus and Statement
of Additional Information of the IMG Mutual Funds, Inc., dated __________, 1998;
and (iii) the Prospectus and Statement of Additional Information of Liquid
Assets Fund and Municipal Assets Fund, dated September 30, 1997. Copies of the
referenced documents are available upon request and without charge by calling
1-800-798-1819.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATOR, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATOR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF IMG MUTUAL FUNDS, INC. ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY, AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
No person has been authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus and, if so given
or made, such information or representation must not be relied upon as having
been authorized. This Proxy Statement/Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which, or to any person to whom, it is unlawful to make such offer or
solicitation.
This Proxy Statement/Prospectus is dated January 5, 1998.
<PAGE>
SYNOPSIS
WHO IS ASKING FOR MY VOTE?
The enclosed proxy is solicited by the Directors of Liquid Assets Fund
and Municipal Assets Fund for use at the Special Meetings of Shareholders of the
Funds to be held on January 26, 1998 (and if your Fund's meeting is adjourned,
at any adjourned meetings) for the purposes stated in the Notice of Special
Meetings.
HOW DO YOUR FUND'S DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE ON THESE
PROPOSALS?
The Directors recommend that you vote
1. FOR the proposed transaction in which assets of Liquid Assets
Fund and Municipal Assets Fund would be transferred to IMG
Mutual Funds, Inc., in exchange for shares of IMG Mutual
Funds, Inc. with an equal net asset value.
2. FOR the new Investment Advisory Agreement to be effective
upon the completion of the proposed acquisition of Investors
Management Group by AMCORE Financial, Inc. of Rockford, Illinois.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on January 2, 1998, are
entitled to be present and vote at the meetings or any adjourned meetings. On
January 2, 1998, there were outstanding __________ shares of Liquid Assets Fund
and _________ shares of Municipal Assets Fund. The Notice of Special Meetings,
the combined Proxy Statement/Prospectus and the enclosed form of proxy are being
mailed to shareholders of record on or about January 5, 1998.
Each share is entitled to one vote, with fractional shares voting
proportionately. Shares represented by duly executed proxies will be voted in
accordance with shareholder's instructions. Any shareholder giving a proxy has
the power to revoke it by mail (addressed to the Fund's Secretary at the
principal offices of the Fund, 2203 Grand Avenue, Des Moines, Iowa 50312-5338)
or in person at the meeting, by executing a superseding proxy, or by submitting
a notice of revocation to the Fund. If you sign the proxy, but don't fill in a
vote, your shares will be voted in accordance with the Directors'
recommendations. If any other business is brought before the meeting, your
shares will be voted at the Directors' discretion.
WHAT IS BEING PROPOSED?
First, the Directors of your Fund are recommending that shareholders
approve the reorganization (the "Reorganization") of Liquid Assets Fund and
Municipal Assets Fund into newly created portfolios of the IMG Mutual Funds,
Inc. An Agreement and Plan of Reorganization provides for the transfer of all of
the assets and liabilities of Liquid Assets Fund and Municipal Assets Fund to
IMG Mutual Funds, Inc., in exchange for shares of IMG Mutual Funds, Inc. The
completion of these transactions, followed by the distribution of IMG Mutual
Funds, Inc. shares received by Liquid Assets Fund and Municipal Assets Fund to
their shareholders, will result in the combination of the Funds' assets and
liabilities, with the shareholders of Liquid Assets Fund and Municipal Assets
Fund becoming shareholders of IMG Mutual Funds, Inc., followed by the
dissolution of Liquid Assets Fund and Municipal Assets Fund. Upon completion of
the Reorganization:
Former Shareholders of Liquid Assets Fund will be
Shareholders of IMG Liquid Assets Fund ("IMGL") which will
have substantially identical investment objectives, policies
and restrictions, fees and purchase and redemption procedures
as Liquid Assets Fund.
Former Shareholders of Municipal Assets Fund will be
shareholders of IMG Municipal Assets Fund ("IMGM") which will
have substantially identical investment objectives, policies
and restrictions, fees and purchase and redemption procedures
as Municipal Assets Fund.
There should be no federal income tax consequences to former
Shareholders of Liquid Assets Fund and Municipal Assets Fund.
Second, the Directors of your Fund are recommending that shareholders
approve continuation of the Investment Advisory Agreement with IMG after a
change of ownership of IMG. This particular Agreement would only continue until
such time as the Reorganization becomes effective, after which an Investment
Advisory Agreement between IMG and IMG Mutual Funds, Inc. would become
effective.
RISK FACTORS
The Directors of your Fund believe that ownership of shares of IMGL and
IMGM does not involve any unique or special risks compared to ownership of
shares of Liquid Assets Fund and Municipal Assets Fund. However, there can be no
assurance that IMGL or IMGM will achieve their investment objectives. Each is
subject to yield variations resulting from changes in prevailing interest rates.
IMGL is subject to the risk that parties to repurchase agreements may default on
their obligations or that banks may default on agreements with Student Loan
Trusts or FmHA Trusts. See IMGL Prospectus dated ______________, 1998, for more
detailed information. IMGM is subject to the same repurchase agreement risks and
to the risk that an issuer or bank may default on a Liquidity Agreement. See
IMGM Prospectus dated _______________, 1998, for more detailed information.
PROPOSAL 1: AGREEMENT AND PLAN OF REORGANIZATION
GENERAL INFORMATION
The Boards of Directors of Liquid Assets Fund and Municipal Assets Fund
have unanimously approved the proposed Agreement and Plan of Reorganization (the
"Plan") providing for the acquisition of all of the assets of Liquid Assets Fund
and Municipal Assets Fund by IMG Mutual Funds, Inc., in exchange for shares of
IMG Mutual Funds, Inc. and the assumption by IMG Mutual Funds, Inc. of the
liabilities of Liquid Assets Fund and Municipal Assets Fund (the
"Reorganization"). The proposed transaction would occur on or about February 15,
1998 (the "Exchange Date"). The value of the acquired assets of Liquid Assets
Fund and Municipal Assets Fund will be determined as of 3:00 p.m. Central Time
on the business day immediately prior to the Exchange Date. The aggregate net
asset value of the shares of IMG Liquid Assets Fund ("IMGL") and IMG Municipal
Assets Fund ("IMGM"), issued in exchange, will equal the aggregate net asset
value of Liquid Assets Fund and Municipal Assets Fund shares, respectively, then
outstanding. In connection with the proposed Reorganization, shares of IMG
Mutual Funds, Inc. will be distributed to shareholders of Liquid Assets Fund and
Municipal Assets Fund will be terminated. Shareholders of Liquid Assets Fund and
Municipal Assets Fund will be the first public shareholders of IMGL and IMGM. As
a result of the proposed Reorganization, each shareholder of Liquid Assets Fund
and Municipal Assets Fund will cease to be a Shareholder of Liquid Assets Fund
and Municipal Assets Fund and will receive that number of full and fractional
shares of IMGL and IMGM, respectively, of the same class as, and having a net
asset value equal to the net asset value of, such shareholder's shares of Liquid
Assets Fund and Municipal Assets Fund. The foregoing is only a summary and is
qualified in its entirety by reference to the Plan, a copy of which is Exhibit A
hereto.
Because all shares of Liquid Assets Fund, Municipal Assets Fund and IMG
Mutual Funds, Inc. are in uncertificated book-entry form, the exchange of shares
will take place automatically on the Exchange Date. If will not be necessary for
shareholders to submit transmittal forms or other documents.
SHAREHOLDER SERVICES AND PRIVILEGES
Shareholders of the newly created portfolios in IMG Mutual Funds, Inc.
will enjoy all the same services and privileges as other shareholders of IMG
Mutual Funds, Inc., including the opportunity to exchange into portfolios with a
wide variety of investment objectives and policies. Purchase and redemption
procedures for IMGL and IMGM are substantially identical to those of Liquid
Assets Fund and Municipal Assets Fund.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
IMGL and IMGM, respectively, have substantially similar investment
objectives, policies and restrictions as Liquid Assets Fund and Municipal Assets
Fund. Thus, the risks of investing in IMGL and IMGM should also be substantially
similar. The only difference in investment policies and restrictions between
IMGL and Liquid Assets Fund is that IMGL is permitted to invest in commercial
paper of the highest rating or of comparable quality as determined by the Board
of Directors. There are no differences in investment policies and restrictions
between IMGM and Municipal Assets Fund.
For a detailed description of the investment objectives, policies and
restrictions of IMGL, IMGM, Liquid Assets Fund and Municipal Assets Fund, see
the IMG Mutual Funds, Inc. Prospectus dated ___________, 1998, and the Liquid
Assets Fund and Municipal Assets Fund Prospectus dated September 30, 1997, both
of which are delivered herewith.
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION
For the reasons set forth below, the Boards of Directors of Liquid
Assets Fund and Municipal Assets Fund, including all of the Directors who are
not "interested persons" as defined by the Investment Company Act of 1940 (the
"Disinterested Directors"), have unanimously concluded that the Reorganization
will be in the best interests of the shareholders of Liquid Assets Fund and
Municipal Assets Fund and that the interests of the existing shareholders of
Liquid Assets Fund and Municipal Assets Fund will not be diluted as a result of
the transactions contemplated by the Plan. The Boards of Directors of Liquid
Assets Fund and Municipal Assets Fund therefore have submitted the Plan for
approval by the shareholders of Liquid Assets Fund and Municipal Assets Fund at
the Special Meetings of Shareholders to be held on January 26, 1998. Approval of
the Plan requires the vote of a majority of the outstanding voting securities of
Liquid Assets Fund and Municipal Assets Fund. The Plan will not become effective
unless the requisite approval is given by shareholders of both Liquid Assets
Fund and Municipal Assets Fund.
The Directors of Liquid Assets Fund and Municipal Assets Fund have
approved the Plan because they believe it will benefit shareholders of Liquid
Assets Fund and Municipal Assets Fund through the expected greater ability of
IMG Mutual Funds, Inc. to attract and retain investors. In determining whether
to recommend the approval of the proposed Reorganization to the shareholders,
the Directors considered a number of factors, including, but not limited to: (i)
the fact that IMG will manage the investments of IMG Mutual Funds, Inc. in the
same manner as it has managed the assets of Liquid Assets Fund and Municipal
Assets Fund; (ii) the capabilities and resources of the other service providers
of IMG Mutual Funds, Inc. in the areas of marketing, investment and shareholder
services; (iii) the expenses and advisory fees applicable to Liquid Assets Fund
and Municipal Assets Fund before the Reorganization and the estimated expense
ratios of IMG Mutual Funds, Inc., after the Reorganization; (iv) the terms and
conditions of the Plan and whether the proposed Reorganization will result in
dilution of Liquid Assets Fund and Municipal Assets Fund shareholder interests;
(v) the economies of scale potentially realized through the combination of the
three funds; (vi) the costs estimated to be incurred to complete the proposed
Reorganization; and (vii) the future growth prospects of IMG Mutual Funds, Inc.
In this regard, the Directors of Liquid Assets Fund and Municipal
Assets Fund reviewed information provided by IMG relating to the anticipated
impact to the shareholders of Liquid Assets Fund and Municipal Assets Fund as a
result of the proposed Reorganization. The Directors considered the probability
that the elimination of duplicative operations and the increase in the asset
levels of IMG Mutual Funds, Inc. after the proposed Reorganization will result
in the following potential benefits for shareholders of Liquid Assets Fund and
Municipal Assets Fund, although there can, of course, be no assurances in this
regard:
(1) ACHIEVEMENT OF ECONOMIES OF SCALE AND REDUCED PER SHARE
EXPENSES. Combining the net assets of Liquid Assets Fund and
Municipal Assets Fund with the assets of IMG Mutual Funds,
Inc. will lead to reduced total operating expenses for
shareholders of Liquid Assets Fund and Municipal Assets Fund,
on a per share basis, by allowing fixed and relatively fixed
costs, such as accounting, legal and printing expenses, to be
spread over a larger asset base.
(2) ELIMINATION OF SEPARATE OPERATIONS. Consolidating Liquid
Assets Fund and Municipal Assets Fund and IMG Mutual Funds,
Inc. will eliminate the duplication of services and expenses
that currently exists as a result of their separate operations
and will promote more efficient operations on a more
cost-effective basis.
The Directors of Liquid Assets Fund and Municipal Assets Fund also
considered the distribution capabilities of BISYS Fund Services, Inc., which
will become the Distributor of the shares of IMG Mutual Funds, Inc. If BISYS
Fund Services, Inc. is able to distribute IMG Mutual Funds, Inc. shares
successfully, growth in assets will make possible the realization of economies
of scale and attendant savings in costs to IMG Mutual Funds, Inc. and its
shareholders. Of course, achievement of these goals cannot be assured.
EXPENSE SUMMARY
The purpose of the following tables is to inform investors of the
various costs and expenses they will bear, directly or indirectly, as
shareholders of IMGL or IMGM, and to compare those costs and expenses with the
costs and expenses borne by shareholders of Liquid Assets Fund and Municipal
Assets Fund during the past fiscal year.
IMGL AND IMGM
SHAREHOLDER TRANSACTION EXPENSES
IMGL IMGM
Maximum Sales Charge Imposed on Purchases None None
Maximum Sales Charge on Reinvested Dividends None None
Deferred Sales Load None None
Redemption Fee* None None
Exchange Fee None None
*A $15.00 fee may be charged to an individual shareholder account for redemption
by wire.
ESTIMATED ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
IMGL IMGM
S S-2 T I S T I
Shares Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees......................................0.35% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35%
12b-1 Distribution Fees1.............................0.40% 0.15% 0.00% 0.00% 0.15% 0.00% 0.00%
Shareholder Servicing Fees2..........................0.25% 0.25% 0.15% 0.00% 0.25% 0.15% 0.00%
Other Expenses3 .....................................0.17% 0.17% 0.17% 0.17% 0.21% 0.21% 0.21%
Total Fund Operating Expenses After Waivers4........ 1.17% 0.92% 0.67% 0.52% 0.96% 0.71% 0.56%
</TABLE>
The table reflects the current fees and an estimate of other expenses.
From time to time, the Advisor and/or Distributor may voluntarily waive the
Management Fees, the 12b-1 Distribution Fees and/or Shareholder Servicing Fees
and/or absorb certain expenses for a Fund or class of Shares of a Fund.
Long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers. Wire transfers may be used to transfer federal funds directly to/from
the Funds' custodian bank.
- --------
1Pursuant to the Funds' Rule12b-1 Plans, the maximum 12b-1 Distribution
Fees for S Shares of IMGL are 0.50% and for S-2 Shares 0.25%. Maximum 12b-1
Distribution Fees for S Shares of IMGM are 0.25%.
2Pursuant to the Funds' Shareholder Servicing Plans, the maximum
Shareholder ServicingFees for S Shares, S-2 Shares and T Shares is 0.25%.
3IMG Mutual Funds, Inc. has entered into a Management and
Administration Agreement pursuant to which IMGL and IMGM are authorized to pay a
periodic amount calculated at an annual rate of 0.21% of the average daily net
assets of such Funds. Currently, however, it is intended that no more than 0.06%
will be paid under the Agreement by IMGL and IMGM.
4Absent the waiver of these fees, "Total Operating Expenses" as a
percentage of average daily net assets would have been 1.42% for IMGL S Shares,
1.17% for IMGL S-2 Shares, 0.92% for IMGL T Shares, 0.67% for IMGL I Shares; and
1.21% for IMGM S Shares, 0.96% for IMGM T Shares, 0.71% for IMGM I Shares.
- --------
EXAMPLE
You would pay the following expenses on a $1,000 investment in each Fund
assuming, (1) a (hypothetical) five percent annual return and (2) redemption at
the end of each time period.
1 Year 3 Years 5 Years 10 Years
IMGL
S Shares $12 $37 $64 $142
S2 Shares $ 9 $29 $51 $113
T Shares $ 7 $21 $37 $ 83
I Shares $ 5 $17 $29 $ 65
IMGM
S Shares $10 $31 $53 $118
T Shares $ 7 $23 $40 $ 88
I Shares $ 6 $18 $31 $ 70
THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN. The above Example is based on the expense information
included in the previous Expense Summary. The Expense Summary and Examples do
not reflect any charges that may be imposed by financial institutions or their
customers.
LIQUID ASSETS FUND AND MUNICIPAL ASSETS FUND
There are no transaction fees imposed upon the purchase, redemption or
exchange of shares.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
Liquid Municipal
Assets Assets
Fund Fund
Sweep S-2 Trust Instl. Sweep Trust Instl.
Shares Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees.................................. 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
12b-1 Distribution Fees.......................... 0.75% 0.50% 0.25% 0.00% 0.50% 0.25% 0.00%
Other Expenses................................... 0.20% 0.20% 0.20% 0.20% 0.40% 0.40% 0.40%
Total Fund Operating Expenses.................... 1.20% 0.95% 0.70% 0.45% 1.15% 0.90% 0.65%
</TABLE>
EXAMPLE
You would pay the following expenses on a $1,000 investment in each Fund
assuming, (1) a (hypothetical) five percent annual return and (2) redemption at
the end of each time period.
1 Year 3 Years 5 Years 10 Years
Liquid Assets Fund
Sweep Shares $ 12 $ 38 $ 66 $145
Trust Shares $ 7 $ 22 $ 39 $ 87
Institutional Shares $ 5 $ 14 $ 25 $ 57
S2 Shares $ 10 $ 30 $ 53 $117
Municipal Assets Fund
Sweep Shares $ 12 $ 37 $ 63 $140
Trust Shares $ 9 $ 29 $ 50 $111
Institutional Shares $ 7 $ 21 $ 36 $ 81
THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN. The Expenses Summary and Examples do not reflect any
charges that may be imposed by financial institutions on their customers.
The purpose of the foregoing tables is to assist in understanding the various
costs and expenses that may be directly or indirectly borne by investors.
Certain figures contained in the above tables are based on amounts incurred
during each Fund's most recent fiscal year and have been adjusted as necessary
to reflect current services provider fees and/or reimbursements. Long-term
shareholders may eventually pay more than the economic equivalent of the maximum
front-end sales charge otherwise permitted by the National Association of
Securities Dealers, Inc. Wire transfers may be used to transfer federal funds
directly to/from the Funds' custodian bank. A $15.00 fee may be charged to an
individual shareholder account for redemption by wire.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that IMG
Mutual Funds, Inc., Liquid Assets Fund and Municipal Assets Fund receive an
opinion from Cline, Williams, Wright, Johnson & Oldfather (which opinion has now
been received) to the effect that for federal income tax purposes: (i) the
transfer of all of the assets and liabilities of Liquid Assets Fund and
Municipal Assets Fund (the "Acquired Funds") to IMG Mutual Funds, Inc. in
exchange for shares of IMGL and IMGM and the distribution to shareholders of the
Acquired Funds of the shares of IMGL and IMGM so received, as described in the
Plan, will constitute a reorganization within the meaning of Section
368(a)(1)(C) or Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"); (ii) in accordance with Sections 361(a), 361(c)(1) and
357(a) of the Code, no gain or loss will be recognized by the Acquired Funds as
a result of such transactions; (iii) in accordance with Section 354(a)(1) of the
Code, no gain or loss will be recognized by the shareholders of the Acquired
Funds or IMG Mutual Funds, Inc. on the distribution of shares of IMGL and IMGM
to shareholders of the Acquired Funds in exchange for shares of the Acquired
Funds; (iv) in accordance with Section 358(a)(1) of the Code, the basis of IMGL
or IMGM shares received by a shareholder of an Acquired Fund will be the same as
the basis of the shareholder's shares immediately before the Effective Time of
the Reorganization; (v) in accordance with Section 362(b) of the Code, the basis
to IMG Mutual Funds, Inc. of the assets of the Acquired Funds received pursuant
to such transactions will be the same as the basis of the assets in the hands of
the Acquired Funds immediately before such transactions; (vi) in accordance with
Section 1223(1) of the Code, a shareholder's holding period for shares of IMGL
or IMGM will be determined by including the period for which the shareholder
held the shares of the Acquired Fund exchanged therefor, provided such shares of
the Acquired Fund were held as a capital asset; and (vii) in accordance with
Section 1223(2) of the Code, the holding period for IMG Mutual Funds, Inc. with
respect to the assets received in the Reorganization will include the period for
which such assets were held by the Acquired Funds.
No party to the Reorganization has sought a tax ruling from the
Internal Revenue Service ("IRS"). The opinion of counsel is not binding on the
IRS and does not preclude the IRS from adopting a contrary position.
Shareholders should consult their own advisers concerning the potential tax
consequences to them, including state and local income tax consequences.
Both IMG Mutual Funds, Inc. and the Acquired Funds have conformed their
operations to the requirements of Subchapter M of the Code and, as a result, do
not bear any corporate level federal or state income tax.
SHARES AND SHAREHOLDER RIGHTS
IMG Mutual Funds, Inc. is a Maryland corporation organized on November
16, 1994. IMGL and IMGM were created on October 30, 1997, to acquire the assets
and continue the business of the corresponding substantially identical
investment portfolios of the Liquid Assets Fund and the Municipal Assets Fund.
Each share of IMGL and IMGM reprsents an equal proportionate interest in it and
is entitled to such dividends and distributions out of the income earned on the
assets belonging to it as are declared at the discretion of the Directors.
The Charter of IMG Mutual Funds, Inc. permits it, by resolution of its
Board of Directors, to create new series of common stock relating to new
investment portfolios or to subdivide existing series of Shares into subseries
or classes. Classes could be utilized to create differing expense and fee
structures for investors in the same Fund. Differences could exist, for example,
in the sales load, Rule 12b-1 fees or service plan fees applicable to different
classes of Shares offered by a particular Fund. Such an arrangement could enable
IMG Mutual Funds, Inc. to tailor its marketing efforts to a broader segment of
the investing public with a goal of attracting additional investments. Reference
is made to the IMGL and IMGM Prospectus for a detailed description of the
classes of shares now offered under the heading "Organization and Shares of the
Funds."
Shareholders are entitled to one vote for each full share held and
proportionate fractional votes for fractional shares held. Shares of each Fund
will vote together and not by class unless otherwise required by law or
permitted by the Board of Directors. All shareholders of each Fund will vote
together as a single class on matters relating to the Fund's investment advisory
agreement, investment objective and fundamental policies.
Shares of the Funds have non-cumulative voting rights and, accordingly,
the holders of more than 50 percent of IMG Mutual Funds, Inc's outstanding
shares (irrespective of class) may elect all of the Directors. Shares have no
preemptive rights and only such conversion and exchange rights as the Board may
grant in its discretion. When issued for payments as described in the
Prospectus, shares will be fully paid and nonassessable. All shares are held in
uncertificated form and will be evidenced by the appropriate notation on the
books of the transfer agent.
IMG Mutual Funds, Inc. may operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not required
by the 1940 Act. IMG Mutual Funds, Inc. has adopted the appropriate provisions
in its Bylaws and may, in its discretion, not hold annual meetings of
shareholders for the election of Directors unless otherwise required by the 1940
Act. IMG Mutual Funds, Inc. has also adopted provisions in its Bylaws for the
removal of Directors by the shareholders. Shareholders may receive assistance in
communicating with other shareholders as provided in Section 16(c) of the 1940
Act.
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 has been elected by shareholders, at which time the
Directors then in office will call a shareholders' meeting for the election of
Directors. Shareholders may remove a Director by the affirmative vote of a
majority of the outstanding voting shares. In addition, the Directors are
required to call a meeting of shareholders for the purpose of voting upon the
question of removal of any such Director or for any other purpose when requested
in writing to do so by the shareholders of record of not less than 10 percent of
the outstanding voting securities.
Liquid Assets Fund and Municipal Assets Fund are Iowa corporations. For
a detailed description of the characteristics of the shares of Liquid Assets
Fund and Municipal Assets Fund and the rights of their shareholders, see
"Organization and Shares of the Funds" in the September 30, 1997 Prospectus.
The principal difference in the rights of shareholders of Liquid Assets
Fund and Municipal Assets Fund, as compared to IMGL and IMGM, is that Iowa law
and the Articles of Incorporation require Liquid Assets Fund and Municipal
Assets Fund to have annual meetings of shareholders for the election of
Directors.
CAPITALIZATION
The capitalization of IMGL immediately after the Reorganization will be
identical to the capitalization of Liquid Assets Fund immediately before the
Reorganization, and the capitalization of IMGM immediately after the
Reorganization will be identical to the capitalization of Municipal Assets Fund
immediately before the Reorganization.
IMG MUTUAL FUNDS, INC.
GENERAL. IMG Mutual Funds, Inc. ("IMG Funds") is a Maryland corporation
organized in November 1994, and operates as an open-end diversified management
investment company. For a general discussion of IMGL and IMGM, see the
accompanying IMG Funds Prospectus dated __________, 1998. For the convenience of
Liquid Assets Fund and Municipal Assets Fund shareholders, cross-references to
such Prospectus are set forth below.
CERTAIN EXPENSES AND FINANCIAL INFORMATION. No information on per-share income
and capital changes is included in the IMG Funds Prospectus because IMGL and
IMGM have not yet commenced substantive operations. For a discussion of IMGL's
and IMGM's expenses, see "Proposal 1: Agreement and Plan of
Reorganization--Expense Summary" above and "Expense Summary" in the IMG Funds
Prospectus.
INVESTMENT OBJECTIVES AND POLICIES. For a discussion of IMGL's and IMGM's
investment objectives and policies, see "Investment Objectives, Policies and
Restrictions" in the IMG Funds Prospectus.
DIRECTORS AND OFFICERS. Overall responsibility for management of IMG Funds rests
with the Board of Directors who are elected by the shareholders of IMG Funds.
There are currently six Directors, two of whom are "interested persons" of IMG
Funds within the meaning of that term under the 1940 Act. The Directors, in
turn, elect the officers of IMG Funds to supervise actively its day-to-day
operations.
The names of the Directors and officers of IMG Funds, their addresses,
ands principal occupations during the past five years are as follows:
*David W. Miles President, Treasurer and Senior Managing Director,
Director Investors Management Group, and IMG Financial
Services, Inc.
*Mark A. McClurg Vice President, Secretary and Senior Managing
President and Director Director, Investors Management Group, and
IMG Financial Services, Inc.
David Ludquist Managing Director, Ludquist, Schlitz & Associates, a
Chairman of the Board consulting company, 1996 to present
and Director
Johnny Danos President, Danos, Inc., a personal investment company,
Director 1994-present; Audit Partner, KPMG Peat Marwick,
1963-1994
Debra Johnson Vice President and CFO, Business Publications
Director Corporation/Iowa Title Company, a publishing and
abstracting service company
Edward J. Stanek CEO, Iowa Lottery, a government-operated lottery
Director
*Ruth L. Prochaska Controller/Compliance Officer, Investors Management
Secretary Group, and IMG Financial Services, Inc.
*Denotes "interested persons," as defined in the 1940 Act, of IMG Funds and the
Advisor.
INVESTMENT ADVISER AND ADMINISTRATOR. For a discussion of IMG and the services
performed by it and its fees, see "Management and Fees" in the IMG Funds
Prospectus.
DISTRIBUTOR. For a discussion of BISYS Fund Services, Inc.'s activities as the
IMG Funds distributor, the services performed by it and its fees, see
"Management and Fees" in the IMG Funds Prospectus.
SHARES. For a discussion of voting rights of shares of IMG Funds, see
"Organization and Shares of the Funds" in the IMG Funds Prospectus.
REDEMPTION OF SHARES. For a discussion concerning redemption of shares of IMGL
and IMGM, see "Purchasing Shares" and "Redeeming Shares" in the IMG Funds
Prospectus.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS. For a discussion of the IMG Funds'
policies with respect to dividends and distributions, see "Distributions and
Taxes" in the IMG Funds Prospectus.
EXCHANGE PRIVILEGES. For a discussion of an IMGL or IMGM shareholder's right to
exchange shares for shares of another IMG Fund, see "Purchasing Shares -
Exchange Privilege" in the IMG Funds Prospectus.
LEGAL PROCEEDINGS. There are no pending material legal proceedings to which IMG
Funds is a party.
SHAREHOLDER INQUIRIES. Shareholder inquiries relating to IMGL, IMGM or other IMG
Funds may be addressed by writing to IMG, 2203 Grand Avenue, Des Moines, Iowa
50312-5338, or by calling toll free 800-798-1819.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE. Management discussion of fund
performance is not included for IMGL and IMGM, which have not yet commenced
operations.
LIQUID ASSETS FUND AND MUNICIPAL ASSETS FUND
GENERAL. Liquid Assets Fund, Inc. and Municipal Assets Fund, Inc. (the "Acquired
Funds") are Iowa corporations which operate as open-end diversified management
investment companies. For a general discussion of the Acquired Funds, see the
accompanying Acquired Funds Prospectus dated September 30, 1997. For the
convenience of shareholders, certain cross-references to such Prospectus are set
forth below.
CERTAIN EXPENSES AND FINANCIAL INFORMATION. The Acquired Fund Prospectus
contains information on per share income and capital changes, under the heading
"Financial Highlights." For a discussion of the Acquired Funds' expenses, see
"Proposal 1: Agreement and Plan of Reorganization--Expense Summary" above and
"Expense Summary" in the Acquired Funds Prospectus.
INVESTMENT OBJECTIVES AND POLICIES. For a discussion of the Acquired Funds'
investment objectives and policies, see "Investment Objective, Policies and
Restrictions" in the Acquired Funds Prospectus.
DIRECTORS AND OFFICERS. Overall responsibility for management of the Acquired
Funds rests with their Boards of Directors, which are elected by their
shareholders. The Directors elect the officers to supervise actively the
day-to-day operations.
The names of the Directors and officers, their addresses, and principal
occupations during the past five years are as follows:
Robert F. Galligan Business Administration Department Chairman,
Director Associate Professor, Grand View College
Chad L. Hensley Retired President and CEO, Preferred Risk Mutual
Director Insurance Company
Fred Lorber Chairman of Board, Lortex Inc., a manufacturer of
Chairman and Director textiles
Darwin T. Lynner, Jr. President, Darwin T. Lynner Co., Inc., a property
Director management company
Mark A. McClurg* Vice President, Secretary and Senior Managing
Treasurer & Director Director of Investors Management Group and IMG
Financial Services, Inc.
David W. Miles* President, Treasurer and Senior Managing
President & Director Director of Investors Management Group, and IMG
Financial Services, Inc.
Richard A. Miller Vice President & General Counsel, Farmers
Director Casualty Company Mutual
Ruth L. Prochaska* Controller/Compliance Officer of Investors
Secretary Management Group, and IMG Financial Services, Inc.
William E. Timmons Partner in Patterson, Lorentzen, Duffield, Timmons,
Director Irish & Becker
Steven E. Zumbach Attorney at Belin, Harris, Lamson, McCormick
Director
*Messrs. McClurg and Miles, and Ms. Prochaska are deemed to be
"interested persons" (as that term is defined in the Investment Company Act of
1940) of the Fund and the Advisor.
The mailing address for all officers and Directors is 2203 Grand
Avenue, Des Moines, Iowa 50312-5338.
INVESTMENT ADVISOR AND ADMINISTRATOR. For a discussion of IMG, the services
performed by it and its fees, see "Management Fees" in the Acquired Funds
Prospectus.
DISTRIBUTOR. For a discussion of IMG Financial Services, Inc.'s activities as
distributor, see "Management and Fees" in the Acquired Funds Prospectus.
SHARES. For a discussion of the significant attributes of the Acquired Funds
shares, see "Organization and Shares of the Funds" in the Acquired Funds
Prospectus.
REDEMPTION OR REPURCHASE OF SHARES. For a discussion concerning redemption or
repurchase of shares of the Acquired Funds, see "Redeeming Shares" in the
Acquired Funds Prospectus.
DIVIDENDS AND DISTRIBUTIONS. For a discussion of the Acquired Funds policies
with respect to dividends and distributions, see "Distributions and Taxes" in
the Acquired Funds Prospectus.
EXCHANGE PRIVILEGES. For a discussion of an Acquired Fund shareholder's right to
exchange shares of an Acquired Fund, see "Shareholder Services" in the Acquired
Funds Prospectus.
LEGAL PROCEEDINGS. There are no pending material legal proceedings to which
either Acquired Fund is a party.
SHAREHOLDER INQUIRIES. Shareholder inquiries relating to the Acquired Funds may
be addressed by writing to IMG Financial Services, Inc., 2203 Grand Avenue, Des
Moines, Iowa 50312-5338, or calling toll-free 800-798-1819.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE. Management's discussion of the
performance of the Acquired Funds is found in the annual report of the Acquired
Funds, which is incorporated by reference into the Statement of Additional
Information relating to the September 30, 1997 Prospectus of the Acquired Funds.
PROPOSAL 2: APPROVAL OF INVESTMENT ADVISORY AGREEMENT
The sole purpose of this Proposal is to permit shareholders of the
Funds to consider the New Advisory Agreement (herein described) to take effect
following the consummation of the transactions contemplated by an Agreement and
Plan of Reorganization by and among AMCORE Financial, Inc., IMG Acquisition,
Inc., Investors Management Group, David W. Miles and Mark A. McClurg, dated
September 30, 1997 (the "Acquisition Agreement"). Pursuant to the Acquisition
Agreement, Investors Management Group will become a wholly owned subsidiary of
AMCORE Financial Inc. This Proposal will be adopted if approved by the lesser of
(a) more than 50% of the outstanding shares of each Fund or (b) 66 2/3% of the
shares of each Fund voting at a meeting at which a majority of such shares are
represented in person or by proxy.
THE INVESTMENT ADVISOR
Investors Management Group has served as the investment advisor to the
Funds since they commenced operations. Investors Management Group is a federally
registered investment advisor organized in 1982. Since then, its principal
business has been providing continuous investment management to pension and
profit sharing plans, insurance companies, public agencies, banks, endowments
and charitable institutions, mutual funds, individuals and others. As of August
31, 1997, Investors Management Group had approximately $1.6 billion in equity,
fixed income and money market assets under management.
Investors Management Group is also the investment advisor of IMG Mutual
Funds, Inc., Iowa Schools Joint Investment Trust, Iowa Public Agency Investment
Trust and sub-advisor of Capital Value Fund, Inc., and engages in certain other
activities unrelated to investment companies. David W. Miles is President,
Treasurer and Director and Mark A. McClurg is Vice President, Secretary and
Director of Investors Management Group. Each directly owns 50% of the
outstanding Class A voting securities of Investors Management Group and the IMG
ESOP owns 100% of the outstanding ESOP voting securities. David W. Miles owns an
additional 13% of the total outstanding voting securities beneficially through
the ESOP, and Mark A. McClurg beneficially owns an additional 5% of the total
outstanding voting securities. Mr. Miles and Mr. McClurg intend to devote
substantially all their time to the operation of Investors Management Group.
Their address is 2203 Grand Avenue, Des Moines, Iowa 50312-5338.
THE ACQUISITION
Pursuant to the Acquisition Agreement, Investors Management Group will
become a wholly owned subsidiary of AMCORE Financial, Inc. (the "Acquisition").
Investors Management Group will continue to be headquartered in the historic
Crawford Mansion located in Des Moines, Iowa. AMCORE Financial, Inc. is a
publicly traded northern Illinois financial services holding company with assets
exceeding $3.5 billion. AMCORE Financial, Inc. presently owns an investment
advisory firm called AMCORE Capital Management, which is primarily known for its
equity management. AMCORE Capital Management is the advisor to the nationally
recognized AMCORE Vintage Mutual Funds, a family of seven funds investing in
stocks and bonds to meet various investor objectives. Investors Management Group
and AMCORE Capital Management intend to merge operations and to operate as
Investors Management Group after the Acquisition.
Under the terms of the Acquisition Agreement, each of Investors
Management Group's ESOP shares will be converted into the right to receive
2.0038 shares of AMCORE Financial, Inc. common stock and each of Investors
Management Group's Class A common shares will be converted into (i) the right to
receive 0.9808 shares of AMCORE Financial, Inc. common stock and (ii) the
contingent right to receive additional AMCORE shares based on certain
performance benchmarks in 1998, 1999 and 2000, with the shares issued in 1999,
2000 and 2001. The Acquisition is expected to be consummated on or about
_________________, 199_ , and is subject to certain closing conditions,
including certain regulatory approvals and the approval of shareholders of
Investors Management Group.
Investors Management Group does not anticipate any reduction in the
quality of services now provided to the Funds. As a condition of the
Acquisition, certain officers of Investors Management Group have agreed to enter
into employment agreements with AMCORE Financial, Inc., which are intended to
assure that the services of such officers are available to Investors Management
Group (and thus to the Funds) after the Acquisition.
As a result of the Acquisition, Mr. Miles will become Chief Operating
Officer and Mr. McClurg will become Managing Director for Client Development for
AMCORE Investment Group, N.A., a trust subsidiary owned by AMCORE Financial,
Inc., in addition to retaining their responsibilities with Investors Management
Group. Jay Evans, presently Chief Investment Officer of AMCORE Capital
Management, Inc., will assume that role at Investors Management Group.
THE ADVISORY AGREEMENT
The Directors of the Funds are proposing that shareholders approve a
new investment advisory agreement (the "New Advisory Agreement") between the
Funds and Investors Management Group to be effective upon consummation of the
Acquisition. In anticipation of the Acquisition, a majority of the Directors
(including a majority of the "Disinterested Directors") approved the New
Advisory Agreement on October 21, 1997. The shareholders of the Funds are being
asked to approve the New Advisory Agreement.
THE CURRENT ADVISORY AGREEMENT. The existing Investment Advisory
Agreement (the "Current Advisory Agreement") was last approved by a majority of
the Disinterested Directors, voting in person at a meeting called for that
purpose on July 15, 1997. The Current Advisory Agreement provides that the
Advisor will supply investment research and portfolio management, including
adequate personnel to market and supervise continuously the investment programs
of the Funds, the administration of the investment programs and the composition
of the portfolios.
The Current Advisory Agreement provides that the Advisor shall not be
liable for any error of judgment or of law, or for any loss suffered by the
Funds in connection with any matters to which the Current Advisory Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its obligations and
duties, or by reason of its reckless disregard of obligations or duties under
the Current Advisory Agreement. The Current Advisory Agreement may be terminated
at any time by either party without the payment of any penalty upon ninety (90)
days written notice, and automatically terminates in the event of its
assignment.
For the fiscal year ended June 30, 1997, Liquid Assets Fund and
Municipal Assets Fund paid $428,125, and $51,871, respectively, for services
provided, under the current Advisory Agreement.
The Fund pays all other expenses incurred in its operation including,
but not limited to, direct charges relating to the purchase and sale of its
portfolio securities, interest charges, fees and expenses of legal counsel and
independent auditors, taxes and governmental fees, expenses of regular and
special meetings of the Directors, fees and disbursements of custodians,
insurance premiums, indemnification and other expenses not expressly provided
for in the Current Advisory Agreement and any extraordinary expenses of a
nonrecurring nature.
THE NEW ADVISORY AGREEMENT. The Board of Directors approved the
proposed New Advisory Agreement between the Funds and Investors Management Group
on October 21, 1997. The form of the proposed New Advisory Agreement is
substantially similar to the Current Advisory Agreement. There are no material
differences between the Current Advisory Agreement and the New Advisory
Agreement.
The investment advisory fee as a percent of net assets payable by the
Funds will be the same under the New Advisory Agreement as under the Current
Advisory Agreement, that is 0.25 percent of the average daily net assets. If the
investment advisory fee under the New Advisory Agreement had been in effect for
the Fund's most recently completed fiscal year, contractual advisory fees
payable to the Advisor by the Funds would have been identical to those payable
under the Current Advisory Agreement.
In connection with approving the New Advisory Agreement, the Directors
held a meeting on October 21, 1997. At this meeting, the Directors considered
the possible effects of the Acquisition on the Funds and Investors Management
Group and its ability to provide investment advisory services with respect to
the Funds. In evaluating the New Advisory Agreement, the Trustees took into
account that the Funds' Current Advisory Agreement and the New Advisory
Agreement, including the terms relating to the services to be provided
thereunder by the Advisor and the fees and expenses payable by the Funds are
identical. The Directors considered the skills and capabilities of the Advisor
and the representation that no material change was planned in the current
management or facilities of the Advisor as a result of the Acquisition. The
Directors considered the continued employment of members of senior management of
the Advisor pursuant to future employment contracts to be important to help
assure the continuity of the personnel primarily responsible for maintaining the
quality of investment advisory and other services for the Funds. The Funds
considered the possible benefits the Advisor may receive as a result of the
Acquisition.
The Directors, including a majority of the Disinterested Directors,
concluded that if the Acquisition occurs, entry by the Funds into a New Advisory
Agreement would be in the best interest of the Funds and the shareholders of the
Funds. The Board of Directors unanimously approved the New Advisory Agreement
and recommended such agreement for approval by the shareholders. The New
Advisory Agreement will take effect upon the later to occur of (i) obtaining of
shareholder approval or (ii) closing of the Acquisition. The New Advisory
Agreement will continue in effect until December 31, 1997, and thereafter for
successive annual periods as long as such continuance is approved in accordance
with the 1940 Act. In the event that shareholders of the Funds do not approve
the New Advisory Agreement and the Acquisition is consummated, the Board of
Directors would be forced to seek investment advisory services from another
advisory organization. In the event the Acquisition is not consummated, the
Advisor would continue to serve as investment advisor of the Funds pursuant to
the terms of the Current Advisory Agreement.
In the event that the Reorganization described in Proposal 1 above is
consummated, the New Advisory Agreement would be superceded by a similar
agreement between Investors Management Group and IMG Mutual Funds, Inc.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This combined Proxy Statement/Prospectus is being furnished in
connection with the solicitation of proxies by the Board of Directors of Liquid
Assets Fund and Municipal Assets Fund (the "Funds") for use at the Special
Meetings of Shareholders to be held on January 26, 1998 (the "Meeting"). It is
expected that the solicitation of proxies by the Board of Directors will be
primarily by mail. The Funds' officers may also solicit proxies by telephone
facsimile transmission or personal interview.
The following table gives the total number of shares of the Funds
outstanding at the close of business __________, 1998, the record date for the
meeting.
Liquid Assets Fund.................... _______________
Municipal Assets Fund................. _______________
Each shareholder of record on the record date is entitled to one vote
for each share owned and a fractional vote for each fractional share owned on
each matter presented for shareholder vote.
If the accompanying proxy is executed and returned in time for the
Meeting, the shares presented thereby will be voted in accordance with the proxy
on all matters that may properly come before the Meeting. If no specification is
made, the proxy will be voted FOR all enumerated proposals. Any shareholder
submitting a proxy may revoke it at any time before it is exercised by
submitting to the Funds, c/o Secretary, 2203 Grand Avenue, Des Moines, Iowa
50312-5338, a written notice of revocation or a subsequently executed proxy or
by attending the meeting and electing to vote in person.
SHAREHOLDER AND BOARD APPROVAL
The Agreement and Plan of Reorganization will not become effective
unless approved by a majority of shares of each Fund. The New Advisory Agreement
must be approved by each Fund by a "majority" vote, as defined in the 1940 Act
and described in Proposal 2 above. Under Iowa law, abstentions do not constitute
a vote "for" or "against" a matter and will be disregarded in determining the
"votes cast" on an issue. Broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular mater
with respect to which the brokers or nominees do not have discretionary power)
will be deemed to be abstentions. An abstention will have the same effect as
casting a vote against the Reorganization.
The vote of the shareholders of IMG Mutual Funds, Inc. is not being
solicited in connection with the approval of the Plan since their approval or
consent is not necessary for the completion of the Reorganization.
As of the Record Date, all of the officers and Directors of the Funds
beneficially owned, individually and as a group, less than 1% of the shares of
the Funds. No person owned of record or beneficially 5% or more of the
outstanding shares of either Fund as of November 30, 1997.
QUORUM
In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present at the Meeting but sufficient votes to approve a
particular proposal are not received, the persons named as proxies, or their
substitutes, may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the meeting in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR the particular proposal
in favor of such adjournments, and will vote those proxies required to be voted
AGAINST such proposal against any adjournment. Under the Bylaws of the Funds, a
quorum is constituted by the presence in person or by proxy of the holders of
more than 50% of the aggregate outstanding shares of the Portfolios entitled to
vote at the Meeting. If a proxy is properly executed and returned and is marked
with an abstention, the shares represented thereby will be considered to be
present at the Meeting for the purpose of determining the existence of a quorum
for the transaction of business.
INFORMATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
This combined Proxy Statement/Prospectus and the related Statement of
Additional information do not contain all of the information set forth in the
registration statements and the exhibits relating thereto which IMG Mutual
Funds, Inc., Liquid Assets Fund and Municipal Assets Fund, respectively, have
filed with the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933 and the 1940 Act to which reference is hereby made. The SEC file
number for the Acquired Funds Prospectus and the related Statement of Additional
Information which are incorporated by reference herein is Registration No.
33-78054. The SEC file number for the IMGL and IMGM Prospectus and related
Statement of Additional Information which are incorporated by reference herein
is Registration No. 33-81998.
IMG Mutual Funds, Inc., Liquid Assets Fund and Municipal Assets Fund
are subject to the informational requirements of the Securities Exchange Act of
1934 and the 1940 Act, and in accordance therewith, file reports and other
information with the SEC. Proxy material, reports, proxy and information
statements, registration statements and other information can be inspected and
copied at the public reference facilities of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filings may also be available at the
following SEC regional offices: Northwestern Atrium, 500 West Madison Street,
Suite 1400, Chicago, IL 60661-2511; 7 World Trade Center, Suite 1300, New York,
NY 10048 and 73 Tremont Street, Suite 600, Boston, MA 02108-3912. Copies of such
materials can also be obtained by mail from the Public Reference Branch, Office
of Consumer Affairs and Information Services, SEC, Washington, D.C. 20549, at
prescribed rates.
OTHER BUSINESS
The Funds' Board of Directors knows of no other business to be brought
before the Meeting. However, if any other matters come before the Meeting, it is
the intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares in the
Reorganization will be passed upon for IMG Mutual Funds, Inc. by Ober, Kaler,
Grimes & Shriver, 120 E. Baltimore Street, Baltimore, Maryland 21202. Certain
tax matters will be passed upon for Liquid Assets Fund and Municipal Assets Fund
by Cline, Williams, Wright, Johnson & Oldfather, 1900 First Bank Building, 233
South 13th Street, Lincoln, Nebraska 68508. Cline, Williams, Wright, Johnson &
Oldfather acts as legal counsel to IMG Mutual Funds, Inc., Investors Management
Group, and other funds and entities managed by Investors Management Group.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Funds in writing at the
address on the cover page of this combined Proxy Statement/Prospectus or by
telephoning 800-795-1819.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
EXHIBIT A
[FORM OF]
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT made as of the 30th day of October 1997, is made by and
among the IMG Mutual Funds, Inc., a Maryland corporation (the "IMG Funds"),
Liquid Assets Fund, Inc., an Iowa corporation ("LAF"), and Investors Management
Group, an Iowa corporation ("IMG").
WITNESSETH:
WHEREAS the Board of Directors of the IMG Funds, and the Board of
Directors of LAF, each an open-end management investment company, deem it
advisable that the IMG Funds acquire all of the assets of LAF in exchange for
the assumption by the IMG Funds of all of the liabilities of LAF and shares
issued by the IMG Funds which are thereafter to be distributed by LAF pro rata
to its shareholders in complete liquidation and termination of LAF and in
exchange for all of LAF's outstanding shares with the intent that the
transactions described herein shall qualify as a tax-free reorganization under
Section 368(a)(1)(C) of the Internal Revenue Code of 1986;
NOW THEREFORE, in consideration of the mutual promises herein
contained, each of the parties hereto represents and warrants to, and agrees
with each of the other parties as follows:
1. The IMG Funds hereby represents and warrants to LAF that:
(a) The IMG Funds is a corporation with transferable shares duly
organized and validly existing under the laws of Maryland and has full power to
own its properties and assets and to carry on its business as such business is
now being conducted.
(b) The IMG Funds' statement of assets and liabilities as of April
30, 1997, and the related statements of operations and changes in net assets for
the fiscal year ended April 30, 1997, all as audited by KPMG Peat Marwick LLP,
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis. Such statement of assets and liabilities fairly
presents the financial position and net assets of the IMG Funds as of such date
and such statements of operations and changes in net assets fairly present the
results of it operations for the period covered thereby;
(c) There are no claims, actions, suits or proceedings pending or,
to its knowledge, threatened against or affecting the IMG Funds or its
properties or business or its right to issue and sell shares, or which would
prevent or hinder consummation of the transactions contemplated hereby, and it
is not charged with or, to the IMG Funds' knowledge, threatened with any charge
or investigation of, any violation of any provision of any federal, state or
local law or any administrative ruling or regulation relating to any aspect of
its business or the issuance or sale of its shares;
(d) The IMG Funds is not a party to or subject to any judgment or
decree or order entered in any suit or proceeding brought by any governmental
agency or by any other person enjoining it in respect of, or the effect of which
is to prohibit, any business practice or the acquisition of any property or the
conduct of business by it or the issuance or sale of its shares in any area;
(e) The IMG Funds has filed all tax returns required to be filed,
has no liability for any unpaid taxes and has made a proper election to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986 (the "Code") for each of its taxable years. The IMG Funds
has not committed any action or failed to perform any necessary action that
would render invalid its election to be treated as a regulated investment
company for any of its taxable years;
(f) The authorization, execution and delivery of this Agreement on
behalf of the IMG Funds does not, and the consummation of the transactions
contemplated hereby will not violate, or conflict with any provision of the IMG
Funds' Charter or By-Laws, or any provision of, or result in the acceleration of
any obligation under, any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which it is party or by which it or any
of its assets is bound, or violate or conflict with any other material
contractual or statutory restriction of any kind or character to which it is
subject;
(g) This Agreement has been duly authorized, executed, and delivered
by the IMG Funds and constitutes a valid and binding agreement of the IMG Funds
and all governmental and other approvals required for the IMG Funds to carry out
the transactions contemplated hereunder have been or on or prior to the Closing
Date (as herein defined) will have been obtained;
(h) The IMG Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company. The IMG Funds is currently in compliance with the 1940 Act
and the rules of the Securities and Exchange Commission (the "Commission")
promulgated thereunder. Neither the IMG Funds nor its affiliates has violated
Section 9 of the 1940 Act, is currently subject to an exemptive order of the
Securities and Exchange Commission pursuant to Section 9(c) of the 1940 Act, or
is currently subject to any current or threatened investigation or enforcement
action by the Securities and Exchange Commission or any other federal or state
authority which could result in a violation of Section 9(a) of the 1940 Act;
(i) On the Closing Date, The IMG Funds will own its assets free and
clear of all liens, claims, charges, options and encumbrances;
(j) On the Closing Date, the IMG Funds will have registered shares
of a new series named the Liquid Assets Fund series of the IMG Funds (or some
other name) (the "Liquid Assets Fund"), and will have registered four classes of
shares of such Liquid Assets Fund, the four classes of shares to be named the
Class A shares, the Class B shares, the Class C shares and the Class D shares
(or, with respect to each class, some other name), and shares of the Class A,
Class B, Class C and Class D shares of the Liquid Assets Fund will represent
interests in a portfolio of securities managed under investment objectives,
policies and restrictions substantially identical to the Class A, Class B, Class
C and Class D shares of LAF;
(k) On the Closing Date, the shares of the Liquid Assets Fund to be
delivered to LAF hereunder shall have been registered under the Securities Act
of 1933, as amended (the "1933 Act") and duly authorized, and, when issued and
delivered pursuant to this Agreement, will be validly issued, fully paid and
nonassessable; and the IMG Funds will comply with all applicable laws in
connection with the issuance of such shares and shall not be subject to a
stop-order of the Commission in connection therewith; and
(l) On the Closing Date, the shares of the Liquid Assets Fund to be
delivered to LAF hereunder shall have been registered with the securities
administrator of each state under whose securities law such registration is
required.
2. LAF hereby represents and warrants to the IMG Funds that:
(a) LAF is a corporation with transferable shares duly organized and
validly existing under the laws of Iowa and has full power to own its properties
and assets and to carry on its business as such business is now being conducted.
(b) LAF's statement of assets and liabilities as of June 30, 1997,
and the related statements of operations and changes in net assets for the
fiscal year ended June 30, 1997, all as audited by KPMG Peat Marwick LLP, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis. Such statement of assets and liabilities fairly
presents the financial position and net assets of LAF as of such date and such
statements of operations and changes in net assets fairly present the results of
it operations for the period covered thereby;
(c) There are no claims, actions, suits or proceedings pending or,
to its knowledge, threatened against or affecting LAF or its properties or
business or its right to issue and sell shares, or which would prevent or hinder
consummation of the transactions contemplated hereby, and it is not charged with
or, to LAF's knowledge, threatened with any charge or investigation of, any
violation of any provision of any federal, state or local law or any
administrative ruling or regulation relating to any aspect of its business or
the issuance or sale of its shares;
(d) LAF is not a party to or subject to any judgment or decree or
order entered in any suit or proceeding brought by any governmental agency or by
any other person enjoining it in respect of, or the effect of which is to
prohibit, any business practice or the acquisition of any property or the
conduct of business by it or the issuance or sale of its shares in any area;
(e) LAF has filed all tax returns required to be filed, has no
liability for any unpaid taxes and has made a proper election to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986 (the "Code") for each of its taxable years. LAF has not committed any
action or failed to perform any necessary action that would render invalid its
election to be treated as a regulated investment company for any of its taxable
years;
(f) The authorization, execution and delivery of this Agreement on
behalf of LAF does not, and the consummation of the transactions contemplated
hereby will not violate, or conflict with any provision of LAF's Articles of
Incorporation or By-Laws, or any provision of, or result in the acceleration of
any obligation under, any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which it is party or by which it or any
of its assets is bound, or violate or conflict with any other material
contractual or statutory restriction of any kind or character to which it is
subject;
(g) This Agreement has been duly authorized, executed, and delivered
by LAF and constitutes a valid and binding agreement of LAF and all governmental
and other approvals required for LAF to carry out the transactions contemplated
hereunder have been or on or prior to the Closing Date (as herein defined) will
have been obtained;
(h) On the Closing Date, LAF will own its assets free and clear of
all liens, claims, charges, options and encumbrances and, except for the
Management and Investment Advisory Agreement, Transfer Agent Agreement and
Administrative Services Agreement with IMG, the Underwriting Agreement with IMG
Financial Services, Inc., and the Custodial Agreement with AMCORE Investment
Group, N.A., there will be no material contracts or agreements, other than this
Agreement, outstanding to which LAF is a party or to which it is subject;
(i) On the Closing Date, LAF will have full right, power and
authority to sell, assign and deliver the assets to be sold, assigned,
transferred and delivered to the IMG Funds hereunder, and upon delivery and
payment for such assets, the IMG Funds will acquire good and marketable title
thereto free and clear of all liens, claims, charges, options and encumbrances;
(j) LAF will declare to shareholders of record on or prior to the
Closing Date a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders all of its
investment company taxable income, computed with regard to any deduction for
dividends paid, and all of its net realized capital gains, if any, as of the
Closing Date; and
(k) LAF will, from time to time, as and when requested by the IMG
Funds, execute and deliver or cause to be executed and delivered, all such
assignments and other instruments, and will take and cause to be taken such
further action, as the IMG Funds may deem necessary or desirable in order to
vest in and confirm to the IMG Funds, title to and possession of all the assets
of LAF to be sold, assigned, transferred and delivered hereunder and otherwise
to carry out the intent and purpose of this Agreement.
3. Based on the respective representations and warranties, subject to
the terms and conditions contained herein, LAF agrees to transfer to the IMG
Funds and the IMG Funds agrees to acquire from LAF, all the assets of LAF on the
Closing Date and to assume from LAF all of the liabilities of LAF in exchange
for the issuance of the number and class of shares of the Liquid Assets Fund
provided in Section 4 which will be subsequently distributed pro rata to the
shareholders of LAF in complete liquidation and termination of LAF and in
exchange for all of LAF's outstanding shares as provided in Section 6. LAF shall
not issue, sell or transfer any of its shares after the Closing Date, and only
redemption requests received by LAF in proper form prior to the Closing Date
shall be fulfilled by LAF. Redemption requests received by LAF thereafter shall
be treated as requests for redemption of those shares of the Liquid Assets Fund
allocable to the shareholder in question as provided in Section 6 of this
Agreement.
4. On the Closing Date, the IMG Funds will issue to LAF that number of
full and fractional shares of the Class A, Class B, Class C and Class D shares
of the Liquid Assets Fund as follows:
(a) the IMG Funds will issue that number of Class A shares of the
Liquid Assets Fund, taken at their net asset value on the Closing Date, having
an aggregate net asset value equal to the aggregate value of the net assets of
LAF that are allocable to the Class A shares of LAF;
(b) the IMG Funds will issue that number of Class B shares of the
Liquid Assets Fund, taken at their net asset value on the Closing Date, having
an aggregate net asset value equal to the aggregate value of the net assets of
LAF that are allocable to the Class B shares of LAF;
(c) the IMG Funds will issue that number of Class C shares of the
Liquid Assets Fund, taken at their net asset value on the Closing Date, having
an aggregate net asset value equal to the aggregate value of the net assets of
LAF that are allocable to the Class C shares of LAF; and
(d) the IMG Funds will issue that number of Class D shares of the
Liquid Assets Fund, taken at their net asset value on the Closing Date, having
an aggregate net asset value equal to the aggregate value of the net assets of
LAF that are allocable to the Class D shares of LAF.
The aggregate value of the net assets of LAF allocable to the Class A,
Class B, Class C and Class D shares of LAF, and the net asset value of the Class
A, Class B, Class C and Class D shares of the Liquid Assets Fund shall be
determined in accordance with the then current prospectuses for Class A, Class
B, Class C and Class D shares of the Liquid Assets Fund as of 3:00 p.m. on the
Closing Date.
5. The closing of the transaction contemplated in this Agreement (the
"Closing") shall be held at the offices of IMG, 2203 Grand Avenue, Des Moines,
Iowa 50312-5338, or at such other place as the parties hereto may agree, at 3:00
p.m. Central Standard Time on December 31, 1997 or on such earlier or later date
as the parties hereto may mutually agree. The date on which the Closing is to be
held as provided in this Agreement shall be known as the "Closing Date".
In the event that on the Closing Date (a) the New York Stock Exchange
is closed for other than customary week-end and holiday closings or (b) trading
on said Exchange is restricted or (c) as emergency exists as a result of which
it is not reasonably practicable for the IMG Funds or LAF to fairly determine
the value of its assets, the Closing Date shall be postponed until the first
business day after the day on which trading shall have been fully resumed.
6. As soon as practicable after the Closing Date, LAF shall distribute
on a pro rata basis to (a) the Class A shareholders of record of LAF at the
close of business on the Closing Date the Class A shares of the Liquid Assets
Fund received by LAF at the Closing in exchange for all of the outstanding Class
A shares of LAF; (b) the Class B shareholders of record of LAF at the close of
business on the Closing Date the Class B shares of the Liquid Assets Fund
received by LAF at the Closing in exchange for all of the outstanding Class B
shares of LAF, (c) the Class C shareholders of record of LAF at the close of
business on the Closing Date the Class C shares of the Liquid Assets Fund
received by LAF at the Closing in exchange for all of the outstanding Class C
shares of LAF; and (d) the Class D shareholders of record of LAF at the close of
business on the Closing Date the Class D shares of the Liquid Assets Fund
received by LAF at the Closing in exchange for all of the outstanding Class D
shares of LAF. As soon as practicable thereafter, LAF shall be liquidated and
dissolved in accordance with applicable law and its Articles of Incorporation.
For purposes of the distribution of shares of the Liquid Assets Fund to
shareholders of LAF, the IMG Funds shall credit on the books of the IMG Funds an
appropriate number of shares of the appropriate class of the Liquid Assets Fund
to the account of each shareholder of LAF whose shares are (a) not represented
by certificates, upon the distribution of such shares by LAF and (b) represented
by certificates, only upon surrender of such certificates. No certificates will
be issued for shares, whether full or fractional, of any class of the Liquid
Assets Fund. After the Closing Date, represented shares of LAF shall be deemed
for all purposes of the IMG Funds' charter and By-Laws to evidence the
appropriate number of shares of the appropriate class of the Liquid Assets Fund
to be credited on the books of the IMG Funds in respect of such shares of LAF as
provided above.
7. Subsequent to the execution of this Agreement and prior to the
Closing Date, LAF shall deliver to the IMG Funds a list setting forth the assets
to be assigned, delivered and transferred to the IMG Funds, including the
securities then owned by LAF and the respective federal income tax basis (on an
identified cost basis) thereof, and the liabilities to be assumed by the IMG
Funds pursuant to this Agreement.
8. All of LAF's portfolio securities shall be delivered by LAF's
custodian on the Closing Date to the IMG Funds or its custodian, either endorsed
in proper form for transfer in such condition as to constitute good delivery
thereof in accordance with the practice of brokers or, if such securities are
held in a securities depository within the meaning of Rule 17f-4 under the 1940
Act, transferred to an account in the name of the IMG Funds or its custodian
with said depository. All cash to be delivered pursuant to this Agreement shall
be wire transferred from LAF's account at its custodian to the IMG Funds'
account at its custodian. If on the Closing Date LAF is unable to make good
delivery pursuant to this Section 8 to the IMG Funds' custodian of any of LAF's
portfolio securities because such securities have not yet been delivered to
LAF's custodian by its broker or by the transfer agent for such securities, then
the delivery requirement of this Section 8 with respect to such securities shall
be waived, and LAF shall deliver to the IMG Funds' custodian on or by said
Closing Date with respect to said undelivered securities executed copies of an
agreement of assignment in a form satisfactory to the IMG Funds, and a due bill
or due bills in form and substance satisfactory to the custodian, together with
such other documents including brokers' confirmations, as may be reasonably
required by the IMG Funds.
9. The obligations of the IMG Funds under this Agreement shall be
subject to receipt by the IMG Funds on or prior to the Closing Date of:
(a) Copies of the resolutions adopted by the Board of Directors of LAF
and its shareholders authorizing the execution of this Agreement by LAF and the
transactions contemplated hereunder, certified by the Secretary or Assistant
Secretary of LAF;
(b) A certificate of the Secretary or Assistant Secretary of LAF as to
the signatures and incumbency of its officers who executed this Agreement on
behalf of LAF and any other documents delivered in connection with the
transactions contemplated thereby on behalf of LAF;
(c) A certificate of an appropriate officer of LAF as to the
fulfillment of all agreements and conditions on its part to be fulfilled
hereunder at or prior to the Closing Date and to the effect that the
representations and warranties of LAF are true and correct in all material
respects at and as of the Closing Date as if made at and as of such date; and
(d) Such other documents, including an opinion of counsel, as IMG Funds
may reasonably request to show fulfillment of the purposes and conditions of
this Agreement.
10. The obligations of LAF under this Agreement shall be subject to
receipt by LAF on or prior to the Closing Date of:
(a) Copies of the resolutions adopted by the Board of Directors of the
IMG Funds authorizing the execution of this Agreement and the transactions
contemplated hereunder, certified by the Secretary or Assistant Secretary of the
IMG Funds;
(b) A certificate of the Secretary or Assistant Secretary of the IMG
Funds as to the signatures and incumbency of its officers who executed this
Agreement on behalf of the IMG Funds and any other documents delivered in
connection with the transactions contemplated thereby on behalf of the IMG
Funds;
(c) A certificate of an appropriate officer of the IMG Funds as to the
fulfillment of all agreements and conditions on its part to be fulfilled
hereunder at or prior to the Closing Date and to the effect that the
representations and warranties of the IMG Funds are true and correct in all
material respects at and as of the Closing Date as if made at and as of such
date; and
(d) Such other documents, including an opinion of counsel, as LAF may
reasonably request to show fulfillment of the purposes and conditions of this
Agreement.
11. The obligations of the parties under this Agreement shall be
subject to:
(a) Any required approval, at a meeting duly called for the purpose, of
the holders of the outstanding shares of LAF, of this Agreement and the
transactions contemplated hereunder; and
(b) The right to abandon and terminate this Agreement, if either party
to this Agreement believes that the consummation of the transactions
contemplated hereunder would not be in the best interests of its shareholders.
12. Except as expressly provided otherwise in this Agreement, IMG will
pay or cause to be paid all out-of-pocket fees and expenses incurred by LAF or
the IMG Funds in connection with the transactions contemplated under this
Agreement, including, but not limited to, accountants' fees, legal fees,
registration fees, printing expenses, transfer taxes (if any) and the fees of
banks and transfer agents. This obligation shall survive the termination or
expiration of this Agreement regardless of the consummation of the transactions
contemplated hereunder.
13. This Agreement may be amended by an instrument executed by both the
duly authorized officers of LAF and the IMG Funds at anytime, except that after
approval by the shareholders of LAF no amendment may be made with respect to the
Agreement which in the opinion of the Board of Directors of LAF materially
adversely affects the interests of the shareholders of LAF. At any time either
party hereto may by written instrument signed by it (i) waive any inaccuracies
in the representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein.
14. In addition to the right to terminate this Agreement described in
Section 11, this Agreement may be terminated and the plan described in the
Agreement abandoned at any time prior to the Closing Date, whether before or
after action thereon by the shareholders of LAF and notwithstanding favorable
action by such shareholders, by mutual consent of the Board of Directors of the
IMG Funds and the Board of Directors of LAF. This Agreement may also be
terminated by action of the Board of Directors of the IMG Funds or the Board of
Directors of LAF, if:
(a) The plan described in the Agreement shall not have become effective
by April 1, 1998 (hereinafter called the "Final Date") unless such Final Date
shall have been changed by mutual agreement; or
(b) Either LAF or the IMG Funds shall, at the Final Date, have failed
to comply with any of its agreements contained herein; or
(c) Prior to the Final Date any one or more of the conditions to the
obligations of the IMG Funds or LAF contained in this Agreement shall not be
fulfilled to the reasonable satisfaction of the IMG Funds and its counsel or LAF
and its counsel or it shall become evident to the IMG Funds or LAF that any of
such conditions are incapable of being fulfilled.
15. This Agreement shall bind and inure to the benefit of the parties
hereto and is not intended to confer upon any other person any rights or
remedies hereunder.
16. The parties hereto represent and warrant that they have not
employed any broker, finder or intermediary in connection with this transaction
who might be entitled to a finder's fee or other similar fee or commission.
17. All prior or contemporaneous agreements and representations are
hereby merged into this Agreement, which constitutes the entire contract between
the parties hereto.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of Iowa.
19. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more of the counterparts has been signed by all parties hereto.
20. IMG shall indemnify, defend and hold harmless the IMG Funds, its
officers, directors, employees and agents against all losses, claims, demands,
liabilities and expenses, including reasonable legal and other expenses incurred
in defending claims or liabilities, whether or not resulting in any liability to
the IMG Funds, its officers, directors, employees or agents, arising out of (1)
breach by LAF of any warranty made by LAF herein or (2) any untrue statement or
alleged untrue statement of a material fact contained in any prospectus or
registration statement for LAF, as filed with the Securities and Exchange
Commission or any state, or any amendment or supplement thereto, or any
application prepared by or on behalf of LAF and filed with any state regulatory
agency in order to register or qualify shares of LAF under the securities laws
thereof, or in any information provided by LAF included in any registration
statement filed by the IMG Funds with the Securities and Exchange Commission or
any state or any amendment or supplement thereto; or which shall arise out of or
be based upon any omission or alleged omission to state therein a material fact
required to be stated in any such prospectus, registration statement or
application necessary to make the statements therein not misleading. This
indemnity provision shall survive the termination of this Agreement.
21. The IMG Funds shall indemnify, defend and hold harmless LAF, its
officers, trustees, employees and agents against all losses, claims, demands,
liabilities and expenses, including reasonable legal and other expenses incurred
in defending claims or liabilities, whether or not resulting in any liability to
LAF, its officers, trustees, employees or agents, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
prospectus or registration statement for the IMG Funds, as filed with the
Securities and Exchange Commission or any state, or any amendment or supplement
thereto, or any application prepared by or on behalf of the IMG Funds and filed
with any state regulatory agency in order to register or qualify shares of the
IMG Funds under the securities laws thereof; or which shall arise out of or be
based upon any omission or alleged omission to state therein a material fact
required to be stated in any such prospectus, registration statement or
application necessary to make the statements therein not misleading; provided,
however, the IMG Funds shall not be required to indemnify LAF, its officers,
directors, employees and agents against any loss, claim, demand, liability or
expense arising out of any information provided by LAF included in any
registration statement filed by the IMG Funds with the Securities and Exchange
Commission or any state, or any amendment or supplement thereto. This indemnity
provision shall survive the termination of this Agreement.
22. The execution of this Agreement has been authorized by the Board of
Directors of the IMG Funds and by the Board of Directors of LAF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and attested by their officers thereunto duly authorized, as of the
date first written above.
IMG MUTUAL FUNDS, INC.
Attest
By:_____________________ By:________________________
Title:______________________ Title:______________________
LIQUID ASSETS FUND, INC.
Attest
By:________________________ By:________________________
Title:______________________ Title:______________________
INVESTORS MANAGEMENT GROUP
Attest
By:________________________ By:_________________________
Title:______________________ Title:_______________________
<PAGE>
TABLE OF CONTENTS
Page
SYNOPSIS..........................................................
RISK FACTORS......................................................
PROPOSAL 1: AGREEMENT AND PLAN OF
REORGANIZATION....................................................
IMG MUTUAL FUNDS, INC.............................................
LIQUID ASSETS FUND AND
MUNICIPAL ASSETS FUND.............................................
PROPOSAL 2: APPROVAL OF INVESTMENT
ADVISORY AGREEMENT................................................
INFORMATION RELATING TO VOTING MATTERS............................
INFORMATION FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION...............................................
OTHER BUSINESS....................................................
LEGAL MATTERS.....................................................
SHAREHOLDER INQUIRIES.............................................
EXHIBIT A--AGREEMENT AND
PLAN OF REORGANIZATION............................................
<PAGE>
LIQUID ASSETS FUND
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, JANUARY 26, 1998
This Proxy is solicited on behalf of the Directors of the Fund
The undersigned hereby appoints ___________, _________________,, and
__________________, and each of them separately, proxies, with power of
substitution, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of Liquid Assets Fund on January
26, 1998, at 10:00 a.m., Central Standard Time, and at any adjournments thereof,
all of the shares of the Fund which the undersigned would be entitled to vote if
personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1 AND FOR PROPOSAL 2. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING. THE DIRECTORS RECOMMEND A VOTE FOR THE PROPOSALS ON THE REVERSE SIDE.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NOTE: Please sign exactly as name appears on this card. All joint owners should
sign. When signing as executor, administrator, attorney, trustee or guardian or
as custodian for a minor, please give full title as such; if a corporation,
please sign in full corporate name and indicate the signer's office. If a
partner, sign in the partnership name.
CHANGE OF ADDRESS NOTIFICATION. Please use this form to inform us of any change
in address or telephone number. Detach this form from the Proxy Ballot and
return it with your executed Proxy in the enclosed envelope.
Has your address changed?
1. Approval of the Agreement and Plan of Reorganization by and between the
Fund and IMG Mutual Funds, Inc. providing for the transfer of all of
the assets of the Fund to IMG Mutual Funds, Inc. in exchange for shares
of IMG Mutual Funds, Inc. and the assumption by IMG Mutual Funds, Inc.
of all of the liabilities of the Fund, followed by the dissolution and
liquidation of the Fund and the distribution of shares of IMG Mutual
Funds, Inc. to the shareholders of the Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approval of the New Investment Advisory Agreement between the Fund and
Investors Management Group, Ltd ("IMG") following a change of ownership
of IMG.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please be sure to sign and date this Proxy:
------------------------------------
Shareholder sign here
----------------------------------
Co-owner sign here
Dated: _____________________, 1998.
<PAGE>
MUNICIPAL ASSETS FUND
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, JANUARY 26, 1998
This Proxy is solicited on behalf of the Directors of the Fund
The undersigned hereby appoints ___________, _________________,, and
__________________, and each of them separately, proxies, with power of
substitution, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of Municipal Assets Fund on
January 26, 1998, at 10:00 a.m., Central Standard Time, and at any adjournments
thereof, all of the shares of the Fund which the undersigned would be entitled
to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1 AND FOR PROPOSAL 2. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING. THE DIRECTORS RECOMMEND A VOTE FOR THE PROPOSALS ON THE REVERSE SIDE.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
NOTE: Pleas sign exactly as name appears on this card. All joint
owners should sign. When signing as executor, administrator, attorney, trustee
or guardian or as custodian for a minor, please give full title as such; if a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, sign in the partnership name.
CHANGE OF ADDRESS NOTIFICATION. Please use this form to inform us of
any change in address or telephone number. Detach this form from the Proxy
Ballot and return it with your executed Proxy in the enclosed envelope.
Has your address changed?
1. Approval of the Agreement and Plan of Reorganization by and between the
Fund and IMG Mutual Funds, Inc. providing for the transfer of all of
the assets of the Fund to IMG Mutual Funds, Inc. in exchange for shares
of IMG Mutual Funds, Inc. and the assumption by IMG Mutual Funds, Inc.
of all of the liabilities of the Fund, followed by the dissolution and
liquidation of the Fund and the distribution of shares of IMG Mutual
Funds, Inc. to the shareholders of the Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approval of the New Investment Advisory Agreement between the Fund and
Investors Management Group, Ltd ("IMG") following a change of ownership
of IMG.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please be sure to sign and date this Proxy:
------------------------------------
Shareholder sign here
----------------------------------
Co-owner sign here
Dated: _____________________, 1998.
<PAGE>
LIQUID ASSETS FUND
MUNICIPAL ASSETS FUND
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information contains or incorporates
information which may be of interest to investors but which is not included in
the combined Proxy Statement/Prospectus (the "Prospectus") of IMG Mutual Funds,
Inc. dated January 5, 1998, relating to the transfer of assets from Liquid
Assets Fund and Municipal Assets Fund (the "Acquired Funds)" to corresponding
portfolios of IMG Mutual Funds, Inc. The Statement of Additional Information for
the Acquired Funds dated September 30, 1997 and the Statement of Additional
Information for IMG Mutual Funds, Inc. dated ____________, 1998, have been filed
with the Securities and Exchange Commission and are incorporated herein by
reference. This Statement is not a Prospectus and is authorized for distribution
only when it accompanies or follows delivery of the Prospectus. This Statement
of Additional Information should be read in conjunction with the Prospectus. A
copy of the ___________, 1998 Prospectus may be obtained, without charge, by
writing IMG Mutual Funds, Inc., 2203 Grand Avenue, Des Moines, Iowa 50312-5338
or by calling 800-298-1819.
The date of this Statement of Additional Information is January 5, 1998.
<PAGE>
PART C
OTHER INFORMATION
Item 15. INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 by the Registrant is against public policy as expressed in
the Act and, therefore, may be unenforceable. In the event that a claim for such
indemnification (except insofar as it provides for the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person and the Securities
and Exchange Commission is still of the same opinion, 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 of whether
or not such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Section 2-418 of the Maryland General Corporation Law permits the
Registrant to indemnify directors and officers. In addition, Section 2-405.1
sets forth the standard of care for directors and Section 2-405.2 allows the
Registrant to include in the Charter provisions further limiting the liability
of the directors and officers in certain circumstances. Article ELEVENTH of the
Articles of Incorporation included herewith as Exhibit 1(a) (the "Articles")
limits the liability of any director or officer of the Registrant arising out of
a breach of fiduciary duty, subject to the limits of the Investment Company Act
of 1940 (the "1940 Act"). Article TWELFTH of the Articles and Article VII of the
Bylaws, included herewith as Exhibit (2), makes mandatory the indemnification of
any person made or threatened to be made a party to any action by reason of the
facts that such person is or was a director, officer or employee, subject to the
limits otherwise imposed by law or by the 1940 Act.
In addition, Paragraph 7 of the Advisory Agreement included herewith as
Exhibit 5(b)(1), and Article III of the Distribution Agreement, included
herewith as Exhibit 6(a), provide that Investors Management Group ("IMG") and
IMG Financial Services, Inc. ("IFS"), shall not be liable to the Registrant for
any error, judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the management provided by IMG or for
any distribution services provided by IFS to the Registrant for the performance
of the duties under such agreements, except for willful misfeasance, bad faith
or gross negligence in the performance of their duties or by reason of reckless
disregard of their obligation and duties under such agreements. In addition,
Article IV of the Distribution Agreement and Paragraph 8 of the Transfer Agent,
Dividend Disbursing Agent and Shareholder Servicing Agent Agreement, included
herewith as Exhibit 5(a)(f), further indemnify IFS and IMG against certain
liabilities arising out of the performance of such agreements.
EXHIBITS
Exhibit No. Description
----------- -----------
1.(a) Articles of Incorporation,
incorporated by reference to the Fund's
N1-A Registration Statement, filed
December 14, 1994
(b) Amendment to Articles of Incorporation
to be filed by amendment
(c) Form of Articles Supplementary to be
filed by amendment
2. Bylaws, incorporated by reference to
the Fund's N1-A Registration Statement,
filed December 14, 1994
4. Form of Agreement and Plan of
Reorganization (included as Exhibit "A"
to Proxy Statement/Prospectus
5. Form of Investment Advisory Agreement
incorporated by reference to P.E.
Amendment No. 7 to the Fund's N1-A
Registration Statement filed
November 7, 1997
6. Form of Distribution Agreement
incorporated by reference to P.E.
Amendment No. 7 to the Fund's N1-A
Registration Statement filed
November 7, 1997
8. Form of Custodial Agreement
incorporated by reference to P.E.
Amendment No. 7 to the Fund's N1-A
Registration Statement filed
November 7, 1997
10.(a) Distribution Plan incorporated by
reference to P.E. Amendment No. 7 to the
Fund's N1-A Registration Statement filed
November 7, 1997
(b) Amended 18f3 Plan incorporated by
reference to Post-Effective Amendment
No. 8 to the Fund's N1-A Registration
Statement filed November 7, 1997
11. Opinion and Consent of Messrs. Ober,
Kaler, Grimes & Schriver to be filed by
amendment
12. Tax opinion of Cline, Williams, Wright,
Johnson & Oldfather (to be included as
Exhibit "C" to Proxy Statement/
Prospectus) to be filed by amendment
14. Consent of KPMG Peat Marwick LLP
16. Power of Attorney
UNDERTAKINGS
(1) The undersigned Company agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Company agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) Prior to commencing the continuous public offering of shares of the
fund, Registrant hereby undertakes to fill a post-effective amendment to its
Form N-14 Registration Statement, using financial statements which need not be
certified, to reflect the consummation of the transactions described in the
Prospectus/Information Statement under the caption "Capitalization."
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the inclusion in the Registration Statement on Form N-14 of
IMG Mutual Funds, Inc., of our report dated July 25, 1997, relating to our audit
of the financial statements and financial highlights of Liquid Assets Fund and
Municipal Assets Fund appearing in the Annual Report to Shareholders dated June
30, 1997. The above-mentioned Annual Report to Shareholders of Liquid Assets
Fund and Municipal Assets Fund is incorporated by reference into the Proxy
Statement/Prospectus and Statement of Additional Information which constitutes
part of this Registration Statement.
KPMG Peat Marwick LLP
Des Moines, Iowa
November 26, 1997
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Des Moines, State of Iowa, on
the 26th day of November, 1997.
IMG MUTUAL FUNDS, INC.
By _/s/__Mark A. McClurg________________
Mark A. McClurg, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the date indicated.
Signature Title
_/s/__David W. Miles________ Director
David W. Miles
_/s/__Mark A. McClurg_______ President, Principal
Mark A. McClurg Executive Officer,
Principal Financial and
Accounting Officer and
Director
__________________________
|
_/s/__Johnny Danos__________ Director > _/s/_David W. Miles__
Johnny Danos | by David W. Miles
| Attorney in Fact
_/s/__David Lundquist_______ Chairman & Director | November 26, 1997
David Lundquist |
|
_/s/__Debra Johnson_________ Director |
Debra Johnson |
|
_/s/__Edward Stanek_________ Director |
Edward Stanek |
__________________________|
