As filed with the Securities and Exchange Commission on April 11, 1997
Registration No. 33-90888
811-9010
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 2 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 4 |X|
TRANSAMERICA INVESTORS, INC.
(Exact Name of Registrant)
1150 South Olive, Los Angeles, CA 90015
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(213) 742-2111
Name and Address of Agent for Service:
Reid A. Evers, Esquire
Second Vice President, Assistant General Counsel
Transamerica Occidental Life Insurance Company
1150 South Olive
Los Angeles, CA 90015
Approximate date of proposed sale to the
public: As soon as practicable after effectiveness of the
Registration Statement.
The Registrant has previously filed a declaration of indefinite registration of
its hsares pursuant to Rule 24F-2 under the Investment Company Act of 1940. The
Form 24F-2 for the year ended December 31, 1996 was filed on February 25, 1997.
It is proposed that this filing will become effective:
|_| immediately upon filing pursuant to paragraph (b)
|_| on April 29, 1996 pursuant to paragraph (b) |_|
60 days after filing pursuant to paragraph (a)(i) |_|
on ________________ pursuant to paragraph (a)(i) |X|
75 days after filing pursuant to paragraph (a)(i) |_|
on ________________ pursuant to paragraph (a)(ii) of
Rule 485
If appropropriate, check the following box:
|_| this Post-Effective Amendment
designates a new effective date
for a previously filed
Post-Effective Amendment.
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TRANSAMERICA INVESTORS, INC.
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
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Pursuant to Rule 481(a)
N-1A
Item No. Caption
PART A INFORMATION REQUIRED IN A PROSPECTUS
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial InformationNot Applicable
4. General Description of Registrant The Funds at a Glance
A General Discussion about Risk
General Information
The Premier Portfolios in Detail
Investment Adviser and Administrator
5. Management of the Fund The Management Team
Investment Adviser and Portfolio Manager Services
General Information
5A. Management's Discussion of Performance Not Applicable
6. Capital Stock and Other Securities The Management Team
Shareholder Services
Dividends and Capital Gains
What About Taxes?
General Information
7. Purchase of Securities Being Offered Opening Your Account
How to Buy Shares
Shareholder Services
General Information
Share Price
Other Investor Requirements and Services
8. Redemption or Repurchase How to Sell Shares
9. Pending Legal Proceedings General Information
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PART B INFORMATION REQUIRED IN THE
STATEMENT OF ADDITIONAL INFORMATION
N-1A
Item No. Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Objectives and Policies
Investment Restrictions
14. Management of the Registrant Management of the Company
Investment Advisory and Other Services
15. Control Persons and Principal
Holders of Securities Management of the Company
16. Investment Advisory and
Other Services Investment Advisory and Other Services
17. Brokerage Allocation and Other
Practices Brokerage Allocation
18. Capital Stock and Other Securities Purchase and Redemption of
Shares
19. Purchase, Redemption and Pricing
of Securities Being Offered Purchase and Redemption of
Shares
20. Tax Status Taxes
21. Underwriters Management of the Company
22. Calculation of Performance Data Performance Information
23. Financial Statements Not Applicable
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PART C OTHER INFORMATION
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
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<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION
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C-1
PART C
OTHER INFORMATION
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Prospectus: June 30, 1997
Transamerica Premier Funds
Premier Aggressive Growth Fund
Investor Class
Your guide This guide (the "Prospectus") will provide you with helpful insights
and details about the Investor Class of shares of the Transamerica Premier
Aggressive Growth Fund (the "Fund"). It is intended to give you what you need to
know before investing. Please read it carefully and save it for future
reference.
The Fund at a Glance The Transamerica Premier Aggressive Growth Fund seeks to
maximize long-term growth of capital. The Fund primarily invests in common
stocks selected for their growth potential resulting from growing franchises
protected by high barriers to competition. Under normal conditions, the Fund
will normally invest at least 65% of its total assets in a non-diversified
portfolio of domestic equity securities of any size, which may include
securities of larger more established companies and/or smaller emerging
companies selected for their growth potential. The remainder may be invested in
a variety of debt and equity securities, including high-yield ("junk") bonds and
derivatives. There can be no assurance that the Fund will achieve its investment
objective.
Shares
Fund shares are available on a no-load basis directly to individuals, companies,
Pension and Retirement Savings Programs, and other institutional investors from
Transamerica Securities Sales Corporation ("TSSC"), the Distributor. For a
listing of applicable Pension and Retirement Savings Programs, see "Pension and
Retirement Savings Programs" on page XX.
Transamerica Investors Transamerica Investors, Inc. (also referred to as the
Company or we, us, or our) is an
open-end, management investment company. We are a mutual fund company that
offers a number of portfolios, known
collectively as the Transamerica Premier Funds. In addition to the Transamerica
Premier Aggressive Growth Fund,
the Transamerica Premier Funds include:
The Transamerica Premier Small Company Fund The Transamerica Premier
Equity Fund The Transamerica Premier Index Fund The Transamerica
Premier Bond Fund The Transamerica Premier Balanced Fund The
Transamerica Premier Cash Reserve Fund
Each of these Funds is described in a separate prospectus. The minimum
investment is $1,000 per Fund, or less in certain instances. See "Minimum
Investments" on page XX.
For additional information or details about any of the Transamerica Premier
Funds (including ordering a prospectus), you can call 1-800-89-ASK-US
(1-800-892-7587), or write to Transamerica Investors, P.O. Box 9232, Boston,
Massachusetts 02205-9232. A free Statement of Additional Information (the
"SAI"), which has been filed with the Securities and Exchange Commission, is
available by calling the above number. The SAI is a part of this Prospectus by
reference.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK OR FDIC OR OTHER AGENCIES. LIKE ALL MUTUAL FUND SHARES, THIS
SECURITY HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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CONTENTS
The Fund at a Glance 3
Summary of Fund Expenses 6
The Management Team 14
The Fund In Detail 15
A General Discussion About Risk 27
Investment Procedures and Risk
Considerations for the Fund 28
Shareholder Services 35
Opening Your Account 36
How to Buy Shares 37
How to Sell Shares 39
How to Exchange Shares 43
Other Investor Requirements and Services 44
Dividends and Capital Gains 46
What About Taxes? 47
Share Price 48
Investment Adviser and Administrator 50
General Information 52
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
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Summary of Fund Expenses
This table is designed to help you understand the costs of investing in the
Fund. These are expected expenses of the Fund for its first year of operation.
Actual expenses may be more or less than those shown.
Transaction Expenses
Sales Charge on Purchases1 None
Redemption Fee None
Sales Charge on Reinvested Dividends None
Exchange Fee None
Contingent Deferred Sales Charge None
Estimated Annual Fund Operating Expenses (as a percent of average net assets)
Transamerica Premier Aggressive Growth Fund
Adviser Fee (after waiver)2 0.85%
12b-1 Fee3 0.25%
Other Expenses After Reimbursement4 0.20%
Total Operating Expenses After Waiver and Reimbursement5 1.30%
Example
Using the previous tables of transaction expenses and operating expenses,6 you
would pay the following expenses based on a $1,000 investment. The expenses
shown assume a 5% annual return. The expenses are the same whether or not you
redeem your shares at the end of each time period. We may assess an annual fee
against accounts used as IRA's or SEP's. For more information on this fee, see
"IRA Accounts" on page 36.
Transamerica Premier Fund 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------
Aggressive Growth $13 $41 $71 $157
THE INFORMATION CONTAINED IN THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES. THE
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
The example shown above assumes that the Investment Adviser and/or Administrator
will limit the Fund's annual operating ratio to 1.30%. Without any fee waiver or
expense reimbursement, the estimated total operating expenses for the first year
would be 1.73% based on $50 million of assets. In addition, the 5% hypothetical
return is used for illustrative purposes only and should not be interpreted as
an estimate of the Fund's annual return, as there can be no guarantee of the
Fund's future performance.
1. Although there is no sales charge, there is a 12b-1 fee. Over a long period
of time, the total amount of 12b-1 fees paid may exceed the amount of another
fund's sales charges.
2. See "Adviser Fee" on page XX..
3. 12b-1 fees cover costs of advertising and marketing the Fund. For more
information on 12b-1 fees, see
"Distribution Plan" on page XX.
4. "Other Expenses" are those incurred after any reimbursements to the Fund by
the Administrator. See "The
Management Team" on page XX. Other expenses include expenses not covered by the
Adviser Fee or the 12b-1 fee. See
"Distribution Plan" on page XX.
5. "Total Operating Expenses" include adviser fees, 12b-1 fees, and other
expenses that the Fund incurs. The Investment Adviser has agreed to waive that
part of its Adviser Fee and the Administrator has agreed to assume any other
operating expenses for the Fund, other than certain extraordinary or
non-recurring expenses, which together exceed a specified percentage of the
average daily net assets of the Fund. The specified percentage is 1.30% for the
Transamerica Premier Aggressive Growth Fund. The Administrator may, from time to
time, assume additional expenses. Fee waivers and expense assumption
arrangements, which may be terminated at any time without notice, will increase
the Fund's yield. 6. The expenses in the example assume no fees for IRA or SEP
accounts.
The Management Team
Responsibility for the management and supervision of the Company and the
Transamerica Premier Funds rests with the Board of Directors of the Company (the
"Board"). The Investment Adviser and the Administrator are subject to the
direction of the Board.
The Fund's Investment Adviser is Transamerica Investment Services, Inc. (the
"Investment Adviser"), 1150 South Olive Street, Los Angeles, California 90015.
The Investment Adviser's duties include, but are not limited to: (1) supervising
and managing the investments of the Fund and directing the purchase and sale of
its investments; and (2) ensuring that investments follow the Fund's investment
objective, strategies, and policies and comply with government regulations.
The Investment Adviser has been in the investment advisory business since 1967
and currently manages approximately $32 billion of discretionary assets for
various clients including corporations, pension plans, 401(k) plans, and other
institutional investors.
The Fund's Administrator is Transamerica Occidental Life Insurance Company (the
"Administrator"), 1150 South Olive Street, Los Angeles, California 90015. The
Administrator's duties include, but are not limited to: (1) providing the Fund
with administrative and clerical services, including the maintenance of the
Fund's books and records; (2) registering the Fund shares with the Securities
and Exchange Commission (the "SEC") and with those states and other
jurisdictions where its shares are offered or sold and arranging periodic
updating of the Funds' prospectus; (3) providing proxy materials and reports to
Fund shareholders and the SEC; and (4) providing the Fund with adequate office
space and all necessary office equipment and services.
Transamerica Occidental Life Insurance Company is a wholly-owned subsidiary of
Transamerica Insurance Corporation of California. Both Transamerica Insurance
Corporation of California and Transamerica Investment Services, Inc. are
wholly-owned subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest financial services
companies. For more information on Fund management, see "Investment Adviser and
Administrator" on page XX.
The Fund in Detail
Fund Objective
The Transamerica Premier Aggressive Growth Fund seeks to maximize long-term
growth of capital. There can be no assurance that the Fund will achieve its
investment objective.
Fund Policies
Under normal conditions, the Fund will normally invest at least 65% of its total
assets in a non-diversified portfolio of domestic equity securities of any size,
which may include securities of larger more established companies and/or smaller
emerging companies selected for their growth potential.
Fund Strategy and Types of Securities
The Fund primarily invests in domestic common stocks selected for their growth
potential resulting from growing franchises protected by high barriers to
competition. The Fund may invest to a lesser degree in other types of domestic
and foreign securities, including preferred stock, warrants, convertible
securities and debt securities. Debt securities that the Fund may purchase
include investment grade and non-investment grade corporate bonds and
debentures, government securities, mortgage and asset-backed securities, zero
coupon bonds, indexed/structured notes, high-grade commercial paper,
certificates of deposit, and repurchase agreements. Such securities may offer
growth potential because of anticipated changes in interest rates, credit
standing, currency relationships or other factors. The Fund may use a variety of
investment techniques, including derivatives and short sales.
The Fund may invest without limit in foreign equity and debt securities,
however, the Investment Adviser currently does not intend to do so.
For additional information on specific types of securities, investment
techniques, and their risks, see "Investment Procedures and Risk Considerations"
on page XX.
Investment Process
The Fund is constructed one stock at a time. Although themes may emerge in the
Fund, securities are generally selected without regard to any defined industry
sector or other similarly defined selection procedure. Each company passes
through a research process and stands on its own merits as a viable investment
in the Investment Adviser's opinion. The Investment Adviser's research is
designed to identify companies with growing franchises protected by high
barriers to competition with potential for improvement in profitability and
acceleration of growth.
The Investment Adviser tries to keep the Fund fully invested under normal market
conditions. When the Investment Adviser determines that market conditions
warrant, the Fund may invest without limit in cash and cash equivalents
General Investment Policies
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
Some Points To Consider When Investing
Since the Fund invests primarily in common stocks, its investments are subject
to stock market price volatility. Price volatility means that stock prices can
go up or down due to a variety of economic and market conditions.
Since the Fund, as a non-diversified investment company portfolio, could invest
in a smaller number of individual issuers than a diversified investment company,
the value of the Fund's investments could be more affected by any single adverse
occurrence than would the value of the investments of a diversified investment
company. However, it is the policy of the Fund to attempt to reduce its overall
exposure to risk from declines in individual securities by spreading its
investments over many different companies and a variety of industries.
The Fund has adopted certain investment restrictions, which are described fully
in the Statement of Additional Information. Like the Fund's investment
objective, certain of these restrictions are fundamental and may be changed only
by a majority vote of the Fund's outstanding shares.
The Fund is intended for investors who have the perspective, patience, and
financial ability to take on above-average stock market volatility in a focused
pursuit of long-term capital growth. Because of the uncertainty associated with
common stock investments, the Fund is intended to be a long-term investment.
What is Fundamental?
The investment objectives given for the Fund are fundamental. This means they
can be changed only with the approval of the majority of shareholders. We can
give you no assurance that these objectives will be met. Many of the strategies
and policies are not fundamental. This means strategies and policies can be
changed by the Board without your approval.
If any investment objectives of the Fund changes, you should decide if the Fund
still meets your financial needs. More information about this is in the
Statement of Additional Information.
A General Discussion About Risk
It's important for you to understand the risks inherent in investing in
different kinds of funds. All investments are subject to risk. Even money you
hide in your mattress is subject to the risk that inflation may erode its value.
The Fund is subject to the following risks:
Market or Price Volatility Risk For stocks, this refers to the up and down price
fluctuations, or volatility, caused by changing conditions in the financial
markets. Stock funds are more subject to this risk than money market and bond
funds.
Financial or Credit Risk For stocks and other equity securities, financial risk
comes from the possibility that current earnings of the stock company will fall
or that overall financial circumstances will decline. Either of these could
cause the security to lose its value. Stock funds are more subject to this risk
than funds with government or high quality bonds. For more information, see
"High-Yield ('Junk') Bonds" on page XX.
Current Income Risk The Fund receives income, either as interest or dividends,
from the securities in which it has invested. The Fund pays out substantially
all of this income to its shareholders as dividends. See the footnote for "What
About Taxes?" on page XX. The dividends paid out to shareholders are called
current income. Current income risk means how much and how quickly overall
interest rate or dividend rate changes on income received by the Fund affects
its ability to maintain the current level of income paid to shareholders.
Inflation or Purchasing Power Risk Inflation risk is the uncertainty that your
invested dollars may not buy as much in the future as they do today. Stocks are
less subject to this risk than longer-maturity bonds.
Sovereign Risk Sovereign risk is the potential loss of assets or earning power
due to government actions, such as taxation, expropriation, or regulation. Funds
with large investments overseas or funds with tax-advantaged investments are
more subject to this risk.
More in-depth information about risk is provided in the following section and in
the Statement of Additional Information.
Investment Procedures and Risk Considerations
Buying and Selling Securities In general, we purchase and hold securities for
the Fund for capital growth. However, we ordinarily buy and sell securities
whenever we think it is appropriate in order to achieve the Fund's investment
objective. Fund changes can result from liquidity needs, securities reaching a
price objective, anticipated changes in interest rates, a change in the
creditworthiness of an issuer, or from general financial or market developments.
Because investment changes usually are not tied to the length of time a security
has been held, a significant number of short-term transactions may result.
We may sell one security and simultaneously purchase another of comparable
quality. We may simultaneously purchase and sell the same security to take
advantage of short-term differentials in bond yields. Or we may purchase
individual securities in anticipation of relatively short-term price gains. The
rate of portfolio turnover will not be a determining factor in these decisions.
However, certain tax considerations can restrict our ability to sell securities
in some circumstances when the security has been held for less than three
months. Increased turnover results in higher costs. These costs result from
brokerage commissions, dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. This can result in the
acceleration of taxable gains.
Turnover will not be a consideration in the management of the Fund. The
Investment Adviser buys and sells securities for the Fund whenever it believes
it is appropriate to do so.
We cannot predict precisely the turnover rates for the Fund, but we expect that
the annual turnover rates will generally not exceed 50% for the Fund. A 100%
annual turnover rate would occur if all of the Fund's securities were replaced
one time during a one year period. Short-term gains realized from turnover are
taxable to shareholders as ordinary income, except for shares held in special
tax-qualified accounts (such as IRA's or employer sponsored pension plans). In
addition, higher turnover rates can result in corresponding increases in
brokerage commissions and other transaction costs. We generally will not
consider turnover rates in making investment decisions on behalf of the Fund
consistent with the Fund's investment objective and policies.
For more information, see "What About Taxes?", on page XX, and the Statement of
Additional Information.
Securities Lending As a way to earn additional income, we may lend Fund
securities to creditworthy persons not affiliated with the Fund. Such loans must
be secured by cash collateral or by irrevocable letters of credit maintained on
a current basis in an amount at least equal to the market value of the
securities loaned. During the existence of the loan, we must continue to receive
the equivalent of the interest and dividends paid by the issuer on the
securities loaned and interest on the investment of the collateral. We must have
the right to call the loan and obtain the securities loaned at any time on three
days notice. This includes the right to call the loan to enable us to execute
shareholder voting rights. Such loans cannot exceed one-third of the Fund's net
assets taken at market value. Interest on loaned securities cannot exceed 10% of
the annual gross income of the Fund (without offset for realized capital gains).
The lending policy described in this paragraph is a fundamental policy that can
be changed only by a vote of a majority of shareholders.
Lending securities to broker-dealers and institutions could result in a loss or
a delay in recovering the Fund's securities.
Borrowing We can borrow money from banks or engage in reverse repurchase
agreements, for temporary or emergency purposes. We can borrow up to one-third
of the Fund's total assets. To secure borrowings, we can mortgage or pledge
securities in an amount up to one-third of the Fund's net assets. If we borrow
money, the Fund's share price may be subject to greater fluctuation until the
borrowing is paid off. The Fund will not make any additional investments, other
than through reverse repurchase agreements, while the level of borrowing exceeds
5% of the Fund's total assets. For more information on reverse repurchase
agreements see the "Reverse Repurchase Agreements and Leverage" section below.
Small Capitalization Stocks We can purchase securities of small companies. The
securities of smaller companies are usually less actively followed by analysts
and may be undervalued by the market, which can provide significant
opportunities for Capital appreciation; however, the securities of such smaller
companies may also involve greater risks and may be subject to more volatile
market movements than securities of larger, more established companies. The
securities of small companies are often traded in the over-the counter market,
and might not be traded in volumes typical of securities traded on a national
securities exchange. Thus, the securities of small companies are likely to be
subject to more abrupt or erratic market movements than securities of larger,
more established companies.
Over-The-Counter-Market The Fund may invest in over-the-counter stocks.
Generally, the volume of trading in an unlisted or over-the-counter common stock
is less than the volume of trading in a listed stock. Low trading volumes may
make it difficult to find a buyer or seller for the securities of some
companies. This will have an effect on the purchase or selling price of a stock.
Special Situations The Fund may invest in "special situations" from time to
time. A special situation arises when, in the opinion of the Fund's portfolio
manager, the securities of a particular issuer will be recognized and appreciate
in value due to a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a merger proposal or
buyout, a leveraged recapitalization, a new product or process, a technological
breakthrough, a management change or other extraordinary corporate event, or
differences in market supply of and demand for the security. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention.
Repurchase Agreements We may enter into repurchase agreements with Federal
Reserve System member banks or U.S. securities dealers. A repurchase agreement
occurs when, at the time we purchase an interest-bearing debt obligation, the
seller agrees to repurchase the debt obligation on a specified date in the
future at an agreed-upon price. The repurchase price reflects an agreed-upon
interest rate during the time the Fund's money is invested in the security.
Since the security constitutes collateral for the repurchase obligation, a
repurchase agreement can be considered a collateralized loan. Our risk is the
ability of the seller to pay the agreed-upon price on the delivery date. If the
seller is unable to make a timely repurchase, our expected proceeds could be
delayed, or we could suffer a loss in principal or current interest, or incur
costs in liquidating the collateral. We have established procedures to evaluate
the creditworthiness of parties making repurchase agreements.
We will not invest in repurchase agreements maturing in more than seven days, if
that would result in more than 10% of the Fund's net assets being so invested
when taking into account the remaining days to maturity of our existing
repurchase agreements.
Reverse Repurchase Agreements and Leverage We may enter into reverse repurchase
agreements with Federal Reserve member banks and U.S. securities dealers from
time to time. In a reverse repurchase transaction we sell securities and
simultaneously agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase agreements to
make other investments which either mature or are under an agreement to resell
at a date simultaneous with or prior to the expiration of the reverse repurchase
agreement. The Fund may utilize reverse repurchase agreements only if the
interest income to be earned from the investment proceeds of the transaction is
greater than the interest expense of the reverse repurchase transaction.
Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Fund's
shares to rise or fall faster than would otherwise be the case. There may also
be a risk of delay in the recovery of the underlying securities, if the opposite
party has financial difficulties.
The Fund's obligations under all borrowings, including reverse repurchase
agreements, will not exceed one-third of the Fund's net assets.
When-Issued Securities We may sometimes purchase new issues of securities on a
when-issued basis. The price of when-issued securities is established at the
time the commitment to purchase is made. Delivery of and payment for these
securities typically occur 15 to 45 days after the commitment to purchase. The
market price of the securities at the time of delivery may be higher or lower
than those contracted for on the when-issued security, and there is some risk
the transaction may not be consummated. We maintain a segregated account for the
Fund consisting of cash or high-quality liquid debt securities in an amount at
least equal to the when-issued commitments.
Short Sales We may sell securities which we do not own, or intend to deliver to
the buyer if we do own ("sell short") if, at the time of the short sale, we own
or have the right to acquire an equal amount of the security being sold short at
no additional cost. These transactions allow us to hedge against price
fluctuations by locking in a sale price for securities we do not wish to sell
immediately.
We may make a short sale when we want to sell a security we own at a current
attractive price. This allows us to postpone a gain or loss for federal income
tax purposes and to satisfy certain tests applicable to regulated investment
companies under the Internal Revenue Code of 1986, as amended, (the "Code"). We
will make short sales only if the total amount of all short sales does not
exceed 10% of the Fund. This limitation can be changed at any time.
Municipal Obligations We may invest in municipal obligations for the Fund. In
addition to the usual risks associated with investing for income, the value of
municipal obligations can be affected by changes in the actual or perceived
credit quality. The credit quality of a municipal obligation can be affected by,
among other factors: a) the financial condition of the issuer or guarantor; b)
the issuer's future borrowing plans and sources of revenue; c) the economic
feasibility of the revenue bond project or general borrowing purpose; d)
political or economic developments in the region or jurisdiction where the
security is issued; and e) the liquidity of the security. Because municipal
obligations are generally traded over the counter, the liquidity of a particular
issue often depends on the willingness of dealers to make a market in the
security. The liquidity of some municipal issues can be enhanced by demand
features which enable us to demand payment from the issuer or a financial
intermediary on short notice.
High-Yield ("Junk") Bonds High-yield bonds (commonly called "junk" bonds) are
lower-rated bonds that involve higher current income but are predominantly
speculative because they present a higher degree of credit risk. Credit risk is
the risk that the issuer of the bonds will not be able to make interest or
principal payment on time. If this happens, we would lose some of our income,
and we could expect a decline in the market value of the securities affected. We
need to carefully analyze the financial condition of companies issuing junk
bonds. The prices of junk bonds tend to be more reflective of prevailing
economic and industry conditions, the issuers' unique financial situations, and
the bonds' coupon than to small changes in the level of interest rates. But
during an economic downturn or a period of rising interest rates, highly
leveraged companies can have trouble making principal and interest payments,
meeting projected business goals, and obtaining additional financing.
We may also invest in unrated debt securities. Unrated debt, while not
necessarily of lower quality than rated securities, may not have as broad a
market. Because of the size and perceived demand for the issue, among other
factors, certain municipalities may decide not to pay the cost of getting a
rating for their bonds. We analyze the creditworthiness of the issuer, as well
as any financial institution or other party responsible for payments on the
security, to determine whether to purchase unrated municipal bonds.
Unrated debt securities will be included in the 35% limit on non-investment
grade debt of the applicable Funds, unless we deem such securities to be the
equivalent of investment grade securities. See "Summary of Bond Ratings" on page
XX and in the Statement of Additional Information for a description of bond
rating categories.
Foreign Securities Investing in the securities of foreign issuers involves
special risks and considerations not typically associated with investing in U.S.
companies. These risks and considerations include differences in accounting,
auditing and financial reporting standards, generally higher commission rates on
foreign Fund transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries
and potential restrictions on the flow of international capital and currencies.
Foreign issuers may also be subject to less government regulation than U.S.
companies. Moreover, the dividends and interest payable on foreign securities
may be subject to foreign withholding taxes, thus reducing the net amount of
income available for distribution to the Fund's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities which are denominated or quoted in currencies other than the U.S.
dollar.
Options, Futures, and Other Derivatives We may use options, futures, forward
contracts, and swap transactions ("derivatives") for the Fund. We may seek to
protect the Fund against potential unfavorable movements in interest rates or
securities' prices by investing in derivatives. If those markets do not move in
the direction we anticipate, we could suffer investment losses.
We may purchase, or we may write, call or put options on securities or on
indexes ("options"). We may also enter into interest rate or index futures
contracts for the purchase or sale of instruments based on financial indexes
("futures contracts"), options on futures contracts, forward contracts, and
interest rate swaps and swap-related products. We use these instruments
primarily to adjust the Fund's exposure to changing securities prices, interest
rates, or other factors that affect securities values. This is an attempt to
reduce the overall investment risk.
Risks in the use of these derivatives include, in addition to those referred to
above: a) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Fund has incurred the cost of
the derivative (either its purchase price or, by writing an option, losing the
opportunity to profit from increases in the value of the securities covered)
with no tangible benefit; b) imperfect correlation between the price of
derivatives and the movements of the securities' prices or interest rates being
hedged; c) the possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty to the
transaction does not perform as promised; and e) the possible need to defer
closing out certain positions to avoid adverse tax consequences.
More information on derivatives is contained in the Statement of Additional
Information.
Mortgage-Backed and Asset-Backed Securities We may invest in mortgage-backed and
asset-backed securities. Mortgage-backed and asset-backed securities are
generally pools of many individual mortgages or other loans. Part of the cash
flow of these securities is from the early payoff of some of the underlying
loans. The specific amount and timing of such prepayments is difficult to
predict, creating "prepayment risk." For example, prepayments on Government
National Mortgage Association ("GNMA's") are more likely to increase during
periods of declining long-term interest rates because borrowers tend to
refinance when interest rates drop. In the event of very high prepayments, we
may be required to invest these proceeds at a lower interest rate, causing us to
earn less than if the prepayments had not occurred. Prepayments are more likely
to decrease during periods of rising interest rates, causing the expected
average life to become longer. This variability of prepayments will tend to
limit price gains when interest rates drop and to exaggerate price declines when
interest rates rise.
Zero Coupon Bonds We may invest in zero coupon bonds and strips. Zero coupon
bonds do not make regular interest payments. Instead, they are sold at a
discount from face value. A single lump sum which represents both principal and
interest is paid at maturity. Strips are debt securities whose interest coupons
are taken out and traded separately after the securities are issued, but
otherwise are comparable to zero coupon bonds. The market value of zero coupon
bonds and strips generally is more sensitive to interest rate fluctuations than
interest-paying securities of comparable term and quality.
Illiquid Securities We may invest up to 15% of the Fund's net assets in
securities that are illiquid. Securities are considered illiquid when there is
no readily available market or when they have legal or contractual restrictions.
Repurchase agreements which mature in more than seven days are included as
illiquid securities. It may be difficult for us to sell these investments
quickly for their fair market value.
Certain restricted securities that are not registered for sale to the general
public but that can be resold to institutional investors under Rule 144A may not
be considered illiquid. This is provided that a dealer or institutional trading
market exists. The institutional trading market is relatively new. Liquidity of
the Fund's investments could be impaired if trading for these securities does
not further develop or declines. The Investment Adviser determines the liquidity
of Rule 144A securities under guidelines approved by the Board.
Variable Rate, Floating Rate, or Variable Amount Securities We may invest in
variable rate, floating rate, or variable amount securities for the Fund. These
are short-term unsecured promissory notes issued by corporations to finance
short-term credit needs. They are interest-bearing notes on which the interest
rate generally fluctuates on a scheduled basis.
Investments in Other Investment Companies We may invest up to 10% of the Fund's
total assets in the shares of other investment companies, but only up to 5% of
its assets in any one other investment company. In addition, we cannot purchase
more than 3% of the securities of any one investment company for the Fund. We
intend to keep these investments to a minimum.
Shareholder Services
Our goal is to make your investment in the Fund, and the ongoing account
servicing, as simple as possible by offering the following shareholder services:
Simple application form with service representatives to assist you.
Purchases, exchanges and redemptions by phone.
Purchases and redemptions by wire.
Automatic Investment Plan - you designate an amount of $50 or more to be
automatically withdrawn from your checking, savings or other bank account
and deposited into the Fund you select.
Automatic Exchange Plan - allows you to specify an amount to be
automatically withdrawn from one Fund and deposited into another
Transamerica Premier Fund on a regular basis, once or twice a month.
Automatic Income Plan - you can receive automatic monthly payments from
your Fund account to your checking or savings account.
Automatic investment of dividends. Uniform Gifts to Minors (UGMA or UTMA).
Transmission of redemption proceeds by electronic funds transfer.
Individual Retirement Account (IRA) - we will administer your IRA.
Opening Your Account
To open an account, complete the application and send it to us with a check,
money order, or wire for the amount you want to invest. Mail the application to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
If you need help in filling out your application, call one of our customer
service representatives at 1-800-89-ASK-US. We will walk you through the
application and help you understand everything.
IRA Accounts You can establish an Individual Retirement Account ("IRA"), for
yourself or under your employer's Simplified Employee Pension ("SEP"), or other
comparable program allowed by the Internal Revenue Service with us.
Contributions to an IRA may be deductible from your taxable income, depending on
your personal tax situation. Please call 1-800-89-ASK-US for your IRA
application kit, or for additional information. The kit has information on
whether you qualify for deductible contributions to an IRA.
If you are receiving a distribution from your pension plan, or you would like to
transfer your IRA account from another financial institution, you can continue
to get tax-deferred growth by transferring these proceeds to your Transamerica
Premier Fund IRA. If you want to rollover distributions from your pension plan
to an IRA, the money must be paid directly by your pension plan administrator to
Transamerica Investors to avoid a 20% federal withholding tax. See "What About
Taxes?" on page XX.
There is an annual fee of $10 per Fund in which you own shares for administering
your IRA. This is limited to a maximum annual fee of $36 per taxpayer
identification number. We will waive this fee if the combined value of all
shares in your IRA accounts is $5,000 or more when the fee is due.
Alternatively, you can pay a one-time, non-refundable fee of $100 for all IRA
accounts that are maintained under the same taxpayer identification number. You
may pay the fee to us, otherwise we will deduct the annual fee ordinarily during
December of each year or at the time you fully redeem your shares in a Fund, if
before then. The Company reserves the right to change the fee, but we will
notify you at least 30 days in advance of any change.
Uniform Gifts to Minors A Uniform Gifts/Transfers to Minors Act (UGMA/UTMA)
account allows an adult to put assets in the name of a minor child. The adult
maintains control over these assets until the child reaches the age of majority,
which is generally 18 or 21. State laws dictate which type of account can be
used and the age of majority. An adult must be appointed as custodian for the
account and will be legally responsible for administering the account, but the
child's Social Security number must be used. Generally, the person selected as
custodian is one of the parents or grandparents, but may be some other adult
relative or friend. By shifting assets to a custodial account, you may benefit
if the child's tax rate is lower.
How to Buy Shares
You May Buy Shares in One of Four Ways:
1. By Mail Fill out an investment coupon from a previous confirmation statement,
or indicate on your check or a separate piece of paper your name, address and
account number, and mail it to:
TRANSAMERICA INVESTORS
P.O. BOX 9232
BOSTON, MA 02205-9232
All investments made by check should be in U.S. dollars and made payable to
Transamerica Investors, Inc., or in the case of a retirement account, the
custodian. We will not accept third party checks, except those payable to an
existing shareholder who is a natural person (as opposed to a corporation or
partnership), and we will not accept checks drawn on credit card accounts. When
you make purchases by check or automatic investment plan, redemptions will not
be allowed until the investment being redeemed has been in the account for 15
business days.
2. By Automatic Investment Plan You can make investments automatically by
electing this service in your application. It will authorize us to take regular,
automatic withdrawals from your bank account. These periodic investments must be
at least $50 for each Transamerica Premier Fund in which you are automatically
investing. You can change the date or amount of your monthly investment, or
terminate the Automatic Investment Plan, at any time by letter or telephone call
(with prior authorization). Give us your request at least 20 business days
before the change is to become effective. You may also be able to have
investments automatically deducted from:
1. your paycheck at work;
2. your savings account;
3. your annuity from Transamerica;
4. your social security payments; or
5. other sources of your choice.
Call 1-800-89-ASK-US for more information.
3. By Telephone If you elect the telephone purchasing service on your
application, you can make occasional electronic withdrawals from your designated
bank account by calling 1-800-89-ASK-US.
We take reasonable precautions to make sure that telephone instructions are
genuine. Precautions include requiring you to positively identify yourself, tape
recording the telephone instructions, and providing written confirmations. We
accept all telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your responsibility.
If reasonable procedures are not used to confirm that instructions communicated
by telephone are genuine, the Company may be liable for any losses due to
unauthorized or fraudulent transactions.
4. By Wire You can make your initial or subsequent investments in the Fund by
wire. Here's what you need to do:
1. send us your application form (initial investment only);
2. call 1-800-89-ASK-US for a wire number;
3. instruct your bank to wire money to State Street Bank, ABA number
011000028, DDA number 9905-134-4; and
4. specify on the wire:
a) "Transamerica Investors, Inc.";
b) your Fund's account number, if you have one;
c) identify the Funds in which you would like to purchase shares,
and the amount to be allocated
to each Fund (e.g., $5,000 in the Transamerica Premier Aggressiv Growth Fund);
d) your name, your city and state; and
e) your wire number.
Wired money is considered received by us when we receive the wire and all the
required information listed above. If we receive your telephone call and wire
before the New York Stock Exchange closes, usually 4:00 p.m. Eastern Standard
Time, the money is credited that same day if you have supplied us with all other
needed information.
Minimum Investments
MINIMUM MINIMUM
INITIAL SUBSEQUENT
TYPE OF ACCOUNT INVESTMENT INVESTMENT
Regular Accounts $1,000 $100
Pension or Retirement Saving Programs $250 None
Uniform Gift to Minors (UGMA) or
Transfer to Minors (UTMA) $250 $100
Automatic Investment Plans $50 $50
Your investment must be a specified dollar amount. We cannot accept purchase
requests specifying a certain price, date, or number of shares; these
investments will be returned. The price you pay for your shares will be the next
determined net asset value after your purchase order is received. See "Share
Price" on page XX. The Company reserves the right to reject any application or
investment. There may be circumstances when the Company will not accept new
investments in the Fund. If you have a securities dealer, bank, or other
financial institution handle your transactions with us you may be charged a fee
by them.
How to Sell Shares
You can sell your shares (called "redeeming") at any time. You'll receive the
net asset value next determined after we receive your redemption request,
assuming all requirements have been met. Before redeeming, please read "When
Share Price Is Determined" on page XX, "Minimum Account Balances" on page XX,
and "Points to Remember When Redeeming" on page XX.
You have several options for receiving your redemption: By check; By
electronic transfer to your bank; or By wire transfer
If your wire transfer is $2,500 or less, we will charge a $10 fee. Also, some
banks may charge a fee to receive the wire transfer.
If you call us before the close of the New York Stock Exchange, usually 4:00
p.m. Eastern Standard Time, you will receive the price determined as of the
close of that business day. See "Share Price" on page XX.
You May Sell Shares in One of Three Ways:
1. By Mail Your written instructions to us to redeem shares can be in any one
of the following forms: By redemption form, available by calling
1-800-89-ASK-US; By letter; or By assignment form or other authorization
granting power with respect to your shares in one of the Funds.
Once mailed to us, your redemption request is irrevocable and cannot be modified
or canceled.
If the amount redeemed is over $50,000, all signatures must be guaranteed. See
"Signature Guarantee" on page XX. The request must be signed by each registered
owner. All owners must sign the request exactly as their names appear in the
registration. For example, if the owner's name appears in the registration as
John Michael Smith, he must sign that way and not as John M. Smith.
2. By Telephone If you have previously authorized telephone directions in
writing (e.g., in your application), you can redeem your shares by calling
1-800-89-ASK-US. Be careful in calling, since once made, your telephone request
cannot be modified or canceled.
We take reasonable precautions to make sure that telephone instructions are
genuine. Precautions include requiring you to positively identify yourself, tape
recording the telephone instructions, and providing written confirmations. We
accept all telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your responsibility.
If reasonable procedures are not used to confirm that instructions communicated
by telephone are genuine, the Company may be liable for any losses due to
unauthorized or fraudulent transactions. For detailed information on how
telephone transactions will operate, see the Statement of Additional
Information.
3. By Automatic Income Plan Under the Automatic Income Plan we automatically
redeem enough shares each month to provide you with a check or automatic deposit
to your bank account. The minimum is $50 per Fund. Please tell us:
a) when you want to be paid each month;
b) how much you want to be paid; and
c) from which Fund(s).
To set up an Automatic Income Plan, call us at 1-800-89-ASK-US.
If your monthly income payments exceed the dividends, interest, and capital
appreciation on your shares, the payments will deplete your investment.
You can specify the Automatic Income Plan when you make your first investment.
If you sign up for the plan later, the request for the Automatic Income Plan or
any increase in payment amount must be signed by all owners of your account.
You can request us to send payments to an address other than the address of
record at the time of your first investment. After that, a request to send
payments to an address other than the address of record must be signed by all
owners of your account, with their signatures guaranteed.
The Automatic Income Plan option can be terminated at any time. If it is, we
will notify you. You can terminate the Plan or change the amount of the payments
by writing or calling us. Termination or change will become effective within 15
days after we receive your instructions.
How Long Will It Take? We will usually send your redemption payment to you on
the second business day after we receive your request, but not later than seven
days afterwards, assuming we have all the information we need. If the
information you provide us is incomplete, we will contact you, but this may
delay the redemption.
The Company may postpone such payment if: (a) the New York Stock Exchange is
closed for other than usual weekends or holidays, or trading on the New York
Stock Exchange is restricted; (b) an emergency exists as defined by the U.S.
Securities and Exchange Commission (the "Commission"), or the Commission
requires that trading be restricted; or (c) the Commission permits a delay for
the protection of investors.
When a redemption occurs shortly after a recent check purchase, the redemption
proceeds may be held beyond seven days but only until the purchase check clears,
which may take up to 15 days. If you anticipate redemptions soon after you
purchase your shares by check, you can avoid this delay by wiring your purchase
payment.
Points to Remember When Redeeming
All redemptions are made and the price is determined on the day we receive
all necessary documentation. See "When Share Price Is Determined" on page
XX.
We cannot accept redemptions specifying a certain date or dollar price. It
must be an amount. We will return these requests.
If you request a redemption check within 30 days of your address change,
you must send us your request in writing with a signature guarantee. Keep
your address current by writing or calling in your new address to us as
soon as possible.
Except for a transfer of redemption proceeds to the custodian of a
tax-qualified plan, we will make all payments to the registered owner of
the shares, unless you tell us otherwise.
We will mail all checks to the address of record, unless you tell us
otherwise.
If the redemption request is made by a corporation, partnership, trust,
fiduciary, agent, or unincorporated association, the individual signing the
request must be authorized. If the redemption is from an account under a
qualified pension plan, spousal consent may be required.
A request to redeem shares in an IRA or 403(b) plan must be accompanied by
an IRS Form W4-P (pension income tax withholding form, which we will
provide) and a reason for withdrawal. This is required by the IRS.
For redemptions greater than $250,000 the Company reserves the right to
give you marketable securities instead of cash. See the Statement of
Additional Information, or call us at 1-800-89-ASK-US.
Please call us at 1-800-89-ASK-US or write to Transamerica Investors, P.O. Box
9232, Boston, MA 02205-9232 for further information.
How to Exchange Shares Between Transamerica Premier Funds
If your investment needs change, you can exchange shares in the Fund for shares
of any other Transamerica Premier Fund. You can exchange shares by any of the
following methods:
By mail;
By telephone; or
By the Automatic Exchange Plan
By Mail or Telephone The procedures relating to exchanges in writing and by
telephone are the same as for purchases. Exchanges are available to any resident
of any state in which shares of the Transamerica Premier Funds are legally sold.
By Automatic Exchange Plan You can make automatic share exchanges either once or
twice a month. You can request this service in writing to us. Your request must
be signed by all registered owners of the account. Call 1-800-89-ASK-US for
information.
Points to Remember When Making Exchanges
Make sure you have read the prospectus and understand the investment
objective of the Transamerica Premier Fund into which you are exchanging
shares. Prospectuses for other Transamerica Premier Funds can be ordered by
dialing 1-800-89-ASK-US. The exchange service is not designed to give
shareholders the opportunity to "time the market." It gives you a
convenient way to change the balance between the accounts so that it more
closely matches your overall investment objectives and risk tolerance
level.
You can make an unlimited number of exchanges between the Transamerica
Premier Funds. However, unless you are using the Automatic Exchange Plan,
further exchanges may be suspended for the remainder of any calendar year
during which you make more than four exchanges involving a single
Transamerica Premier Fund. This limitation is designed to keep each Fund's
asset base stable and to reduce its administrative expenses.
An exchange is treated as a sale of shares from one Transamerica Premier
Fund and the purchase of shares in another Transamerica Premier Fund.
Exchanges are taxable events. See "What About Taxes?" on page XX.
Exchanges into or out of the Funds are made at the next determined net
asset value per share after we receive all necessary information for the
exchange.
Exchanges are accepted only if the ownership registrations of both
accounts are identical. The Company reserves the right to reject any
exchange request and to modify or terminate the exchange
option at any time.
Other Investor Requirements and Services
Tax Identification Number You must furnish your taxpayer identification number
and state whether or not you are subject to backup withholding for prior
under-reporting. If you don't furnish your tax I.D. number, redemptions or
exchanges of shares, as well as dividends and capital gains distributions, will
be subject to federal withholding tax.
Changing Your Address To change the address on your account, please call us at
1-800-89-ASK-US, or send us a written notification signed by all registered
owners of your account. Include the name of your Transamerica Premier Fund(s),
the account number(s), the name(s) on the account and both the old and new
addresses. Within the first 30 days after an address change, telephone
redemptions are permissible only if the redemption proceeds are wired or
electronically transferred. See "How to Sell Shares" on page XX.
Signature Guarantee When a signature guarantee is required, e.g., when the
redemption amount is more than $50,000, the signature of each owner of record
must be guaranteed by a bank or trust company (or savings bank, savings and loan
association, or a member of a national stock exchange). This is required to
comply with general stock transfer rules. You must obtain a written guarantee
that states "Signature(s) Guaranteed" and is signed in the name of the guarantor
by an authorized person. If you have any questions, call 1-800-89-ASK-US.
Our policy to waive the signature guarantee for amounts of $50,000 or less can
be amended or discontinued at any time. A signature guarantee may be required
with regard to any particular redemption transaction.
Minimum Account Balances You must maintain a minimum balance of $500 in the
Fund. If your account balance falls below $500 as a result of your action, we
will notify you. You will have 30 days to increase your balance to or above the
minimum. If you do not increase your balance, we will redeem your shares and pay
the value to you.
This minimum does not apply if you are actively contributing to the Fund through
an Automatic Investment Plan or if your investment in the Fund is for a Pension
or Retirement Savings Program (including IRAs), or for an UGMA/UTMA.
How You Will Get Ongoing Information About the Fund? When you open your account,
purchase, redeem, transfer, or exchange shares, we will send you a confirmation
of the transaction. We will also send you a consolidated, quarterly statement of
your account showing all transactions since the beginning of the current
quarter. You can request a statement of your account activity at any time.
We will send you an annual report that includes audited financial statements for
the fiscal year. It will include a list of securities in the Fund on that date.
We will also send you a semi-annual report that includes unaudited financial
statements for the previous six months. It will also include a list of
securities in the Fund on that date.
We will send you a new Prospectus each year. The Statement of Additional
Information is also revised each year; however, we will send this to you only if
you request it.
How to Transfer Your Shares to Another Person You can transfer ownership of your
shares to another person or organization, or change the name on an account, by
sending us written instructions. The request must be signed by all registered
owners of your account. To change the name on an account, the shares must be
transferred to a new account. The request must include a signature guarantee.
See "Signature Guarantee" on page XX. This option is not available for Pension
or Retirement Savings Programs. Please call us at 1-800-89-ASK-US for additional
information.
The Company reserves the right to amend, suspend, or discontinue offering any of
these options at any time without prior notice.
Dividends and Capital Gains
We distribute substantially all of the Fund's net investment income in the form
of dividends to you. The Transamerica Premier Aggressive Growth Fund distributes
dividends on an annual basis.
We distribute net capital gains, if any, on the Fund annually.
You can select from among the following distribution options:
REINVESTED You can have all of your dividends and capital gains distributions
reinvested in additional shares the Fund or of any Transamerica Premier Fund.
Unless you choose one of the other options, we will select this option for you
automatically CASH AND You can choose to have either your dividends or your
capital gains REINVESTED paid in cash and the other will be reinvested in
additional shares in the Fund or any other Transamerica Premier Fund; or ALL
CASH You can choose to have your dividends and capital gains distributions paid
in cash.
We make distributions for the Fund on a per share basis to the shareholders of
record as of the distribution date of the Fund. We do this regardless of how
long the shares have been held. That means if you buy shares just before or on a
record date, you will pay the full price for the shares and then you may receive
a portion of the price back as a taxable distribution.
What About Taxes?
Federal Taxes* Dividends paid by the Fund from net investment income, the excess
of net short-term capital gain over net long-term capital loss, and original
issue discount or certain market discount income will be taxable to shareholders
as ordinary income. Distributions paid by the Fund from the excess of net
long-term capital gain over net short-term capital loss will be taxable as
long-term capital gains regardless of how long the shareholders have held their
shares. These tax consequences will apply regardless of whether distributions
are received in cash or reinvested in shares. A portion of the dividends paid to
corporate shareholders may qualify for the corporate dividends-received
deduction to the extent the Fund earns qualifying dividends. We will notify you
after each calendar year of the amount and character of distributions you
received from the Fund for federal tax purposes.
For IRA's and pension plans, dividends and capital gains are reinvested and not
taxed until you receive a qualified distribution from your IRA or pension plan.
You need to consider the tax implications of buying shares immediately prior to
a dividend or capital gain distribution. Investors who purchase shares shortly
before the record date for a distribution will pay a per share price that
includes the value of the anticipated distribution. You will be taxed when you
receive the distribution even though the distribution represents a return of a
portion of the purchase price. You may want to call us at 1-800-89-ASK-US before
your purchase. We will tell you if a distribution is due.
Redemptions and exchanges of shares are taxable events which may represent a
gain or a loss for the shareholder.
Individuals and certain other classes of shareholders may be subject to backup
withholding of federal income tax on distributions, redemptions and exchanges if
they fail to furnish their correct taxpayer identification number. Individuals,
corporations and other shareholders that are not U.S. persons under the Code are
subject to different tax rules. They may be subject to nonresident alien
withholding on amounts considered ordinary dividends from the Fund.
When you sign your account application, you will be asked to certify that your
social security or taxpayer identification number is correct. You will also be
asked to certify that you are not subject to backup withholding for failure to
report income to the Internal Revenue Service.
Pension and Retirement Savings Programs The tax rules applicable to participants
and beneficiaries in Pension and Retirement Savings Programs vary according to
the type of plan and the terms and conditions of the plan. In general,
distributions from these plans are taxed as ordinary income. Special favorable
tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits: 1. distributions prior to age 591\2 (subject to certain
exceptions); 2. distributions that do not conform to specified commencement and
minimum distribution rules; 3. aggregate distributions in excess of a specified
annual amount; and 4. in other specified circumstances.
You should consult a qualified tax adviser for more information.
Other Taxes In addition to federal taxes, you may be subject to state and local
taxes on payments received from us. Depending on the state tax rules pertaining
to a shareholder, a portion of the dividends paid by a Fund that come from
direct obligations of the U.S. Treasury and certain agencies may be exempt from
state and local taxes. Check with your own tax adviser regarding specific
questions as to federal, state and local taxes.
*For each taxable year, we intend to qualify the Fund as a regulated investment
company under Subchapter M of the Code. Qualifying regulated investment
companies distributing substantially all of their ordinary income and capital
gains are not subject to federal income or excise tax on any net investment
income and net realized capital gains distributed to shareholders. However, the
shareholders (you) are subject to tax on these distributions.
Share Price
How Share Price Is Determined We value Fund securities, primarily traded on a
domestic securities exchange or NASDAQ, at the last sale price on that exchange
on the day the valuation is made. We take price information on listed securities
from the exchange where the security is primarily traded. If no sale is
reported, we use the mean of the latest bid and asked prices. We generally price
securities traded over-the-counter the same way. When market quotations are not
readily available, we value securities and other assets at fair value as
determined in good faith by the Board.
We will value all securities with maturities of 60 days or less at the time of
purchase, on the basis of amortized cost when the Board determines that
amortized cost is fair value. Amortized cost involves valuing an investment at
its cost and a constant amortization to maturity of any discount or premium,
regardless of the effect of assuming movements in interest rates. For more
information, see the Statement of Additional Information.
When Share Price Is Determined The price of your shares is their net asset
value. We determine the net asset value by calculating the total value of the
Fund's assets, deducting total liabilities, and dividing the result by the
number of shares outstanding. We determine the net asset value only on days that
the New York Stock Exchange (the "Exchange") is open.
If we receive your investment or redemption request before the close of business
on the Exchange, usually 4:00 p.m. Eastern Standard Time, your share price for
that transaction will be the price we determine at the close of the Exchange
that day. When investment and redemption requests are received after the
Exchange is closed, we use the share price at the close of the Exchange the next
day the Exchange is open. We consider investment and redemption requests by
telephone to be received at the time of your telephone call, assuming you've
given us all required information.
We consider purchase payments to be received only when your check, wire, or
automatic investment funds are received by us along with all required
information. We consider wired funds to be received on the day they are
deposited in the Company's bank account. If you call us with wire instructions
before the Exchange closes, we usually deposit the money that day.
Where To Find Information About Share Price You can get the current net asset
value of the Fund by calling us at 1-800-89-ASK-US. The net asset value of the
Fund may also be published in leading newspapers daily, once its net assets
reach a certain amount. Weekly updates of the Fund's net asset value are
available on the Transamerica Premier Funds Web site at
http://funds.transamerica.com.
Organization and Management
Transamerica Investors, Inc. Transamerica Investors, Inc. was organized as a
Maryland corporation on February
22, 1995. The Company is registered with the Securities and Exchange Commission
under the 1940 Act as an open-end
management investment company of the series type. The Fund constitutes a
separate series, and is part of a family
of series known as the Transamerica Premier Funds. The fiscal year-end of the
Fund is December 31.
The Company is authorized to issue and sell multiple classes of shares for each
its Funds. The Company reserves the right to issue additional classes of shares
in the future without the consent of shareholders, and can allocate any
remaining unclassified shares or reallocate any unissued classified shares.
Except for the differences noted below and elsewhere in this Prospectus, each
share of the Fund has equal dividend, redemption and liquidation rights with
other shares of the Fund and when issued, is fully paid and nonassessable. Each
share of each class represents an identical legal interest in the same
investments of the Fund. Should several classes be offered, each class has
certain other expenses related solely to that class. Each class will have
exclusive voting rights under the 12b-1 distribution plan. In the event that a
special meeting of shareholders is called, separate votes are taken by each
class only if a matter affects, or requires the vote of, just that class.
Although the legal rights of holders of each class of shares are identical, it
is likely that the difference in expenses will result in different net asset
values and dividends. The classes may have different exchange privileges.
As a Maryland corporation, the Company is not required to hold regular annual
meetings of shareholders. Ordinarily there will be no shareholder meetings,
unless requested by shareholders holding 10% or more of the outstanding shares,
or unless required by the 1940 Act or Maryland law. You are entitled to cast one
vote for each share you own of each Transamerica Premier Fund. At a special
shareholders meeting, if one is called, issues that affect all the Transamerica
Premier Funds in substantially the same way will be voted on by all
shareholders. Issues that do not affect a Transamerica Premier Fund will not be
voted on by that Transamerica Premier Fund. Issues that affect all Funds, but in
which their interests are not substantially the same, will be voted on
separately by each Transamerica Premier Fund.
Investment Adviser Services The Investment Adviser is responsible for making
investment decisions for the Fund. The Investment Adviser is also responsible
for the selection of brokers and dealers to execute transactions for the Fund.
Some of these brokers or dealers may be affiliated persons of the Company, the
Investment Adviser, Administrator, or the Distributor. Since it is our policy to
seek the best price and execution for each transaction, the Investment Adviser
may give consideration to brokers and dealers who provide us with statistical
information and other services in addition to transaction services. Additional
information about the selection of brokers and dealers is provided in the
Statement of Additional Information.
Trading decisions for the Fund described in this Prospectus are made by a team
of expert managers and analysts headed by a team leader. The team leader is
primarily responsible for the day-to-day decisions related to the Fund. He is
supported by the entire group of managers and analysts. The team leader of the
Fund may be on another Transamerica Premier Fund team. The transactions and
performance of the Transamerica Premier Funds are reviewed continuously by the
Investment Adviser's senior officers.
The team leader for the Fund is Phillip Treick, Vice President and Fund Manager,
Transamerica Investment
Services. B.S., University of South Florida, 1987. Financial Analyst, Raymond
James Financial Corporation, 1987
- - 1988. Joined Transamerica in 1988.
Adviser Fee For its services to the Fund, the Investment Adviser receives an
Adviser Fee. This fee is based on an annual percentage of the average daily net
assets of the Fund. It is accrued daily, and paid monthly.
The annual fee percentages for the Fund is .85% on the first $1 billion of
assets. This reduces to .82% on the next $1 billion, and finally .80% on assets
over $2 billion.
Administrator Services The Investment Adviser pays part of the Adviser Fee to
the Administrator. The Administrator provides office space for the Company and
pays the salaries, fees and expenses of all Company officers and those directors
affiliated with Transamerica Corporation and not already paid by the Investment
Adviser. The Fund pays all of its expenses not assumed by the Administrator.
This includes transfer agent and custodian fees and expenses, legal and auditing
fees, printing costs of reports to shareholders, registration fees and expenses,
12b-1 fees, and fees and expenses of directors unaffiliated with Transamerica
Corporation.
The Administrator may from time to time reimburse the Fund for some or all of
its operating expenses, including 12b-1 fees. Such reimbursements will increase
the Fund's return. This is intended to make the Fund more competitive. This
practice may be terminated at any time.
Custodian and Transfer Agent Under a Custodian Agreement, State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, Massachusetts
02110, holds all securities and cash assets of the Fund, provides recordkeeping
services, and serves as the Fund's custodian. State Street is authorized to
deposit securities in securities depositories or to use services of
sub-custodians.
Under a Transfer Agency Agreement, State Street Bank also serves as the Fund's
transfer agent. The transfer agent
is responsible for: a) opening and maintaining your account; b) reporting
information to you about your account;
c) paying you dividends and capital gains; and d) handling your requests for
exchanges, transfers and redemptions.
Distributor Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter and distributor of the shares of the Fund. TSSC will distribute
Investor Shares.
TSSC is a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which is a wholly-owned subsidiary of Transamerica Corporation. TSSC
is registered with the Securities and Exchange Commission as a broker-dealer.
TSSC is also a member of the National Association of Securities Dealers, Inc.
Distribution Plan The Fund makes payments to TSSC according to a plan adopted to
meet the requirements of Rule 12b-1 under the Investment Company Act of 1940, as
amended. These fees accrue daily and are based on an annual percentage of the
daily average net value of the assets.
The 12b-1 plan of distribution and related distribution contracts require the
Fund to pay distribution and service fees to TSSC as compensation for its
activities, not as reimbursement for specific expenses. If TSSC's expenses are
more than its fees for the Fund, the Fund will not have to pay more than those
fees. If TSSC's expenses are less than the fees, it will keep the excess. The
Company will pay the distribution and service fees to TSSC until the
distribution contracts are terminated or not renewed. In that event, TSSC's
expenses over and above any fees through the termination date will be TSSC's
sole responsibility and not the obligation of the Company. The Board will review
and approve the distribution plan, contracts and TSSC's expenses quarterly.
There is an annual 12b-1 distribution fee of .25% of the average daily net
assets of the Fund. This fee covers such expenses as preparation, printing and
mailing of the Prospectus and Statement of Additional Information, as well as
sales literature and other media advertising, and related expenses. It can also
be used to compensate sales personnel involved with selling the Fund.
From time to time, the Distributor may waive all or any portion of these fees at
its discretion.
Performance Information The Company may publish performance information about
the Fund. Fund performance usually will be shown either as cumulative total
return or average periodic total return compared with other mutual funds by
public ranking services, such as Lipper Analytical Services, Inc. Cumulative
total return is the actual performance over a stated period of time. Average
annual total return is the hypothetical return, compounded annually, that would
have produced the same cumulative return if the Fund's performance had been
constant over the entire period. The Fund's total return shows its overall
dollar or percentage change in value. This includes changes in the share price
and reinvestment of dividends and capital gains.
The performance of the Fund can also be measured in terms of yield. The Fund's
yield shows the rate of income the Fund earns on its investments as a percentage
of the Fund's share price.
The Fund can also separate its cumulative and average annual total returns into
income results and capital gains or losses. The Fund can quote its total returns
on a before-tax or after-tax basis.
The performance information which may be published for the Fund is historical.
It is not intended to represent or guarantee future results. The value of your
Fund shares can be more or less than their original cost when they are redeemed.
Summary of Bond Ratings Following is a summary of the grade indicators used by
two of the most prominent, independent rating agencies (Moody's Investors
Service, Inc. and Standard & Poor's Corporation) to rate the quality of bonds.
The first four categories are generally considered investment quality bonds.
Those below that level are of lower quality, commonly referred to as "junk
bonds."
STANDARD &
INVESTMENT GRADE MOODY'S POOR'S
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default C D
For more detailed information on bond ratings, including gradations within each
category of quality, see the Statement of Additional Information.
Pension and Retirement Savings Programs
Following is a listing of Pension and Retirement Savings Programs. Provided you
have the necessary plan documents, you can use the Transamerica Premier Funds as
investment options for:
401(a), 401(k), profit sharing, or money purchase pension plans (including
KEOGH/HR 10 Plans) designed to benefit employees of corporations,
partnerships, and sole proprietors.
Section 403(b)(7) (Tax-Sheltered Annuity) Plans* for employees of
educational organizations or other qualifying, tax exempt organizations.
Individual Retirement Account ("IRA"), or comparable program, for
individuals and Simplified Employee Pension ("SEP") Plans for employers
(including sole proprietors) and their employees.
Section 457 deferred compensation plans for employees of state governments
and tax exempt organizations. Employers' non-qualified plans or savings
programs, that do not qualify for federal tax advantages.
Other retirement plans or savings programs allowed by the Board.
*You may be required to have your own custodian for this plan.
<PAGE>
DRAFT - 4/10/97
Prospectus: June 30, 1997
Transamerica Premier Funds
Premier Small Company Fund
Investor Class
Your guide This guide (the "Prospectus") will provide you with helpful insights
and details about the Investor Class of shares of Transamerica Premier Small
Company Fund (the "Fund"). It is intended to give you what you need to know
before investing. Please read it carefully and save it for future reference.
The Fund at a Glance The Transamerica Premier Small Company Fund (the "Fund")
seeks maximize long-term growth. The Fund invests primarily in a diversified
portfolio of domestic common stocks. Most of the companies the Fund invests in
have smaller market capitalizations (below $250 million) or annual revenues of
no more than $250 million. The companies in which the Fund invests are believed
by Transamerica Investment Services, Inc. (the "Adviser") to have the potential
for significant long-term capital appreciation. The remainder of the Fund's
assets may be invested in a variety of debt and equity securities, including
high-yield ("junk") bonds and derivatives. There can be no assurance that the
Fund will achieve its investment objective.
Shares Fund shares are available on a no-load basis directly to individuals,
companies, Pension and Retirement Savings Programs, and other institutional
investors from Transamerica Securities Sales Corporation ("TSSC"), the
Distributor. For a listing of applicable Pension and Retirement Savings
Programs, see "Pension and Retirement Savings Programs" on page XX.
Transamerica Investors Transamerica Investors, Inc. (also referred to as the
Company or we, us, or our) is an open-end, management investment company. We are
a mutual fund company that offers a number of portfolios, known collectively as
the Transamerica Premier Funds. In addition to the Transamerica Premier Small
Company Fund, the Transamerica Premier Fund family includes:
The Transamerica Premier Aggressive Growth Fund The Transamerica
Premier Equity Fund The Transamerica Premier Index Fund The
Transamerica Premier Bond Fund The Transamerica Premier Balanced Fund
The Transamerica Premier Cash Reserve Fund
Each of these Funds is described in a separate prospectus. The minimum
investment is $1,000 per Fund, or less in certain instances. See "Minimum
Investments" on page XX.
For additional information or details about any of the Transamerica Premier
Funds (including ordering a prospectus), you can call 1-800-89-ASK-US
(1-800-892-7587), or write to Transamerica Investors, P.O. Box 9232, Boston,
Massachusetts 02205-9232. A free Statement of Additional Information (the
"SAI"), which has been filed with the Securities and Exchange Commission, is
available by calling the above number. The SAI is a part of this Prospectus by
reference.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK OR FDIC OR OTHER AGENCIES. LIKE ALL MUTUAL FUND SHARES, THIS
SECURITY HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
CONTENTS
The Fund at a Glance 3
Summary of Fund Expenses 6
The Management Team 14
The Fund In Detail 15
A General Discussion About Risk 27
Investment Procedures and Risk
Considerations for the Fund 28
Shareholder Services 35
Opening Your Account 36
How to Buy Shares 37
How to Sell Shares 39
How to Exchange Shares 43
Other Investor Requirements and Services 44
Dividends and Capital Gains 46
What About Taxes? 47
Share Price 48
Investment Adviser and Administrator 50
General Information 52
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
Summary of Fund Expenses
This table is designed to help you understand the costs of investing in the
Fund. These are expected expenses of the Fund for its first year of operation.
Actual expenses may be more or less than those shown.
Transaction Expenses
Sales Charge on Purchases1 None
Redemption Fee None
Sales Charge on Reinvested Dividends None
Exchange Fee None
Contingent Deferred Sales Charge None
Estimated Annual Fund Operating Expenses (as a percent of average net assets)
Transamerica Premier Small Company Fund
Adviser Fee (after waiver)2 0.85%
12b-1 Fee3 0.25%
Other Expenses After Reimbursement4 0.25%
Total Operating Expenses After Waiver and Reimbursement5 1.35%
Example
Using the previous tables of transaction expenses and operating expenses,6 you
would pay the following expenses based on a $1,000 investment. The expenses
shown assume a 5% annual return. The expenses are the same whether or not you
redeem your shares at the end of each time period. We may assess an annual fee
against accounts used as IRA's or SEP's. For more information on this fee, see
"IRA Accounts" on page 36.
Transamerica Premier Fund 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------
Small Company $14 $43 $74 $162
The example shown above assumes that the Investment Adviser and/or Administrator
will limit the Fund's annual operating ratio to 1.35%. Without any fee waiver or
expense reimbursement, the estimated total operating expenses for the first year
would be 1.73% based on $50 million of assets. In addition, the 5% hypothetical
return is used for illustrative purposes only and should not be interpreted as
an estimate of the Fund's annual return, as there can be no guarantee of the
Fund's future performance.
THE INFORMATION CONTAINED IN THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES. THE
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
1. Although there is no sales charge, there is a 12b-1 fee. Over a long period
of time, the total amount of 12b-1 fees paid may exceed the amount of another
fund's sales charges.
2. See "Adviser Fee" on page XX..
3. 12b-1 fees cover costs of advertising and marketing the Fund. For more
information on 12b-1 fees, see
"Distribution Plan" on page XX.
4. "Other Expenses" are those incurred after any reimbursements to the Fund by
the Administrator. See "The
Management Team" on page XX. Other expenses include expenses not covered by the
Adviser Fee or the 12b-1 fee. See
"Distribution Plan" on page XX.
5. "Total Operating Expenses" include adviser fees, 12b-1 fees, and other
expenses that the Fund incurs. The Investment Adviser has agreed to waive that
part of its Adviser Fee and the Administrator has agreed to assume any other
operating expenses for the Fund, other than certain extraordinary or
non-recurring expenses, which together exceed a specified percentage of the
average daily net assets of that Fund. The specified percentage is 1.35% for the
Transamerica Premier Small Company Fund. The Administrator may, from time to
time, assume additional expenses. Fee waivers and expense assumption
arrangements, which may be terminated at any time without notice, will increase
the Fund's yield. 6. The expenses in the example assume no fees for IRA or SEP
accounts.
The Management Team
Responsibility for the management and supervision of the Company and the
Transamerica Premier Funds rests with the Board of Directors of the Company (the
"Board"). The Investment Adviser and the Administrator are subject to the
direction of the Board.
The Fund's Investment Adviser is Transamerica Investment Services, Inc. (the
"Investment Adviser"), 1150 South Olive Street, Los Angeles, California 90015.
The Investment Adviser's duties include, but are not limited to: (1) supervising
and managing the investments of the Fund and directing the purchase and sale of
its investments; and (2) ensuring that investments follow the Fund's investment
objective, strategies, and policies and comply with government regulations.
The Investment Adviser has been in the investment advisory business since 1967
and currently manages approximately $32 billion of discretionary assets for
various clients including corporations, pension plans, 401(k) plans, and other
institutional investors.
The Fund's Administrator is Transamerica Occidental Life Insurance Company (the
"Administrator"), 1150 South Olive Street, Los Angeles, California 90015. The
Administrator's duties include, but are not limited to: (1) providing the Fund
with administrative and clerical services, including the maintenance of the
Fund's books and records; (2) registering the Fund shares with the Securities
and Exchange Commission (the "SEC") and with those states and other
jurisdictions where its shares are offered or sold and arranging periodic
updating of the Funds' prospectus; (3) providing proxy materials and reports to
Fund shareholders and the SEC; and (4) providing the Fund with adequate office
space and all necessary office equipment and services.
Transamerica Occidental Life Insurance Company is a wholly-owned subsidiary of
Transamerica Insurance Corporation of California. Both Transamerica Insurance
Corporation of California and Transamerica Investment Services, Inc. are
wholly-owned subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest financial services
companies. For more information on Fund management, see "Investment Adviser and
Administrator" on page XX.
The Fund in Detail
Fund Objective
The Transamerica Premier Small Company Fund seeks to maximize long-term growth.
There can be no assurance that the Fund will achieve its investment objective.
Fund Policies
Under normal conditions, the Fund will invest primarily in a diversified
portfolio of domestic equity securities (i.e., common stocks, preferred stocks,
rights, warrants and securities convertible into or exchangeable for common
stocks) of companies with smaller market capitalizations (below $250 million) or
annual revenues of up to $250 million. The companies in which the Fund invests
are those that the Adviser believes to have the potential for significant
long-term capital appreciation. The average and median market capitalization of
holdings in the Fund may, however, fluctuate over time as a result of changes in
stock prices and the companies held by the Fund. In addition, the Fund may
continue to hold securities of companies whose market capitalization or revenues
grow above $250 million while they are in the portfolio, if these companies
continue to meet the other investment policies of the Fund.
The securities of smaller companies are usually less actively followed by
analysts than those of larger companies and may be undervalued by the market.
This can provide significant opportunities for capital appreciation. However,
the securities of such smaller companies may also involve greater risks and may
be subject to more volatile market movements than securities of larger, more
established companies. See "Risk Factors" for further information about smaller
company securities.
Fund Strategy and Types of Securities
The Fund primarily invests in domestic common stocks of small companies selected
by the Adviser for their growth potential resulting from growing franchises
protected by high barriers to competition. The Fund may invest to a lesser
degree in other types of domestic and foreign securities, including preferred
stock, warrants, convertible securities and debt securities. Debt securities
that the Fund may purchase include investment grade and non-investment grade
corporate bonds and debentures, government securities, mortgage and asset-backed
securities, zero coupon bonds, indexed/structured notes, high-grade commercial
paper, certificates of deposit, and repurchase agreements. Such securities may
offer growth potential because of anticipated changes in interest rates, credit
standing, currency relationships or other factors. The Fund may use a variety of
investment techniques, including derivatives and short sales.
The Fund may invest without limit in foreign equity and debt securities,
however, the Investment Adviser currently does not intend to do so.
For additional information on specific types of securities, investment
techniques, and their risks, see "Investment Procedures and Risk Considerations"
on page XX.
Investment Process
The Fund is constructed one stock at a time. Each company passes through a
research process and stands on its own merits as a viable investment in the
Investment Adviser's opinion. The Investment Adviser's research is designed to
identify companies with potential for improvement in profitability and
acceleration of growth.
The Investment Adviser tries to keep the Fund fully invested under normal market
conditions. When the Investment Adviser determines that market conditions
warrant, the Fund may invest without limit in cash and cash equivalents.
General Investment Policies
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
Some Points To Consider When Investing
Since the Fund invests primarily in common stocks, its investments are subject
to stock market price volatility. Price volatility means that stock prices can
go up or down due to a variety of economic and market conditions.
The Fund is intended for investors who have the perspective, patience, and
financial ability to take on above-average stock market volatility in a focused
pursuit of long-term capital growth. Because of the uncertainty associated with
common stock investments, the Fund is intended to be a long-term investment.
What is Fundamental?
The investment objectives given for the Fund are fundamental. This means they
can be changed only with the approval of the majority of shareholders. We can
give you no assurance that these objectives will be met. Many of the strategies
and policies are not fundamental. This means strategies and policies can be
changed by the Board without your approval.
If any investment objectives of the Fund changes, you should decide if the Fund
still meets your financial needs. More information about this is in the
Statement of Additional Information.
A General Discussion About Risk
It's important for you to understand the risks inherent in investing in
different kinds of funds. All investments are subject to risk. Even money you
hide in your mattress is subject to the risk that inflation may erode its value.
The Fund is subject to the following risks:
Market or Price Volatility Risk For stocks, this refers to the up and down price
fluctuations, or volatility, caused by changing conditions in the financial
markets. Stock funds are more subject to this risk than money market and bond
funds.
Financial or Credit Risk For stocks and other equity securities, financial risk
comes from the possibility that current earnings of the stock company will fall
or that overall financial circumstances will decline. Either of these could
cause the security to lose its value. For bonds and other debt securities,
financial risk comes from the possibility that the issuer will not be able to
pay principal and interest on time. Funds with low quality bonds and speculative
stock funds are more subject to this risk than funds with government or high
quality bonds.
For more information, see "High-Yield ('Junk') Bonds" on page XX.
Current Income Risk The Fund receives income, either as interest or dividends,
from the securities in which it has invested. The Fund pays out substantially
all of this income to its shareholders as dividends. See the footnote for "What
About Taxes?" on page XX. The dividends paid out to shareholders are called
current income. Current income risk means how much and how quickly overall
interest rate or dividend rate changes on income received by the Fund affects
our ability to maintain the current level of income paid to shareholders.
Inflation or Purchasing Power Risk Inflation risk is the uncertainty that your
invested dollars may not buy as much in the future as they do today.
Longer-maturity bonds are more subject to this risk than stocks or money market
securities.
Sovereign Risk Sovereign risk is the potential loss of assets or earning power
due to government actions, such as taxation, expropriation, or regulation. Funds
with large investments overseas or funds with tax-advantaged investments are
more subject to this risk.
More in-depth information about risk is provided in the following section and in
the Statement of Additional Information.
Investment Procedures and Risk Considerations
Buying and Selling Securities In general, we purchase and hold securities for
the Fund for capital growth. However, we ordinarily buy and sell securities
whenever we think it is appropriate in order to achieve the Fund's investment
objective. Fund changes can result from liquidity needs, securities reaching a
price objective, anticipated changes in interest rates, a change in the
creditworthiness of an issuer, or from general financial or market developments.
Because investment changes usually are not tied to the length of time a security
has been held, a significant number of short-term transactions may result.
We may sell one security and simultaneously purchase another of comparable
quality. We may simultaneously purchase and sell the same security to take
advantage of short-term differentials in bond yields. Or we may purchase
individual securities in anticipation of relatively short-term price gains. The
rate of portfolio turnover will not be a determining factor in these decisions.
However, certain tax considerations can restrict our ability to sell securities
in some circumstances when the security has been held for less than three
months. Increased turnover results in higher costs. These costs result from
brokerage commissions, dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. This can result in the
acceleration of taxable gains.
Turnover has not been and will not be a consideration. The Investment Adviser
buys and sells securities for the Fund whenever it believes it is appropriate to
do so.
We cannot predict precisely the turnover rates for the Fund, but we expect that
the annual turnover rates will generally not exceed 50% for Fund. A 100% annual
turnover rate would occur if all of the Fund's securities were replaced one time
during a one year period. Short-term gains realized from turnover are taxable to
shareholders as ordinary income, except for shares held in special tax-qualified
accounts (such as IRA's or employer sponsored pension plans). In addition,
higher turnover rates can result in corresponding increases in brokerage
commissions and other transaction costs. We generally will not consider turnover
rates in making investment decisions on behalf of the Fund consistent with the
Fund's investment objective and policies.
For more information, see "What About Taxes?", on page XX, and the Statement of
Additional Information.
Securities Lending As a way to earn additional income, we may lend Fund
securities to creditworthy persons not affiliated with the Fund. Such loans must
be secured by cash collateral or by irrevocable letters of credit maintained on
a current basis in an amount at least equal to the market value of the
securities loaned. During the existence of the loan, we must continue to receive
the equivalent of the interest and dividends paid by the issuer on the
securities loaned and interest on the investment of the collateral. We must have
the right to call the loan and obtain the securities loaned at any time on three
days notice. This includes the right to call the loan to enable us to execute
shareholder voting rights. Such loans cannot exceed one-third of the Fund's net
assets taken at market value. Interest on loaned securities cannot exceed 10% of
the annual gross income of the Fund (without offset for realized capital gains).
The lending policy described in this paragraph is a fundamental policy that can
be changed only by a vote of a majority of shareholders.
Lending securities to broker-dealers and institutions could result in a loss or
a delay in recovering the Fund's securities.
Borrowing We can borrow money from banks or engage in reverse repurchase
agreements, for temporary or emergency purposes. We can borrow up to one-third
of the Fund's total assets. To secure borrowings, we can mortgage or pledge
securities in an amount up to one-third of the Fund's net assets. If we borrow
money, the Fund's share price may be subject to greater fluctuation until the
borrowing is paid off. The Fund will not make any additional investments, other
than through reverse repurchase agreements, while the level of borrowing exceeds
5% of the Fund's total assets. For more information on reverse repurchase
agreements see the "Reverse Repurchase Agreements and Leverage" section below.
Small Capitalization Stocks We can purchase securities of small companies. The
securities of smaller companies are usually less actively followed by analysts
and may be undervalued by the market, which can provide significant
opportunities for Capital appreciation; however, the securities of such smaller
companies may also involve greater risks and may be subject to more volatile
market movements than securities of larger, more established companies. The
securities of small companies are often traded in the over-the counter market,
and might not be traded in volumes typical of securities traded on a national
securities exchange. Thus, the securities of small companies are likely to be
subject to more abrupt or erratic market movements than securities of larger,
more established companies.
Over-The-Counter-Market The Fund may invest in over-the-counter stocks.
Generally, the volume of trading in an unlisted or over-the-counter common stock
is less than the volume of trading in a listed stock. Low trading volumes may
make it difficult to find a buyer or seller for the securities of some
companies. This will have an effect on the purchase or selling price of a stock.
Special Situations The Fund may invest in "special situations" from time to
time. A special situation arises when, in the opinion of the Fund's portfolio
manager, the securities of a particular issuer will be recognized and appreciate
in value due to a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a merger proposal or
buyout, a leveraged recapitalization, a new product or process, a technological
breakthrough, a management change or other extraordinary corporate event, or
differences in market supply of and demand for the security. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention.
Repurchase Agreements We may enter into repurchase agreements with Federal
Reserve System member banks or U.S. securities dealers. A repurchase agreement
occurs when, at the time we purchase an interest-bearing debt obligation, the
seller agrees to repurchase the debt obligation on a specified date in the
future at an agreed-upon price. The repurchase price reflects an agreed-upon
interest rate during the time the Fund's money is invested in the security.
Since the security constitutes collateral for the repurchase obligation, a
repurchase agreement can be considered a collateralized loan. Our risk is the
ability of the seller to pay the agreed-upon price on the delivery date. If the
seller is unable to make a timely repurchase, our expected proceeds could be
delayed, or we could suffer a loss in principal or current interest, or incur
costs in liquidating the collateral. We have established procedures to evaluate
the creditworthiness of parties making repurchase agreements.
We will not invest in repurchase agreements maturing in more than seven days, if
that would result in more than 10% of the Fund's net assets being so invested
when taking into account the remaining days to maturity of our existing
repurchase agreements.
Reverse Repurchase Agreements and Leverage We may enter into reverse repurchase
agreements with Federal Reserve member banks and U.S. securities dealers from
time to time. In a reverse repurchase transaction we sell securities and
simultaneously agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase agreements to
make other investments which either mature or are under an agreement to resell
at a date simultaneous with or prior to the expiration of the reverse repurchase
agreement. The Fund may utilize reverse repurchase agreements only if the
interest income to be earned from the investment proceeds of the transaction is
greater than the interest expense of the reverse repurchase transaction.
Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Fund's
shares to rise or fall faster than would otherwise be the case. There may also
be a risk of delay in the recovery of the underlying securities, if the opposite
party has financial difficulties.
The Fund's obligations under all borrowings, including reverse repurchase
agreements, will not exceed one-third of the Fund's net assets.
When-Issued Securities We may sometimes purchase new issues of securities on a
when-issued basis. The price of when-issued securities is established at the
time the commitment to purchase is made. Delivery of and payment for these
securities typically occur 15 to 45 days after the commitment to purchase. The
market price of the securities at the time of delivery may be higher or lower
than those contracted for on the when-issued security, and there is some risk
the transaction may not be consummated. We maintain a segregated account for the
Fund consisting of cash or high-quality liquid debt securities in an amount at
least equal to the when-issued commitments.
Short Sales We may sell securities which we do not own, or intend to deliver to
the buyer if we do own ("sell short") if, at the time of the short sale, we own
or have the right to acquire an equal amount of the security being sold short at
no additional cost. These transactions allow us to hedge against price
fluctuations by locking in a sale price for securities we do not wish to sell
immediately.
We may make a short sale when we want to sell a security we own at a current
attractive price. This allows us to postpone a gain or loss for federal income
tax purposes and to satisfy certain tests applicable to regulated investment
companies under the Internal Revenue Code of 1986, as amended, (the "Code"). We
will make short sales only if the total amount of all short sales does not
exceed 10% of the Fund. This limitation can be changed at any time.
Municipal Obligations We may invest in municipal obligations for the Fund. In
addition to the usual risks associated with investing for income, the value of
municipal obligations can be affected by changes in the actual or perceived
credit quality. The credit quality of a municipal obligation can be affected by,
among other factors: a) the financial condition of the issuer or guarantor; b)
the issuer's future borrowing plans and sources of revenue; c) the economic
feasibility of the revenue bond project or general borrowing purpose; d)
political or economic developments in the region or jurisdiction where the
security is issued; and e) the liquidity of the security. Because municipal
obligations are generally traded over the counter, the liquidity of a particular
issue often depends on the willingness of dealers to make a market in the
security. The liquidity of some municipal issues can be enhanced by demand
features which enable us to demand payment from the issuer or a financial
intermediary on short notice.
High-Yield ("Junk") Bonds High-yield bonds (commonly called "junk" bonds) are
lower-rated bonds that involve higher current income but are predominantly
speculative because they present a higher degree of credit risk. Credit risk is
the risk that the issuer of the bonds will not be able to make interest or
principal payment on time. If this happens, we would lose some of our income,
and we could expect a decline in the market value of the securities affected. We
need to carefully analyze the financial condition of companies issuing junk
bonds. The prices of junk bonds tend to be more reflective of prevailing
economic and industry conditions, the issuers' unique financial situations, and
the bonds' coupon than to small changes in the level of interest rates. But
during an economic downturn or a period of rising interest rates, highly
leveraged companies can have trouble making principal and interest payments,
meeting projected business goals, and obtaining additional financing.
We may also invest in unrated debt securities. Unrated debt, while not
necessarily of lower quality than rated securities, may not have as broad a
market. Because of the size and perceived demand for the issue, among other
factors, certain municipalities may decide not to pay the cost of getting a
rating for their bonds. We analyze the creditworthiness of the issuer, as well
as any financial institution or other party responsible for payments on the
security, to determine whether to purchase unrated municipal bonds.
Unrated debt securities will be included in the 35% limit on non-investment
grade debt of the applicable Funds, unless we deem such securities to be the
equivalent of investment grade securities. See "Summary of Bond Ratings" on page
XX and in the Statement of Additional Information for a description of bond
rating categories.
Foreign Securities Investing in the securities of foreign issuers involves
special risks and considerations not typically associated with investing in U.S.
companies. These risks and considerations include differences in accounting,
auditing and financial reporting standards, generally higher commission rates on
foreign Fund transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries
and potential restrictions on the flow of international capital and currencies.
Foreign issuers may also be subject to less government regulation than U.S.
companies. Moreover, the dividends and interest payable on foreign securities
may be subject to foreign withholding taxes, thus reducing the net amount of
income available for distribution to the Fund's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities which are denominated or quoted in currencies other than the U.S.
dollar.
Options, Futures, and Other Derivatives We may use options, futures, forward
contracts, and swap transactions ("derivatives") for the Fund. We may seek to
protect the Fund against potential unfavorable movements in interest rates or
securities' prices by investing in derivatives. If those markets do not move in
the direction we anticipate, we could suffer investment losses.
We may purchase, or we may write, call or put options on securities or on
indexes ("options"). We may also enter into interest rate or index futures
contracts for the purchase or sale of instruments based on financial indexes
("futures contracts"), options on futures contracts, forward contracts, and
interest rate swaps and swap-related products. We use these instruments
primarily to adjust the Fund's exposure to changing securities prices, interest
rates, or other factors that affect securities values. This is an attempt to
reduce the overall investment risk.
Risks in the use of these derivatives include, in addition to those referred to
above: a) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Fund has incurred the cost of
the derivative (either its purchase price or, by writing an option, losing the
opportunity to profit from increases in the value of the securities covered)
with no tangible benefit; b) imperfect correlation between the price of
derivatives and the movements of the securities' prices or interest rates being
hedged; c) the possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty to the
transaction does not perform as promised; and e) the possible need to defer
closing out certain positions to avoid adverse tax consequences.
More information on derivatives is contained in the Statement of Additional
Information.
Mortgage-Backed and Asset-Backed Securities We may invest in mortgage-backed and
asset-backed securities. Mortgage-backed and asset-backed securities are
generally pools of many individual mortgages or other loans. Part of the cash
flow of these securities is from the early payoff of some of the underlying
loans. The specific amount and timing of such prepayments is difficult to
predict, creating "prepayment risk." For example, prepayments on Government
National Mortgage Association ("GNMA's") are more likely to increase during
periods of declining long-term interest rates because borrowers tend to
refinance when interest rates drop. In the event of very high prepayments, we
may be required to invest these proceeds at a lower interest rate, causing us to
earn less than if the prepayments had not occurred. Prepayments are more likely
to decrease during periods of rising interest rates, causing the expected
average life to become longer. This variability of prepayments will tend to
limit price gains when interest rates drop and to exaggerate price declines when
interest rates rise.
Zero Coupon Bonds We may invest in zero coupon bonds and strips. Zero coupon
bonds do not make regular interest payments. Instead, they are sold at a
discount from face value. A single lump sum which represents both principal and
interest is paid at maturity. Strips are debt securities whose interest coupons
are taken out and traded separately after the securities are issued, but
otherwise are comparable to zero coupon bonds. The market value of zero coupon
bonds and strips generally is more sensitive to interest rate fluctuations than
interest-paying securities of comparable term and quality.
Illiquid Securities We may invest up to 15% of the Fund's net assets in
securities that are illiquid. Securities are considered illiquid when there is
no readily available market or when they have legal or contractual restrictions.
Repurchase agreements which mature in more than seven days are included as
illiquid securities. It may be difficult for us to sell these investments
quickly for their fair market value.
Certain restricted securities that are not registered for sale to the general
public but that can be resold to institutional investors under Rule 144A may not
be considered illiquid. This is provided that a dealer or institutional trading
market exists. The institutional trading market is relatively new. Liquidity of
the Fund's investments could be impaired if trading for these securities does
not further develop or declines. The Investment Adviser determines the liquidity
of Rule 144A securities under guidelines approved by the Board.
Variable Rate, Floating Rate, or Variable Amount Securities We may invest in
variable rate, floating rate, or variable amount securities for the Fund. These
are short-term unsecured promissory notes issued by corporations to finance
short-term credit needs. They are interest-bearing notes on which the interest
rate generally fluctuates on a scheduled basis.
Investments in Other Investment Companies We may invest up to 10% of the Fund's
total assets in the shares of other investment companies, but only up to 5% of
its assets in any one other investment company. In addition, we cannot purchase
more than 3% of the securities of any one investment company for the Fund. We
intend to keep these investments to a minimum.
Shareholder Services
Our goal is to make your investment in the Fund, and the ongoing account
servicing, as simple as possible by offering the following shareholder services:
Simple application form with service representatives to assist you.
Purchases, exchanges and redemptions by phone.
Purchases and redemptions by wire.
Automatic Investment Plan - you designate an amount of $50 or more to be
automatically withdrawn from your checking, savings or other bank account
and deposited into the Fund you select.
Automatic Exchange Plan - allows you to specify an amount to be
automatically withdrawn from one Fund and deposited into another
Transamerica Premier Fund on a regular basis, once or twice a month.
Automatic Income Plan - you can receive automatic monthly payments from
your Fund account to your checking or savings account.
Automatic investment of dividends. Uniform Gifts to Minors (UGMA or UTMA).
Transmission of redemption proceeds by electronic funds transfer.
Individual Retirement Account (IRA) - we will administer your IRA.
Opening Your Account
To open an account, complete the application and send it to us with a check,
money order, or wire for the amount you want to invest. Mail the application to:
Transamerica Investors
P.O. Box 9232
Boston, MA 02205-9232
If you need help in filling out your application, call one of our customer
service representatives at 1-800-89-ASK-US. We will walk you through the
application and help you understand everything.
IRA Accounts You can establish an Individual Retirement Account ("IRA"), for
yourself or under your employer's Simplified Employee Pension ("SEP"), or other
comparable program allowed by the Internal Revenue Service with us.
Contributions to an IRA may be deductible from your taxable income, depending on
your personal tax situation. Please call 1-800-89-ASK-US for your IRA
application kit, or for additional information. The kit has information on
whether you qualify for deductible contributions to an IRA.
If you are receiving a distribution from your pension plan, or you would like to
transfer your IRA account from another financial institution, you can continue
to get tax-deferred growth by transferring these proceeds to your Transamerica
Premier Fund IRA. If you want to rollover distributions from your pension plan
to an IRA, the money must be paid directly by your pension plan administrator to
Transamerica Investors to avoid a 20% federal withholding tax. See "What About
Taxes?" on page XX.
There is an annual fee of $10 per Fund in which you own shares for administering
your IRA. This is limited to a maximum annual fee of $36 per taxpayer
identification number. We will waive this fee if the combined value of all
shares in your IRA accounts is $5,000 or more when the fee is due.
Alternatively, you can pay a one-time, non-refundable fee of $100 for all IRA
accounts that are maintained under the same taxpayer identification number. You
may pay the fee to us, otherwise we will deduct the annual fee ordinarily during
December of each year or at the time you fully redeem your shares in a Fund, if
before then. The Company reserves the right to change the fee, but we will
notify you at least 30 days in advance of any change.
Uniform Gifts to Minors A Uniform Gifts/Transfers to Minors Act (UGMA/UTMA)
account allows an adult to put assets in the name of a minor child. The adult
maintains control over these assets until the child reaches the age of majority,
which is generally 18 or 21. State laws dictate which type of account can be
used and the age of majority. An adult must be appointed as custodian for the
account and will be legally responsible for administering the account, but the
child's Social Security number must be used. Generally, the person selected as
custodian is one of the parents or grandparents, but may be some other adult
relative or friend. By shifting assets to a custodial account, you may benefit
if the child's tax rate is lower.
How to Buy Shares
You May Buy Shares in One of Four Ways:
1. By Mail Fill out an investment coupon from a previous confirmation statement,
or indicate on your check or a separate piece of paper your name, address and
account number, and mail it to:
TRANSAMERICA INVESTORS
P.O. BOX 9232
BOSTON, MA 02205-9232
All investments made by check should be in U.S. dollars and made payable to
Transamerica Investors, Inc., or in the case of a retirement account, the
custodian. We will not accept third party checks, except those payable to an
existing shareholder who is a natural person (as opposed to a corporation or
partnership), and we will not accept checks drawn on credit card accounts. When
you make purchases by check or automatic investment plan, redemptions will not
be allowed until the investment being redeemed has been in the account for 15
business days.
2. By Automatic Investment Plan You can make investments automatically by
electing this service in your application. It will authorize us to take regular,
automatic withdrawals from your bank account. These periodic investments must be
at least $50 for each Transamerica Premier Fund in which you are automatically
investing. You can change the date or amount of your monthly investment, or
terminate the Automatic Investment Plan, at any time by letter or telephone call
(with prior authorization). Give us your request at least 20 business days
before the change is to become effective. You may also be able to have
investments automatically deducted from:
1. your paycheck at work;
2. your savings account;
3. your annuity from Transamerica;
4. your social security payments; or
5. other sources of your choice.
Call 1-800-89-ASK-US for more information.
3. By Telephone If you elect the telephone purchasing service on your
application, you can make occasional electronic withdrawals from your designated
bank account by calling 1-800-89-ASK-US.
We take reasonable precautions to make sure that telephone instructions are
genuine. Precautions include requiring you to positively identify yourself, tape
recording the telephone instructions, and providing written confirmations. We
accept all telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your responsibility.
If reasonable procedures are not used to confirm that instructions communicated
by telephone are genuine, the Company may be liable for any losses due to
unauthorized or fraudulent transactions.
4. By Wire You can make your initial or subsequent investments in the Fund by
wire. Here's what you need to do:
1. send us your application form (initial investment only);
2. call 1-800-89-ASK-US for a wire number;
3. instruct your bank to wire money to State Street Bank, ABA number
011000028, DDA number 9905-134-4; and
4. specify on the wire:
a) "Transamerica Investors, Inc.";
b) your Fund's account number, if you have one;
c) identify the Funds in which you would like to purchase shares,
and the amount to be allocated
to each Fund (e.g., $5,000 in the Transamerica Premier Small Company Fund);
d) your name, your city and state; and
e) your wire number.
Wired money is considered received by us when we receive the wire and all the
required information listed above. If we receive your telephone call and wire
before the New York Stock Exchange closes, usually 4:00 p.m. Eastern Standard
Time, the money is credited that same day if you have supplied us with all other
needed information.
Minimum Investments
MINIMUM MINIMUM
INITIAL SUBSEQUENT
TYPE OF ACCOUNT INVESTMENT INVESTMENT
Regular Accounts $1,000 $100
Pension or Retirement Saving Programs $250 None
Uniform Gift to Minors (UGMA) or
Transfer to Minors (UTMA) $250 $100
Automatic Investment Plans $50 $50
Your investment must be a specified dollar amount. We cannot accept purchase
requests specifying a certain price, date, or number of shares; these
investments will be returned. The price you pay for your shares will be the next
determined net asset value after your purchase order is received. See "Share
Price" on page XX. The Company reserves the right to reject any application or
investment. There may be circumstances when the Company will not accept new
investments in the Fund. If you have a securities dealer, bank, or other
financial institution handle your transactions with us you may be charged a fee
by them.
How to Sell Shares
You can sell your shares (called "redeeming") at any time. You'll receive the
net asset value next determined after we receive your redemption request,
assuming all requirements have been met. Before redeeming, please read "When
Share Price Is Determined" on page XX, "Minimum Account Balances" on page XX,
and "Points to Remember When Redeeming" on page XX.
You have several options for receiving your redemption: By check; By
electronic transfer to your bank; or By wire transfer
If your wire transfer is $2,500 or less, we will charge a $10 fee. Also, some
banks may charge a fee to receive the wire transfer.
If you call us before the close of the New York Stock Exchange, usually 4:00
p.m. Eastern Standard Time, you will receive the price determined as of the
close of that business day. See "Share Price" on page XX.
You May Sell Shares in One of Three Ways:
1. By Mail Your written instructions to us to redeem shares can be in any one
of the following forms: By redemption form, available by calling
1-800-89-ASK-US; By letter; or By assignment form or other authorization
granting power with respect to your shares in one of the Funds.
Once mailed to us, your redemption request is irrevocable and cannot be modified
or canceled.
If the amount redeemed is over $50,000, all signatures must be guaranteed. See
"Signature Guarantee" on page XX. The request must be signed by each registered
owner. All owners must sign the request exactly as their names appear in the
registration. For example, if the owner's name appears in the registration as
John Michael Smith, he must sign that way and not as John M. Smith.
2. By Telephone If you have previously authorized telephone directions in
writing (e.g., in your application), you can redeem your shares by calling
1-800-89-ASK-US. Be careful in calling, since once made, your telephone request
cannot be modified or canceled.
We take reasonable precautions to make sure that telephone instructions are
genuine. Precautions include requiring you to positively identify yourself, tape
recording the telephone instructions, and providing written confirmations. We
accept all telephone instructions we reasonably believe to be accurate and
genuine. Any losses arising from communication errors are your responsibility.
If reasonable procedures are not used to confirm that instructions communicated
by telephone are genuine, the Company may be liable for any losses due to
unauthorized or fraudulent transactions. For detailed information on how
telephone transactions will operate, see the Statement of Additional
Information.
3. By Automatic Income Plan Under the Automatic Income Plan we automatically
redeem enough shares each month to provide you with a check or automatic deposit
to your bank account. The minimum is $50 per Fund. Please tell us:
a) when you want to be paid each month;
b) how much you want to be paid; and
c) from which Fund(s).
To set up an Automatic Income Plan, call us at 1-800-89-ASK-US.
If your monthly income payments exceed the dividends, interest, and capital
appreciation on your shares, the payments will deplete your investment.
You can specify the Automatic Income Plan when you make your first investment.
If you sign up for the plan later, the request for the Automatic Income Plan or
any increase in payment amount must be signed by all owners of your account.
You can request us to send payments to an address other than the address of
record at the time of your first investment. After that, a request to send
payments to an address other than the address of record must be signed by all
owners of your account, with their signatures guaranteed.
The Automatic Income Plan option can be terminated at any time. If it is, we
will notify you. You can terminate the Plan or change the amount of the payments
by writing or calling us. Termination or change will become effective within 15
days after we receive your instructions.
How Long Will It Take? We will usually send your redemption payment to you on
the second business day after we receive your request, but not later than seven
days afterwards, assuming we have all the information we need. If the
information you provide us is incomplete, we will contact you, but this may
delay the redemption.
The Company may postpone such payment if: (a) the New York Stock Exchange is
closed for other than usual weekends or holidays, or trading on the New York
Stock Exchange is restricted; (b) an emergency exists as defined by the U.S.
Securities and Exchange Commission (the "Commission"), or the Commission
requires that trading be restricted; or (c) the Commission permits a delay for
the protection of investors.
When a redemption occurs shortly after a recent check purchase, the redemption
proceeds may be held beyond seven days but only until the purchase check clears,
which may take up to 15 days. If you anticipate redemptions soon after you
purchase your shares by check, you can avoid this delay by wiring your purchase
payment.
Points to Remember When Redeeming
All redemptions are made and the price is determined on the day we receive
all necessary documentation. See "When Share Price Is Determined" on page
XX.
We cannot accept redemptions specifying a certain date or dollar price. It
must be an amount. We will return these requests.
If you request a redemption check within 30 days of your address change,
you must send us your request in writing with a signature guarantee. Keep
your address current by writing or calling in your new address to us as
soon as possible.
Except for a transfer of redemption proceeds to the custodian of a
tax-qualified plan, we will make all payments to the registered owner of
the shares, unless you tell us otherwise.
We will mail all checks to the address of record, unless you tell us
otherwise.
If the redemption request is made by a corporation, partnership, trust,
fiduciary, agent, or unincorporated association, the individual signing the
request must be authorized. If the redemption is from an account under a
qualified pension plan, spousal consent may be required.
A request to redeem shares in an IRA or 403(b) plan must be accompanied by
an IRS Form W4-P (pension income tax withholding form, which we will
provide) and a reason for withdrawal. This is required by the IRS.
For redemptions greater than $250,000 the Company reserves the right to
give you marketable securities instead of cash. See the Statement of
Additional Information, or call us at 1-800-89-ASK-US.
Please call us at 1-800-89-ASK-US or write to Transamerica Investors, P.O. Box
9232, Boston, MA 02205-9232 for further information.
How to Exchange Shares Between Transamerica Premier Funds
If your investment needs change, you can exchange shares in the Fund for shares
of any other Transamerica Premier Fund. You can exchange shares by any of the
following methods:
By mail;
By telephone; or
By the Automatic Exchange Plan
By Mail or Telephone The procedures relating to exchanges in writing and by
telephone are the same as for purchases. Exchanges are available to any resident
of any state in which shares of the Transamerica Premier Funds are legally sold.
By Automatic Exchange Plan You can make automatic share exchanges either once or
twice a month. You can request this service in writing to us. Your request must
be signed by all registered owners of the account. Call 1-800-89-ASK-US for
information.
Points to Remember When Making Exchanges
Make sure you have read the prospectus and understand the investment
objective of the Transamerica Premier Fund into which you are exchanging
shares. Prospectuses for other Transamerica Premier Funds can be ordered by
dialing 1-800-89-ASK-US. The exchange service is not designed to give
shareholders the opportunity to "time the market." It gives you a
convenient way to change the balance between the accounts so that it more
closely matches your overall investment objectives and risk tolerance
level.
You can make an unlimited number of exchanges between the Transamerica
Premier Funds. However, unless you are using the Automatic Exchange Plan,
further exchanges may be suspended for the remainder of any calendar year
during which you make more than four exchanges involving a single Fund.
This limitation is designed to keep each Fund's asset base stable and to
reduce its administrative expenses.
An exchange is treated as a sale of shares from one Transamerica Premier
Fund and the purchase of shares in another Transamerica Premier Fund.
Exchanges are taxable events. See "What About Taxes?" on page XX.
Exchanges into or out of the Transamerica Premier Funds are made at the
next determined net asset value per share after we receive all necessary
information for the exchange.
Exchanges are accepted only if the ownership registrations of both
accounts are identical. The Company reserves the right to reject any
exchange request and to modify or terminate the exchange
option at any time.
Other Investor Requirements and Services
Tax Identification Number You must furnish your taxpayer identification number
and state whether or not you are subject to backup withholding for prior
under-reporting. If you don't furnish your tax I.D. number, redemptions or
exchanges of shares, as well as dividends and capital gains distributions, will
be subject to federal withholding tax.
Changing Your Address To change the address on your account, please call us at
1-800-89-ASK-US, or send us a written notification signed by all registered
owners of your account. Include the name of your Transamerica Premier Fund(s),
the account number(s), the name(s) on the account and both the old and new
addresses. Within the first 30 days after an address change, telephone
redemptions are permissible only if the redemption proceeds are wired or
electronically transferred. See "How to Sell Shares" on page XX.
Signature Guarantee When a signature guarantee is required, e.g., when the
redemption amount is more than $50,000, the signature of each owner of record
must be guaranteed by a bank or trust company (or savings bank, savings and loan
association, or a member of a national stock exchange). This is required to
comply with general stock transfer rules. You must obtain a written guarantee
that states "Signature(s) Guaranteed" and is signed in the name of the guarantor
by an authorized person. If you have any questions, call 1-800-89-ASK-US.
Our policy to waive the signature guarantee for amounts of $50,000 or less can
be amended or discontinued at any time. A signature guarantee may be required
with regard to any particular redemption transaction.
Minimum Account Balances You must maintain a minimum balance of $500 in the
Fund. If your account balance falls below $500 as a result of your action, we
will notify you. You will have 30 days to increase your balance to or above the
minimum. If you do not increase your balance, we will redeem your shares and pay
the value to you.
This minimum does not apply if you are actively contributing to the Fund through
an Automatic Investment Plan or if your investment in the Fund is for a Pension
or Retirement Savings Program (including IRAs), or for an UGMA/UTMA.
How You Will Get Ongoing Information About the Fund? When you open your account,
purchase, redeem, transfer, or exchange shares, we will send you a confirmation
of the transaction. We will also send you a consolidated, quarterly statement of
your account showing all transactions since the beginning of the current
quarter. You can request a statement of your account activity at any time.
We will send you an annual report that includes audited financial statements for
the fiscal year. It will include a list of securities in the Fund on that date.
We will also send you a semi-annual report that includes unaudited financial
statements for the previous six months. It will also include a list of
securities in the Fund on that date.
We will send you a new Prospectus each year. The Statement of Additional
Information is also revised each year; however, we will send this to you only if
you request it.
How to Transfer Your Shares to Another Person You can transfer ownership of your
shares to another person or organization, or change the name on an account, by
sending us written instructions. The request must be signed by all registered
owners of your account. To change the name on an account, the shares must be
transferred to a new account. The request must include a signature guarantee.
See "Signature Guarantee" on page XX. This option is not available for Pension
or Retirement Savings Programs. Please call us at 1-800-89-ASK-US for additional
information.
The Company reserves the right to amend, suspend, or discontinue offering any of
these options at any time without prior notice.
Dividends and Capital Gains
We distribute substantially all of the Fund's net investment income in the form
of dividends to you. The Transamerica Premier Small Company Fund distributes
dividends on an annual basis.
We distribute net capital gains, if any, on the Fund annually.
You can select from among the following distribution options:
REINVESTED You can have all of your dividends and capital gains distributions
reinvested in additional shares the Fund or of any Transamerica Premier Fund.
Unless you choose one of the other options, we will select this option for you
automatically CASH AND You can choose to have either your dividends or your
capital gains REINVESTED paid in cash and the other will be reinvested in
additional shares in the Fund or any other Transamerica Premier Fund; or ALL
CASH You can choose to have your dividends and capital gains distributions paid
in cash.
We make distributions for the Fund on a per share basis to the shareholders of
record as of the distribution date of the Fund. We do this regardless of how
long the shares have been held. That means if you buy shares just before or on a
record date, you will pay the full price for the shares and then you may receive
a portion of the price back as a taxable distribution.
What About Taxes?
Federal Taxes* Dividends paid by the Fund from net investment income, the excess
of net short-term capital gain over net long-term capital loss, and original
issue discount or certain market discount income will be taxable to shareholders
as ordinary income. Distributions paid by the Fund from the excess of net
long-term capital gain over net short-term capital loss will be taxable as
long-term capital gains regardless of how long the shareholders have held their
shares. These tax consequences will apply regardless of whether distributions
are received in cash or reinvested in shares. A portion of the dividends paid to
corporate shareholders may qualify for the corporate dividends-received
deduction to the extent the Fund earns qualifying dividends. We will notify you
after each calendar year of the amount and character of distributions you
received from the Fund for federal tax purposes.
For IRA's and pension plans, dividends and capital gains are reinvested and not
taxed until you receive a qualified distribution from your IRA or pension plan.
You need to consider the tax implications of buying shares immediately prior to
a dividend or capital gain distribution. Investors who purchase shares shortly
before the record date for a distribution will pay a per share price that
includes the value of the anticipated distribution. You will be taxed when you
receive the distribution even though the distribution represents a return of a
portion of the purchase price. You may want to call us at 1-800-89-ASK-US before
your purchase. We will tell you if a distribution is due.
Redemptions and exchanges of shares are taxable events which may represent a
gain or a loss for the shareholder.
Individuals and certain other classes of shareholders may be subject to backup
withholding of federal income tax on distributions, redemptions and exchanges if
they fail to furnish their correct taxpayer identification number. Individuals,
corporations and other shareholders that are not U.S. persons under the Code are
subject to different tax rules. They may be subject to nonresident alien
withholding on amounts considered ordinary dividends from the Fund.
When you sign your account application, you will be asked to certify that your
social security or taxpayer identification number is correct. You will also be
asked to certify that you are not subject to backup withholding for failure to
report income to the Internal Revenue Service.
Pension and Retirement Savings Programs The tax rules applicable to participants
and beneficiaries in Pension and Retirement Savings Programs vary according to
the type of plan and the terms and conditions of the plan. In general,
distributions from these plans are taxed as ordinary income. Special favorable
tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits: 1. distributions prior to age 591\2 (subject to certain
exceptions); 2. distributions that do not conform to specified commencement and
minimum distribution rules; 3. aggregate distributions in excess of a specified
annual amount; and 4. in other specified circumstances.
You should consult a qualified tax adviser for more information.
Other Taxes In addition to federal taxes, you may be subject to state and local
taxes on payments received from us. Depending on the state tax rules pertaining
to a shareholder, a portion of the dividends paid by a Fund that come from
direct obligations of the U.S. Treasury and certain agencies may be exempt from
state and local taxes. Check with your own tax adviser regarding specific
questions as to federal, state and local taxes.
*For each taxable year, we intend to qualify the Fund as a regulated investment
company under Subchapter M of the Code. Qualifying regulated investment
companies distributing substantially all of their ordinary income and capital
gains are not subject to federal income or excise tax on any net investment
income and net realized capital gains distributed to shareholders. However, the
shareholders (you) are subject to tax on these distributions.
Share Price
How Share Price Is Determined We value Fund securities, primarily traded on a
domestic securities exchange or NASDAQ, at the last sale price on that exchange
on the day the valuation is made. We take price information on listed securities
from the exchange where the security is primarily traded. If no sale is
reported, we use the mean of the latest bid and asked prices. We generally price
securities traded over-the-counter the same way. When market quotations are not
readily available, we value securities and other assets at fair value as
determined in good faith by the Board.
We will value all securities with maturities of 60 days or less at the time of
purchase, on the basis of amortized cost when the Board determines that
amortized cost is fair value. Amortized cost involves valuing an investment at
its cost and a constant amortization to maturity of any discount or premium,
regardless of the effect of assuming movements in interest rates. For more
information, see the Statement of Additional Information.
When Share Price Is Determined The price of your shares is their net asset
value. We determine the net asset value by calculating the total value of the
Fund's assets, deducting total liabilities, and dividing the result by the
number of shares outstanding. We determine the net asset value only on days that
the New York Stock Exchange (the "Exchange") is open.
If we receive your investment or redemption request before the close of business
on the Exchange, usually 4:00 p.m. Eastern Standard Time, your share price for
that transaction will be the price we determine at the close of the Exchange
that day. When investment and redemption requests are received after the
Exchange is closed, we use the share price at the close of the Exchange the next
day the Exchange is open. We consider investment and redemption requests by
telephone to be received at the time of your telephone call, assuming you've
given us all required information.
We consider purchase payments to be received only when your check, wire, or
automatic investment funds are received by us along with all required
information. We consider wired funds to be received on the day they are
deposited in the Company's bank account. If you call us with wire instructions
before the Exchange closes, we usually deposit the money that day.
Where To Find Information About Share Price You can get the current net asset
values of the Fund by calling us at 1-800-89-ASK-US. The net asset value of the
Fund may also be published in leading newspapers daily, once its net assets
reach a certain amount. Weekly updates of the Fund's net asset value are
available on the Transamerica Premier Funds Web site at
http://funds.transamerica.com.
Organization and Management
Transamerica Investors, Inc. Transamerica Investors, Inc. was organized as a
Maryland corporation on February
22, 1995. The Company is registered with the Securities and Exchange Commission
under the 1940 Act as an open-end
management investment company of the series type. The Fund constitutes a
separate series, and is part of a family
of series known as the Transamerica Premier Funds. The fiscal year-end of the
Fund is December 31.
The Company is authorized to issue and sell multiple classes of shares for each
its Funds. The Company reserves the right to issue additional classes of shares
in the future without the consent of shareholders, and can allocate any
remaining unclassified shares or reallocate any unissued classified shares.
Except for the differences noted below and elsewhere in this Prospectus, each
share of the Fund has equal dividend, redemption and liquidation rights with
other shares of the Fund and when issued, is fully paid and nonassessable. Each
share of each class represents an identical legal interest in the same
investments of the Fund. Should several classes be offered, each class has
certain other expenses related solely to that class. Each class will have
exclusive voting rights under the 12b-1 distribution plan. In the event that a
special meeting of shareholders is called, separate votes are taken by each
class only if a matter affects, or requires the vote of, just that class.
Although the legal rights of holders of each class of shares are identical, it
is likely that the difference in expenses will result in different net asset
values and dividends. The classes may have different exchange privileges.
As a Maryland corporation, the Company is not required to hold regular annual
meetings of shareholders. Ordinarily there will be no shareholder meetings,
unless requested by shareholders holding 10% or more of the outstanding shares,
or unless required by the 1940 Act or Maryland law. You are entitled to cast one
vote for each share you own of each Transamerica Premier Fund. At a special
shareholders meeting, if one is called, issues that affect all the Transamerica
Premier Funds in substantially the same way will be voted on by all
shareholders. Issues that do not affect a Transamerica Premier Fund will not be
voted on by that Transamerica Premier Fund. Issues that affect all Funds, but in
which their interests are not substantially the same, will be voted on
separately by each Transamerica Premier Fund.
Investment Adviser Services The Investment Adviser is responsible for making
investment decisions for the Fund. The Investment Adviser is also responsible
for the selection of brokers and dealers to execute transactions for the Fund.
Some of these brokers or dealers may be affiliated persons of the Company, the
Investment Adviser, Administrator, or the Distributor. Since it is our policy to
seek the best price and execution for each transaction, the Investment Adviser
may give consideration to brokers and dealers who provide us with statistical
information and other services in addition to transaction services. Additional
information about the selection of brokers and dealers is provided in the
Statement of Additional Information.
Trading decisions for the Fund described in this Prospectus are made by a team
of expert managers and analysts headed by a team leader. The team leader is
primarily responsible for the day-to-day decisions related to the Fund. He is
supported by the entire group of managers and analysts. The team leader of the
Fund may be on another Transamerica Premier Fund team. The transactions and
performance of the Transamerica Premier Funds are reviewed continuously by the
Investment Adviser's senior officers.
The team leader for the Fund is Phillip Treick, Vice President and Fund Manager,
Transamerica Investment
Services. B.S., University of South Florida, 1987. Financial Analyst, Raymond
James Financial Corporation, 1987
- - 1988. Joined Transamerica in 1988.
Adviser Fee For its services to the Fund, the Investment Adviser receives an
Adviser Fee. This fee is based on an annual percentage of the average daily net
assets of the Fund. It is accrued daily, and paid monthly.
The annual fee percentages for the Fund is .85% on the first $1 billion of
assets. This reduces to .82% on the next $1 billion, and finally .80% on assets
over $2 billion.
Administrator Services The Investment Adviser pays part of the Adviser Fee to
the Administrator. The Administrator provides office space for the Company and
pays the salaries, fees and expenses of all Company officers and those directors
affiliated with Transamerica Corporation and not already paid by the Investment
Adviser. The Fund pays all of its expenses not assumed by the Administrator.
This includes transfer agent and custodian fees and expenses, legal and auditing
fees, printing costs of reports to shareholders, registration fees and expenses,
12b-1 fees, and fees and expenses of directors unaffiliated with Transamerica
Corporation.
The Administrator may from time to time reimburse the Fund for some or all of
its operating expenses, including 12b-1 fees. Such reimbursements will increase
the Fund's return. This is intended to make the Fund more competitive. This
practice may be terminated at any time.
Custodian and Transfer Agent Under a Custodian Agreement, State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, Massachusetts
02110, holds all securities and cash assets of the Fund, provides recordkeeping
services, and serves as the Fund's custodian. State Street is authorized to
deposit securities in securities depositories or to use services of
sub-custodians.
Under a Transfer Agency Agreement, State Street Bank also serves as the Fund's
transfer agent. The transfer agent
is responsible for: a) opening and maintaining your account; b) reporting
information to you about your account;
c) paying you dividends and capital gains; and d) handling your requests for
exchanges, transfers and redemptions.
Distributor Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter and distributor of the shares of the Fund.
TSSC is a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which is a wholly-owned subsidiary of Transamerica Corporation. TSSC
is registered with the Securities and Exchange Commission as a broker-dealer.
TSSC is also a member of the National Association of Securities Dealers, Inc.
Distribution Plan The Fund makes payments to TSSC according to a plan adopted to
meet the requirements of Rule 12b-1 under the Investment Company Act of 1940, as
amended. These fees accrue daily and are based on an annual percentage of the
daily average net value of the assets.
The 12b-1 plan of distribution and related distribution contracts require the
Fund to pay distribution and service fees to TSSC as compensation for its
activities, not as reimbursement for specific expenses. If TSSC's expenses are
more than its fees for the Fund, the Fund will not have to pay more than those
fees. If TSSC's expenses are less than the fees, it will keep the excess. The
Company will pay the distribution and service fees to TSSC until the
distribution contracts are terminated or not renewed. In that event, TSSC's
expenses over and above any fees through the termination date will be TSSC's
sole responsibility and not the obligation of the Company. The Board will review
and approve the distribution plan, contracts and TSSC's expenses quarterly.
There is an annual 12b-1 distribution fee of .25% of the average daily net
assets of the Fund. This fee covers such expenses as preparation, printing and
mailing of the Prospectus and Statement of Additional Information, as well as
sales literature and other media advertising, and related expenses. It can also
be used to compensate sales personnel involved with selling the Fund.
From time to time, the Distributor may waive all or any portion of these fees at
its discretion.
Performance Information The Company may publish performance information about
the Fund. Fund performance usually will be shown either as cumulative total
return or average periodic total return compared with other mutual funds by
public ranking services, such as Lipper Analytical Services, Inc. Cumulative
total return is the actual performance over a stated period of time. Average
annual total return is the hypothetical return, compounded annually, that would
have produced the same cumulative return if the Fund's performance had been
constant over the entire period. The Fund's total return shows its overall
dollar or percentage change in value. This includes changes in the share price
and reinvestment of dividends and capital gains.
The performance of the Fund can also be measured in terms of yield. The Fund's
yield shows the rate of income the Fund earns on its investments as a percentage
of the Fund's share price.
The Fund can also separate its cumulative and average annual total returns into
income results and capital gains or losses. The Fund can quote its total returns
on a before-tax or after-tax basis.
The performance information which may be published for the Fund is historical.
It is not intended to represent or guarantee future results. The value of your
Fund shares can be more or less than their original cost when they are redeemed.
Summary of Bond Ratings Following is a summary of the grade indicators used by
two of the most prominent, independent rating agencies (Moody's Investors
Service, Inc. and Standard & Poor's Corporation) to rate the quality of bonds.
The first four categories are generally considered investment quality bonds.
Those below that level are of lower quality, commonly referred to as "junk
bonds."
STANDARD &
INVESTMENT GRADE MOODY'S POOR'S
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default C D
For more detailed information on bond ratings, including gradations within each
category of quality, see the Statement of Additional Information.
Pension and Retirement Savings Programs
Following is a listing of Pension and Retirement Savings Programs. Provided you
have the necessary plan documents, you can use the Transamerica Premier Funds as
investment options for:
401(a), 401(k), profit sharing, or money purchase pension plans (including
KEOGH/HR 10 Plans) designed to benefit employees of corporations,
partnerships, and sole proprietors.
Section 403(b)(7) (Tax-Sheltered Annuity) Plans* for employees of
educational organizations or other qualifying, tax exempt organizations.
Individual Retirement Account ("IRA"), or comparable program, for
individuals and Simplified Employee Pension ("SEP") Plans for employers
(including sole proprietors) and their employees.
Section 457 deferred compensation plans for employees of state governments
and tax exempt organizations. Employers' non-qualified plans or savings
programs, that do not qualify for federal tax advantages.
Other retirement plans or savings programs allowed by the Board.
*You may be required to have your own custodian for this plan.
<PAGE>
2
Transamerica Premier Funds
Statement of Additional Information
June 25, 1997
Your Guide
This Statement of Additional Information pertains to the Transamerica Premier
Aggressive Growth and Transamerica Premier Small Company Funds (the"Fund" or
collectively the "Funds") only. In addition to the Funds, other series of
Transamerica Investors, Inc. (the "Company") include: Transamerica Premier
Equity Fund, Transamerica Premier Index Fund, Transamerica Premier Bond Fund,
Transamerica Premier Balanced Fund, and Transamerica Premier Cash Reserve Fund.
This Statement of Additional Information will provide you with details beyond
what is available in the Prospectuses. Please refer to the Prospectuses first,
then to this document. Please read it carefully. Save it for future reference.
The Premier Funds
Transamerica Premier Aggressive Growth Fund
The Fund seeks to maximize long-term growth of capital by investing in common
stocks selected for their growth potential resulting from growing franchises
protected by high barriers to competition.
Transamerica Premier Small Company Fund
The Fund seeks to maximize long-term growth by investing in small company
stocks.
About the Prospectuses
This Statement of Additional Information is not a prospectus. It should be read
in connection with the current Prospectuses dated June 25, 1997. The
Prospectuses are available without charge by calling 1-800-89-ASK-US.
Terms used in the Prospectuses are incorporated in this Statement of Additional
Information.
Contents
Investment Objectives and Policies 2
Investment Restrictions 11
Management of the Company 14
Investment Advisory and Other Services 15
Purchases and Redemptions of Shares 17
Brokerage Allocation 18
Determination of Net Asset Value 19
Performance Information 20
Taxes 22
Other Information 23
Appendix A: Description of Corporate Bond Ratings 24
Appendix B: Description of Fixed-Income Instruments 26
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectuses dated June 25, 1997, as revised from time to
time, and if given or made, such information or representations may not be
relied upon as having been authorized by the Funds.
Investment Objectives and Policies
The investment objectives and policies of the Funds are described in the
Prospectuses. The achievement of each Fund's investment objectives will depend
on market conditions generally and on the analytical and portfolio management
skills of the Investment Adviser.
High Yield ("Junk") Bonds. High-yield bonds (commonly called "junk" bonds) are
lower rated bonds that involve a higher degree of credit risk. See Appendix A
for a description of credit ratings. Credit risk is the risk that the issuer of
the bonds will not be able to make interest or principal payment on time. If
this happened to a bond in a Fund, the Fund would lose some of its income, and
could expect a decline in the market value of the securities affected. So the
Investment Adviser needs to carefully analyze the financial condition of
companies issuing junk bonds. The prices of junk bonds tend to be more
reflective of prevailing economic and industry conditions, issuers' unique
financial situations, and the bonds' coupon than to small changes in the level
of interest rates. But during an economic downturn or a period of rising
interest rates, highly leveraged companies may have trouble making principal and
interest payments, meeting projected business goals, and obtaining additional
financing. Junk bonds' values will generally decrease in a rising interest rate
market.
Junk bonds may contain "call" provisions, which enable the issuers of the bond
to redeem the bond at will. If the issuer exercises this privilege during a
declining interest rate market, the Fund would replace the bond most likely with
a lower yield bond, resulting in a lower return for investors.
Periods of economic or political uncertainty and change can create some
volatility for junk bonds. Since the last major economic recession, there has
been a substantial increase in the use of high-yield debt securities to fund
highly leveraged corporate acquisitions and restructurings. Past experience with
high-yield securities in a prolonged economic downturn may not provide an
accurate indication of future performance during such periods. Lower rated
securities may also be harder to sell than higher rate securities because of bad
publicity and investor perceptions of this market, as well as new or proposed
laws dealing with high yield securities. For many junk bonds, there is no
established retail secondary market. As a result, it may be difficult for the
Investment Adviser to accurately value the bonds because they cannot rely on
available, objective data.
Each Fund may also invest in unrated debt securities. Unrated debt, while not
necessarily of lower quality than rated securities, may not have as broad a
market. Since these ratings do not consider factors relevant to each issue, and
may not be updated regularly, the Investment Adviser may treat high yield
securities as unrated debt.
Because of the size and perceived demand of the issue, among other factors,
certain municipalities may decide not to pay the cost of getting a rating for
their bonds. The Investment Adviser will analyze the creditworthiness of the
issuer, as well as any financial institution or other party responsible for
payments on the security, to determine whether to purchase unrated municipal
bonds. See Appendix B for a description of fixed income instruments.
Restricted and Illiquid Securities. A Fund may purchase certain restricted
securities of U.S. issuers (those that are not registered under the Securities
Act of 1933, as amended (the "1933 Act") but can be offered and sold to
"qualified institutional buyers" under Rule 144A of that Act) and limited
amounts of illiquid investments, including illiquid restricted securities.
Illiquid investments include many restricted securities, repurchase agreements
that mature in more than seven days, fixed time deposits that mature in more
than seven days and participation interests in loans.
Certain repurchase agreements which provide for settlement in more than seven
days, however, can be liquidated before the nominal fixed term of seven days or
less notice. The Investment Adviser will consider such repurchase agreements as
liquid. Likewise, restricted securities (including commercial paper issued
pursuant to Section 4(2) of the 1933 Act) that the Board or the Investment
Adviser have determined to be liquid will be treated as such.
The SEC staff has taken the position that fixed time deposits maturing in more
than seven days that cannot be traded on a secondary market and participation
interests in loans are illiquid and not readily marketable. A considerable
amount of time may elapse between a Fund's decision to dispose of restricted or
illiquid securities and the time which such Fund is able to dispose of them,
during which time the value of such securities (and therefore the value of the
Fund's shares held by an account) could decline.
Derivatives. Each Fund may use options, futures, forward contracts, and swap
transactions ("derivatives"). The Funds may purchase and write, call or put
options on securities or on indexes ("options") and may enter into interest rate
or index futures contracts for the purchase or sale of instruments based on
financial indexes ("futures contracts"), options on futures contracts, forward
contracts, and interest rate swaps and swap-related products. The Funds may
invest more than 35% of their assets in derivatives.
By investing in derivatives, the Investment Adviser may seek to protect a Fund
against potentially unfavorable movements in interest rates or securities'
prices, or attempt to adjust a Fund's exposure to changing securities prices,
interest rates, or other factors that affect securities values. This is done in
an attempt to reduce a Fund's overall investment risk. Although it will not
generally be a significant part of a Fund's strategies, the Investment Adviser
may also use derivatives to enhance returns. Opportunities to enhance returns
arise when the derivative does not reflect the fair value of the underlying
securities. None of the Funds will use derivatives for leverage.
Risks in the use of derivatives include, in addition to those referred to above:
(1) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Fund has incurred the cost of
the derivative (either its purchase price or, by writing an option, losing the
opportunity to profit from increases in the value of the securities covered)
with no tangible benefit; (2) imperfect correlation between the price of
derivatives and the movements of the securities' prices or interest rates being
hedged; (3) the possible absence of a liquid secondary market for any particular
derivative at any time (some derivatives are not actively traded but are custom
designed to meet the investment needs of a narrow group of institutional
investors and can become illiquid if the needs of that group of investors
change); (4) the potential loss if the counterparty to the transaction does not
perform as promised; and (5) the possible need to defer closing out certain
positions to avoid adverse tax consequences.
The Board will closely monitor the Investment Adviser's use of derivatives in
each of the Funds to assure they are used in accordance with the investment
objectives of each Fund.
Options on Securities and Securities Indexes. A Fund may write (i.e., sell)
covered call and put options on any securities in which it may invest. A call
option written by a Fund obligates the Fund to sell specified securities to the
holder of the option at a specified price if the option is exercised at any time
before the expiration date. All call options written by a Fund are covered,
which means that the Fund will own the securities subject to the option so long
as the option is outstanding. A Fund's purpose in writing covered call options
is to realize greater income than would be realized on securities transactions
alone. However, by writing the call option a Fund might forgo the opportunity to
profit from an increase in the market price of the underlying security.
A put option written by a Fund would obligate the Fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by a
Fund would be covered, which means that such Fund would have deposited with its
custodian cash or liquid high grade debt securities with a value at least equal
to the exercise price of the put option. The purpose of writing such options is
to generate additional income for the Fund. However, in return for the option
premium, a Fund accepts the risk that it might be required to purchase the
underlying securities at a price in excess of the securities' market value at
the time of purchase.
In addition, a written call option or put option may be covered by maintaining
cash or liquid high grade debt securities in a segregated account with its
custodian or by purchasing an offsetting option or any other option which, by
virtue of its exercise price or otherwise, reduces a Fund's net exposure on its
written option position.
A Fund may also write (sell) covered call and put options on any securities
index composed of securities in which it may invest. Options on securities
indexes are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.
A Fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities in the Fund. A Fund may cover call and put options on a securities
index by maintaining cash or liquid high grade debt securities with a value
equal to the exercise price in a segregated account with its custodian.
A Fund may terminate its obligations under an exchange traded call or put option
by purchasing an option identical to the one it has written. Obligations under
over-the-counter options may be terminated only by entering into an offsetting
transaction with the counterparty to such option. Such purchases are referred to
as "closing purchase" transactions.
A Fund may purchase put and call options on any securities in which it may
invest or options on any securities index based on securities in which it may
invest. A Fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it had purchased.
A Fund would normally purchase call options in anticipation of an increase in
the market value of securities of the type in which it may invest. The purchase
of a call option would entitle a Fund, in return for the premium paid, to
purchase specified securities at a specified price during the option period. A
Fund would ordinarily realize a gain if, during the option period, the value of
such securities exceeded the sum of the exercise price, the premium paid and
transaction costs; otherwise the Fund would realize a loss on the purchase of
the call option.
A Fund would normally purchase put options in anticipation of a decline in the
market value of its securities ("protective puts") or in securities in which it
may invest. The purchase of a put option would entitle a Fund, in exchange for
the premium paid, to sell specified securities at a specified price during the
option period. The purchase of protective puts is designed to offset or hedge
against a decline in the market value of a Fund's securities. Put options may
also be purchased by a Fund for the purpose of affirmatively benefiting from a
decline in the price of securities which it does not own. A Fund would
ordinarily realize a gain if, during the option period, the value of the
underlying securities decreased below the exercise price sufficiently to cover
the premium and transaction costs; otherwise such a Fund would realize a loss on
the purchase of the put option.
A Fund would purchase put and call options on securities indexes for the same
purposes as it would purchase options on individual securities.
Risks Associated with Options Transactions. There is no assurance that a liquid
secondary market on an options exchange will exist for any particular
exchange-traded option or at any particular time. If a Fund is unable to affect
a closing purchase transaction with respect to covered options it has written,
the Fund will not be able to sell the underlying securities or dispose of assets
held in a segregated account until the options expire or are exercised.
Similarly, if a Fund is unable to effect a closing sale transaction with respect
to options it has purchased, it would have to exercise the options in order to
realize any profit and will incur transaction costs upon the purchase or sale of
underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an exchange or the Options
Clearing Corporation may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that exchange (or in that class or series of options) would cease to
exist, although outstanding options on that exchange that had been issued by the
Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
A Fund may purchase and sell both options that are traded on U.S., United
Kingdom, and other exchanges and options traded over-the-counter with
broker-dealers who make markets in these options. The ability to terminate
over-the-counter options is more limited than with exchange-traded options and
may involve the risk that broker-dealers participating in such transactions will
not fulfill their obligations. Until such time as the staff of the SEC changes
its position, a Fund will treat purchased over-the-counter options and all
assets used to cover written over-the-counter options as illiquid securities,
except that with respect to options written with primary dealers in U.S.
government securities pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid securities may be
calculated with reference to the formula.
Transactions by a Fund in options on securities and securities indexes will be
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group of investors
acting in concert. Thus, the number of options which a Fund may write or
purchase may be affected by options written or purchased by other investment
advisory clients of the Investment Adviser of the Funds. An exchange, board of
trade or other trading facility may order the liquidations of positions found to
be in excess of these limits, and it may impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary securities transactions. The successful use of protective puts for
hedging purposes depends in part on an ability to anticipate future price
fluctuations and the degree of correlation between the options and securities
markets.
Futures Contracts and Options on Futures Contracts. A Fund may purchase and sell
futures contracts and may also purchase and write options on futures contracts.
A Fund may purchase and sell futures contracts based on various securities (such
as U.S. government securities), securities indexes, and other financial
instruments and indexes. A Fund will engage in futures or related options
transactions only for bona fide hedging purposes as defined below or to increase
total returns to the extent permitted by regulations of the Commodity Futures
Trading Commission ("CFTC"). All futures contracts entered into by a Fund are
traded on U.S. exchanges or boards of trade that are licensed and regulated by
the CFTC.
Futures Contracts. A futures contract may generally be described as an
agreement between two parties to buy or sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, a Fund can seek
to offset a decline in the value of its current securities through the sale of
futures contracts. When rates are falling or prices are rising, a Fund, through
the purchase of futures contracts, can attempt to secure better rates or prices
than might later be available in the market when it effects anticipated
purchases.
Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions which may result in a
profit or a loss. While a Fund's futures contracts on securities will usually be
liquidated in this manner, it may instead make or take delivery of the
underlying securities whenever it appears economically advantageous for a Fund
to do so. A clearing corporation associated with the exchange on which futures
on securities are traded guarantees that, if still open, the sale or purchase
will be performed on the settlement date.
Hedging Strategies. Hedging by use of futures contracts seeks to
establish more certainty than would otherwise be possible in the effective price
or rate of return on securities that a Fund owns or proposes to acquire. A Fund
may, for example, take a "short" position in the futures market by selling
futures contracts in order to hedge against an anticipated rise in interest
rates or a decline in market prices that would adversely affect the value of the
Fund's securities. Such futures contracts may include contracts for the future
delivery of securities held by the Fund or securities with characteristics
similar to those of a Fund's securities.
If, in the opinion of the Investment Adviser, there is a sufficient degree of
correlation between price trends for a Fund's securities and futures contracts
based on other financial instruments, securities indexes or other indexes, the
Fund may also enter into such futures contracts as part of its hedging strategy.
Although under some circumstances prices of a Fund's securities may be more or
less volatile than prices of such futures contracts, the Investment Adviser will
attempt to estimate the extent of this difference in volatility based on
historical patterns and to compensate for it by having a Fund enter into a
greater or lesser number of futures contracts or by attempting to achieve only a
partial hedge against price changes affecting the Fund's securities. When
hedging of this character is successful, any depreciation in the value of the
Fund's securities will be substantially offset by appreciation in the value of
the futures position. On the other hand, any unanticipated appreciation in the
value of the Fund's securities would be substantially offset by a decline in the
value of the futures position.
On other occasions, a Fund may take a "long" position by purchasing such futures
contracts. This would be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or interest rates then available in the applicable market to
be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options
on futures contracts will give a Fund the right (but not the obligation), for a
specified price, to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, a Fund obtains the benefit of the futures position if prices
move in a favorable direction but limits its risk of loss in the event of an
unfavorable price movement to the loss of the option premium and transaction
costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of a Fund's assets. By writing a call
option, a Fund becomes obligated, in exchange for the premium, to sell a futures
contract, which may have a value higher than the exercise price. Conversely, the
writing of a put option on a futures contract generates a premium, which may
partially offset an increase in the price of securities that a Fund intends to
purchase. However, a Fund becomes obligated to purchase a futures contract,
which may have a value lower than the exercise price. Thus, the loss incurred by
a Fund in writing options on futures is potentially unlimited and may exceed the
amount of the premium received. A Fund will increase transaction costs in
connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. A Fund's ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid market.
Other Considerations. Where permitted, a Fund will engage in futures
transactions and in related options transactions only for bona fide hedging or
to increase total return to the extent permitted by CFTC regulations. A Fund
will determine that the price fluctuations in the futures contracts and options
on futures used for hedging purposes are substantially related to price
fluctuations in securities held by the Fund or which it expects to purchase.
Except as stated below, each Fund's futures transactions will be entered into
for traditional hedging purposes, i.e., futures contracts will be sold to
protect against a decline in the price of securities that the Fund owns, or
futures contracts will be purchased to protect the Fund against an increase in
the price of securities it intends to purchase. As evidence of this hedging
intent, a Fund expects that on 75% or more of the occasions on which they take a
long futures or option position (involving the purchase of futures contracts),
that Fund will have purchased, or will be in the process of purchasing,
equivalent amounts of related securities in the cash market at the time when the
futures or option position is closed out. However, in particular cases, when it
is economically advantageous for a Fund to do so, a long futures position may be
terminated or an option may expire without the corresponding purchase of
securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits a Fund to elect to comply with a different test, under
which the aggregate initial margin and premiums required to establish positions
in futures contracts and options on futures for the purpose of increasing total
return, will not exceed 5% of the Fund's net asset value, after taking into
account unrealized profits and losses on any such positions and excluding the
amount by which such options were in-the-money at the time of purchase. As
permitted, each Fund will engage in transactions in futures contracts and in
related options transactions only to the extent such transactions are consistent
with the requirements of the Internal Revenue Code of 1986, as amended (the
"Code") for maintaining its qualification as a regulated investment company for
federal income tax purposes.
Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating a Fund to purchase securities or currencies, require the Fund to
segregate with its custodian liquid high grade debt securities in an amount
equal to the underlying value of such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for a Fund than if it had not entered into any
futures contracts or options transactions. In the event of an imperfect
correlation between a futures position and the position which is intended to be
protected, the desired protection may not be obtained and a Fund may be exposed
to risk of loss.
Perfect correlation between a Fund's futures positions and current positions may
be difficult to achieve because no futures contracts based on individual equity
securities are currently available. The only futures contracts available to
these Funds for hedging purposes are various futures on U.S. government
securities and securities indexes.
Interest Rate Swaps. A Fund may enter into interest rate swaps for
hedging purposes and non-hedging purposes. Since swaps are entered into for good
faith hedging purposes or are offset by a segregated account as described below,
the Investment Adviser believes that swaps do not constitute senior securities
as defined in the 1940 Act and, accordingly, will not treat them as being
subject to the Fund's borrowing restrictions. The net amount of the excess, if
any, of a Fund's obligations over its "entitlement" with respect to each
interest rate swap will be accrued on a daily basis and an amount of cash or
liquid high grade debt securities (i.e., securities rated in one of the top
three ratings categories by Moody's or S&P, or, if unrated, deemed by the
Investment Adviser to be of comparable credit quality) having an aggregate net
asset value at least equal to such accrued excess will be maintained in a
segregated account by the Fund's custodian. A Fund will not enter into any
interest rate swap unless the credit quality of the unsecured senior debt or the
claims-paying ability of the other party thereto is considered to be investment
grade by the Investment Adviser. If there is a default by the other party to
such a transaction, a Fund will have contractual remedies pursuant to the
agreement. The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become relatively liquid in comparison with the markets for other similar
instruments which are traded in the interbank market.
Swap Transactions. The Funds may, to the extent permitted by the SEC, enter into
privately negotiated "swap" transactions with other financial institutions in
order to take advantage of investment opportunities generally not available in
public markets. In general, these transactions involve "swapping" a return based
on certain securities, instruments, or financial indexes with another party,
such as a commercial bank, in exchange for a return based on different
securities, instruments, or financial indexes.
By entering into swap transactions, a Fund may be able to protect the value of a
portion of its securities against declines in market value. A Fund may also
enter into swap transactions to facilitate implementation of allocation
strategies between different market segments or to take advantage of market
opportunities which may arise from time to time. A Fund may be able to enhance
its overall performance if the return offered by the other party to the swap
transaction exceeds the return swapped by the Fund. However, there can be no
assurance that the return a Fund receives from the counterparty to the swap
transaction will exceed the return it swaps to that party.
While a Fund will only enter into swap transactions with counterparties it
considers creditworthy (and will monitor the creditworthiness of parties with
which it enters into swap transactions), a risk inherent in swap transactions is
that the other party to the transaction may default on its obligations under the
swap agreement. If the other party to the swap transaction defaults on its
obligations, a Fund would be limited to contractual remedies under the swap
agreement. There can be no assurance that a Fund will succeed when pursuing its
contractual remedies. To minimize a Fund's exposure in the event of default, the
Funds will usually enter into swap transactions on a net basis (i.e., the
parties to the transaction will net the payments payable to each other before
such payments are made). When a Fund enters into swap transactions on a net
basis, the net amount of the excess, if any, of the Fund's obligations over its
entitlements with respect to each such swap agreement will be accrued on a daily
basis and an amount of liquid assets having an aggregate market value at least
equal to the accrued excess will be segregated by the Fund's custodian. To the
extent a Fund enters into swap transactions other than on a net basis, the
amount segregated will be the full amount of the Fund's obligations, if any,
with respect to each such swap agreement, accrued on a daily basis. See
"Segregated Funds" below.
Swap agreements are considered to be illiquid by the SEC staff and will be
subject to the limitations on illiquid investments. See "Restricted and Illiquid
Securities" on page 2.
To the extent that there is an imperfect correlation between the return a Fund
is obligated to swap and the securities or instruments representing such return,
the value of the swap transaction may be adversely affected. A Fund therefore
will not enter into a swap transaction unless it owns or has the right to
acquire the securities or instruments representative of the return it is
obligated to swap with the counterparty to the swap transaction. It is not the
intention of the Funds to engage in swap transactions in a speculative manner,
but rather primarily to hedge or manage the risks associated with assets held in
a Fund, or to facilitate the implementation of strategies of purchasing and
selling assets for a Fund.
Foreign Securities. All Funds can invest in foreign securities. Foreign
securities, other than ADRs, will be held in custody by State Street London
Limited, who will handle transactions with the transnational depositories
Euroclear and Cedel.
Segregated Accounts. In connection with when-issued securities, firm commitment
agreements, futures, the writing of options, and certain other transactions in
which a Fund incurs an obligation to make payments in the future, a Fund may be
required to segregate assets with its custodian in amounts sufficient to settle
the transaction. To the extent required, such segregated assets will consist of
liquid assets such as cash, United States government securities or other
appropriate high grade, short-term debt obligations as may be permitted by law.
Purchase of "When-Issued" Securities. The Funds may enter into firm commitment
agreements for the purchase of securities on a specified future date. Thus, the
Funds may purchase, for example, new issues of fixed-income instruments on a
"when-issued" basis, whereby the payment obligation, or yield to maturity, or
coupon rate on the instruments may not be fixed at the time of the transaction.
In addition, the Funds may invest in asset-backed securities on a delayed
delivery basis. This reduces the Funds' risk of early repayment of principal,
but exposes the Funds to some additional risk that the transaction will not be
consummated.
When the Funds enter into firm commitment agreements, liability for the purchase
price and the rights and risks of ownership of the securities accrue to the
Funds at the time they become obligated to purchase such securities, although
delivery and payment occur at a later date. Accordingly, if the market price of
the security should decline, the effect of the agreement would be to obligate
the Funds to purchase the security at a price above the current market price on
the date of delivery and payment. During the time the Funds are obligated to
purchase such securities they will be required to segregate assets. See
"Segregated Accounts," on this page. A Fund will not purchase securities on a
"when-issued" basis if, as a result, more than 15% of the Fund's net assets
would be so invested.
Lending of Securities. Subject to investment restriction number 2 titled
"Lending" on page 3 (relating to loans of securities), a Fund may lend its
securities to brokers and dealers that are not affiliated with the Investment
Adviser, are registered with the Commission and are members of the NASD, and
also to certain other financial institutions. All loans will be fully
collateralized. In connection with the lending of its securities, a Fund will
receive as collateral cash, securities issued or guaranteed by the United States
government (i.e., Treasury securities), or other collateral permitted by
applicable law, which at all times while the loan is outstanding will be
maintained in amounts equal to at least 102% of the current market value of the
loaned securities, or such lesser percentage as may be permitted by applicable
law, as reviewed daily. The Fund lending its securities will receive amounts
equal to the interest or dividends paid on the securities loaned and in addition
will expect to receive a portion of the income generated by the short-term
investment of cash received as collateral or, alternatively, where securities or
a letter of credit are used as collateral, a lending fee paid directly to the
Fund by the borrower of the securities. Such loans will be terminable by the
Fund at any time and will not be made to affiliates of the Investment Adviser. A
Fund may terminate a loan of securities in order to regain record ownership of,
and to exercise beneficial rights related to, the loaned securities, including
but not necessarily limited to voting or subscription rights, and may, in the
exercise of its fiduciary duties, terminate a loan in the event that a vote of
holders of those securities is required on a material matter. The Fund may pay
reasonable fees to persons unaffiliated with the Fund for services or for
arranging such loans. Loans of securities will be made only to firms deemed
creditworthy. As with any extension of credit, however, there are risks of delay
in recovering the loaned securities, should the borrower of securities default,
become the subject of bankruptcy proceedings, or otherwise be unable to fulfill
its obligations or fail financially.
Borrowing Policies of the Funds. We can borrow money from banks or engage in
reverse repurchase agreements, for temporary or emergency purposes. We can
borrow up to one-third of a Fund's total assets. To secure borrowings, we can
mortgage or pledge securities in an amount up to one-third of a Fund's net
assets. If we borrow money, a Fund's share price may be subject to greater
fluctuation until the borrowing is paid off. The Fund will not make any
additional investments, other than the case of reverse repurchase agreements,
while the level of the borrowing exceeds 5% of the Fund's total assets.
Short-term corporate obligations may also include variable amount master demand
notes. Variable amount master notes are obligations that permit the investment
of fluctuating amounts by the Fund at varying rates of interest pursuant to
direct arrangements between the Fund, as lender, and the borrower. These notes
permit daily changes in the amounts borrowed. The Fund has the right to increase
the amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. The borrower is typically a large industrial
or finance company which also issues commercial paper. Typically these notes
provide that the interest rate is set daily by the borrower. The rate is usually
the same or similar to the interest rate on commercial paper being issued by the
borrower. Because variable amount master notes are direct lending arrangements
between the lender and borrower, it is not generally contemplated that such
instruments will be traded, and there is no secondary market for these notes,
although they are redeemable (and thus immediately repayable by the borrower) at
the face value, plus accrued interest, at any time. Accordingly, the Fund's
right to redeem is dependent on the ability of the borrower to pay principal and
interest on demand. In connection with master demand note arrangements, the Fund
considers earning power, cash flow, and other liquidity ratios of the issuer.
The Fund will only invest in master demand notes of U.S. issuers. While master
demand notes, as such, are not typically rated by credit rating agencies, if not
so rated the Fund may invest in them only if at the time of an investment the
issuer meets the criteria set forth in the Prospectuses for all other commercial
paper issuers. The Fund will not invest more than 25% of its assets in master
demand notes.
Repurchase Agreements. Repurchase agreements have the characteristics of loans
by a Fund, and will be fully collateralized (either with physical securities or
evidence of book entry transfer to the account of the custodian bank) at all
times. During the term of the repurchase agreement the Fund retains the security
subject to the repurchase agreement as collateral securing the seller's
repurchase obligation, continually monitors the market value of the security
subject to the agreement, and requires the Fund's seller to deposit with the
Fund additional collateral equal to any amount by which the market value of the
security subject to the repurchase agreement falls below the resale amount
provided under the repurchase agreement. The Funds will enter into repurchase
agreements only with member banks of the Federal Reserve System, and with
primary dealers in United States government securities or their wholly-owned
subsidiaries whose creditworthiness has been reviewed and found satisfactory by
the Investment Adviser and who have, therefore, been determined to present
minimal credit risk.
Securities underlying repurchase agreements will be limited to certificates of
deposit, commercial paper, bankers' acceptances, or obligations issued or
guaranteed by the United States government or its agencies or instrumentalities,
in which the Fund may otherwise invest.
If a seller of a repurchase agreement defaults and does not repurchase the
security subject to the agreement, the Fund would look to the collateral
security underlying the seller's repurchase agreement, including the securities
subject to the repurchase agreement, for satisfaction of the seller's obligation
to the Fund; in such event the Fund might incur disposition costs in liquidating
the collateral and might suffer a loss if the value of the collateral declines.
In addition, if bankruptcy proceedings are instituted against a seller of a
repurchase agreement, realization upon the collateral may be delayed or limited.
Reverse Repurchase Agreements and Leverage. We may enter into reverse repurchase
agreements with Federal Reserve member banks and U.S. securities dealers from
time to time. In a reverse repurchase transaction we sell securities and
simultaneously agree to repurchase them at a price which reflects an agreed-upon
rate of interest. We will use the proceeds of reverse repurchase agreements to
make other investments which either mature or are under an agreement to resell
at a date simultaneous with or prior to the expiration of the reverse repurchase
agreement. The Fund may utilize reverse repurchase agreements only if the
interest income to be earned from the investment proceeds of the transaction is
greater than the interest expense of the reverse repurchase transaction.
Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Funds'
shares to rise or fall faster than would otherwise be the case. There may also
be a risk of delay in the recovery of the underlying securities if the opposite
party has financial difficulties.
A Fund's obligations under all borrowings, including reverse repurchase
agreements, will not exceed one-third of the Fund's net assets.
The use of reverse repurchase agreements is included in the Fund's borrowing
policy and is subject to the limit of Section 18(f)(1) of the Investment Company
Act of 1940, as amended. During the time a reverse repurchase agreement is
outstanding, each Fund that has entered into such an agreement maintains a
segregated account with its Custodian containing cash, U.S. government or other
liquid high grade debt securities having a value at least equal to the
repurchase price under the reverse repurchase agreement.
Other Investment Techniques and Opportunities. The Funds may take certain
actions with respect to merger proposals, tender offers, conversion of
equity-related securities and other investment opportunities with the objective
of enhancing overall return, irrespective of how these actions may affect the
weight of the particular securities in a Fund. It is not the policy of any of
the Funds to select investments based primarily on the possibility of one or
more of these investment techniques and opportunities being presented.
Investment Restrictions
Investment restrictions numbered 1 through 10 below have been adopted by the
Company as fundamental policies of the Funds. Under the Investment Company Act
of 1940, as amended (the "1940 Act"), a fundamental policy may not be changed
with respect to a Fund without the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. Each Fund will operate as a
"diversified company" within the meaning of the 1940 Act, except the
Transamerica Premier Aggressive Growth Fund which will operate as a
nondiversified fund. The Transamerica Premier Aggressive Growth Fund reserves
the right to become a diversified company by limiting the investments in which
more than 5% of its total assets are invested. Investment restrictions 11
through 16 may be changed by a vote of the Board of Directors of the Company
(the "Board") at any time.
1. Borrowing. Each Fund may borrow from banks for temporary or emergency (not
leveraging) purposes, including the meeting of redemption requests and cash
payments of dividends and distributions that might otherwise require the
untimely disposition of securities, in an amount not to exceed 33-1\3% of the
value of the Fund's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at the time the
borrowing is made. Whenever borrowings, not including reverse repurchase
agreements, of 5% or more of a Fund's total assets are outstanding, the Fund
will not make any additional investments.
2. Lending. No Fund may lend its assets or money to other persons, except
through (a) purchasing debt obligations, (b) lending securities in an amount not
to exceed 331/3% of the Fund's assets taken at market value, (c) entering into
repurchase agreements (d) trading in financial futures contracts, index futures
contracts, securities indexes and options on financial futures contracts,
options on index futures contracts, options on securities and options on
securities indexes and (e) entering into variable rate demand notes.
3. 5% Fund Rule. Except for the Transamerica Premier Aggressive Growth Fund, no
Fund may purchase securities (other than government securities) of a single
issuer if, as a result of the purchase, more than 5% of the Fund's total assets
would be invested in the securities of the issuer, except that up to 25% of the
value of the total assets of each Fund may be invested without regard to this
limitation. All securities of a foreign government and its agencies will be
treated as a single issuer for purposes of this restriction. With respect to the
Transamerica Premier Aggressive Growth Fund, no more than 25% of the Fund's
total assets may be invested in the securities of a single issuer (other than
cash items and government securities); and with respect to 50% of the Fund's
total assets, no more than 5% may be invested in the securities of a single
issuer (other than cash items and government securities).
4. 10% Issuer Rule. No Fund may purchase more than 10% of the voting securities
of any one issuer, or more than 10% of the outstanding securities of any class
of issuer, except that (a) this limitation is not applicable to a Fund's
investments in government securities and (b) up to 25% of the value of the
assets of a Fund may be invested without regard to these 10% limitations. All
securities of a foreign government and its agencies will be treated as a single
issuer for purposes of this restriction. These limitations are subject to any
further limitation under the 1940 Act.
5. 25% Industry Rule. No Fund may invest more than 25% of the value of its total
assets in securities issued by companies engaged in any one industry, including
non-domestic banks or any foreign government. This limitation does not apply to
securities issued or guaranteed by the United States government, its agencies or
instrumentalities.
6. Underwriting. No Fund may underwrite any issue of securities, except to the
extent that the sale of securities in accordance with the Fund's investment
objective, policies and limitations may be deemed to be an underwriting, and
except that the Fund may acquire securities under circumstances in which, if the
securities were sold, the Fund might be deemed to be an underwriter for purposes
of the Securities Act of 1933, as amended.
7. Real Estate. No Fund may purchase or sell real estate or real estate limited
partnership interests, or invest in oil, gas or mineral leases, or mineral
exploration or development programs, except that a Fund may (a) invest in
securities secured by real estate, mortgages or interests in real estate or
mortgages, (b) purchase securities issued by companies that invest or deal in
real estate, mortgages or interests in real estate or mortgages, (c) engage in
the purchase and sale of real estate as necessary to provide it with an office
for the transaction of business or (d) acquire real estate or interests in real
estate securing an issuer's obligations, in the event of a default by that
issuer.
8. Short Sales. No Fund may make short sales of securities or maintain a short
position, unless at all times when a short position is open, the Fund owns an
equal amount of the securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of the same issue
as, and equal in amount to, the securities sold short.
9. Margin Purchases. No Fund may purchase securities on margin, except that a
Fund may obtain any short-term credits necessary for the clearance of purchases
and sales of securities. For purposes of this restriction, the deposit or
payment of initial or variation margin in connection with futures contracts,
financial futures contracts or related options, and options on securities, and
options on securities indexes will not be deemed to be a purchase of securities
on margin by a Fund.
10. Commodities. No Fund may invest in commodities, except that each Fund may
invest in futures contracts (including financial futures contracts or securities
index futures contracts) and related options and other similar contracts as
described in this Statement of Additional Information and in the Prospectuses.
11. Securities of Other Investment Companies. No Fund may purchase securities of
other investment companies, other than a security acquired in connection with a
merger, consolidation, acquisition, reorganization or offer of exchange and
except as permitted under the 1940 Act, if as a result of the purchase: (a) more
than 10% of the value of the Fund's total assets would be invested in the
securities of investment companies; (b) more than 5% of the value of the Fund's
total assets would be invested in the securities of any one investment company;
or (c) the Fund would own more than 3% of the total securities of any investment
company.
12. Invest for Control. No Fund may invest in companies for the purposes of
exercising control or management.
13. 3-Year Rule. No Fund may purchase securities (other than government
securities) if, as a result of the purchase, the Fund would then have more than
5% of its total assets invested in securities of companies (including
predecessors) that have been in continuous operation for fewer than three years.
This restriction will apply to the entity supplying the revenues from which the
issue is to be paid.
14. Affiliated Parties. No Fund may purchase or retain securities of any
company if any of the Company's officers or directors or
any officer or director of the Investment Adviser who individually own 1/2 of 1%
of the company, together own more than 5% of the company.
15. Warrants. No Fund may purchase warrants (other than warrants acquired by the
Fund as part of a unit or attached to securities at the time of purchase) if, as
a result, the investments (valued at the lower of cost or market) would exceed
5% of the value of the Fund's net assets of which not more than 2% of the value
of the Fund's net assets may be invested in warrants not listed on the New York
Stock Exchange, Inc. (the "NYSE") or the American Stock Exchange. For purposes
of this restriction, warrants acquired by a Fund in units or attached to
securities may be deemed to be without value.
16. Restricted and Illiquid Securities. The Funds will each not invest more than
10% of their total assets in securities that are not registered or are offered
in an exempt, non-public offering ("restricted securities") under the Securities
Act of 1933, as amended ("1933 Act"). However, such restriction will not apply
to restricted securities offered and sold to "qualified institutional buyers"
under Rule 144A of the 1933 Act or to foreign securities which are offered or
sold outside the United States in accordance with Regulation S of the 1933 Act.
In addition, no Fund will invest more than 15% of its net assets in illiquid
investments, which includes most repurchase agreements maturing in more than
seven days, currency and interest rate swaps, time deposits with a notice or
demand period of more than seven days, certain over-the-counter option
contracts, participation interests in loans, securities that are not readily
marketable, and restricted securities, unless the Investment Adviser determines,
based upon a continuing review of the trading markets and available reliable
price information for the specific security, that such restricted securities are
eligible under Rule 144A and are liquid. For purposes of this restriction,
illiquid securities are securities that cannot be disposed of by a Fund within
seven days in the ordinary course of business at approximately the amount at
which the Fund has valued the securities. In no event, will any Fund's
investment in illiquid restricted securities, in the aggregate, exceed 15% of
its assets. If through a change in values, net assets, or other circumstances,
any Fund were in a position where more than 15% of its assets were invested in
illiquid securities, it would take appropriate steps to protect liquidity.
The Board has adopted guidelines and delegated to the Investment Adviser the
daily function of determining and monitoring the liquidity of restricted
securities. The Board, however, will retain sufficient oversight and be
ultimately responsible for the determinations. When no market, dealer, or matrix
quotations are available for a security, illiquid investments are priced at fair
value as determined in good faith by a committee appointed by the Board. Since
it is not possible to predict with assurance exactly how the market for
restricted securities sold and offered under Rule 144A will develop, the Board
will carefully monitor each Fund's investments in these securities, focusing on
such important factors, among others, as valuation, liquidity, and availability
of information. To the extent that qualified institutional buyers become for a
time uninterested in purchasing these restricted securities, this investment
practice could have the effect of decreasing the level of liquidity in a Fund.
The purchase price and subsequent valuation of restricted securities normally
reflect a discount from the price at which such securities would trade if they
were not restricted, since the restriction makes them less liquid. The amount of
the discount from the prevailing market prices is expected to vary depending
upon the type of security, the character of the issuer, the party who will hear
the expenses of registering the restricted securities, and prevailing supply and
demand conditions.
The Company may make commitments more restrictive than the restrictions listed
above with respect to a Fund to permit the sale of shares of the Fund in certain
states. If the Company determines that any such commitment is no longer in the
best interests of a Fund and its shareholders, the Company will revoke the
commitment by terminating the sale of shares of the Fund in the state involved
or may otherwise modify its commitment based on a change in the state's
restrictions. The percentage limitations in the restrictions listed above apply
at the time of purchases of securities.
Management of the Company
The names of the directors and executive officers of the Company, their business
addresses and their principal occupations during the past five years are listed
below. Each of the officers listed below is an employee of an entity that
provides services to the Funds. An asterisk (*) appears before the name of each
director who is an "interested person" of the Company, as defined in the 1940
Act.
<TABLE>
<CAPTION>
Name, Address Position Held with Principal Occupations During
& Age Transamerica Investors Past 5 Years
- -------------------------------- ----------------------------- --------------------------------------------
<S> <C> <C>
Nooruddin S. Veerjee* Chief Executive Officer President, Transamerica Life
Insurance and
Transamerica Center and Chairman of the Board Annuity Company
("TALIAC"), and President,
1150 S. Olive St. Asset Management Division,
Transamerica
Los Angeles, CA 90015 Occidental Life Insurance Company
Age 38 ("TOLIC") since 1993. Formerly Senior
Vice
President, TOLIC.
Gary U. Rolle'* Director Chairman and President,
Transamerica
Transamerica Center Income Shares investment company;
1150 S. Olive St. Executive Vice President & Chief
Los Angeles, CA 90015 Investment Officer, Transamerica
Age 55 Investment Services ("TIS"); and Chief
Investment
Officer, TOLIC and TALIAC.
Sidney E. Harris Director Professor of Management, Peter F.
Drucker
2058 N. Mills Road Management Center, Claremont
Graduate
Suite 428 School. Formerly Dean of the Peter F.
Claremont, CA 91711 Drucker Management Center.
Age 47
Charles C. Reed Director Executive Vice President, Alexander
&
Alexander & Alexander Alexander of California, Inc.
(business
801 S. Figueroa St, Suite 700 risk management and insurance
brokerage)
Los Angeles, CA 90017 since 1993. Formerly First Vice
President
Age 63 & Director of Marketing, H.F.
Ahmanson &
Co. (Savings & Loan holding company).
Carl R. Terzian Director Chairman of Carl Terzian Associates
Carl Terzian Associates (public relations).
12400 Wilshire Blvd, Suite 200
Los Angeles, CA 90025
Age 61
Nicki Bair President Senior Vice President, TOLIC &
TALIAC
Transamerica Center since 1996. Formerly Vice President,
TOLIC
1150 S. Olive St. & TALIAC.
Los Angeles, CA 90015
Age 41
E. Joy Heckendorf Senior Vice President Marketing Director, TALIAC
since 1996.
Transamerica Center Formerly President, Dreyfus Service
1150 S. Olive St. Corporation in 1996. Formerly Vice
Los Angeles, CA 90015 President Marketing, , Janus Capital
Age 40 Corporation.
</TABLE>
The directors are responsible for major decisions relating to the Funds'
objectives, policies and operations pursuant to the Funds' Bylaws, Articles of
Incorporation, Maryland law and the 1940 Act. Day to day decisions by the
officers of the Funds are reviewed by the directors on a quarterly basis. During
the interim between quarterly Board meetings, the Executive Committee is
empowered to act when necessary for the Board of Directors. The Executive
Committee members are Nooruddin S. Veerjee and Gary U. Rolle.'
No officer, director or employee of Transamerica Investment Services, Inc. or
Transamerica Occidental Life Insurance Company or any of their affiliates
receives any compensation from the Company for acting as a director or officer
of the Company. Each director of the Company who is not an "interested person"
of the Company receives an annual fee of $10,000, and $1,000 for each meeting of
the Company's Board attended, and $500 for each Board committee meeting
attended, and is reimbursed for expenses incurred in connection with such
attendance.
Following is a table of the compensation expected to be paid to all directors
during the current fiscal year ending December 31, 1997.
<TABLE>
<CAPTION>
Estimated Total
Annual Compensation
Compensation Pension Benefits at All Related
Name Paid Benefits Retirement Funds
<S> <C> <C> <C> <C>
Sidney E. Harris $15,000 $0 $0 $15,000
Charles C. Reed $15,000 $0 $0 $15,000
Carl R. Terzian $15,000 $0 $0 $15,000
Gary U. Rolle' $0 $0 $0 $0
Nooruddin S. Veerjee $0 $0 $0 $0
</TABLE>
Investment Advisory and Other Services
Investment Adviser and Administrator. Responsibility for the management and
supervision of the Company and its Funds rests with the
Board of Directors of Transamerica Investors, Inc. (the "Board"). The Investment
Adviser and the Administrator are subject to the direction of the Board.
The Funds' Investment Adviser is Transamerica Investment Services, Inc. (the
"Investment Adviser"), 1150 South Olive Street, Los Angeles, California 90015.
The Investment Adviser will: (1) supervise and manage the investments of each
Fund and direct the purchase and sale of its investment securities; and (2) see
that investments follow the investment objectives and comply with government
regulations. The Investment Adviser is also responsible for the selection of
brokers and dealers to execute transactions for each Fund. Some of these brokers
or dealers may be affiliated persons of the Company, the Investment Adviser,
Administrator, or the Distributor. Since it is our policy to seek the best price
and execution for each transaction, the Investment Adviser may give
consideration to brokers and dealers who provide us with statistical information
and other services in addition to transaction services. For its services to the
Funds, the Investment Adviser receives an Adviser Fee. This fee is based on an
annual percentage of the average daily net assets of each Fund. It is accrued
daily, and paid monthly.
The Adviser Fee for any Fund may be reduced in any year if the Fund's expenses
exceed the limits on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of the Fund are
qualified to offer for sale. The term "expenses" is defined in the statutes or
regulations of such jurisdictions, but it generally excludes brokerage
commissions, taxes, interest, and extraordinary expenses.
The Funds' Administrator is Transamerica Occidental Life Insurance Company (the
"Administrator"), 1150 South Olive Street, Los Angeles, California 90015. The
Administrator will: (1) provide the Funds with administrative and clerical
services, including the maintenance of the Funds' books and records; (2) arrange
periodic updating of the Funds' prospectus and any supplements; (3) provide
proxy materials and reports to Fund shareholders and the Securities and Exchange
Commission; and (4) provide the Funds with adequate office space and all
necessary office equipment and services. The Administrator also provides
services for the registration of Fund shares with those states and other
jurisdictions where its shares are offered or sold.
Transamerica Occidental Life Insurance Company is a wholly-owned subsidiary of
Transamerica Insurance Corporation of California. Both Transamerica Insurance
Corporation of California and Transamerica Investment Services, Inc. are
wholly-owned subsidiaries of Transamerica Corporation, 600 Montgomery Street,
San Francisco, California 94111, one of the nation's largest financial services
companies.
Custodian and Transfer Agent. State Street Bank and Trust Company ("State
Street"), located at 225 Franklin Street, Boston, Massachusetts 02110, serves as
custodian of the Funds' investments. Under its custodian contract with the
Company, State Street is authorized to appoint one or more banking institutions
as subcustodians of assets owned by each Fund. For its custody services, State
Street receives monthly fees charged to the Funds based upon the month-end,
aggregate net asset value of the Funds, plus certain charges for securities
transactions. The assets of the Company are held under bank custodianship in
accordance with the 1940 Act.
Under a Foreign Subcustodian Agreement with State Street, State Street London
Limited is responsible for foreign assets and transactions with the
transnational depositories of Euroclear and Cedel.
Under a Transfer Agency Agreement, State Street Bank is also responsible for
processing redemption requests and crediting dividends to the accounts of
shareholders of the Funds.
Distribution of Shares of the Funds. Transamerica Securities Sales Corporation
("TSSC") serves as the principal underwriter of shares of the Funds, which are
continuously distributed. Transamerica Financial Resources, Inc. ("TFR") will
also distribute shares of the Funds pursuant to a selling agreement with TSSC.
Both TSSC and TFR are wholly-owned subsidiaries of Transamerica Insurance
Corporation of California, which is a wholly-owned subsidiary of Transamerica
Corporation, are registered with the Securities and Exchange Commission as
broker/dealers, and are members of the National Association of Securities
Dealers, Inc. TSSC may also enter into arrangements whereby Fund shares may be
sold by other broker/dealers, which may or may not be affiliated with TFR or
TSSC.
The Company has adopted a plan of distribution pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940, as amended (the "1940 Act").
Under the Plan, each Fund makes payments monthly to TSSC based on an annual
percentage of the average net value of the assets represented by each class of
shares.
For the Investor Shares class, there is an annual 12b-1 distribution fee of .25%
of the average daily net assets of the Investor shares of each Fund. This fee
covers such expenses as preparation, printing and mailing of the Prospectuses
and Statement of Additional Information, as well as sales literature and other
media advertising, and related expenses. It can also be used to compensate sales
personnel involved with selling the Funds.
From time to time, and for one or more Funds within each class of Shares, the
Distributor may waive any or all of these fees at its discretion. Purchases and
Redemptions of Shares Detailed information on how to purchase and redeem shares
of a Fund is included in the Prospectuses under "How to Buy Shares" and "How to
Sell Shares."
The right of redemption of shares of a Fund may be suspended or the date of
payment postponed (1) for any periods during which the New York Stock Exchange
is closed (other than for customary weekend and holiday closings), (2) when
trading in the markets the Fund normally utilizes is restricted, or an
emergency, as defined by the rules and regulations of the SEC, exists, making
disposal of a Fund's investments or determination of its net asset value not
reasonably practicable, or (3) for such other periods as the Securities and
Exchange Commission by order may permit for the protection of the Fund's
shareholders. A shareholder who pays for Fund shares by personal check will
receive the proceeds of a redemption of those shares when the purchase check has
been collected, which may take up to 10 days or more. Shareholders who
anticipate the need for more immediate access to their investment should
purchase shares with Federal funds or bank wire or by a certified or cashier's
check.
Redemptions in Excess of $250,000. If you request a redemption of up to
$250,000, the amount will be paid in cash. If you redeem more than $250,000 from
any one account in any one Fund in a 90-day period, the entire redemption will
be paid in cash if you provide Transamerica with an unconditional instruction to
redeem at least 30 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. The date must be a minimum of 30
days after receipt of the instruction by Transamerica. If you have authorized
Transamerica to accept such instructions, your instruction may be by telephone
or in writing without a signature guarantee. If you have not done so, the
instruction must be in writing with all signatures guaranteed. Your shares will
be redeemed at the price determined on the date you specify in your instruction
and the proceeds will be sent by mail, wire or electronic funds transfer in
accordance with the procedures specified in the Prospectuses.
Receipt of your instruction to redeem 30 days prior to the transaction provides
the Fund with sufficient time to raise the cash in an orderly manner to pay the
redemption and thereby minimizes the effect of the redemption on the Fund and
its shareholders.
You may cancel your redemption instruction prior to the transaction date.
However, if you do so, Transamerica may not accept an instruction from you to
redeem in accordance with this alternative for a period of 90 days from the date
of cancellation.
If you do not provide your instruction to redeem 30 days prior to the
transaction, Transamerica offers you two alternatives:
(1) You may redeem up to $250,000 in cash the first day, and the remainder over
the next 20 business days at the rate of not less than $50,000 or more than
$500,000 per day (and such lesser amount on the last day to redeem all the
shares remaining), but not more than $10 million total. The redemption each day
will be at the price determined that day. For example, a request to redeem
$525,000, or a number of shares worth $525,000, will be effective at $250,000 on
the first day, and $50,000 per day for the next five business days, and $25,000
on the last day. A request to redeem $11 million would be effective at $250,000
the first day and $500,000 per day for the next 20 business days ($10.25 million
total) and the remaining $750,000 to be redeemed by the delivery of securities.
Since the price is determined not on the date the redemption request is
received, but instead on succeeding business days when the redemption is
effected, the number of shares redeemed will vary from day to day. The total you
will receive over the entire period may be more or less than the amount that you
would have received had the redemption been effected on the day your redemption
request was received. In the first example above, falling per-share prices could
cause the value of the shares on the last day to be less than $25,000, and the
redemption on the last day would be only of the shares left in the account.
(2) In lieu of receiving cash as described earlier, you may elect to receive
securities from Transamerica's fund. The securities delivered will be selected
at the sole discretion of Transamerica. They will be readily marketable with an
active and substantial secondary market given the type of companies involved and
the characteristics of the markets in which they trade, but will not necessarily
be representative of the entire fund, and will be securities that Transamerica
may regard as least desirable. You may incur brokerage costs in converting the
securities to cash.
The method of valuing securities used to make the redemptions will be the same
as the method of valuing securities described under "Determination of Net Asset
Value," page 17, and such valuation will be made as of the same time the
redemption price is determined.
These alternatives are designed to lessen the adverse effect of large
redemptions on the Fund and its non-redeeming shareholders. For example, assume
that a shareholder redeems $1 million on a given day and that the Fund pays him
$250,000 in cash and is required to sell securities for $750,000 to raise the
remainder of the cash to pay him. The securities valued at $750,000 on the day
of the redemption may bring a lower price when sold thereafter, so that more
securities may be sold to realize $750,000. In that case, the redeeming
shareholder's proceeds would be fixed at $750,000 and the market risk would be
imposed on the Fund and its remaining shareholders, who would suffer the loss.
By delivering securities instead of cash or staggering the payment of cash, the
market risk is imposed on the redeeming shareholder. If securities are
delivered, the redeeming shareholder (and not the Fund) bears the brokerage cost
of selling them.
Brokerage Allocation
Subject to the direction of the Board, the Investment Adviser has responsibility
for making a Fund's investment decisions, for effecting the execution of trades
for a Fund and for negotiating any brokerage commissions thereon. It is the
Investment Adviser's policy to obtain the best price and execution available,
giving attention to net price (including commissions where applicable),
execution capability (including the adequacy of a firm's capital position), and
other services related to execution; the relative priority given to these
factors will depend on all of the circumstances regarding a specific trade.
The Investment Adviser receives a variety of brokerage and research services
from brokerage firms in return for the execution by such brokerage firms of
trades on behalf of the Funds. These brokerage and research services include,
but are not limited to, quantitative and qualitative research information and
purchase and sale recommendations regarding securities and industries, analyses
and reports covering a broad range of economic factors and trends, statistical
data relating to the strategy and performance of the Funds and other investment
companies, services related to the execution of trades in a Fund's securities
and advice as to the valuation of securities. The Investment Adviser considers
the quantity and quality of such brokerage and research services provided by a
brokerage firm along with the nature and difficulty of the specific transaction
in negotiating commissions for trades in a Fund's securities and may pay higher
commission rates than the lowest available when it is reasonable to do so in
light of the value of the brokerage and research services received generally or
in connection with a particular transaction.
Consistent with federal legislation, the Investment Adviser may obtain such
brokerage and research services regardless of whether they are paid for (1) by
means of commissions, or (2) by means of separate, non-commission payments. The
Investment Adviser's judgment as to whether and how it will obtain the specific
brokerage and research services will be based upon its analysis of the quality
of such services and the cost (depending upon the various methods of payment
which may be offered by brokerage firms) and will reflect the Investment
Adviser's opinion as to which services and which means of payment are in the
long-term best interests of the Funds. The Investment Adviser will not effect
any brokerage transactions in the Funds' securities with any affiliate of the
Company, the Investment Adviser, or the Administrator except in accordance with
applicable SEC rules.
Certain executive officers of the Investment Adviser also have supervisory
responsibility with respect to the securities of the Investment Adviser's own
accounts. In placing orders for the purchase and sale of debt securities for a
Fund, the Investment Adviser will normally use its own facilities. A Fund and
another fund or another advisory client of the Investment Adviser, or the
Investment Adviser itself, may desire to buy or sell the name, publicly traded
security at or about the same time. In such a case, the purchases or sales will
normally be allocated as nearly as practicable on a pro rata basis in proportion
to the amounts to be purchased or sold by each. In determining the amounts to be
purchased and sold, the main factors to be considered are the respective
investment objectives of a Fund and the other funds, the relative size of
holdings of the same or comparable securities, availability of cash for
investment by a Fund and the other funds, and the size of their respective
investment commitments.
Determination of Net Asset Value
Under the 1940 Act, the Board is responsible for determining in good faith the
fair value of securities of each Fund, and each class of each Fund. In
accordance with procedures adopted by the Board, the net asset value per share
is calculated by determining the net worth of each Fund (assets, including
securities at market value, minus liabilities) divided by the number of that
Fund's outstanding shares. All securities are valued as of the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Standard
Time). Each Fund will compute its net asset value once daily at the close of
such trading on each day that the New York Stock Exchange is open for business
(as described in the Prospectuses).
In the event that the New York Stock Exchange, the Federal Reserve, or the
national securities exchange on which stock options are traded adopt different
trading hours on either a permanent or temporary basis, the Board will
reconsider the time at which net asset value is computed. In addition, the Funds
may compute their net asset value as of any time permitted pursuant to any
exemption, order or statement of the SEC or its staff.
Assets of the Funds are valued as follows:
(a) equity securities and other similar investments ("Equities") listed on any
U.S. or foreign stock exchange or the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") are valued at the last sale price on that
exchange or NASDAQ on the valuation day; if no sale occurs, Equities traded on a
U.S. exchange or NASDAQ are valued at the mean between the closing bid and
closing asked prices. Equities traded on a foreign exchange will be valued at
the official bid price; (b) over-the-counter securities not quoted on NASDAQ are
valued at the last sale price on the valuation day or, if no sale occurs, at the
mean between the last bid and asked prices; (c) debt securities purchased with a
remaining maturity of 61 days or more are valued on the basis of dealer-supplied
quotations or by a pricing service selected by the Investment Adviser and
approved by the Board; (d) options and futures contracts are valued at the last
sale price on the market where any such option or futures contracts is
principally traded; (e) over-the-counter options are valued based upon prices
provided by market makers in such securities or dealers in such currencies. (f)
forward foreign currency exchange contracts are valued based upon quotations
supplied by dealers in such contracts; (g) all other securities and other
assets, including those for which a pricing service supplies no quotations or
quotations are not deemed by the Investment Adviser to be representative of
market values, but excluding debt securities with remaining maturities of 60
days or less, are valued at fair value as determined in good faith pursuant to
procedures established by the Board; and (h) debt securities with a remaining
maturity of 60 days or less will be valued at their amortized cost, which
approximates market value.
Equities traded on more than one U.S. national securities exchange or foreign
securities exchange are valued at the last sale price on each business day at
the close of the exchange representing the principal market for such securities.
The value of all assets and liabilities expressed in foreign currencies will be
converted into U.S. dollar values at the noon (Eastern Standard Time) Reuters
spot rate. If such quotations are not available, the rate of exchange will be
determined in good faith by or under procedures established by the Board.
Performance Information
Performance information for the Funds including the yield and the total return
of all Funds, may appear in reports or promotional literature to current or
prospective shareholders.
30-Day Yield for Non-Money Market Funds. Quotations of yield for the remaining
Funds will be based on all investment income per share earned during a
particular 30-day period, less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income by
the value of a share on the last day of the period, according to the following
formula:
Yield = 2[({[a-b]/cd} + 1)6 - 1] Where:
a = dividends and interest earned during the period b = the expenses accrued for
the period (net of reimbursements) c = the average daily number of shares
outstanding during the period d = the maximum offering price per share on the
last day of the period
Average Annual Total Return for Non-Money Market Funds Quotations of average
annual total return for any Fund will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in a Fund over a
period of one, five and ten years (or, if less, up to the life of the Fund),
calculated pursuant to the formula:
P(1 + T)n = ERV Where:
P = a hypothetical initial payment of $1,000 T = an average annual total return
n = the number years
ERV = the ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5, or 10 year period at the end of the 1, 5, 10 year period
(or fractional portion thereof)
Any performance data quoted for a Fund will represent historical performance and
the investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
original cost.
Published Performance. From time to time the Company may publish, or provide
telephonically, an indication of the Funds' past performance as measured by
independent sources such as (but not limited to) Lipper Analytical Services,
Incorporated, Weisenberger Investment Companies Service, IBC's Money Fund
Report, Barron's, Business Week, Changing Times, Financial World, Forbes,
Fortune, Money, Personal Investor, Sylvia Porter's Personal Finance and The Wall
Street Journal. The Company may also advertise information which has been
provided to the NASD for publication in regional and local newspapers.
In addition, the Company may from time to time advertise its performance
relative to certain indexes and benchmark investments, including:
the Lipper Analytical Services, Inc. Mutual Fund Performance Analysis,
Fixed-Income Analysis and Mutual Fund Indexes (which
measure total return and average current yield for the mutual fund industry
and rank mutual fund performance);
the CDA Mutual Fund Report published by CDA Investment Technologies, Inc.
(which analyzes price, risk and various measures of
return for the mutual fund industry);
the Consumer Price Index published by the U.S. Bureau of Labor Statistics
(which measures changes in the price of goods and
services);
Stocks, Bonds, Bills and Inflation published by Ibbotson Associates (which
provides historical performance figures for stocks, government securities
and inflation);
the Hambrecht & Quist Growth Stock Index;
the NASDAQ OTC Composite Prime Return;
the Russell Midcap Index;
the Russell 2000 Index;
the ValueLine Composite;
the Wilshire 4500 Index;
the Salomon Brothers World Bond Index (which measures the total return in
U.S. dollar terms of government bonds, Eurobonds and foreign bonds of ten
countries, with all such bonds having a minimum maturity of five years);
the Shearson Lehman Brothers Aggregate Bond Index or its component indexes
(the Aggregate Bond Index measures the performance of
Treasury, U.S. government agencies, mortgage and Yankee bonds);
the S&P Bond indexes (which measure yield and price of corporate,
municipal and U.S. government bonds); the J.P. Morgan Global Government
Bond Index; IBC's Money Market Fund Report (which provides industry
averages of 7-day annualized and compounded yields of taxable, tax-free
and U.S. government money market funds);
historical investment data supplied by the research departments of Goldman
Sachs, Lehman Brothers, First Boston Corporation, Morgan Stanley (including
EAFE), Salomon Brothers, Merrill Lynch, Donaldson Lufkin and Jenrette or
other providers of such data;
the FT-Actuaries Europe and Pacific Index;
mutual fund performance indexes published by Morningstar, Inc., Variable
Annuity Research & Data Service, the Investment Company Institute, the
Investment Company Data, Inc., Media General Financial, and Value Line
Mutual Fund Survey; and financial industry analytical surveys, such as
Piper Universe.
The composition of the investments in such indexes and the characteristics of
such benchmark investments are not identical to, and in some cases are very
different from, those of a Fund. These indexes and averages are generally
unmanaged and the items included in the calculations of such indexes and
averages may be different from those of the equations used by the Company to
calculate a Fund's performance figures.
The Funds may also from time to time include in such advertising a total return
figure that is not calculated according to the formula set forth above in order
to compare more accurately the performance of a Fund with other measures of
investment return. For example, unmanaged indexes may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.
The Company may from time to time summarize the substance of discussions
contained in shareholder reports in advertisements and publish the Investment
Adviser's views as to markets, the rationale for a Fund's investments, and
discussions of the Fund's current asset allocation.
From time to time, advertisements or information may include a discussion of
certain attributes or benefits to be derived by an investment in a particular
Fund. Such advertisements or information may include symbols, headlines or other
material which highlight or summarize the information discussed in more detail
in the communication.
Such performance data will be based on historical results and will not be
intended to indicate future performance. The total return or yield of a Fund
will vary based on market conditions, expenses, investments, and other factors.
The value of a Fund's shares will fluctuate and an investor's shares may be
worth more or less than their original cost upon redemption. The Company may
also, at its discretion, from time to time make a list of a Fund's holdings
available to investors upon request.
Taxes
Each Fund intends to qualify and to continue to qualify as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). The distribution requirement, in order to qualify for that
treatment, is that each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income, consisting
generally of net investment income, net short-term capital gain, and net gains
from certain foreign currency transactions. The Company must also meet the
following additional requirements: (1) The Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans, and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, futures,
or forward contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) The Fund must derive
less than 30% of its gross income each taxable year from gains (without
including losses) on the sales or other disposition of securities, or any of the
following, that were held for less than three months - options, futures, or
forward contracts (other than those on foreign currencies), or foreign
currencies (or options, futures, or forwards thereon) that are not directly
related to the Fund's principal business of investing in securities (or options
and futures with respect thereto) ("Short-Short Limitation"); (3) At the close
of each quarter of the Fund's taxable year, at least 50% of the value of its
total assets must be represented by cash and cash items, U.S. government
securities, securities of other RIC's, and other securities that, with respect
to any one issuer, do not exceed 5% of the value of the Fund's total assets and
that do not represent more than 10% of the outstanding voting securities of the
issuer; and (4) At the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S.
government securities or the securities of other RIC's) of any one issuer.
Each Fund will be subject to a nondeductible 4% excise tax on amounts not
distributed to shareholders on a timely basis. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
Dividends and interest received by each Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on capital gains in
respect to investments by foreign investors.
Certain of the Funds may invest in the stock of "passive foreign investment
companies" ("PFIC's"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) At least 75% of its gross income is passive;
or (2) An average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, the Fund would be
subject to Federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on disposition of that stock (collectively
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC income
would be included in the Fund's investment company taxable income, and
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders. If the Fund invests in a PFIC and elects to treat the PFIC
as a "qualified electing fund," then in lieu of the foregoing tax and interest
obligation, that Fund will be required to include income each year to its pro
rata share of the qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), even if they are not distributed to the Fund; those amounts would
be subject to the Distribution Requirement. The ability of a Fund to make this
election may be limited.
The use of hedging strategies, such as writing (selling) and purchasing options
and futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the income received in connection therewith by a Fund. Income
from the disposition of foreign currencies (except certain gains therefrom that
may be excluded by future regulations), and income from transactions in options,
futures, and forward contracts derived by a Fund with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from the disposition of
options and futures contract (other than those on foreign currencies) will be
subject to the Short-Short Limitation if they are held for less than three
months. Income from the disposition of foreign currencies, and options, futures,
and forward contracts on foreign currencies, that are not directly related to a
Fund's principal business of investing in securities (or options and futures
with respect thereto) also will be subject to the Short-Short Limitation if they
are held for less than three months.
If a Fund satisfies certain requirements, any increase in value on a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether that Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Fund intends that, when it engages in hedging transactions, it will qualify for
this treatment, but it is not clear whether this treatment will be available for
all of the Fund's hedging transactions. To the extent this treatment is not
available, a Fund may be forced to defer the closing out of certain options and
futures contracts beyond the time when it otherwise would be advantageous to do
so, in order for the Fund to qualify as a RIC.
The foregoing is only a general summary of some of the important Federal income
tax considerations generally affecting the Funds and their shareholders. No
attempt is made to present a complete explanation of the Federal tax treatment
of the Funds' activities. Potential investors are urged to consult their own tax
advisers for more detailed information and for information regarding any
applicable state, local, or foreign taxes.
Other Information
Legal Matters. An opinion of counsel as to the legality of the shares of the
Funds has been given by Reid A. Evers.
Independent Auditors. Ernst & Young LLP, 515 S. Flower Street, Los Angeles,
California 90071, performs audits of the Funds'
financial statements.
Other Information. A Registration Statement has been filed with the Securities
and Exchange Commission, under the Securities Act of 1933 as amended, with
respect to the Company and the shares of the Funds discussed in this Statement
of Additional Information. Not all of the information set forth in the
Registration Statement, amendments and exhibits thereto has been included in the
Prospectuses or this Statement of Additional Information. Statements contained
herein concerning the contents of certain other legal instruments are intended
to be summaries. For a complete statement of the terms of these documents,
reference should be made to the instruments filed with the Commission.
<PAGE>
Appendix A: Description of Corporate Bond Ratings
Moody's Investors Service, Inc. and Standard and Poor's Corporation are two
prominent independent rating agencies that rate the
quality of bonds. Following are expanded explanations of the ratings shown in
the Prospectuses.
Moody's Investors Service, Inc.
Aaa: Bonds with this rating are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest
payments are protected by a large or exceptionally stable margin and principal
is secure.
Aa: Bonds with this rating are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude.
A: Bonds with this rating possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds with this rating are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds with this rating are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B: Bonds with this rating generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds with this rating are of poor standing. Such issues may be in defaul
or there may be present elements of danger with
respect to principal or interest.
Ca: Bonds with this rating represent obligations which are speculative in a high
degree. Such issues are often in default or have
other marked shortcomings.
C: Bonds with this rating are the lowest rated class of bonds. Issues so rated
can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Generally, investment-grade debt securities are those rated Baa3 or better by
Moody's.
Standard & Poor's Corporation
AAA: This rating is the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is very strong.
AA: This rating indicates a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A: This rating indicates a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: This rating indicates an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.
BB, B, CCC, CC: These ratings indicate, on balance, a predominantly speculative
capacity of the issuer to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates the lowest degree of speculation and
CC the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C: This rating is reserved for income bonds on which no interest is being paid.
D: This rating indicates debt in default, and payment of interest and/or
repayment of principal are in arrears.
The ratings from "AA" to "B" may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories, for example A
or B+.
Generally, investment-grade debt securities are those rated BBB- or better by
Standard & Poor's.
<PAGE>
Appendix B: Description of Fixed-Income Instruments
U.S. Government Obligations. Securities issued or guaranteed as to principal and
interest by the United States government include a variety of Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have a maturity of one year or less; Treasury Notes
have maturities of one to ten years; and Treasury Bonds can be issued with any
maturity period but generally have a maturity of greater than ten years.
Agencies of the United States government which issue or guarantee obligations
include, among others, the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, government National Mortgage
Association, Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Obligations of instrumentalities of the United
States government include securities issued or guaranteed by, among others,
banks of the Farm Credit System, the Federal National Mortgage Association,
Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Student Loan
Marketing Association, Federal Intermediate Credit Banks, Federal Land Banks,
Banks for Cooperatives, and the U.S. Postal Service. Some of these securities
are supported by the full faith and credit of the U.S. Treasury; others are
supported by the right of the issuer to borrow from the Treasury, while still
others are supported only by the credit of the instrumentality.
Certificates of Deposit. Certificates of deposit are generally short-term,
interest-bearing negotiable certificates issued by banks, savings and loan
associations or savings banks against funds deposited in the issuing
institution.
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received. Certain time deposits may be considered
illiquid.
Bankers' Acceptance. A bankers' acceptance is a draft drawn on a commercial bank
by a borrower usually in connection with an international commercial transaction
(to finance the import, export, transfer or storage of goods). The borrower is
liable for payment as well as the bank, which unconditionally guarantees to pay
the draft at its face amount on the maturity date. Most acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured promissory
notes issued by corporations to finance short-term credit needs. Commercial
paper is usually sold on a discount basis and has a maturity at the time of
issuance not exceeding 270 days.
Variable Rate, Floating Rate, or Variable Amount Securities. Variable rate,
floating rate, or variable amount securities are short-term unsecured promissory
notes issued by corporations to finance short-term credit needs. These are
interest-bearing notes on which the interest rate generally fluctuates on a
scheduled basis.
Corporate Debt Securities. Corporate debt securities are debt issued by a
corporation that pays interest and principal to the
holders at specified times.
Asset-Backed Securities. Asset-backed securities are securities which represent
an undivided fractional interest in a trust whose assets generally consist of
mortgages, motor vehicle retail installment sales contracts, or other
consumer-based loans.
Participation Interests in Loans. A participation interest in a loan entitles
the purchaser to receive a portion of principal and interest payments due on a
commercial loan extended by a bank to a specified company. The purchaser of such
an interest has no recourse against the bank if payments of principal and
interest are not made by the borrower and generally relies on the bank to
administer and enforce the loan's terms.
International Organization Obligations. International organization obligations
include obligations of those organizations designated or supported by U.S. or
foreign government agencies to promote economic reconstruction and development
or international banking, and related government agencies. Examples include the
International Bank for Reconstruction and Development (the World Bank), the
European Coal and Steel Community, the Asian Development Bank, and the
InterAmerican Development Bank.
Custody Receipts. A Fund may acquire custody receipts in connection with
securities issued or guaranteed as to principal and interest by the U.S.
government, its agencies, authorities or instrumentalities. Such custody
receipts evidence ownership of future interest payments, principal payments or
both on certain notes or bonds issued by the U.S. government, its agencies,
authorities or instrumentalities. These custody receipts are known by various
names, including "Treasury Receipts," "Treasury Investors Growth Receipts"
("TIGRs"), and "Certificates of Accrual on Treasury Securities" ("CATS"). For
certain securities law purposes, custody receipts are not considered U.S.
government securities.
Pass-Through Securities. The Funds may invest in mortgage pass-through
securities such as Government National Mortgage Association ("GNMA")
certificates or Federal National Mortgage Association ("FNMA") and other
mortgage-backed obligations, or modified pass-through securities such as
collateralized mortgage obligations issued by various financial institutions. In
connection with these investments, early repayment of investment principal
arising from prepayments of principal on the underlying mortgage loans due to
the sale of the underlying property, the refinancing of the loan, or foreclosure
may expose the Fund to a lower rate of return upon reinvestment of the
principal. Prepayment rates vary widely and may be affected by changes in market
interest rates. In periods of falling interest rates, the rate of prepayment
tends to increase, thereby shortening the actual average life of the
mortgage-related security. Conversely, when interest rates are rising, the rate
of prepayment tends to decrease, thereby lengthening the actual average life of
the mortgage-related security. Accordingly, it is not possible to accurately
predict the average life of a particular pool of pass-through securities.
Reinvestment of prepayments may occur at higher or lower rates than the original
yield on the certificates. Therefore, the actual maturity and realized yield on
pass-through or modified pass-through mortgage-related securities will vary
based upon the prepayment experience of the underlying pool of mortgages. For
purposes of calculating the average life of the assets of the relevant Fund, the
maturity of each of these securities will be the average life of such securities
based on the most recent or estimated annual prepayment rate.
<PAGE>
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Not applicable.
(b) Exhibits
(1) Amended Articles of Incorporation of Transamerica Investors,
Inc.1/5/
(2) Amended Bylaws of Transamerica Investors, Inc.2/5/
(3) Not Applicable.
(4) Not Applicable.
(5) Form of Investment Advisory and Administrative Services
Agreement between Transamerica
Investors, Inc. and Transamerica Investment Services, Inc.2/5/
(6) (a) Form of Distribution Agreement between Transamerica
Investors, Inc. and
Transamerica Securities Sales Corporation ("TSSC").2/
(b) Form of Selling Agreement between TSSC and Transamerica
Financial Resources, Inc.2/
(c) Form of Operating Agreement between Transamerica
Investors, Inc. and Charles Schwab & Co.2/
(7) Not Applicable.
(8) (a)Form of Custodian Agreement between Transamerica Investors,
Inc. and State Street Bank and Trust Company.2/
-
(b)Form of Sub-Custodian Agreement between State Street Bank
and Trust Company and State Street London Limited.2/
(9) Transfer Agency Agreement between Transamerica Investors, Inc.
and Boston Financial Data Services.2/
(10) Opinion and Consent of Counsel.2/
(11) Not applicable.
(12) Not Applicable.
(13) Subscription agreement.2/
(14) Form of Disclosure Statement and Custodial Account Agreement
for Transamerica Investors IRA.2/
(15)(i) Form of Plan of Distribution Pursuant to Rule 12b-1.2/
(a) Investor Shares.
(1) Transamerica Premier Equity Fund (2) Transamerica
Premier Index Fund (3) Transamerica Premier Bond Fund (4)
Transamerica Premier Balanced Fund (5) Transamerica
Premier Short-Term Government Fund (6) Transamerica
Premier Cash Reserve Fund
(b) Adviser Shares.
(1) Transamerica Premier Equity Fund (2) Transamerica
Premier Index Fund (3) Transamerica Premier Bond Fund (4)
Transamerica Premier Balanced Fund (5) Transamerica
Premier Short-Term Government Fund (6) Transamerica
Premier Cash Reserve Fund
(15)(ii) Premier Aggressive Growth Fund 5/
Premier Small Company Fund 5/
(16) Not Applicable.
(17) Not Applicable.
(18) Form of Multi-Class Plan Pursuant to Rule 18f-3.2/
(19) Powers of Attorney.2/5/
1/ Filed with initial registration statement on April 3, 1995.
2/ Filed herewith.Filed with Pre-Effective Amendment No. 1 to this
registration statement on August 29, 1995.
3/ Filed with Pre-Effective Amendment No. 2 to this registration statement
on September 18, 1995.
4/ Filed with Post-Effective Amendment No. 1 to this registration statement
on April 2, 1996.
5/ Filed herewith.
Item 25. Person Controlled by or Under Common Control With the Registrant.
The Registrant, Transamerica Investors, Inc., is controlled by
Transamerica Occidental Life Insurance Company ("Transamerica Occidental"), a
wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which, in turn is a wholly-owned subsidiary of Transamerica Corporation.
The following chart indicates the persons controlled by or under common
control with Transamerica Corporation:
<PAGE>
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
ARC Reinsurance Corporation - Hawaii
Inter-America Corporation - California
Mortgage Corporation of America - California
Pyramid Insurance Company, Ltd. - Hawaii
Pacific Cable Ltd. - Bermuda
TC Cable, Inc. - Delaware
River Thames Insurance Company Limited - England
RTI Holdings, Inc. - Delaware
Transamerica Airlines, Inc. - Delaware
Transamerica Asset Management Group, Inc. - Delaware
Criterion Investment Management Company - Texas
Transamerica CBO I, Inc. - Delaware
Transamerica Corporation (Oregon) - Oregon
Transamerica Delaware, L.P. - Delaware
Transamerica Finance Group, Inc. - Delaware
BWAC Twelve, Inc. - Delaware
Transamerica Insurance Finance Corporation - Maryland
Transamerica Insurance Finance Company (Europe) - Maryland
Transamerica Insurance Finance Corporation, California - California
Transamerica Insurance Finance Corporation, Canada - Ontario
Transamerica Finance Corporation - Delaware
TA Leasing Holding Co., Inc. - Delaware
Trans Ocean Ltd. - Delaware
Trans Ocean Container Corp. - Delaware
Cool Solutions, Inc. - Delaware
TOD Liquidating Corp. - California
TOL S.R.L. - Italy
Trans Ocean Leasing Deutschland GMBH - Germany
Trans Ocean Leasing PTY Limited - Australia
Trans Ocean Management Corporation -
Trans Ocean Regional Corporate Holdings - California
Trans Ocean SARL - France
Trans Ocean Tank Services Corporation - Delaware
Trans Ocean Container Finance Corp. - Delaware
Transamerica Leasing Inc. - Delaware
Better Asset Management Company LLC - Delaware
Greybox L.L.C. - Delaware
Transamerica Leasing Holdings Inc. - Delaware
Greybox Services Limited - United Kingdom
Intermodal Equipment, Inc. - Delaware
Transamerica Leasing N.V. - Belgium
Transamerica Leasing SRL - Italy
Transamerica Distribution Services Inc. - Delaware
Transamerica Leasing Coordination Center - Belgium
Transamerica Leasing do Brasil Ltda. - Brazil
Transamerica Leasing GmbH - West Germany
Transamerica Leasing Limited - United Kingdom
ICS Terminals (UK) Limited - United Kingdom
Transamerica Leasing Pty. Ltd. - Australia
Transamerica Leasing (Canada) Inc. - Canada
Transamerica Leasing (HK) Ltd. - Hong Kong
Transamerica Leasing (Proprietary) Limited - South Africa
Transamerica Tank Container Leasing Pty. Limited - Australia
Transamerica Trailer Holdings I Inc. - Delaware
Transamerica Trailer Holdings II Inc. - Delaware
Transamerica Trailer Holdings III Inc. - Delaware
Transamerica Trailer Leasing AB - Sweden
Transamerica Trailer Leasing A/S - Denmark.
Transamerica Trailer Leasing GmbH - Germany
Transamerica Trailer Leasing S.A. - Fra.
Transamerica Trailer Leasing S.p.A. - Italy
Transamerica Trailer Leasing (Belgium) N.V. - Belg.
Transamerica Trailer Leasing (Netherlands) B.V. - Neth.
Transamerica Trailer Spain S.A. - Spn.
Transamerica Transport Inc. - NJ
TELColorado Holding Co., Inc. - Delaware
Transamerica Commercial Finance Corporation, I - Delaware
BWAC Credit Corporation - Delaware
BWAC International Corporation - Delaware
Transamerica Business Credit Corporation - Delaware
The Plain Company - Delaware
Transamerica Global Distribution Finance Corporation - Delaware
Transamerica Inventory Finance Corporation - Delaware
BWAC Seventeen, Inc. - Delaware
Transamerica Commercial Finance Canada, Limited - Ontario
Transamerica Commercial Finance Corporation, Canada - Canada
TCF Commercial Leasing Corporation, Canada - Ontario
BWAC Twenty-One, Inc. - Delaware
Transamerica Commercial Holdings Limited - United Kingdom
Transamerica Commercial Finance Limited - United Kingdom
Transamerica Trailer Leasing Limited - United Kingdom
Transamerica Commercial Finance Corporation - Delaware
TCF Asset Management Corporation - Colorado
Transamerica Joint Ventures, Inc. - Delaware
Transamerica Commercial Finance France S.A. - France
Transamerica GmbH Inc. - Delaware
Transamerica Financieringsmaatschappij B.V. - Netherlands
Transamerica GmbH - Germany - Germany
Transamerica Finance Loan Company - Delaware
Transamerica Financial Services Holding Company - Delaware
Arcadia General Insurance Company - Arizona
Arcadia National Life Insurance Company - Arizona
First Credit Corporation - Delaware
Pacific Agency, Inc. - Indiana
Pacific Agency, Inc. - Nevada
Pacific Finance Loans - California
Pacific Service Escrow Inc. - Delaware
Transamerica Acceptance Corporation - Delaware
Transamerica Financial Services Limited, United Kingdom
- - United Kingdom
Transamerica Credit Corporation - Nevada
Transamerica Credit Corporation (Washington) - Washington
Transamerica Financial Consumer Discount Company (Pennsylvania) -
Pennsylvania
Transamerica Financial Corporation - Nevada
Transamerica Financial Services Mortgage Company - Delaware
Transamerica Financial Professional Services, Inc. - California
Transamerica Financial Services - California
NAB Services, Inc. - California
Transamerica Financial Services Company - Ohio
Transamerica Financial Services Inc. - Hawaii
Transamerica Financial Services Inc. - Minnesota
Transamerica Financial Services of Dover, Inc. - Delaware
Transamerica Financial Services, Inc. - Alabama
Transamerica Financial Services, Inc. - British Columbia
Transamerica Financial Services, Inc. - New Jersey
Transamerica Financial Services, Inc. - Texas
Transamerica Financial Services, Inc. - West Virginia
Transamerica Insurance Administrators, Inc. - Delaware
Transamerica Mortgage Company - Delaware
Transamerica Financial Services Finance Co. - Delaware
Transamerica HomeFirst, Inc. - California
Transamerica Foundation - California
Transamerica Information Management Services, Inc. - Delaware
Transamerica Insurance Corporation of California - California
Arbor Life Insurance Company - Arizona
Plaza Insurance Sales, Inc. - California
Transamerica Advisors, Inc. - California
Transamerica Annuity Service Corporation - New Mexico
Transamerica Financial Resources, Inc. - Delaware
Financial Resources Insurance Agency of Texas - Texas
TBK Insurance Agency of Ohio, Inc. - Ohio
Transamerica Financial Resources Insurance Agency of Alabama Inc.
- - Alabama
Transamerica Financial Resources Insurance Agency of Massachusetts
Inc. - Massachusetts
Transamerica International Insurance Services, Inc. - Delaware
Home Loans and Finance Ltd. - United Kingdom
Transamerica Occidental Life Insurance Company - California Bulkrich
Trading Limited - Hong Kong First Transamerica Life Insurance
Company - New York NEF Investment Company - California Transamerica
Life Insurance and Annuity Company - North Carolina
Transamerica Assurance Company - Colorado
Transamerica Life Insurance Company of Canada - Canada
Transamerica Variable Insurance Fund, Inc. - Maryland
USA Administration Services, Inc. - Kansas
Transamerica Products, Inc. - California
Transamerica Leasing Ventures, Inc. - California
Transamerica Products II, Inc. - California
Transamerica Products IV, Inc. - California
Transamerica Products I, Inc. - California
Transamerica Securities Sales Corporation - Maryland
Transamerica Service Company - Delaware
Transamerica International Holdings, Inc. - Delaware
Transamerica Investment Services, Inc. - Delaware
Transamerica Income Shares, Inc. (managed by TA Investment Services)
- Maryland
Transamerica LP Holdings Corp. - Delaware
Transamerica Properties, Inc. - Delaware
Transamerica Retirement Management Corporation - Delaware
Transamerica Real Estate Tax Service (A Division of Transamerica
Corporation) - N/A
Transamerica Flood Hazard Certification (A Division of TA Real Estate
Tax Service) -
N/A
Transamerica Realty Services, Inc. - Delaware
Bankers Mortgage Company of California - California
Pyramid Investment Corporation - Delaware
The Gilwell Company - California
Transamerica Affordable Housing, Inc. - California
Transamerica Minerals Company - California
Transamerica Oakmont Corporation - California
Ventana Inn, Inc. - California
Transamerica Telecommunications Corporation - Delaware
*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
Limited Partner; Transamerica Corporation is General Partner
Item 26. Numbers of Holders of Securities.
Title of Class Number of Record Holders
NONE
Item 27. Indemnification
Transamerica Investors' Bylaws provide in Article VII as follows:
Section 1. OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND OTHERS. The
Corporation shall indemnify its Officers, Directors, employees and agents and
any person who serves at the request of the Corporation as a Director, Officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise as follows:
(a) Every person who is or has been a Director, Officer, employee or
agent of the Corporation and persons who serve at the Corporation's
request as Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Corporation to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid
by him or her in connection with any debt, claim, action, demand, suit,
proceeding, judgment, decree, liability or obligation of any kind in
which he or she becomes involved as a party or otherwise by virtue of
his or her being or having been a Director, Officer, employee or agent
of the Corporation or of another employee or agent of the Corporation
or of another corporation, partnership, joint venture, trust or other
enterprise at the request of the Corporation and against amounts paid
or incurred by him or her in the settlement thereof.
(b) The words "claim," "action," "suit" or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal,
administrative, legislative, investigative or other, including
appeals), actual or threatened, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other
liabilities.
(c) No indemnification shall be provided hereunder to a Director,
Officer, employee or agent against any liability to the Corporation or
its shareholders by reason of willful misfeasance, active and
deliberate dishonesty, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Corporation, shall be severable,
shall not affect any other rights to which any Director, Officer,
employee or agent may now or hereafter be entitled, shall continue as
to a person who has ceased to be such Director, Officer, employee or
agent and shall insure to the benefit of the heirs, executors and
administrators of such a person.
(e) In the absence of a final decision on the merits by a court or
other body before which such proceeding was brought, an indemnification
payment will not be made, except as provided in paragraph (f) of this
Section 1, unless in the absence of such a decision, a reasonable
determination based upon a factual review has been made: (1) by a
majority vote of a quorum of non-party Directors who are not
"interested persons" of the Corporation as defined in Section 2(a)(19)
of the Investment Company Act of 1940; (2) by independent legal counsel
approved by the Board of Directors in a written opinion that the
indemnitee was not liable for an act of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties; or (3) by the
shareholders.
(f) The Corporation further undertakes that advancement of expenses
incurred in the defense of a proceeding by an Officer, Director, or
controlling person of the Corporation in advance of the final
disposition of the proceeding (upon receipt by the Corporation of: (a)
a written affirmation by the Officer, Director, or controlling person
of the Corporation of that person's good faith belief that the standard
of conduct necessary for indemnification by the Corporation as
authorized in the Maryland General Corporation Law has been met; and
(b) a written undertaking by or on behalf of such person to repay the
amount if it shall ultimately be determined that the standard of
conduct as stated above has not been met) will not be made absent the
fulfillment of at least one of the following conditions: (1) the
Corporation is insured against losses arising by reason of any lawful
advances; or (2) a majority of a quorum of disinterested, non-party
Directors or independent legal counsel in a written opinion makes a
factual determination that there is a reason to believe the indemnitee
will be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of Transamerica Investors, Inc. are covered
under a Directors and Officers liability program which includes direct coverage
to directors and officers and corporate reimbursement to reimburse the Company
for indemnification of its directors and officers. Such directors and officers
are indemnified for loss arising from any covered claim by reason of any
Wrongful Act in their capacities as directors or officers. In general, the term
"loss" means any amount which the insureds are legally obligated to pay for a
claim for Wrongful Acts. In general, the term "Wrongful Acts" means any breach
of duty, neglect, error, misstatement, misleading statement or omission caused,
committed or attempted by a director or officer while acting individually or
collectively in their capacity as such, claimed against them solely by reason of
their being directors and officers. The limit of liability under the program is
$5,000,000 for the period from the date of effectiveness of this registration
statement to 2/1/96. The primary policy under the program is with ICI Mutual
Insurance Company.
Item 28. Business and Other Connections of the Investment Adviser:
Transamerica Investment Services, Inc. (the "Adviser") is a registered
investment adviser. The Adviser is a
direct wholly-owned subsidiary of Transamerica Corporation.
Information as to the officers and directors of the Adviser is included in its
Form ADV last filed in March 1995 with the Securities and Exchange Commission
(registration number 801-7740) and is incorporated herein by reference.
Item 29. Principal Underwriter
(a) Transamerica Securities Sales Corporation ("TSSC") serves as the
principal underwriter of shares of the Funds.
(b) TSSC is the principal underwriter for the Registrant.
Transamerica Financial Resources, Inc.
("TFR") will also distribute shares of the funds. Set forth below is a list
of the directors and officers of
TSSC and TFR and their positions with the Registrant.
NAME AND PRINCIPAL POSITIONS AND OFFICE POSITIONS
BUSINESS ADDRESS* WITH TSSC WITH REGISTRANT
Barbara A. Kelley President and Director None
Regina M. Fink Secretary and Director None
Benjamin Tang Treasurer None
Nooruddin Veerjee Director Director & CEO
James B. Roszak Director None
Dan S. Trivers Senior Vice President None
Nicki Bair Vice President President, CA &
CFO
Christopher W. Shaw Second Vice President Assistant Vice
President
* The principal business address for each officer and director is 1150
South Olive, Los Angeles, CA 90015.
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS
BUSINESS ADDRESS* WITH TFR WITH
REGISTRANT
Barbara A. Kelley President and Director None
Regina M. Fink Secretary and Counsel None
Monica Suryapranata Treasurer None
Gilbert Cronin Director None
James W. Dederer Director None
Jeffrey C. Goodrich Vice President None
John Leon Second Vice-President None
James B. Roszak Director None
Dan Trivers Second Vice President, None
Director of Administration and Chief Compliance
Officer
Ronald F. Wagley Director None
Kerry Rider Compliance Manager None
Second Vice President and Director of Compliance
* The principal business address for each officer and director is 1150
South Olive, Los Angeles, CA 90015.
Item 30. Location and Accounts and Records
All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules promulgated thereunder are maintained at the offices
of:
Registrant, located at 1150 South Olive, Los Angeles, California 90015-2211;
State Street Bank and Trust Company, Registrant's custodian, located at 225
Franklin Street, Boston, Massachusetts 02110; and Boston Financial Data
Services, Inc., a subsidiary of State Street, located at 2 Heritage Drive,
Quincy, Massachusetts 02171.
Item 31. Management Services
All management contracts are discussed in Parts A or B.
<PAGE>
Items 32. Undertakings
(a) Not Applicable.
(b) Registrant undertakes that it will file a post-effective amendment, using
financial statements of a reasonably current date which need not be certified,
within four to six months from the commencement of operations of the Funds.
(c) Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of its most recent annual report to shareholders, upon
request and without charge.
(d) Registrant hereby undertakes to call for a meeting of shareholders for the
purpose of voting upon the question of removal of one or more of the directors
if requested to do so by the holders of at least 10% of a Fund's outstanding
shares, and to assist in communication with other shareholders as required by
Section 16(c).
<PAGE>
C-14
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Transamerica Investors, Inc. certifies that it meets the requirements of
Securities Act Rule 485(ba) for effectiveness if this Registration Statement and
has caused this Registration Statement to be signed on its behalf in the City of
Los Angeles and State of California on the 11th day of April, 1997.
TRANSAMERICA INVESTORS, INC.
By: __________________________
Nicki Bair
President
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 12 to the Registration Statement has been signed by the following persons in
the capaciaties and on the date indicated.
Signatures Titles Date
______________________ Director and Chief April ___, 1997
Nooruddin Veerjee Executive Officer
______________________ President April ____, 1997
Nicki Bair
______________________ Treasurer and April ____, 1997
Susan Hughes Chief Accounting Officer
______________________ Chief Financial Officer April ___, 1997
H. Michael Kim
______________________ Director April ____, 1997
Sidney E. Harris
______________________ Director April ___, 1997
Charles C. Reed
_____________________ Director April ___, 1997
Gary U. Rolle
______________________ Director April ___, 1997
Carl R. Terzian
<PAGE>
Exhibit 1 Amended Articles of Incorporation
<PAGE>
TRANSAMERICA INVESTORS, INC.
ARTICLES SUPPLEMENTARY
Transamerica Investors, Inc., a Maryland corporation, having its principal
office in Silver Springs, Maryland (the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: (a) Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Article VI of the Articles of Incorporation of the
Corporation, as amended (the "Charter"), the Board of Directors has duly divided
and classified 750,000,000 Shares of the authorized and unissued Shares of
capital stock into the following series and has provided for the issuance of
such series:
Series Number of Shares in Series
Transamerica Premier Equity Fund 50,000,000
Transamerica Premier Index Fund 50,000,000
Transamerica Premier Bond Fund 50,000,000
Transamerica Premier Balanced Fund 50,000,000
Transamerica Premier Short-Intermediate
Government Fund 50,000,000
Transamerica Premier Cash Reserve Fund 500,000,000
Any series of Common Stock of the Corporation shall be referred to herein
individually as a "Series" and collectively, together with any further series
from time to time established, as the "Series."
(b) The following is a description of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the Shares of Common
Stock classified into the Series listed above and any additional series of
Common Stock of the Corporation (unless provided in the articles supplementary
or other charter document classifying or reclassifying such Series):
(1) Assets Belonging to Series. All consideration received by the
Corporation from the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any investment or reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series for all
purposes, subject only to the rights of creditors, and shall be so recorded
upon the books of account of the Corporation. Such consideration, assets,
income, earnings, profits and proceeds, together with any General Items (as
defined below) allocated to that Series as provided in the following sentence,
are herein referred to collectively as "assets belonging to" that Series. In
the event that there are any assets, income, earnings, profits or proceeds
which are not readily identifiable as belonging to any particular Series
(collectively, "General Items"), such General Items shall be allocated by or
under the supervision of the Board of Directors to and among any one or more
of the Series established and designated from time to time in such manner and
on such basis as the Board of Directors, in its sole discretion, deems fair
and equitable; and any General Items so allocated to a particular Series shall
belong to that Series. Each such allocation by or under the supervision of the
Board of Directors shall be conclusive and binding for all purposes. No holder
of a particular Series shall have any right or claim against the assets
belonging to any other Series, except as a holder of the Shares of such other
Series.
(2) Liabilities of Series. The assets belonging to each particular
Series shall be charged with the liabilities of the Corporation in respect of
that Series and all expenses, costs, charges and reserves attributable to that
Series, and any general liabilities, expenses, costs, charges or reserves of
the Corporation which are not readily identifiable as pertaining to any
particular Series shall be allocated and charged by or under the supervision
of the Board of Directors to and among any one or more of the Series
established and designated from time to time in such manner and on such basis
as the Board of Directors, in its sole discretion, deems fair and equitable.
The liabilities, expenses, costs, charges and reserves allocated and so
charged to a Series are herein referred to collectively as "liabilities of"
that Series. Each allocation of liabilities, expenses, costs, charges and
reserves by or under the supervision of the Board of Directors shall be
conclusive and binding for all purposes.
(3) Dividends and Distributions. Dividends and capital gains
distributions on Shares of a particular Series may be paid with such
frequency, in such form and in such amount as the Board of Directors may
determine by resolution adopted from time to time, or pursuant to a standing
resolution or resolutions adopted only once or with such frequency as the
Board of Directors may determine, after providing for actual and accrued
liabilities of that Series. All dividends on Shares of a particular Series
shall be paid only out of the income belonging to that Series and all capital
gains distributions on Shares of a particular Series shall be paid only out of
the capital gains belonging to that Series. All dividends and distributions on
Shares of a particular Series shall be distributed pro rata to the holders of
that Series in proportion to the number of Shares of that Series held by such
holders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure, the Board of Directors may determine that
no dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Board of Directors under such program or
procedure.
Dividends and distributions may be paid in cash, property or
additional Shares of the same or another Series, or a combination thereof, as
determined by the Board of Directors or pursuant to any program that the Board
of Directors may have in effect at the time for the election by Shareholders
of the form in which dividends or distributions are to be paid. Any such
dividend or distribution paid in Shares shall be paid at the current net asset
value thereof.
(4) Voting. On each matter submitted to a vote of the Shareholders,
each holder of Shares shall be entitled to one vote for each Share standing in
his name on the books of the Corporation, irrespective of the Series thereof,
and all Shares of all Series shall vote as a single class ("Single Class
Voting"); provided, however, that as to any matter with respect to which a
separate vote of any Series is required by the Investment Company Act of 1940,
as amended (the "Investment Company Act") or by the Maryland General
Corporation Law, such requirement shall apply and, in that event, the other
Series entitled to vote on the matter shall vote together as a single class;
and provided, further, that the holders of a particular Series shall not be
entitled to vote on any matter which does not affect any interest of that
Series, including liquidation of another Series, except as otherwise required
by the Investment Company Act or the Maryland General Corporation Law.
(5) Redemption by Shareholders. Each holder of Shares of a particular
Series shall have the right at such times as may be permitted by the
Corporation to require the Corporation to redeem all or any part of his Shares
of that Series, at a redemption price per Share equal to the net asset value
per Share of that Series next determined after the Shares are properly
tendered for redemption, less such redemption fee or sales charge, if any, as
may be established by the Board of Directors in its sole discretion in
accordance with any applicable provisions of the Investment Company Act.
Payment of the redemption price shall be in cash; provided, however, that if
the Board of Directors determines, which determination shall be conclusive,
that conditions exist which make payment wholly in cash unwise or undesirable,
the Corporation may, to the extent and in the manner permitted by the
Investment Company Act, make payment wholly or partly in securities or other
assets belonging to the Series of which the Shares being redeemed are a part,
at the value of such securities or assets used in such determination of net
asset value.
Notwithstanding the foregoing, the Corporation may postpone
payment of the redemption price and may suspend the right of the holders of
Shares of any Series to require the Corporation to redeem Shares of that
Series during any period or at any time when and to the extent permissible
under the Investment Company Act.
(6) Redemption by Corporation. To the extent and in the manner
permitted by the Investment Company Act and the Maryland General Corporation
Law, the Board of Directors may cause the Corporation to redeem at their net
asset value the Shares of any Series held in the account of any Shareholder
having, because of redemptions or exchanges, an aggregate net asset value
which is less than the minimum initial investment in that Series specified by
the Board of Directors from time to time in its sole discretion.
(7) Liquidation. In the event of the liquidation of a particular
Series, the Shareholders of the Series that is being liquidated shall be
entitled to receive, as a class, when and as declared by the Board of
Directors, the excess of the assets belonging to that Series over the
liabilities of that Series. The holders of Shares of any particular Series
shall not be entitled thereby to any distribution upon liquidation of any
other Series. The assets so distributable to the Shareholders of any
particular Series shall be distributed among such Shareholders in proportion
to the number of Shares of that Series held by them and recorded on the books
of the Corporation. The liquidation of any particular Series in which there
are Shares then outstanding may be authorized by vote of a majority of the
Board of Directors then in office, and, if required under Maryland or other
applicable law, subject to the approval of a majority of the outstanding
voting securities of that Series, as defined in the Investment Company Act,
and without the vote of the holders of Shares of any other Series. The
liquidation of a particular Series may be accomplished, in whole or in part,
by the transfer of assets of such Series to another Series or by the exchange
of Shares of such Series for the Shares of another Series.
(8) Net Asset Value Per Share. The net asset value per Share of any
Series shall be the quotient obtained by dividing the value of the net assets
of that Series (being the value of the assets belonging to that Series less
the liabilities of that Series) by the total number of Shares of that Series
outstanding, all as determined by or under the direction of the Board of
Directors in accordance with generally accepted accounting principles and the
Investment Company Act. Subject to the applicable provisions of the Investment
Company Act, the Board of Directors, in its sole discretion, may prescribe and
shall set forth in the Bylaws of the Corporation or in a duly adopted
resolution of the Board of Directors such bases and times for determining the
value of the assets belonging to, and the net asset value per Share of
outstanding Shares of, each Series, or the net income attributable to such
Shares, as the Board of Directors deems necessary or desirable. The Board of
Directors shall have full discretion, to the extent not inconsistent with the
Maryland General Corporation Law and the Investment Company Act, to determine
which items shall be treated as income and which items as capital and whether
any item of expense shall be charged to income or capital. Each such
determination and allocation shall be conclusive and binding for all purposes.
The Board of Directors may determine to maintain the net asset
value per Share of any Series at a designated constant dollar amount and in
connection therewith may adopt procedures not inconsistent with the Investment
Company Act for the continuing declaration of income attributable to that
Series as dividends and for the handling of any losses attributable to that
Series. Such procedures may provide that in the event of any loss, each
Shareholder shall be deemed to have contributed to the capital of the
Corporation attributable to that Series his pro rata portion of the total
number of Shares required to be canceled in order to permit the net asset
value per Share of that Series to be maintained, after reflecting such loss,
at the designated constant dollar amount. Each Shareholder of the Corporation
shall be deemed to have agreed, by his investment in any Series with respect
to which the Board of Directors shall have adopted any such procedure, to make
the contribution referred to in the preceding sentence in the event of any
such loss.
(9) Conversion or Exchange Rights. Subject to compliance with the
requirements of the Investment Company Act, the Board of Directors shall have
the authority to provide that holders of Shares of any Series shall have the
right to convert or exchange said Shares into Shares of one or more other
Series of Shares in accordance with such requirements and procedures as may be
established by the Board of Directors.
(c) The Series identified in paragraph (a) of this Article FIRST and any
additional Series of Common Stock (unless otherwise specified in the articles
supplementary designating such Series) shall each initially have two classes
of Shares, which shall be designated Class A and Class B, each consisting,
until further changed, of the lesser of (x) the total number of Shares of each
such Series designated and specified in Paragraph (a) above or (y) the number
of Shares that could be issued by issuing all of the Shares of that Series
currently or hereafter classified less the total number of Shares of all other
classes of such Series then issued and outstanding. Any class of a Series of
Common Stock shall be referred to herein individually as a "Class" and
collectively, together with any further class or classes of such Series from
time to time established, as the "Classes".
(d) The Class A Shares shall be sold directly by the Corporation's
principal underwriter, as designated from time to time in accordance with the
Investment Company Act. The Class B Shares shall only be available to pension
plans, retirement savings plans and other institutional investors and shall be
sold by broker-dealers who have entered into selling agreements with the
Corporation's principal underwriter. Subject to the foregoing, all Classes of
a particular Series of Common Stock of the Corporation shall represent the
same interest in the Corporation and have identical voting, dividend,
liquidation, and other rights with any other Shares of Common Stock of that
Series; provided, however, that notwithstanding anything in the charter of the
Corporation to the contrary:
(1) Each Class of Shares of a Series may be subject to such
front-end sales loads as may be established by the Board of Directors from
time to time in accordance with the Investment Company Act and applicable
rules and regulations of the National Association of Securities Dealers,
Inc.
(2) Each Class of Shares of a Series may be subject to such
contingent deferred sales charges as may be established from time to time
by the Board of Directors in accordance with the Investment Company Act and
applicable rules and regulations of the National Association of Securities
Dealers, Inc.
(3) Expenses related solely to a particular Class of a Series
(including, without limitation, distribution expenses under a Rule 12b-1
plan and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which may differ
among the various Classes) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution and liquidation
rights of the Shares of that Class.
(4) At such time as may be determined by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the National Association of Securities Dealers, Inc. and
reflected in the current registration statement relating to a Series,
Shares of a particular Class of a Series may be automatically converted
into Shares of another Class; provided, however, that such conversion shall
be subject, at the election of the Board of Directors, to the continuing
availability of a private letter ruling of the Internal Revenue Service or
an opinion of counsel to the effect that such conversion does not
constitute a taxable event under federal income tax law and shall otherwise
be in accordance with the Investment Company Act. The Board of Directors,
in its sole discretion, may suspend any conversion rights if such opinion
is no longer available.
(5) As to any matter with respect to which a separate vote of any
Class of a Series is required by the Investment Company Act or by the
Maryland General Corporation Law (including, without limitation, approval
of any plan, agreement or other arrangement referred to in subsection (3)
above), such requirement as to a separate vote by that Class shall apply in
lieu of Single Class Voting, and if permitted by the Investment Company Act
or the Maryland General Corporation Law, the Classes of more than one
Series shall vote together as a single class on any such matter which shall
have the same effect on each such Class. As to any matter which does not
affect the interest of a particular Class of a Series, only the holders of
Shares of the affected Classes of that Series shall be entitled to vote.
SECOND: The Shares aforesaid have been duly classified by the Board of
Directors pursuant to authority and power contained in the Charter of the
Corporation. These Articles Supplementary do not increase the aggregate
authorized capital stock of the Corporation.
IN WITNESS WHEREOF, Transamerica Investors, Inc. has caused these presents
to be signed in its name and on its behalf by its President and witnessed by
its Secretary
on .
WITNESS: TRANSAMERICA INVESTORS, INC.
____________________________ By:_____________________________
Reid Evers Nicki Bair
Secretary President
THE UNDERSIGNED, President of Transamerica Investors, Inc., who executed on
behalf of the Corporation Articles Supplementary of which this Certificate is
made a part, hereby acknowledges in the name and on behalf of said Corporation
the foregoing Articles Supplementary to be the corporate act of said
Corporation and hereby certifies that the matters and facts set forth herein
with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.
--------------------------------
Nicki Bair
President
<PAGE>
Exhibit 2 Amended Bylaws
<PAGE>
TRANSAMERICA INVESTORS, INC.
BYLAWS
ARTICLE I
MEETING OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. The Corporation is not required to hold an
annual meeting each year. An annual meeting of shareholders shall be held only
in those years in which the election of Directors is required to be acted on
under the Investment Company Act of 1940. At each such meeting, any other
proper business within the power of shareholders may be transacted. Such
annual meeting shall be held on a date and at a time designated by the Board
of Directors. If the Corporation is required to hold a meeting of shareholders
to elect Directors, such meeting shall be designated an annual meeting and
shall be held on such date no later than 120 days after the occurrence of the
event requiring the meeting.
Section 2. SPECIAL MEETINGS. Special meetings of shareholders may be called
by the President or by the Board of Directors. Special meetings of
shareholders may also be called by the Secretary on the written request of
shareholders entitled to cast at least 10 percent of all the votes entitled to
be cast at the meeting. Any such request shall state the purposes of the
proposed meeting. The Secretary shall inform such shareholders of the
reasonably estimated cost of preparing and mailing such notice of the meeting,
and upon payment to the Corporation of such costs, the Secretary shall give
notice stating the purpose or purposes of the meeting. No special meeting need
be called upon the request of the holders of less than a majority of all the
votes entitled to be cast at such meeting to consider any matter that is
substantially the same as a mater voted upon at any special meeting of the
shareholders held during the preceding twelve months.
Section 3. PLACE OF MEETINGS. All meetings of the shareholders shall be
held at such place within or without the State of Maryland as may be fixed by
the party or parties making the call as stated in the notice thereof.
Section 4. NOTICE. Not less than ten nor more than ninety days before the
date of every annual or special meeting of shareholders the Secretary or an
Assistant Secretary shall give to each shareholder of record notice of such
meeting either by mail or by presenting it to him or her personally or by
leaving it at his or her residence or usual place of business. Such notice
shall be deemed to have been given when deposited in the mail for delivery to
the shareholder at the shareholder's address appearing on the books of the
Corporation. It shall not be necessary to set forth the business proposed to
be transacted in the notice of any annual meeting except that any proposal to
amend the Articles of Incorporation of the Corporation shall be set forth in
such notice. Notice of a special meeting shall state the purpose or purposes
for which it is called.
Section 5. QUORUM. At all meetings of the shareholders (including meetings
of shareholders of a particular series), the presence in person or by proxy of
shareholders entitled to cast a majority in number of votes shall be necessary
to constitute a quorum for the transaction of business. In the absence of a
quorum at any meeting, a majority of those shareholders present in person or
by proxy may adjourn the meeting from time to time to be held at the same
place without further notice than by announcement to be given at the meeting
until a quorum, as above defined shall be present, whereupon any business may
be transacted which might have been transacted at the meeting originally
called had the same been held at the time so called.
Section 6. VOTING. A majority of the votes cast at a meeting of
shareholders, duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may properly come
before the meeting, unless more than a majority of the votes cast is required
by statute or by the Articles of Incorporation. At all meetings of
shareholders, each shareholder shall be entitled to one vote or fraction
thereof for each share standing in the shareholder's name on the books of the
Corporation on the date for the determination of shareholders entitled to vote
at such meeting. On any matter submitted to a vote of shareholders, all shares
of the Corporation then issued and outstanding entitled to vote shall be voted
in the aggregate and not by class or by series except that (1) when otherwise
expressly required by the Maryland General Corporation Law or the Investment
Company Act of 1940, shares shall be voted by individual class or series and
(2) only shares of the respective series or class are entitled to vote on
matters concerning only that series or class.
Section 7. PROXIES. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person or by proxy, but no proxy which is
dated more than eleven months before the meeting named therein shall be
accepted. Every proxy shall be in writing subscribed by the shareholder or the
shareholder's duly authorized attorney and dated, but need not be sealed,
witnessed or acknowledged. All proxies shall be filed with the Secretary or an
Assistant Secretary of the Corporation or if the meeting shall so decide, by
the Secretary of the meeting. All proxies shall be deemed valid unless
challenged at or prior to its exercise with the burden to prove invalidity
resting on the challenger. At all meetings of shareholders, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the Chairperson of the
meeting.
Section 8. INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken at any meeting of shareholders may be taken without a
meeting, if a consent in writing, setting forth such action is signed by each
shareholder entitled to vote on the subject matter thereof, each shareholder
entitled to notice of the meeting but not entitled to vote at it signs a
written waiver of any right to dissent and such consents and waivers are filed
with the records of the Corporation.
Section 9. PRESIDING OFFICER. Shareholders meetings shall be presided over
by a Chairperson of the meeting who shall be the Chairperson of the Board of
Directors, or if he or she is not present, by the President of the
Corporation, or if he or she is not present, by an Officer or Director
appointed by the President.
ARTICLE II
BOARD OF DIRECTORS
Section 1. POWERS IN GENERAL. The Board of Directors shall have control and
management of the affairs, business and properties of the Corporation. The
Board of Directors shall have and exercise in the name of the Corporation and
on behalf of the Corporation all the rights and privileges legally exercisable
by the Corporation except as otherwise provided by law, the Articles of
Incorporation or these Bylaws.
Section 2. POWER TO AUTHORIZE ISSUANCE OF SHARES. The Board of Directors is
empowered to authorize the issuance from time to time of shares of the
Corporation, whether now or hereafter authorized; provided, however, that the
consideration per share to be received by the Corporation upon the issuance or
sale of any shares shall be the net asset value per share determined in
accordance with the requirements of the Investment Company Act of 1940 and the
applicable rules and regulations of the Securities and Exchange Commission and
in conformity with generally accepted accounting practices and principles.
Section 3. POWER TO DECLARE DIVIDENDS. The Board of Directors is expressly
authorized to determine in accordance with generally accepted accounting
principles and practices what constitutes net profits, earnings, surplus or
net assets in excess of capital, and to determine what accounting periods
shall be used by the Corporation for any purpose, whether annual or any other
period, including daily; to set apart out of any funds of the Corporation such
reserves for such purposes as it shall determine and to abolish the same; to
declare and pay dividends and distributions on any series by means of a
formula or other method of determination, at meetings held less frequently
than the frequency of the effectiveness of such declarations; to establish
payment dates for dividends or any other distributions on any basis, including
dates occurring less frequently than the effectiveness of declarations
thereof; and to provide for the payment of declared dividends on a date
earlier or later than the specified payment date in the case of shareholders
redeeming their entire ownership of shares. Any dividends or distributions may
be made in cash or shares or a combination thereof as determined by the
Directors or pursuant to any program that the Directors may have in effect at
the time for election by each shareholder of the mode of the making of such
dividend or distribution to that shareholder.
Section 4. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF OFFICE.
The number of Directors of the Corporation shall be fixed from time to time by
a majority of the entire Board of Directors but shall be no less than three
nor more than twenty. Directors need not be shareholders. The Board of
Directors may from time to time by a majority of the entire Board increase or
decrease the number of Directors to such number as it deems expedient not to
be less than three nor more than twenty, however, and fill the vacancies so
created. The term of office of a Director shall not be affected by any
decrease in the number of Directors made by the Board pursuant to the
foregoing authorization. Until the first annual meeting of shareholders or
until successors are duly elected and qualify, the Board of Directors shall
consist of the persons named as such in the Articles of Incorporation. The
members of the Board of Directors shall be elected by the shareholders at each
annual meeting of shareholders. Each Director shall hold office until the
annual meeting next held after the Director's election and until the election
and qualification of the Director's successor.
Section 5. PLACE OF MEETING. The Board of Directors may hold its meetings
at such place or places within or without the State of Maryland as the Board
may from time to time determine.
Section 6. ANNUAL MEETINGS. The Board of Directors shall meet for the
election of Officers and any other business as promptly as may conveniently
be done after the adjournment of the annual meeting of shareholders.
Section 7. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such intervals and on such dates as the Board may from time
to time designate.
Section 8. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be held at such times and at such places as may be designated at the call of
such meeting. Special meetings shall be called by the Secretary or Assistant
Secretary at the request of the President or any Director.
Section 9. NOTICE. Annual and regular meetings of the Board of Directors
shall be held without notice. The Secretary or Assistant Secretary shall give,
at least twenty-four hours before any special meeting of the Board of
Directors, notice of such special meeting to each member of the Board by mail,
facsimile, telegram or telephone to member's last known residence or usual
place of business. It is not necessary to state in the notice of any special
meeting the purpose or business to be transacted at such meeting.
Section 10. CONDUCT OF MEETINGS AND BUSINESS. The Board of
Directors may adopt such rules and regulations for the conduct of its meetings
and the management of the affairs of the Corporation as it may deem proper and
not inconsistent with applicable law, the Articles of Incorporation of the
Corporation or these Bylaws.
Section 11. QUORUM. A majority of the Directors then in office shall
constitute a quorum at any meeting of the Board of Directors. The action of a
majority of Directors present at any meeting at which a quorum is present
shall be the action of the Board of Directors unless the concurrence of a
greater proportion is required for such action by statute, the Articles of
Incorporation of the Corporation or these Bylaws. In the absence of a quorum
at any meeting, a majority of the Directors present may adjourn the meeting
from day to day or for such longer periods as they may designate without
notice other than by announcement at the meeting. At the adjourned meeting,
the Directors may transact any business which might have been transacted at
the original meeting.
Section 12. RESIGNATIONS. Any Director of the Corporation may resign at any
time by mailing or delivering written notice to the President or to the
Secretary of the Corporation. The resignation of any Director shall take
effect at the time specified therein and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
Section 13. REMOVAL. At any meeting of shareholders duly called for the
purpose, any Director may by the vote of a majority of all of the shares
entitled to vote be removed from office. At the same meeting, the vacancy in
the Board of Directors may be filled by the election of a Director to serve
for the remainder of the term and until the election and qualification of the
Director's successor.
Section 14. VACANCIES. Except as otherwise provided by the Investment
Company Act of 1940 or other applicable law, any vacancy occurring in the
Board of Directors for any cause other than by reason of an increase in the
number of Directors may be filled by action of a majority of the remaining
members of the Board of Directors although such majority is less than a quorum
and any vacancy occurring by reason of an increase in the number of Directors
may be filled by action of a majority of the entire Board of Directors. The
Board may not elect any Director to fill any vacancy as provided herein unless
immediately after filling any such vacancy at least two-thirds of the
Directors then holding office shall be those named in the Articles of
Incorporation or shall have been elected to such office by the shareholders.
If at any time after the first meeting of shareholders of the Corporation, a
majority of the Directors in office shall consist of Directors elected by the
Board of Directors, a meeting of the shareholders shall be called forthwith,
and in any event within sixty (60) days, for the purpose of electing the
entire Board of Directors, and the terms of office of the Directors then in
office shall terminate upon the election and qualification of such Board of
Directors. A Director elected by the Board to fill a vacancy shall be elected
to hold office until the next annual meeting of shareholders or until the
Director's successor is duly elected and qualifies. Notwithstanding the
foregoing, the shareholders may, at any time during the term of such Director
elect to fill a vacancy, elect some other person to fill said vacancy and
thereupon the election by the Board shall be superseded and such election by
the shareholders shall be deemed a filling of the vacancy and not a removal
and may be made at any meeting called for such purpose. An appointment of a
Director may be made in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Directors, provided that such
appointment shall not become effective prior to such retirement, resignation
or increase in number of Directors.
Section 15. COMPENSATION OF DIRECTORS. The Directors may receive a stated
salary for their services as Directors, and by Resolution of the Board of
Directors, a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any Director from serving the Corporation in any other capacity, as
an Officer, agent or otherwise, and receiving compensation therefor.
Section 16. INFORMAL ACTION BY DIRECTORS. Any action required or permitted
to be taken at any annual, regular or special meeting of the Board of
Directors may be taken at a meeting by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time or without a meeting if a written
consent to such action is signed by all members of the Board and such written
consent is filed with the minutes of proceedings of the Board.
Section 17. OFFICERS OF THE BOARD. The Board of Directors may appoint one
of its members to serve as Chairperson of the Board of Directors, and may
appoint one or more of its members to serve as Vice Chairperson of the Board
of Directors.
Section 18. MAXIMUM AGE. Notwithstanding any other provision of these
Bylaws to the contrary, a Director shall cease to serve as a Director as of
the end of the calendar year in which the Director attains the age of 68
years.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE
COMMITTEE. The Board of Directors, by resolution passed by a vote of a
majority of the entire Board, may appoint an Executive Committee, which shall
consist of two or more Directors.
Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring
in the Executive Committee from any cause may be filled by the Board of
Directors at any meeting thereof by a vote of the majority of the entire Board.
Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All actions
by the Executive Committee shall be reported to the Board of Directors at its
meeting next succeeding such action.
Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive
Committee shall fix its own rules of procedure not inconsistent with these
Bylaws or with any directions of the Board of Directors. It shall meet at such
times and places and upon such notice as shall be provided by such rules or by
resolution of the Board of Directors. The presence of a majority of the
members of the Executive Committee at any meeting shall constitute a quorum
for the transaction of business and in every case an affirmative vote of a
majority of all of the members of the Executive Committee present shall be
necessary for the taking of any action.
Section 5. POWERS OF EXECUTIVE COMMITTEE. During the intervals between the
meetings of the Board of Directors, the Executive Committee, except as limited
by these Bylaws or by specific directions of the Board of Directors, shall
possess and may exercise all the powers of the Board of Directors in the
management and direction of the business and conduct of the affairs of the
Corporation in such manner as the Executive Committee shall deem to be in the
best interest of the Corporation, and shall have power to authorize the Seal
of the Corporation to be affixed to all instruments and documents requiring
same. Notwithstanding the foregoing, the Executive Committee shall not have
the power (a) to elect Directors, (b) to increase or decrease the number of
Directors, (c) to declare dividends or other distributions, (d) to issue
shares or recommend to shareholders any action requiring shareholder approval,
(e) to amend or repeal these Bylaws or adopt new Bylaws, (f) to approve or
terminate any contract with an investment adviser or principal underwriter as
such terms are defined in the Investment Company Act of 1940 or (g) to take
any other action required to be taken by the Board of Directors under the
Investment Company Act of 1940.
Section 6. OTHER COMMITTEES. From time to time the Board of Directors may
appoint any other Committee or Committees for any purpose or purposes to the
extent lawful, which shall have such powers as shall be specified in the
resolution of appointment.
Section 7. COMPENSATION. The members of any duly appointed Committee
shall receive such compensation and/or fees as from time to time may be
fixed by the Board of Directors.
Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR OTHER COMMITTEES. Any
action required or permitted to be taken at any meeting of the Executive
Committee or any other duly appointed Committee may be taken without a meeting
if written consent to such action is signed by all members of such Committee
and such written consent is filed with the minutes of the proceedings of such
Committee.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be the
Chief Executive Officer, the President, one or more Vice Presidents, a
Treasurer and a Secretary. The Board of Directors shall elect or appoint such
other Officers or agents as the business of the Corporation may require
including a one or more Assistant Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers. The same person may hold any
two or more Offices except those of President and Vice President.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Officers shall
be elected annually by the Board of Directors at its annual meeting following
the annual meeting of shareholders, if an annual meeting of shareholders is
held. Each Officer shall hold Office until the annual meeting of the Board of
Directors in the next year and until the election and qualification of the
Officer's successor. Any vacancy in any of the offices may be filled for the
unexpired portion of the term by the Board of Directors at any regular or
special meeting of the Board. The Board of Directors may elect or appoint
additional Officers or agents at any regular or special meeting of the Board.
Section 3. REMOVAL. Any Officer elected by the Board of Directors may be
removed with or without cause at any time upon a vote of the majority of the
entire Board of Directors, if the Board of Directors, in its judgment, finds
that the best interests of the Corporation will be served by such removal. Any
other employee of the Corporation may be removed or dismissed at any time by
the President.
Section 4. RESIGNATIONS. Any Officer may resign at any time by giving
written notice to the Board of Directors. Any such resignation shall take
effect at the date of receipt of such notice or at any later time specified
therein, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any Office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in these Bylaws for
regular election or appointment to such Office.
Section 6. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
be the officer who is primarily responsible for the affairs of the
Corporation. The Chief Executive Officer shall report directly to the Board of
Directors.
Section 7. PRESIDENT. The President shall, unless other provisions are made
therefor by the Board or Executive Committee, employ and define the duties of
all employees of the Corporation and shall have the power to discharge any
such employees. The President shall exercise general supervision over the
affairs of the Corporation and shall perform such other duties as may be
assigned to the President from time to time by the Board of Directors.
Section 8. VICE PRESIDENT. A Vice President shall have such authority and
perform such duties as may be assigned to the Vice President from time to time
by the Board of Directors, the Executive Committee or the President.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept, in
books provided for the purpose, the minutes of the meetings of the
shareholders and of the Board of Directors. The Secretary shall see that all
notices are duly given in accordance with the provisions of these Bylaws and
as required by law. The Secretary shall be custodian of the records and of the
Seal of the Corporation and shall see that the Seal is affixed to all
documents the execution of which on behalf of the Corporation under its Seal
is duly authorized. The Secretary shall keep directly or through a Transfer
Agent a register of the post office address of each shareholder, and shall be
responsible for making all proper changes in such register and retaining and
filing the authority for such entries. The Secretary shall see that the books,
reports, statements, certificates and all other documents and records required
by law are properly kept and filed. The Secretary shall perform such other
duties as may, from time to time, be assigned to the Secretary by the Board of
Directors, the Executive Committee or the President.
Section 10. TREASURER. The Treasurer shall have supervision of the custody
of the funds and securities of the Corporation, subject to the Articles of
Incorporation of the Corporation and applicable law. The Treasurer shall
submit to the annual meeting of shareholders a statement of the financial
condition of the Corporation and whenever required by the Board of Directors
shall make and render a statement of the accounts of the Corporation and such
other statements as may be required. The Treasurer shall cause to be kept in
books of the Corporation full and accurate account of all moneys received and
paid out for the account of the Corporation. The Treasurer shall perform such
other duties as may be from time to time assigned to the Treasurer by the
Board of Directors, the Executive Committee or the President.
Section 11. ASSISTANT VICE PRESIDENT. An Assistant Vice President shall
have such authority and perform such duties as may be assigned to the
Assistant Vice President from time to time by the Board of Directors, the
Executive Committee or the President.
Section 12. ASSISTANT SECRETARY. An Assistant Secretary shall, in the
absence of the Secretary, perform the duties of the Secretary and shall have
such further powers and perform such other duties as may be assigned to the
Assistant Secretary from time to time by the Board of Directors, the Executive
Committee or the President.
Section 13. ASSISTANT TREASURER. An Assistant Treasurer shall, in the
absence of the Treasurer, perform the duties of the Treasurer and shall have
such further powers and perform such other duties as may be assigned to the
Assistant Treasurer from time to time by the Board of Directors, the Executive
Committee or the President.
Section 14. SALARIES. The salaries of the Officers shall be fixed from time
to time by the Board of Directors. No Officers shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE V
SHARES
Section 1. STOCK LEDGER. A stock ledger shall be kept at the principal
office of the Corporation or at the principal office of any Transfer Agent
duly appointed by the Board of Directors which shall contain the names and
addresses of all the shareholders, the number of shares held by them and a
record of all transfers thereof.
Section 2. ISSUANCE OF SHARES. Shares of stock will be issued without
certificates. Fractional shares may be issued.
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE.
The Board of Directors may fix in advance a date as the record date for the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or shareholders to receive payment of any dividend.
Such date shall in any case not be more than 60 days, and in case of a meeting
of shareholders not less than 10 days, prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
In lieu of fixing a record date, the Board of Directors may provide that the
share transfer books of the Corporation shall be closed for a stated period
not to exceed in any case 20 days. If the share transfer books are closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders such books shall be closed for at least 10 days
immediately preceding such meeting.
Section 4. TRANSFER AGENT; REGULATIONS. The Board of Directors shall have
the power and authority to make all such rules and regulations as it may deem
expedient concerning the issuance and transfer of shares and may appoint a
Transfer Agent for that purpose.
ARTICLE VI
AGREEMENTS, CHECKS, DRAFTS, AND ENDORSEMENTS
Section 1. AGREEMENTS. (a) The Corporation may enter into exclusive or
non-exclusive contract(s) for the sale of its shares and may also enter into
contracts, including but not limited to investment advisory, management,
custodial, transfer agency and administrative services. The terms and
conditions, methods of authorization, renewal, amendment and termination of
the aforesaid contracts shall be as determined at the discretion of the Board
of Directors, subject, however, to the provisions of these Bylaws, applicable
federal and state law and the rules and regulations of the Securities and
Exchange Commission.
(b) Subject to and in compliance with the provisions of the General
Laws of the State of Maryland respecting interested director transactions and
applicable federal law, the Corporation may enter into written underwriting
contracts, management contracts and contracts for research, advisory or
administrative services with Transamerica Occidental Life Insurance Company,
Transamerica Investment Services, Inc., the parents, affiliates or
subsidiaries thereof, or their respective successors, or otherwise to do
business with such Corporation, notwithstanding the fact that one or more of
the Directors of the Corporation and some or all of its Officers are, have
been, or may become Directors, Officers, Employees or Stockholders of
Transamerica Occidental Life Insurance Company, Transamerica Investment
Services, Inc., or their parents, affiliates, subsidiaries or successors, and
in the absence of actual fraud the Corporation may deal freely with
Transamerica Occidental Life Insurance Company, Transamerica Investment
Services, Inc., or their parents, affiliates, subsidiaries or successors, and
neither such underwriting contract, management contact or contract for
research, advisory or administrative services nor any other contract or
transaction between the Corporation and Transamerica Occidental Life Insurance
Company, Transamerica Investment Services, Inc. or their parents, affiliates,
subsidiaries or successors shall be invalidated or in any way affected
thereby, nor shall any Director or Officer of the Corporation be liable to the
Corporation or to any shareholder or creditor of the Corporation or to any
other person for any loss incurred under or by reason of any such contract or
transaction. Anything in the foregoing notwithstanding, no Officer or Director
or underwriter or investment adviser of the Corporation shall be protected
against any liability to the Corporation or to its security holders to which
he or she would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
(c) The Board of Directors or the Executive Committee may authorize
any Officer or Officers or agent or agents of the Corporation to enter into
any Agreement or execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general or confined to
specific instances and, unless so authorized by the Board of Directors or by
the Executive Committee or by these Bylaws, no Officer, agent or employee
shall have any power or authority to bind the Corporation by any Agreement or
engagement or to pledge its credit or to render it liable pecuniarily for any
purpose or to any amount.
Section 2. CHECKS AND DRAFTS. All checks, drafts or orders for the payment
of money, notes and other evidences of indebtedness shall be signed by such
Officer or Officers, employee or employees, or agent or agents as shall from
time to time be designated by the Board of Directors or the Executive
Committee, or as may be specified in or pursuant to the agreement between the
Corporation and the bank appointed as Custodian, pursuant to the provisions of
these Bylaws.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF
SECURITIES. All endorsements, assignments, stock powers or other instruments
of transfer of securities standing in the name of the Corporation or its
nominee or directions for the transfer of securities belonging to the
Corporation shall be made by such Officer or Officers, employee or employees,
or agent or agents as may be authorized by the Board of Directors or the
Executive Committee.
Section 4. EVIDENCE OF AUTHORITY. Anyone dealing with the Corporation shall
be fully justified in relying on a copy of a resolution of the Board of
Directors or of any Committee thereof empowered to act which is certified as
true by the Secretary or an Assistant Secretary under the Seal of the
Corporation.
Section 5. DESIGNATION OF A CUSTODIAN. The Corporation shall place and at
all times maintain in the custody of a Custodian all funds, securities and
similar investments owned by the Corporation, with the exception of securities
loaned under a properly authorized Securities Loan Agreement. The Custodian
shall be a bank having not less than $2,000,000 aggregate capital, surplus and
undivided profits and shall be appointed from time to time by the Board of
Directors, which shall fix the Custodian's remuneration.
Section 6. ACTION UPON TERMINATION OF A CUSTODIAN AGREEMENT.
Upon termination of a Custodian Agreement or inability of the Custodian to
continue to serve, the Board of Directors shall use its best efforts to
appoint promptly a successor Custodian, but in the event that no successor
Custodian can be found who has the required qualifications and is willing to
serve, the Board of Directors shall call as promptly as possible a special
meeting of the shareholders to determine whether the Corporation shall
function without a Custodian or shall be liquidated. If so directed by vote of
the holders of a majority of the outstanding shares, the Custodian shall
deliver and pay over all property of the Corporation held by it as specified
in such vote.
ARTICLE VII
BOOKS AND RECORDS
Section 1. LOCATION. The books and records of the Corporation, including
the stock ledger or ledgers, may be kept in or outside the State of Maryland
at such office or agency of this Corporation as may be from time to time
determined by the Board of Directors.
Section 2. INSPECTION BY SHAREHOLDERS. The Board of Directors shall,
subject to the General Laws of the State of Maryland, have the power to
determine, from time to time, whether and to what extent and at what times and
places and under what conditions and regulations any accounts and books of the
Corporation, or any of them, shall be open to the inspection of shareholders.
Section 3. INSPECTION BY INDEPENDENT PUBLIC ACCOUNTANTS. The
books of account of the Corporation shall be examined by an independent firm
of public accountants, selected and ratified in accordance with the provisions
of the Investment Company Act of 1940, at the close of each annual fiscal
period of the Corporation and at such other times, if any, as may be directed
by the Board of Directors of the Corporation.
ARTICLE VIII
INDEMNIFICATION
Section 1. OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND OTHERS. The
Corporation shall indemnify its Officers, Directors, employees and agents and
any person who serves at the request of the Corporation as a Director,
Officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise as follows:
(a) Every person who is or has been a Director, Officer, employee or
agent of the Corporation and persons who serve at the
Corporation's request as Director, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise shall be indemnified by the Corporation to the fullest
extent permitted by law against liability and against all expenses
reasonably incurred or paid by him or her in connection with any
debt, claim, action, demand, suit, proceeding, judgment, decree,
liability or obligation of any kind in which he or she becomes
involved as a party or otherwise by virtue of his or her being or
having been a Director, Officer, employee or agent of the
Corporation or of another employee or agent of the Corporation or
of another corporation, partnership, joint venture, trust or other
enterprise at the request of the Corporation and against amounts
paid or incurred by him or her in the settlement thereof.
(b) The words "claim," "action," "suit" or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal,
administrative, legislative, investigative or other, including
appeals), actual or threatened, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
(c) No indemnification shall be provided hereunder to a Director,
Officer, employee or agent against any liability to the
Corporation or its shareholders by reason of willful
misfeasance, active and deliberate dishonesty, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Corporation, shall be
severable, shall not affect any other rights to which any
Director, Officer, employee or agent may now or hereafter be
entitled, shall continue as to a person who has ceased to be
such Director, Officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such
a person.
(e) In the absence of a final decision on the merits by a court or other
body before which such proceeding was brought, an
indemnification payment will not be made, except as provided in
paragraph (f) of this Section 1, unless in the absence of such a
decision, a reasonable determination based upon a factual review
has been made (1) by a majority vote of a quorum of non-party
Directors who are not "interested persons" of the Corporation as
defined in Section 2(a)(19) of the Investment Company Act of
1940; (2) by independent legal counsel approved by the Board of
Directors in a written opinion that the indemnitee was not liable for
an act of willful misfeasance, bad faith, gross negligence or
reckless disregard of duties; or (3) by the shareholders.
(f) The Corporation further undertakes that advancement of expenses
incurred in the defense of a proceeding by an Officer, Director or
controlling person of the Corporation in advance of the final
disposition of the proceeding (upon receipt by the Corporation of:
(a) a written affirmation by the Officer, Director or controlling
person of the Corporation of that person's good faith belief that the
standard of conduct necessary for indemnification by the
Corporation as authorized in the Maryland General Corporation
Law has been met; and (b) a written undertaking by or on behalf
of such person to repay the amount if it shall ultimately be
determined that the standard of conduct as stated above has not
been met) will not be made absent the fulfillment of at least one of
the following conditions: (1) the Corporation is insured against
losses arising by reason of any lawful advances or (2) a majority
of a quorum of disinterested, non-party Directors or independent
legal counsel in a written opinion makes a factual determination
that there is a reason to believe the indemnitee will be entitled to
indemnification.
ARTICLE IX
MISCELLANEOUS
Section 1. SEAL. The Seal of the Corporation shall be a disk inscribed with the
words TRANSAMERICA INVESTORS, INC.
Section 2. FISCAL YEAR. The fiscal year of the Corporation shall end on the
last day of December in each year.
Section 3. WAIVER OF NOTICE. Whenever, under the provisions of these
Bylaws or of any law, an individual is entitled to receive notice of a meeting,
such individual waives notice if he or she:
(a) before or after the meeting signs a waiver of the notice which is
filed with the records of the meeting; or
(b) is present at the meeting.
ARTICLE X
AMENDMENTS
Section 1. AMENDMENTS BY BOARD OF DIRECTORS. The Board of
Directors shall have the power at any regular or special meeting, if notice
thereof be included in the notice of such special meeting, to alter, amend or
repeal any of these Bylaws of the Corporation and to make new Bylaws for the
Corporation.
Section 2. AMENDMENTS BY SHAREHOLDERS. The shareholders shall have the
power, at any annual meeting or at any special meeting, if notice thereof be
included in the notice of such special meeting, to alter, amend or repeal any
of these Bylaws of the Corporation and to make new Bylaws for the Corporation.
<PAGE>
Exhibit 5 Amended Investment Advisory and Administrative Agreement
<PAGE>
TRANSAMERICA INVESTORS, INC.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
AGREEMENT
THIS AGREEMENT is made and entered into this 2nd day of October, 1995, by and
between Transamerica Investors, Inc., a corporation organized and existing
under the laws of the State of Maryland (the "Corporation"), and Transamerica
Investment Services, Inc., a corporation organized and existing under the laws
of the State of Delaware (the "Adviser").
WHEREAS, the Corporation is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several fundsseries of shares, each pursuing its investment
objectives through separate investment policies;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engages
in the business of providing investment advisory services;
WHEREAS, the Corporation desires to retain the Adviser to render investment
management and administrative services with respect to its Premier Aggressive
Growth Fund and Premier Small Company Fund, Equity Fund, Premier Index Fund,
Premier Bond Fund, Premier Balanced Fund, Premier Short-Intermediate
Government Fund, Premier Cash Reserve Fund, and such other funds as the
Corporation may establish in the future (the "Funds"); and
WHEREAS, the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER
The Adviser is hereby appointed to serve as the investment adviser to the
Funds, to provide the investment advisory and administrative services set
forth in Section II of this Agreement, subject to the terms of this Agreement
and the policies and control of the Corporation's Board of Directors (the
"Board"). The Adviser hereby accepts such employment.
In the event that the Corporation establishes one or more series other than
the Funds with respect to which it desires to retain the Adviser to serve as
investment adviser hereunder, the Corporation will notify the Adviser in
writing. If the Adviser is willing to render such services under this
Agreement, it will so notify the Corporation in writing, whereupon such series
will become a "Fund" hereunder and will be subject to the provisions of this
Agreement to the same extent as the current Funds except to the extent that
such provision (including those relating to the compensation payable by such
Fund to the Adviser) are modified with respect to such Fund in writing by the
Corporation and the Adviser at the time.
It is understood and agreed that the Adviser will enter into an
Administrative Services Agreement with Transamerica Occidental Life Insurance
Company (the "Administrator") under which the Administrator will furnish
management and administrative personnel and services to assist the Adviser in
carrying out its responsibilities under this Agreement including, without
limitation, the responsibilities under Sections II.A., II.B., II.C., II.D.,
II.E., II.F. and II.L. of this Agreement, subject to the provisions of the
1940 Act and the Advisers Act. It is understood and agreed that the
Administrator may enter into a Sub-Administration Agreement with State Street
Bank and Trust Company (the "Sub-Administrator") under which the
Sub-Administrator will furnish certain administrative services to assist the
Administrator in carrying out its responsibilities under its Administrative
Services Agreement, subject to the provisions of the 1940 Act and the Advisers
Act.
The Adviser shall, for all purposes herein, be deemed to be an independent
contractor and shall have, unless otherwise expressly provided or authorized,
no authority to act for or represent the Corporation in any way or otherwise
be deemed an agent for the Corporation.
The Adviser shall, for purposes of this Agreement, have and exercise full
investment discretion and authority to act as agent for the Corporation in
buying, selling or otherwise disposing of or managing the Corporation's
investments, subject to the supervision of the Board.
II. DUTIES OF THE ADVISER
The Corporation employs the Adviser:
A. to supervise all aspects of the operations of the Corporation and each
Fund, including the supervision and coordination of transfer agency,
custodial and accounting services; provided however, that nothing
herein shall be deemed to relieve or deprive the Board of its
responsibilities for and control of the conduct of the affairs of the
Corporation and each Fund;
B. to provide the Corporation and each Fund with such corporate,
administrative and clerical personnel (including officers of the
Corporation), and services as are reasonably deemed necessary or
advisable by the Board, including the maintenance of certain books and
records of the Corporation and each Fund;
C. to arrange for the periodic preparation, updating, filing and
distribution (as applicable) of the Corporation's registration
statement, proxy material, tax returns and required reports to each
Fund's shareholders and the Securities and Exchange Commission (the
"Commission") and other appropriate federal and state regulatory
authorities;
D. to provide the Corporation and each Fund with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items;
E. to perform other administrative functions for the Corporation as the Board
may deem necessary and appropriate including:
1. computation and publication of each Fund's daily net asset value
and daily income;
2. computation of each Fund's yields and total returns;
3. schedule, plan agendas for, and conduct meeting of the directors
and shareholders;
4. coordinate the efforts of the Corporation's auditors;
5. maintain corporate records not otherwise maintained by the
Corporation's custodian, transfer agent, or accounting agent;
6. monitor state and federal laws as they may apply to the
Corporation and the Funds;
7. prepare for execution and file all the Corporation's federal, state
and local tax returns and required tax filings other than those
required to be made by the Corporation's custodian and transfer
agent; and
8. coordinate the efforts of attorneys providing legal advice relating
to the Corporation;
F. to maintain the Corporation's existence, and during such times as the
shares of the Corporation are publicly offered, maintain the registration and
qualification of the Corporation's shares under federal and state law;
G. to obtain and evaluate pertinent information about significant
developments, including economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally or the Funds in particular, whether concerning the
individual issuers of the securities included in the Funds or the
activities in which the issuers engage, or whether concerning the
securities that the Adviser considers desirable for inclusion in the
Fund;
H. to determine in its discretion which issuers and securities are to be owned
or held in the Funds and to report thereon to the Board;
I. to formulate and implement a continuous investment program for each
Fund and regularly report thereon to the Board;
J. to give instructions to the custodian and/or sub-custodian of the
Corporation appointed by the Board, as to deliveries of securities, transfer
of currencies or payments of cash for the account of the Corporation, in
relation to the matters contemplated by this Agreement;
K. to take, on behalf of the Corporation, all actions which appear to the
Corporation and the Funds necessary to effect the purchase and sale of
securities for the Corporation and the supervisory functions listed above,
including the placing of orders for the purchase and sale of securities for
the Funds; and
L. to arrange for the periodic preparation, updating, filing and distribution
(as applicable) of the Corporation's state registration statements.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE ADVISER
The Adviser hereby represents and warrants to the Corporation as follows:
1. Due Incorporation and Organization. The Adviser is duly
organized and is in good standing under the laws of the State of
Delaware and is fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
2. Registration. The Adviser is registered as an investment adviser
with the Commission under the Advisers Act, and is registered or
licensed as an investment adviser under the laws of all jurisdictions
in which its activities require it to be so registered or licensed. The
Adviser shall maintain such registration or license in effect at all
times during the term of this Agreement and will immediately
notify the Corporation of the occurrence of any event that would
disqualify the Adviser from serving as an investment adviser by
operation of Section 9(a) of the 1940 Act or otherwise.
3. Best Efforts. The Adviser at all times shall provide its best
judgment and efforts to the Corporation in carrying out its
obligations hereunder.
4. Code of Ethics. The Adviser has adopted a written code of ethics
that complies with the requirements of Rule 17j-1 under the 1940
Act and will provide the Corporation with a copy of such code of
ethics and all subsequent modifications, together with evidence of
its adoption. At least annually the Adviser will provide the
Corporation with a report describing the implementation of the
code of ethics during the immediately preceding twelve (12) month
period.
B. REPRESENTATIONS AND WARRANTIES OF THE
CORPORATION AND THE FUNDS
The Corporation, on behalf of the Funds, hereby represent and warrants to the
Adviser as follows:
1. Due Incorporation and Organization. The Corporation has been
duly incorporated under the laws of the state of Maryland and it is
authorized to enter into this Agreement and to carry out its terms.
2. Registration. The Corporation is registered as an investment
company with the Commission under the 1940 Act and shares of the
Corporation will be registered for offer and sale to the public
under the Securities Act of 1933, as amended (the "1933 Act"),
and all applicable state securities laws. Such registrations
shall be kept in effect during the term of this Agreement.
IV. BROKER-DEALER RELATIONSHIPS
A. FUND TRADES
The Adviser shall place all orders for the purchase and sale of securities
for the Funds with brokers and dealers selected by the Adviser, which may, if
approved by the Corporation, include brokers or dealers affiliated with the
Adviser. The Adviser shall use its best efforts to obtain the most favorable
price and execution. The Adviser will engage only those brokers or dealers
offering prices and commission rates it believes are reasonable in relation to
the benefits received.
B. SELECTION OF BROKER-DEALERS
In selecting broker-dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and research
services, prices and commissions (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934, as amended) to the Funds and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who provides
such brokerage and research services, prices and commissions for executing a
portfolio transaction for the Funds that is in excess of the amount of the
price and commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determines in good faith that such price and
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities that the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Board shall
periodically review the prices and commissions paid by the Funds to determine
if over representative periods of time they were reasonable in relation to the
benefits received. In no instance, however, will any Fund's securities be
purchased from or sold to the Adviser, or any affiliated person of the
Corporation or the Adviser, acting as principal in the transaction, except to
the extent permitted by the Commission, the 1940 Act, and approved by the
Corporation.
C. AGGREGATION OF SECURITIES PURCHASES
The Adviser furnishes investment advice to the Funds as well as other
institutional clients, including some investment companies. Some of the
Adviser's other clients have investment objectives and programs similar to
those of a Fund. Accordingly, occasions may arise when sales or purchases of
securities will be consistent with the investment policies of one or more of
the Funds and of other clients of the Adviser. If purchases or sales of
securities for the Corporation or other clients of the Adviser arise for
consideration at or about the same time, the Corporation agrees that the
Adviser may make transactions in such securities, insofar as feasible, for the
respective entities and clients in a manner deemed equitable to all. To the
extent that transactions on behalf of more than one client of the Adviser
during the same period may increase the demand for securities being purchased
or the supply of securities being sold, the Corporation recognizes that there
may be an adverse effect on price.
It is agreed that, on the occasions when the Adviser deems the purchase or
sale of a security to be in the best interest of the Corporation, as well as
its other clients, it may, to the extent permitted by applicable laws or
regulations, but will not be obligated to, aggregate the securities to be sold
or purchases for other clients in order to obtain favorable execution and
lower brokerage commissions or prices. In that event, the allocation of the
securities purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner it considers to be most
equitable and consistent with its fiduciary obligations to the Corporation and
to such other accounts. The Corporation recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for a Fund.
V. CONTROL BY THE BOARD
Any investment program undertaken by the Adviser pursuant to this Agreement,
as well as any other activities undertaken by the Adviser on behalf of the
Corporation pursuant thereto, shall at all times be subject to any directives
of the Board.
VI. COMPLIANCE WITH APPLICABLE REQUIREMENTS
In carrying out its obligations under this Agreement, the Adviser shall at
all times conform to:
A. all applicable provisions of the 1940 Act and the rules and regulations
thereunder;
B. the provisions of the registration statement of the Corporation, as the same
may be amended from time to time, under the 1933 Act and the 1940 Act;
C. the provisions of the Corporation's Articles of Incorporation, as amended;
D. the provisions of the Bylaws of the Corporation, as amended; and
E. any other applicable provisions of state and federal law.
VII. COMPENSATION
For the services to be rendered by the Adviser pursuant to this Agreement,
the Corporation shall pay to the Adviser, and the Adviser agrees to accept as
full compensation therefor, compensation at the rates specified in Schedule A,
which is attached hereto and made a part of this Agreement. The Adviser's
compensation shall be calculated by applying a daily rate, based on the annual
percentage rates as specified in Schedule A, to the daily net assets of each
Fund and shall be paid to the Adviser monthly. Prior to performing any
services pursuant to this Agreement, the Adviser may elect to waive all or a
portion of the compensation that the Adviser would otherwise be entitled to
receive pursuant to this Agreement for performing such services.
No Fund of the Corporation shall be liable for the obligations of any other
Fund of the Corporation. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of a particular Fund for payment of fees
for services rendered to that Fund.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the
date of termination. All rights of compensation under this Agreement for
services performed as of the termination date shall survive the termination of
this Agreement.
VIII. EXPENSES
The expenses in connection with the management of the Funds shall be
allocable between the Corporation and the Adviser or the Administrator as
follows:
A. EXPENSES OF THE CORPORATION
Except for those expenses agreed to be paid by the Adviser or the
Administrator pursuant to Sections VIII.B. and IX of this Agreement, the
Corporation shall pay all of its expenses including, without limitation, the
following expenses:
1. Compensation to be paid to the Adviser pursuant to this Agreement;
2. Interest and taxes;
3. Brokerage commissions and other costs in connection with the
purchase or sale of securities, commodities, and other
investments for the Corporation, including portions of
commissions that may be paid to reflect brokerage research
services provided to the Adviser;
4. Fees and expenses of its directors (other than those who are
"interested persons" of the Corporation or the Adviser);
5. Fees and expenses of the Corporation's independent public
accountants;
6. Transfer agent, custodian, and dividend disbursement agent fees
and expenses;
7. Fees of dividend, accounting and pricing agents appointed by the
Corporation;
8. Fees and expenses related to the registration and qualification of
the Corporation and its shares for distribution under state and
federal securities laws;
9. All costs attributable to investor services, administering shareholder
accounts and handling shareholder relations (including, without
limitation, telephone and personnel expenses);
10. Fees and assessments of the Investment Company Institute or any
successor organization or other association memberships approved
by the Board;
11. Expenses of preparing and typesetting prospectuses;
12. Expenses of printing and mailing prospectuses sent to existing
shareholders;
13. All expenses incident to the payment of any dividend, distribution,
or redemption, whether in shares of the Fund or in cash;
14. Insurance premiums on property or personnel (including, without
limitation, officers and directors of the Corporation which inure to
its benefit);
15. Such nonrecurring or extraordinary expenses as may arise,
including, without limitation, litigation expenses affecting the
Corporation and any indemnification by the Corporation of its
officers, directors or agents with respect thereto;
16. All costs attributable to periodic shareholder reports (including,
without limitation, annual and semi-annual reports);
17. All costs attributable to proxy solicitations;
18. Attorneys' fees of the Corporation; and
19. Such other expenses that the Board, from time to time, determines
are properly payable by the Corporation.
B. EXPENSES OF THE ADVISER OR THE ADMINISTRATOR
The expenses payable by the Adviser or the Administrator are:
1. The salaries, employment benefits and related costs of those
personnel necessary to perform the Adviser's obligations under this
Agreement;
2. The expense of providing office space, equipment and facilities for
the Corporation; and
3. The fees and expenses of all directors of the Corporation who are
"interested persons" (as defined in the 1940 Act) of the
Corporation or of the Adviser and any salaries and employment
benefits of the officers of the Corporation who are affiliated
persons of the Adviser for acting as officers of the Corporation.
IX. EXPENSE PAYMENTS AND LIMITATIONS
The Adviser believes that it is in the Adviser's best interests that the
expenses of the Corporation be capped from time to time. Accordingly, the
Adviser agrees to pay expenses related to the operation of the Corporation to
the extent necessary to achieve this goal.
In addition, if the expenses for any Fund for any fiscal year (including fees
and other amounts payable to the Adviser, but excluding interest, taxes,
brokerage costs, litigation, and other extraordinary costs and certain other
excludable expenses) would exceed the expense limitations imposed on
investment companies by an applicable statute or regulatory authority of any
jurisdiction in which shares of the Corporation are qualified for offer and
sale, the Adviser agrees, unless a waiver is obtained, to reduce its
compensation in order to reduce such excess expenses.
X. REPORTS
The Corporation and the Adviser agree to furnish to each other, as
applicable, current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information
with regard to their affairs as each may reasonably request.
XI. NON-EXCLUSIVITY
The services of the Adviser to the Corporation are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others
(including other investment companies) so long as its services to the
Corporation are not impaired thereby. It is understood and agreed that
officers and directors of the Adviser may serve as officers or directors of
the Corporation, and that officers or directors of the Corporation may serve
as officers or directors of the Adviser to the extent permitted by law. The
officers and directors of the Adviser are not prohibited from engaging in any
other business activity or from rendering services to any other person, or
from serving as partners, officers, directors or trustees of any other firm,
corporation or trust, including other investment companies.
XII. CERTAIN RECORDS
The Adviser shall keep and maintain all books and records with respect to
each Fund's investment transactions required by Rule 31a-1 and Rule 2a-7 under
the 1940 Act and shall render to the Board such periodic and special reports
as the Board may reasonably request. The Adviser and other entities providing
services to the Corporation shall maintain for the Corporation any other
information that is required to be filed by the Corporation with the
Commission or sent to shareholders under the 1940 Act (including the rules
adopted thereunder) or any exemptive or other relief that the Adviser or the
Corporation obtains from the Commission. The Adviser agrees that all records
that it maintains on behalf of the Corporation are the property of the
Corporation and the Adviser will surrender promptly to the Corporation any of
such records upon the Corporation's request; provided, however, that the
Adviser may retain a copy of such records.
In addition, for the duration of this Agreement, the Adviser shall preserve
for the periods prescribed by Rule 31a-2 and Rule 2a-7 under the 1940 Act any
such records as are required to be maintained by it pursuant to this
Agreement, and shall transfer said records to any successor Adviser upon the
termination of this Agreement (or, if there is no successor Adviser, to the
Corporation).
XIII. LIABILITY OF ADVISER AND INDEMNIFICATION
A. LIABILITY
The duties of the Adviser shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Adviser hereunder. The Adviser may rely on information reasonably believed by
it to be accurate and reliable. The Adviser shall not be liable to the
Corporation or to any shareholder of the Corporation for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in carrying out its duties hereunder, except:
1. for a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby;
2. to the extent specified in Section 36(b) of the 1940 Act concerning
losses resulting from a breach of fiduciary duty with respect to the
Adviser's receipt of compensation; and
3. for a loss resulting from any breach of any representation and
warranty contained in Section III of this Agreement.
As used in this Section XIII, the term "Adviser" shall include any affiliates
of the Adviser performing services for the Corporation contemplated hereby and
the directors, officers, employees and other corporate agents of the Adviser
and such affiliates.
B. INDEMNIFICATION
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser, to the fullest extent permitted by applicable law, the Corporation
hereby agrees to indemnify and hold the Adviser harmless from and against all
claims, actions, suits and proceedings at law or in equity, whether brought or
asserted by a private party or a governmental agency, instrumentality or
entity of any kind, relating to the sale, purchase, pledge of, advertisement
of, or solicitation of sales or purchases of any security (whether of a Fund
or otherwise) by the Corporation, its officers, directors, employees or agents
in alleged violation of applicable federal, state or foreign laws, rules or
regulations.
XIV. TERM
This Agreement shall not become effective unless and until it is approved:
(a) by the Board, including a majority of directors who are not interested
persons of any party to this Agreement, and (b) by the sole shareholder of the
Corporation. Having been so approved, this Agreement shall come into full
force and effect on the date on which it is executed. This Agreement shall not
become effective as to any subsequently created Fund until it has been
approved by the Board and the shareholders of such Fund. As to each Fund, the
Agreement shall remain in effect (unless terminated as hereinafter provided)
until two years from the date of execution.
XV. RENEWAL
Following the expiration of its initial two-year term, this Agreement shall
continue in force and effect from year to year, so long as such continuance is
specifically approved at least annually:
A. by the vote of a majority of those directors of the Corporation who
are not parties to this Agreement or "interested persons" of any such
party (as such term is used in Section 15(c) of the 1940 Act), cast in
person at a meeting called for the purpose of voting on such approval;
and
B. by either the Board or the vote of a majority of the "outstanding
voting securities" (as defined in Section 2(a)(42) of the 1940 Act) of
each Fund; provided, however, that if the shareholders of any Fund
fail to approve the Agreement as provided herein, the Adviser may
continue to serve hereunder in the manner and to the extent permitted
by the 1940 Act and rules and regulations thereunder.
XVI. TERMINATION
This Agreement may be terminated as to any Fund at any time, without the
payment of any penalty, by vote of a majority of the directors of the
Corporation or by vote of a majority of the "outstanding voting securities"
(as defined in Section 2(a)(42) of the 1940 Act) of the Corporation or a Fund,
on sixty (60) days' written notice to the Adviser, or by the Adviser at any
time without the payment of any penalty, on sixty (60) days' written notice to
the Corporation. This Agreement will automatically and immediately terminate
in the event of its "assignment," as that term is defined in Section 2(a)(4)
of the 1940 Act.
XVII. AMENDMENTS
This Agreement may be amended at any time or from time to time with respect
to any Fund by an instrument in writing signed by a duly authorized officer of
the Corporation and by a duly authorized officer of the Adviser, but no
amendment to this Agreement shall be effective with respect to any Fund until
such amendment is approved:
A. by the vote of a majority of those directors of the Corporation who
are not parties to this Agreement or "interested persons" of any such
party (as such term is used in Section 15(c) of the 1940 Act), cast in
person at a meeting called for the purpose of voting on such approval;
and
B. by vote of a majority of the "outstanding voting securities" (as
defined in Section 2(a)(42) of the 1940 Act) of the CorporationFund;
provided, however, that if the shareholders of any Fund fail to
approve the Agreement as provided herein, the Adviser may continue to
serve hereunder in the manner and to the extent permitted by the 1940
Act and rules and regulations thereunder.
XVIII. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Maryland,
without regard to conflicts of law principles; provided, however, that nothing
herein shall be construed as being inconsistent with the 1940 Act.
XIX. NOTICE
Any notice, advice or report to be given pursuant to this Agreement shall be
deemed sufficient if delivered by hand, transmitted by electronic facsimile,
or mailed by registered, certified or overnight United States mail, postage
prepaid, or sent by overnight delivery with a recognized courier, addressed by
the party giving notice to the other party at the last address furnished by
the other party:
To the Adviser at: Transamerica Investment Services, Inc.
1150 South Olive Street
Los Angeles, CA 90015
Attn: Corporate Secretary
To the Corporation at: Transamerica Investors, Inc.
1150 South Olive Street
Los Angeles, CA 90015
Attn: Corporate Secretary
Each such notice, advice or report shall be effective upon receipt or three
days after mailing.
XX. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
XXI. ENTIRE AGREEMENT
This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings
relating to this Agreement's subject matter. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one instrument.
XXII. 1940 ACT
Where the effect of a requirement of the 1940 Act reflected in any provision
of this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first
written above.
TRANSAMERICA INVESTORS, INC.
By:
Title:
Attest:
TRANSAMERICA INVESTMENT
SERVICES, INC.
By:
Title:
Attest:
<PAGE>
Schedule A
to the
Investment Advisory and Administrative Services Agreement
between
Transamerica Investors, Inc.
and
Transamerica Investment Services, Inc.
Pursuant to Section VII of this Agreement, the Corporation shall pay the
Adviser compensation at an effective annual rate as follows:
Name of Fund Annual Rate of Compensation
Premier Aggressive Growth 0.85% of first $1 billion
0.82% of next $1 billion
0.80% over $2 billion
Premier Small Company 0.85% of first $1 billion
0.82% of next $1 billion
0.80% over $2 billion
<PAGE>
Exhibit 15(i) Plan of Distribution Pursuant to Rule 12b-1
<PAGE>
INVESTOR SHARES
TRANSAMERICA PREMIER AGGRESSIVE GROWTH FUND
a series of
TRANSAMERICA INVESTORS, INC.
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12b-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, Transamerica Investors, Inc. (the "Corporation") is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company, and offers for sale to the public
shares of beneficial interest; and
WHEREAS, the Corporation desires to adopt a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act (the "12b-1 Plan") applicable to the Investor
Shares of Transamerica Premier Aggressive Growth Fund (the "Fund"), a series
of shares of the Corporation; and
WHEREAS, the Corporation has entered into a Distribution Agreement
("Distribution Agreement") with Transamerica Securities Sales Corporation
("TSSC"), pursuant to which TSSC has agreed to serve as Distributor for the
various series and classes of shares of the Corporation during the continuous
offering of its shares;
NOW, THEREFORE, the Corporation hereby adopts this 12b-1 Plan with respect to
the Investor Shares of the Fund in accordance with Rule 12b-1 under the 1940
Act.
I. COMPENSATION
A. The Fund is authorized to pay to TSSC, as compensation for TSSC's
services as Distributor of the Investor Shares of the Fund, a distribution fee
at the rate of 0.25% on an annualized basis of the average daily net assets of
the Fund's Investor Shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Corporation and the Distributor
agree.
B. The Fund may pay a distribution fee to TSSC at a rate that is lower than
the rate specified in Section I.A. of this 12b-1 Plan, as agreed upon by the
Corporation
and TSSC and as approved in the manner specified in Section IV.B. of this
12b-1 Plan.
<PAGE>
The amount of the fees payable by the Fund to TSSC under Section I.A hereof
and the Distribution Agreement is not related directly to expenses incurred by
TSSC on behalf of the Fund in serving as Distributor of the Investor Shares.
Section II of this 12b- 1 Plan and the Distribution Agreement do not obligate
the Corporation to reimburse TSSC for such expenses. If TSSC's expenses with
respect to the Investor Shares of the Fund exceed the fee set forth in Section
I.A. of this 12b-1 Plan, the Fund will not pay TSSC any additional fee.
Conversely, if such expenses of TSSC are less than the fee set forth in
Section I.A., TSSC shall be entitled to keep the excess fee.
The fee set forth in Section I.A. of this 12b-1 Plan will be paid by the Fund
to TSSC unless and until either the 12b-1 Plan or the Distribution Agreement
is terminated or not renewed with respect to the Investor Shares. If either
the 12b-1 Plan or the Distribution Agreement is terminated or not renewed with
respect to the Investor Shares, any distribution expenses incurred by TSSC on
behalf of the Investor Shares of the Fund in excess of the payments of the
fees specified in Section I.A. hereof and the Distribution Agreement which
TSSC has received or accrued through the termination date are the sole
responsibility and liability of TSSC, and are not obligations of the
Corporation.
II. EXPENDITURES OF THE DISTRIBUTOR
As Distributor of the Investor Shares of the Fund, TSSC may spend such
amounts as it deems appropriate on any activities or expenses primarily
intended to result in the sale of the Investor Shares of the Fund, including,
but not limited to: (a) compensation to employees of TSSC; (b) compensation to
and expenses, including overhead and telephone expenses, of TSSC and other
selected broker-dealers who engage in or support the distribution of shares;
(c) the costs of printing and distributing prospectuses, statements of
additional information and annual and interim reports of the Corporation for
other than existing shareholders; (d) the costs of preparing, printing and
distributing sales literature and advertising materials; (e) expenses relating
to the formulation and implementation of marketing strategies and promotional
activities such as direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising; and (f) the costs of building and
maintaining a database of prospective shareholders and of obtaining such
information, analyses and reports with respect to marketing and promotional
activities and investor accounts as the Corporation may, from time to time,
deemed advisable.
III. REPORTS
TSSC shall provide to the Board of Directors of the Corporation (the "Board")
and the Board shall review, at least quarterly, a written report of the
amounts expended by TSSC with respect to the Investor Shares of the Fund under
this 12b-1 Plan and the Distribution Agreement and the purposes for which such
expenditures were made. TSSC shall submit only information regarding amounts
expended for "Distribution Activities," as defined in this Section III, to the
Board in support of the distribution fee payable hereunder.
For purposes of this 12b-1 Plan, "Distribution Activities" shall mean any
activities in connection with TSSC's performance of its obligations under this
12b-1 Plan or the Distribution Agreement that are not deemed "Service
Activities." "Service Activities" shall mean activities in connection with the
provision by TSSC or other entity of personal services and/or the maintenance
of shareholder accounts within the meaning of the definition of "service fee"
for purposes of Section 26(b) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. Overhead and other expenses of TSSC
related to its Distribution Activities, including telephone and other
communications expenses, may be included in the information regarding amounts
expended for "Distribution Activities."
IV. TERM
This 12b-1 Plan shall not become effective unless it first has been approved:
A. by a vote of at least a majority of the outstanding voting securities of the
Investor Shares of the Fund (which may consist of the initial sole
shareholder); and
B. by votes of a majority of both: (a) the Board; and (b) those Directors of
the Corporation who are not "interested persons" of the Corporation and
have no direct or indirect financial interest in the operation of this 12b-1
Plan or any agreements related thereto (the "Independent Directors"), cast
in person at a meeting called for the purpose of voting on such approval;
and until the Directors who approve the 12b-1 Plan's taking effect with
respect to the Investor Shares of the Fund have reached the conclusion
required by Rule 12b-1(e) under the 1940 Act.
If approved as set forth above, this Plan shall continue thereafter in full
force and effect with respect to the Investor Shares of the Fund for so long
as such continuance is specifically approved at least annually in the manner
provided for approval of this 12b-1 Plan in this Section IV.B.
V. TERMINATION
This 12b-1 Plan may be terminated at any time without penalty by vote of a
majority of the Independent Directors or by vote of a majority of the
outstanding voting securities of the Investor Shares of the Fund.
VI. AMENDMENTS
This 12b-1 Plan may not be amended to increase materially the amount of fees
provided for in Section I hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Investor Shares of
the Fund, and may not be amended in any other material respect unless approved
in the manner provided for approval and annual renewal in Section IV.B.
hereof.
VII. INDEPENDENT DIRECTORS
While this 12b-1 Plan is in effect, the selection and nomination of the
Independent Directors shall be committed to the discretion of the Independent
Directors.
VIII. DEFINITIONS
As used in this 12b-1 Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
IX. RECORDS
The Corporation shall preserve copies of this 12b-1 Plan (including any
amendments thereto) and any related agreements and all reports made pursuant
to Section III hereof for a period of not less than six (6) years from the
date of this 12b-1 Plan, the first two years in an easily accessible place.
X. SEVERABILITY
If any provision of this 12b-1 Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this 12b-1 Plan shall
not be affected thereby.
<PAGE>
IN WITNESS WHEREOF, the Corporation has executed this 12b-1 Plan on the day
and year set forth below.
Date:_________________
TRANSAMERICA INVESTORS, INC.
By:
Title:
Attest:
<PAGE>
INVESTOR SHARES
TRANSAMERICA PREMIER SMALL COMPANY FUND
a series of
TRANSAMERICA INVESTORS, INC.
PLAN OF DISTRIBUTION PURSUANT TO
RULE 12b-1 UNDER THE INVESTMENT COMPANY ACT OF 1940
WHEREAS, Transamerica Investors, Inc. (the "Corporation") is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company, and offers for sale to the public
shares of beneficial interest; and
WHEREAS, the Corporation desires to adopt a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act (the "12b-1 Plan") applicable to the Investor
Shares of Transamerica Premier Small Company Fund (the "Fund"), a series of
shares of the Corporation; and
WHEREAS, the Corporation has entered into a Distribution Agreement
("Distribution Agreement") with Transamerica Securities Sales Corporation
("TSSC"), pursuant to which TSSC has agreed to serve as Distributor for the
various series and classes of shares of the Corporation during the continuous
offering of its shares;
NOW, THEREFORE, the Corporation hereby adopts this 12b-1 Plan with respect to
the Investor Shares of the Fund in accordance with Rule 12b-1 under the 1940
Act.
I. COMPENSATION
A. The Fund is authorized to pay to TSSC, as compensation for TSSC's
services as Distributor of the Investor Shares of the Fund, a distribution fee
at the rate of 0.25% on an annualized basis of the average daily net assets of
the Fund's Investor Shares. Such fee shall be calculated and accrued daily and
paid monthly or at such other intervals as the Corporation and the Distributor
agree.
B. The Fund may pay a distribution fee to TSSC at a rate that is lower than
the rate specified in Section I.A. of this 12b-1 Plan, as agreed upon by the
Corporation and TSSC and as approved in the manner specified in Section IV.B.
of this 12b-1 Plan.
<PAGE>
The amount of the fees payable by the Fund to TSSC under Section I.A hereof
and the Distribution Agreement is not related directly to expenses incurred by
TSSC on behalf of the Fund in serving as Distributor of the Investor Shares.
Section II of this 12b- 1 Plan and the Distribution Agreement do not obligate
the Corporation to reimburse TSSC for such expenses. If TSSC's expenses with
respect to the Investor Shares of the Fund exceed the fee set forth in Section
I.A. of this 12b-1 Plan, the Fund will not pay TSSC any additional fee.
Conversely, if such expenses of TSSC are less than the fee set forth in
Section I.A., TSSC shall be entitled to keep the excess fee.
The fee set forth in Section I.A. of this 12b-1 Plan will be paid by the Fund
to TSSC unless and until either the 12b-1 Plan or the Distribution Agreement
is terminated or not renewed with respect to the Investor Shares. If either
the 12b-1 Plan or the Distribution Agreement is terminated or not renewed with
respect to the Investor Shares, any distribution expenses incurred by TSSC on
behalf of the Investor Shares of the Fund in excess of the payments of the
fees specified in Section I.A. hereof and the Distribution Agreement which
TSSC has received or accrued through the termination date are the sole
responsibility and liability of TSSC, and are not obligations of the
Corporation.
II. EXPENDITURES OF THE DISTRIBUTOR
As Distributor of the Investor Shares of the Fund, TSSC may spend such
amounts as it deems appropriate on any activities or expenses primarily
intended to result in the sale of the Investor Shares of the Fund, including,
but not limited to: (a) compensation to employees of TSSC; (b) compensation to
and expenses, including overhead and telephone expenses, of TSSC and other
selected broker-dealers who engage in or support the distribution of shares;
(c) the costs of printing and distributing prospectuses, statements of
additional information and annual and interim reports of the Corporation for
other than existing shareholders; (d) the costs of preparing, printing and
distributing sales literature and advertising materials; (e) expenses relating
to the formulation and implementation of marketing strategies and promotional
activities such as direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising; and (f) the costs of building and
maintaining a database of prospective shareholders and of obtaining such
information, analyses and reports with respect to marketing and promotional
activities and investor accounts as the Corporation may, from time to time,
deemed advisable.
III. REPORTS
TSSC shall provide to the Board of Directors of the Corporation (the "Board")
and the Board shall review, at least quarterly, a written report of the
amounts expended by TSSC with respect to the Investor Shares of the Fund under
this 12b-1 Plan and the Distribution Agreement and the purposes for which such
expenditures were made. TSSC shall submit only information regarding amounts
expended for "Distribution Activities," as defined in this Section III, to the
Board in support of the distribution fee payable hereunder.
For purposes of this 12b-1 Plan, "Distribution Activities" shall mean any
activities in connection with TSSC's performance of its obligations under this
12b-1 Plan or the Distribution Agreement that are not deemed "Service
Activities." "Service Activities" shall mean activities in connection with the
provision by TSSC or other entity of personal services and/or the maintenance
of shareholder accounts within the meaning of the definition of "service fee"
for purposes of Section 26(b) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. Overhead and other expenses of TSSC
related to its Distribution Activities, including telephone and other
communications expenses, may be included in the information regarding amounts
expended for "Distribution Activities."
IV. TERM
This 12b-1 Plan shall not become effective unless it first has been approved:
A. by a vote of at least a majority of the outstanding voting securities of
the Investor Shares of the Fund (which may consist of the initial sole
shareholder); and
B. by votes of a majority of both: (a) the Board; and (b) those Directors of
the Corporation who are not "interested persons" of the Corporation and
have no direct or indirect financial interest in the operation of this 12b-1
Plan or any agreements related thereto (the "Independent Directors"), cast
in person at a meeting called for the purpose of voting on such approval;
and until the Directors who approve the 12b-1 Plan's taking effect with
respect to the Investor Shares of the Fund have reached the conclusion
required by Rule 12b-1(e) under the 1940 Act.
If approved as set forth above, this Plan shall continue thereafter in full
force and effect with respect to the Investor Shares of the Fund for so long
as such continuance is specifically approved at least annually in the manner
provided for approval of this 12b-1 Plan in this Section IV.B.
V. TERMINATION
This 12b-1 Plan may be terminated at any time without penalty by vote of a
majority of the Independent Directors or by vote of a majority of the
outstanding voting securities of the Investor Shares of the Fund.
VI. AMENDMENTS
This 12b-1 Plan may not be amended to increase materially the amount of fees
provided for in Section I hereof unless such amendment is approved by a vote
of a majority of the outstanding voting securities of the Investor Shares of
the Fund, and may not be amended in any other material respect unless approved
in the manner provided for approval and annual renewal in Section IV.B.
hereof.
VII. INDEPENDENT DIRECTORS
While this 12b-1 Plan is in effect, the selection and nomination of the
Independent Directors shall be committed to the discretion of the Independent
Directors.
VIII. DEFINITIONS
As used in this 12b-1 Plan, the terms "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
IX. RECORDS
The Corporation shall preserve copies of this 12b-1 Plan (including any
amendments thereto) and any related agreements and all reports made pursuant
to Section III hereof for a period of not less than six (6) years from the
date of this 12b-1 Plan, the first two years in an easily accessible place.
X. SEVERABILITY
If any provision of this 12b-1 Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this 12b-1 Plan shall
not be affected thereby.
<PAGE>
IN WITNESS WHEREOF, the Corporation has executed this 12b-1 Plan on the day
and year set forth below.
Date:_________________
TRANSAMERICA INVESTORS, INC.
By:
Title:
Attest:
<PAGE>
Exhibit 19 Power of Attorney
<PAGE>
POWER OF ATTORNEY
The undersigned Treasurer and Chief Accounting Officer of Transamerica
Investors, Inc., a Maryland corporation (the "Company"), hereby constitutes
and appoints Nicki Bair, Reid Evers, and Donald Radisich and each of them
(with full power to each of them to act alone), her true and lawful
attorney-in-fact and agent, with full power of substitution to each, for her
and on her behalf and in her name, place and stead, to execute and file any of
the documents referred to below relating to the registration of the
Corporation under the Securities Act of 1933 (the "1933 Act") or the
Investment Company Act of 1940 (the "1940 Act"): registration statements on
any form or forms under the 1933 Act or the 1940 Act, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and her or their substitutes being empowered to
act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each
and every act and thing requisite and necessary or appropriate with respect
thereto to be done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand, this 10th day
of April, 1997.
------------------------------
Susan Hughes