<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
TRANSAMERICA INVESTORS, INC.
(Name of Registrant as Specified In Its Charter)
NAME OF COMPANY
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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TRANSAMERICA INVESTORS, INC.
1150 SOUTH OLIVE STREET
LOS ANGELES, CA 90015
(800) 892-7587
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders (the
"Special Meeting") of Transamerica Investors, Inc., a Maryland corporation (the
"Corporation"), will be held on June 16, 1999, at 10:00 a.m. (Pacific Time) at
the executive offices of the Corporation, 1150 South Olive Street, Los Angeles,
CA 90015. At the Special Meeting, you and the other shareholders of the
Corporation will be asked to consider and vote on the following matters:
1. To approve a new investment advisory agreement between each of
the Transamerica Premier Aggressive Growth Fund, the
Transamerica Premier Small Company Fund, the Transamerica
Premier Equity Fund, the Transamerica Premier Value Fund, the
Transamerica Premier Index Fund, the Transamerica Premier
Balanced Fund, the Transamerica Premier High Yield Bond Fund,
the Transamerica Premier Bond Fund and the Transamerica
Premier Cash Reserve Fund, each a portfolio series of the
Corporation, and Transamerica Investment Services, Inc., as
discussed in Part I of the attached Proxy Statement. (Each
investment advisory agreement will be voted on only by
shareholders of the relevant Fund.)
2. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on May 10, 1999 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof. Regardless of whether you plan to attend the Special Meeting, PLEASE
COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so that a quorum will
be present and the maximum number of shares may be voted.
By Order of the Board of Directors
----------------------------------
Secretary
Los Angeles, California
May 7 , 1999
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TRANSAMERICA INVESTORS, INC.
1150 South Olive Street
Los Angeles, CA 90015
(800) 892-7487
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Transamerica Investors,
Inc. (the "Corporation") for use at the Special Meeting of Shareholders of the
Corporation, to be held at the executive offices of the Corporation, 1150 South
Olive Street, Los Angeles, California 90015, on June 16, 1999 at 10:00 a.m.
(Pacific Time), and at any and all adjournments thereof (the "Special Meeting").
The Corporation currently consists of the following series of shares
that have commenced operations: Transamerica Premier Aggressive Growth Fund,
Transamerica Premier Small Company Fund, Transamerica Premier Equity Fund,
Transamerica Premier Value Fund, Transamerica Premier Index Fund, Transamerica
Premier Balanced Fund, Transamerica Premier High Yield Bond Fund, Transamerica
Premier Bond Fund and Transamerica Premier Cash Reserve Fund (each a "Fund" and,
collectively, the "Funds").
This Proxy Statement, the Notice of Special Meeting and the proxy cards
are first being mailed to shareholders on or about May 17, 1999 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it by mail (addressed to the Secretary at the principal executive office of the
Corporation, c/o Transamerica Investment Services, Inc., at the address shown at
the beginning of this Proxy Statement) or in person at the Special Meeting, by
executing a superseding proxy or by submitting a notice of revocation to the
Corporation. All properly executed proxies received in time for the Special
Meeting will be voted as specified in the proxy or, if no specification is made,
in favor of the Proposals referred to in the Proxy Statement.
Shareholders of each Fund will vote separately by Fund on Proposal 1
(approval of a new investment advisory agreement).
The presence at the Special Meeting, in person or by proxy, of the
holders of a majority of the votes of the relevant Fund entitled to be cast
shall be necessary and sufficient to constitute a quorum for the transaction of
business. For purposes of determining the presence of a quorum, abstentions will
be counted as present. Broker "nonvotes" occur when the Corporation receives a
proxy from a broker or nominee who does not have discretionary power to vote on
a particular matter and the broker or nominee has not received instructions from
the beneficial owner or other person entitled to vote the shares represented by
the proxy. With respect to each Fund, Proposal 1 requires the approval of a
"majority of the outstanding voting securities" of such Fund, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). Abstentions and
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broker "nonvotes" will have the effect of a vote against Proposal 1. See
"Proposal 1 -- Required Vote."
The solicitation will be made primarily by mail, but may be
supplemented by telephone calls, telegrams, personal interviews and other
communications by officers, employees and agents of the Corporation and its
affiliates. Authorization to execute proxies may be obtained telephonically or
by electronically transmitted instructions. The Corporation has retained
Georgeson & Company, Inc., 88 Pine Street, New York, NY 10005 to aid in the
solicitation of proxies. The costs of retaining Georgeson & Company, Inc., which
are anticipated to be approximately $10,000, and other expenses incurred in
connection with the solicitation of proxies and the holding of the Special
Meeting, will be borne by Transamerica Corporation ("Transamerica") or its
affiliates and not by the Corporation.
Holders of record of the shares of the Corporation at the close of
business on May 10, 1999 (the "Record Date"), as to any matter on which they are
entitled to vote, will be entitled to one vote per share on all business of the
Special Meeting. The table provided in Appendix 1 hereto sets forth the number
of shares outstanding for each Fund as of the Record Date.
Appendix 2 sets forth the beneficial owners of at least 5% of a Fund's
shares. To the best of the Corporation's knowledge, as of May 10, 1999, no
person owned beneficially more than 5% of any Fund's outstanding shares, except
as stated in Appendix 2.
Appendix 3 hereto sets forth the number of shares of each Fund owned
directly or beneficially by the directors or executive officers of the
Corporation. To the best of the Corporation's knowledge, as of May 10, 1999, no
director or executive officer of the Corporation owned beneficially any shares
of the Corporation, except as stated in Appendix 3.
Each Fund provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You can receive an additional copy of the most recent annual
report for each Fund and a copy of any more recent semi-annual report, without
charge, by calling 800-892-7587 or writing the Corporation at the address shown
at the beginning of this Proxy Statement.
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I. APPROVAL OF NEW
INVESTMENT ADVISORY AGREEMENT
(PROPOSAL 1)
INTRODUCTION
Transamerica Investment Services, Inc. ("TIS") acts as the investment
adviser to each Fund pursuant to an investment advisory agreement entered into
by the Corporation and TIS. The investment advisory agreement in effect with
respect to each Fund and TIS prior to the consummation of the transaction
described below between AEGON N.V. ("AEGON"), Tony Merger Corp. ("Merger Sub")
and Transamerica (the "AEGON-Transamerica Transaction" or the "Transaction") is
referred to in this Proxy Statement as a "Former Investment Advisory Agreement,"
and, collectively, the "Former Investment Advisory Agreements." The Former
Investment Advisory Agreements in effect with respect to each of the Funds are
evidenced by two distinct agreements between the Corporation and TIS. One such
agreement relates to five of the Funds, and the other relates to the remaining
four Funds. The investment advisory agreement proposed to become effective with
respect to each of the nine Funds and TIS as of the consummation of the
AEGON-Transamerica Transaction will also be evidenced by two distinct agreements
between the Corporation and TIS (each a "New Investment Advisory Agreement",
collectively, the "New Investment Advisory Agreements," and, together with the
Former Investment Advisory Agreements, the "Investment Advisory Agreements").
The AEGON-Transamerica Transaction. TIS is a direct wholly-owned
subsidiary of Transamerica. On February 17, 1999, AEGON, Merger Sub, a
wholly-owned subsidiary of AEGON, and Transamerica entered into an Agreement and
Plan of Merger and Reorganization (the "Merger Agreement"). Pursuant to the
Merger Agreement, Transamerica will merge with and into Merger Sub. Merger Sub
will be the surviving corporation in the Transaction, and the separate corporate
existence of Transamerica will cease. The Certificate of Incorporation of Merger
Sub will be amended to change the name of Merger Sub from Tony Merger Corp. to
Transamerica Corporation. The result of the Transaction will be that
Transamerica will become a wholly-owned subsidiary of AEGON.
Consummation of the Transaction may be deemed to constitute an
"assignment," as that term is defined in the 1940 Act, of each Fund's Former
Investment Advisory Agreement with TIS. As required by the 1940 Act, each of the
Former Investment Advisory Agreements provides for its automatic termination in
the event of its assignment. Accordingly, a New Investment Advisory Agreement
with respect to each Fund and TIS was approved by the Board and is now being
proposed for approval by the shareholders of each Fund. TIS is seeking an
exemptive order from the Securities and Exchange Commission (the "SEC" or the
"Commission") permitting each Fund to obtain shareholder approval of its New
Investment Advisory Agreement within 150 days after the consummation of the
Transaction, which is expected to occur in mid-June (and, consequently, within
150 days after the termination of its Former Investment Advisory Agreement).
Pursuant to the exemptive order, should TIS choose
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<PAGE> 6
to rely on it, each Fund's investment advisory fees would be held in escrow
until the earlier of (i) shareholder approval of the Fund's New Investment
Advisory Agreement and (ii) the expiration of the 150-day period. A copy of the
master form of New Investment Advisory Agreement is attached hereto as Exhibit
A. THE NEW INVESTMENT ADVISORY AGREEMENT FOR EACH FUND IS SUBSTANTIALLY
IDENTICAL TO THE CORRESPONDING FORMER INVESTMENT ADVISORY AGREEMENT, EXCEPT FOR
THE DATE OF EXECUTION AND THE TERMINATION DATE. The material terms of the
Investment Advisory Agreements are described under "Description of the
Investment Advisory Agreements" below.
BOARD'S RECOMMENDATION
The Board met on May 7, 1999, and the Board members, including the
Board members who are not parties to the New Investment Advisory Agreements or
"interested persons" (as defined in the 1940 Act) (the "Non-Interested
Directors" or "Non-Interested Board members") of any such party, voted to
approve the New Investment Advisory Agreements and to recommend approval to the
shareholders of each applicable Fund.
BOARD'S EVALUATION
On May 7, 1999, the Board met with senior management personnel of TIS.
As a result of its review and consideration of the Transaction and the proposed
New Investment Advisory Agreements, the Board voted unanimously to approve the
applicable New Investment Advisory Agreement and to recommend it to the
shareholders of the respective Fund for their approval.
In connection with its review, TIS and AEGON represented to the Board
that: although integration of the businesses of Transamerica and AEGON may occur
and therefore some changes may result, it is the current intention that the
Transaction will have no material effect on the operational management of any
Fund and that it will not result in any material change in the management or
operations of TIS as they relate to the Funds; there will not be any increase in
the advisory fee or any change in any other provision, other than the date of
execution and the termination date, of any Investment Advisory Agreement as a
result of the Transaction; and the Transaction will not adversely affect TIS's
financial condition.
In connection with its deliberations, the Board obtained such
information as it deemed reasonably necessary to evaluate the New Investment
Advisory Agreements and other agreements, including certain assurances from each
of AEGON, Transamerica and TIS, including the following:
- The Transaction will not result in any change in any Fund's
investment objectives or policies.
- It is the current intention that the Transaction will not
result in any material change in the management or operations
of TIS as they relate to the Funds.
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- There is a commitment to the continuance, without
interruption, of services to the Funds of the type and quality
currently provided by TIS.
- The current plan is to maintain TIS's facilities and
organization.
Transamerica informed the Board that it intends to comply with Section
15(f) of the 1940 Act, which provides a non-exclusive safe harbor for an
investment adviser to an investment company or any of the investment adviser's
affiliated persons (as defined in the 1940 Act) to receive any amount or benefit
in connection with a change in control of the investment adviser so long as two
conditions are met. First, for a period of three years after the transaction, at
least 75% of the board members of the investment company must not be "interested
persons" of the investment company's investment adviser or its predecessor
adviser. On or prior to the consummation of the Transaction, the Board will be
in compliance with this provision of Section 15(f). Second, an "unfair burden"
must not be imposed upon the investment company as a result of such transaction
or any express or implied terms, conditions or understandings applicable
thereto. The term "unfair burden" is defined in Section 15(f) to include any
arrangement during the two-year period after the transaction whereby the
investment adviser, or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from the
investment company or its shareholders (other than fees for bona fide investment
advisory or other services) or from any person in connection with the purchase
or sale of securities or other property to, from or on behalf of the investment
company (other than bona fide ordinary compensation as principal underwriter for
such investment company). Transamerica has advised the Board that it is not
aware of any express or implied term, condition, arrangement or understanding
that would impose an "unfair burden" on the Funds as a result of the
Transaction. Transamerica has agreed that it, and its affiliates, will take no
action that would have the effect of imposing an "unfair burden" on the Funds as
a result of the Transaction. In furtherance thereof, Transamerica has undertaken
to pay the costs of preparing and distributing proxy materials to, and of
holding the meeting of the Corporation's shareholders as well as other fees and
expenses in connection with the Transaction.
In evaluating the New Investment Advisory Agreements, the Board took
into account that the fees and expenses payable by each Fund under its New
Investment Advisory Agreement are the same as under its Former Investment
Advisory Agreement, that the services provided to each Fund are the same and
that the other terms are, except for the date of execution and the termination
date, identical. The Board also took into consideration that the current
intention is that the portfolio managers and research personnel would continue
their functions with TIS after the Transaction. The Board noted that, in
previously approving the Former Investment Advisory Agreements, the Board had
considered a number of factors, including the nature and quality of services
provided by TIS; investment performance, both that of each Fund itself and
relative to that of competitive investment companies; the investment advisory
fees and expense ratios of each Fund and competitive investment companies; TIS's
profitability from managing each Fund; fallout benefits to TIS from its
relationship to each Fund, including revenues derived from services provided to
the Fund by affiliates of TIS; and the potential benefits to TIS and to each
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Fund and its shareholders of receiving research services from broker-dealer
firms in connection with the allocation of portfolio transactions to such firms.
The Board discussed the Transaction with the senior management of TIS,
Transamerica and AEGON and among themselves. The Board considered that AEGON and
Transamerica are large, well-established companies with substantial resources.
AS A RESULT OF ITS REVIEW AND CONSIDERATION OF THE TRANSACTION
AND THE NEW INVESTMENT ADVISORY AGREEMENTS, AT ITS MEETING
THE BOARD VOTED TO APPROVE THE NEW INVESTMENT ADVISORY
AGREEMENTS AND TO RECOMMEND THEIR APPROVAL
TO THE SHAREHOLDERS OF EACH FUND.
DESCRIPTION OF THE INVESTMENT ADVISORY AGREEMENTS
Except as disclosed below, the Former Investment Advisory Agreements
and New Investment Advisory Agreements are substantially identical. Under the
Investment Advisory Agreements, TIS provides each Fund with continuing
investment advisory services. TIS also determines which securities should be
purchased, held, or sold, and what portion of each Fund's assets should be held
uninvested, subject to the Corporation's Articles of Incorporation, ByLaws,
investment policies and restrictions, the provisions of the 1940 Act, and such
policies and instructions as the Board may have determined.
The Investment Advisory Agreement for each Fund appoints TIS to serve
as investment adviser to the Fund, to provide the following investment advisory
and administrative services, subject to the policies and control of the Board:
(a) to supervise all aspects of the operations of the Corporation and the Fund,
including the supervision and coordination of transfer agency, custodial and
accounting services; (b) to provide 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; (c) to arrange for the periodic preparation, updating, filing
and distribution of the Corporation's federal registration statement, state
registration statements, proxy material, tax returns and required reports to
Fund shareholders and the Commission and other regulatory authorities; (d) to
provide to or obtain for the Corporation and the Fund adequate office space and
all necessary office equipment and services; (e) to perform other administrative
functions as the Board may deem necessary and appropriate, including: (i)
computation and publication of the Fund's daily net asset value and daily
income; (ii) computation of the Fund's yield and total return; (iii) scheduling,
planning and conducting meetings of directors and shareholders; (iv)
coordination of the efforts of the Corporation's auditors; (v) maintenance of
corporate records not otherwise maintained by the custodian, transfer agent or
accounting agent; (vi) monitoring of applicable state and federal laws; (vii)
preparation and filing of the Corporation's federal, state and local tax
returns; and (viii) coordination of the efforts of attorneys providing legal
advice relating to the Corporation; (f) to maintain the Corporation's existence
and, during such time as shares of the
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Fund are publicly offered, to maintain the registration and qualification of
such 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 Fund in particular, whether concerning the individual issues of
the securities included in the Fund or the activities in which the issuers
engage, or whether concerning the securities that TIS 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 Fund; (i) to formulate and implement a
continuous investment program for the Fund; (j) to instruct the Fund's custodian
as to deliveries of securities, transfer of currencies or payment of cash for
the account of the Corporation; and to take all actions which appear to the
Corporation and the Fund necessary to effect the purchase and sale of securities
for the Fund and the supervisory functions listed above, including the placing
of orders for the purchase and sale of securities for the Fund.
Each Investment Advisory Agreement provides that TIS will enter into an
Administrative Services Agreement with Transamerica Occidental Life Insurance
Company (the "Administrator"), an indirect wholly-owned subsidiary of
Transamerica and an affiliate of TIS, under which the Administrator will furnish
management and administrative personnel and services to assist TIS in carrying
out its responsibilities under the Investment Advisory Agreement. As permitted
by the Investment Advisory Agreement, the Administrator entered into a
Sub-Administration Agreement with State Street Bank and Trust Company ("State
Street") under which State Street, as sub-administrator, furnished certain
administrative services to assist the Administrator in carrying out its
responsibilities under its Administrative Services Agreement.
Under each Investment Advisory Agreement, the expenses payable by TIS
or the Administrator are: the salaries, employment benefits and related costs of
those personnel necessary to perform TIS's obligations under the Investment
Advisory Agreement; the expense of providing office space, equipment and
facilities for the Fund; and the fees and expenses of the directors of the
Corporation (other than the Non-Interested Directors) and any salaries and
employment benefits of the officers of the Corporation who are affiliated
persons of TIS or the Administrator for acting as officers of the Corporation.
TIS may determine to pay (or to cause the Administrator to pay) additional
expenses from time to time for the purpose of capping the expenses paid by the
Fund, although it is within TIS's sole discretion to make such a determination
or to terminate any such arrangement.
Under each Investment Advisory Agreement, each Fund is responsible for
all of its expenses, except for those agreed to be paid by TIS or the
Administrator as described above. The expenses payable by the Fund include,
without limitation: compensation payable to TIS; interest and taxes; brokerage
commission and other costs in connection with the purchase and sale of
securities, commodities and other investments, including portions of commissions
that may be paid to reflect brokerage and research services provided to TIS;
fees and expenses of its Non-Interested Directors; fees and expenses of the
Corporation's independent public accountants;
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transfer agent, custodian and dividend disbursement agent fees and expenses;
fees of dividend, accounting and pricing agents; fees and expenses related to
the registration and qualification of the Corporation and the Fund's shares for
distribution under state and federal securities laws; all costs attributable to
investor services, administering shareholder accounts and handling shareholder
relations; fees and assessments of the Investment Company Institute or any
successor organization or other association memberships approved by the Board;
expenses of preparing and typesetting prospectuses; expenses of printing and
mailing prospectuses sent to existing shareholders; all expenses incident to the
payment of any dividend, distribution or redemption, whether in shares of the
Fund or in cash; insurance premiums on property or personnel; such nonrecurring
or extraordinary expenses as may arise, including litigation expenses and any
indemnification by the Corporation of its officers, directors or agents with
respect thereto; all costs attributable to periodic shareholder reports; all
costs attributable to proxy solicitations; attorneys' fees of the Corporation;
and such other expenses as the Board determines are properly payable by the
Fund.
In return for the services provided by TIS and the expenses it assumes
under each Investment Advisory Agreement, each Fund pays TIS an advisory fee
which is accrued daily and payable monthly. The advisory fee rate for each Fund
under the Investment Advisory Agreements is set forth in Appendix 4 hereto. As
of the end of each Fund's last fiscal year, each Fund had net assets and paid an
aggregate advisory fee to TIS during such period as also set forth in Appendix
4.
At present, for each Fund, TIS has agreed to waive its fee, and the
Administrator has agreed to assume any other operating expenses (other than
certain extraordinary or non-recurring expenses), which together exceed a
specified percentage of the average daily net assets of that Fund as set forth
in Appendix 5 hereto. These waivers and subsidies may be terminated at any time
without notice.
Each Investment Advisory Agreement further provides that TIS shall not
be liable for any error or 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
under the Investment Advisory Agreement, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of TIS in the
performance of its duties or from reckless disregard by TIS of its obligations
and duties under such agreement. Each Investment Advisory Agreement also
provides that purchase and sale opportunities which are suitable for more than
one client of TIS will be allocated by the TIS in an equitable manner. Lastly,
each Investment Advisory Agreement contains a provision stating that it
supersedes all prior agreements.
Each Investment Advisory Agreement may be terminated without penalty
upon sixty (60) days' written notice by either party. Each Fund may agree to
terminate its Investment Advisory Agreement either by the vote of a majority of
the outstanding voting securities of the Fund or by a vote of the Board. As
stated above, each Investment Advisory Agreement automatically terminates in the
event of its assignment.
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TIS has acted as the investment adviser for each Fund since its
commencement of operations, the date of which is set forth in the table in
Appendix 6 hereto. Also shown in Appendix 6 is the effective date of each Former
Investment Advisory Agreement, the date on which each Former Investment Advisory
Agreement was last approved by the shareholders of each Fund and the date on
which each Former Investment Advisory Agreement was last approved by the Board.
In the case of each Fund, shareholder approval was last obtained for the purpose
of obtaining initial shareholder approval of the Former Investment Advisory
Agreement as required by the 1940 Act.
THE NEW INVESTMENT ADVISORY AGREEMENTS
The New Investment Advisory Agreement for each Fund, if approved by the
shareholders of that Fund, would be dated the date of the consummation of the
Transaction, which is expected to occur in mid-June. Each New Investment
Advisory Agreement would be in effect for an initial term of two years, and
would be continued thereafter from year to year only if specifically approved at
least annually by the vote of a "majority of the outstanding voting securities"
of each Fund, or by the Board and, in either event, the vote of a majority of
the Non-Interested Directors, cast in person at a meeting called for such
purpose. In the event that shareholders of a Fund do not approve the Fund's New
Investment Advisory Agreement, the Board will take such action as it deems to be
in the best interests of the Fund and its shareholders.
DIFFERENCES BETWEEN THE FORMER AND NEW INVESTMENT ADVISORY AGREEMENTS
The New Investment Advisory Agreements are identical to the Former
Investment Advisory Agreements, except for the dates of execution and the
termination dates.
TIS AND OTHER SERVICE PROVIDERS
TIS is a Delaware corporation that is an investment adviser registered
under the Investment Advisers Act of 1940, as amended. TIS has been in existence
since 1967 and has provided investment services to investment companies since
1968 and to Transamerica and affiliated companies since 1981. TIS is a direct
wholly-owned subsidiary of Transamerica. TIS's address is 1150 South Olive
Street, Los Angeles, California 90015. Appendix 7 includes information regarding
each director and officer of the Corporation who is associated with TIS.
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The following table shows the address and principal occupation of the
principal executive officer and each director of TIS:
<TABLE>
<CAPTION>
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
<S> <C> <C>
Richard N. Latzer * Director, President & Chief Executive Officer
Gary U. Rolle * Executive Vice President
Thomas J. Cusak * Director
Edgar H. Grubb * Director
Frank C. Herringer * Director
</TABLE>
*c/o Transamerica Investment Services, Inc., 1150 South Olive Street, Los
Angeles, CA 90015
Transamerica is a financial services company with approximately $58.5
billion in assets. Its principal offices are located at The Transamerica
Pyramid, 600 Montgomery Street, 24th Floor, San Francisco, California 94111.
Transamerica's two major lines of business are life insurance (including asset
management) and finance. As a result of the AEGON-Transamerica Transaction,
Transamerica will become a direct wholly-owned subsidiary of AEGON.
AEGON is headquartered in The Hague, The Netherlands, and is a holding
corporation of one of the world's ten largest life insurance groups ranked by
market capitalization and assets. Over 80% of AEGON's existing business is in
life insurance, pensions and related savings and investment products. AEGON's
address is Mariahoeveplain 50, 2591 TV The Hague, The Netherlands.
Vereniging AEGON ("Association AEGON") controls a majority voting
interest in AEGON through its minority holding of common stock plus its holding
of all the issued and outstanding preferred stock of AEGON. Association AEGON
currently intends to increase gradually its ownership of AEGON common stock to
40% by purchasing shares of common stock on the open market. At the same time,
Association AEGON intends to decrease its holding of preferred stock. It is
currently contemplated that, at all times, Association AEGON will maintain the
majority of voting rights of AEGON. Association AEGON is registered in The
Hague, The Netherlands.
Directors, officers and employees of TIS from time to time may enter
into transactions with various banks, including each Fund's custodian bank. It
is TIS's opinion that the terms and conditions of those transactions will not be
influenced by existing or potential custodial or other Fund relationships.
As stated above under "Description of the Investment Advisory
Agreements," Transamerica Occidental Life Insurance Company serves as
Administrator to the Funds. The
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Administrator is a direct wholly-owned subsidiary of Transamerica Insurance
Corporation of California ("Transamerica Insurance"), which in turn is a direct
wholly-owned subsidiary of Transamerica. The Administrator provides
administrative and clerical services to the Funds. The Administrator receives
its fee directly from TIS and receives no compensation from the Funds. The
Administrator's address is 1150 South Olive Street, Los Angeles, California
90015.
Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter and distributor of the shares of each of the Funds. TSSC is a direct
wholly-owned subsidiary of Transamerica Insurance. TSSC's address is 1150 South
Olive Street, Los Angeles, California 90015. For the Investor Shares of each
Fund, TSSC receives a Rule 12b-1 distribution fee of 0.25% of average daily net
assets, except for the Premier Index Fund and Premier Cash Reserve Fund, which
pay a distribution fee of 0.10% of average daily net assets. On November 1,
1997, TSSC agreed to waive the distribution fee for the Premier Cash Reserve
Fund. For the Class A and Class M shares of each Fund, TSSC receives a 12b-1
distribution fee of 0.35% and 0.60%, respectively, of average daily net assets.
The table contained in Appendix 8 sets forth for each Fund (or class thereof,
where appropriate) the fees paid to TSSC during the most recent fiscal year of
the Fund.
The Administrator and TSSC will continue to provide their respective
services to the Funds, as described above, under the current arrangements if the
New Investment Advisory Agreements are approved.
Charles Schwab & Company is considered an affiliated broker of the
Corporation because the Chief Executive Officer of its parent corporation is on
the board of directors of Transamerica, the parent corporation of TIS and the
Administrator. The amount of commissions paid by the Funds to Charles Schwab &
Company in 1998 was $1,200. For 1998, transactions effected through Charles
Schwab & Company represented 0.0001% of the total commissions paid by the Funds
to all brokers, and 0.0001% of the aggregate dollar amount of transactions made
by the Funds through all brokers.
State Street, located at 225 Franklin Street, Boston, Massachusetts
02110, serves as custodian to the Funds. Under its custodian contract with the
Corporation, State Street is authorized to appoint one or more banking
institutions as subcustodians of assets owned by each Fund. Under a Transfer
Agency Agreement, State Street is also responsible for processing redemption
requests and crediting dividends to the accounts of shareholders of the Funds.
Under a Sub-Administration Agreement, State Street is also responsible for
furnishing certain administrative services to assist the Administrator in
carrying out its responsibilities under its Administrative Services Agreement.
Ernst & Young LLP, 725 South Figueroa Street, Los Angeles, California
90017, performs audits of the Funds' financial statements.
-12-
<PAGE> 14
REQUIRED VOTE
Approval of each Fund's New Investment Advisory Agreement will require
the affirmative vote of a "majority of the outstanding voting securities" of
that Fund (as defined in the 1940 Act), which means the affirmative vote of the
lesser of (i) more than 50% of the outstanding shares of that Fund or (ii) 67%
or more of the shares of that Fund present at the meeting if more than 50% of
the outstanding shares of that Fund are represented at the meeting in person or
by proxy.
THE BOARD MEMBERS RECOMMEND THAT THE
SHAREHOLDERS OF EACH FUND VOTE IN FAVOR OF THIS
PROPOSAL 1.
ADDITIONAL INFORMATION
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a Proxy
Statement for a shareholder meeting subsequent to the Special Meeting, if any,
should send their written proposals to the Secretary of the Corporation, c/o
Transamerica Investment Services, Inc., at the address shown at the beginning of
this Proxy Statement, within a reasonable time before the solicitation of
proxies for such meeting. The timely submission of a proposal does not guarantee
its inclusion.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
No Board member is aware of any matters that will be presented for
action at the Special Meeting other than the matters set forth herein. Should
any other matters requiring a vote of shareholders arise, the proxy in the
accompanying form will confer upon the person or persons entitled to vote the
shares represented by such proxy the discretionary authority to vote the shares
as to any such other matters in accordance with their best judgment in the
interest of each Fund.
ADJOURNMENT
In the event that sufficient votes in favor of any of the proposals set
forth in the Notice of a Special Meeting of Shareholders are not received by the
time scheduled for the Special Meeting, the persons named as proxies may propose
one or more adjournments of the Special Meeting after the date set for the
original Special Meeting to permit further solicitation of proxies with respect
to any such proposals. In addition, if, in the judgment of the persons named as
proxies, it is advisable to defer the action on one or more proposals, the
persons named as proxies may propose one or more adjournments of the Special
Meeting. Any such adjournments will require the affirmative vote of a majority
of the votes cast on the question in person or by proxy at the session of the
Special Meeting as permitted by the Corporation's By-Laws. The
-13-
<PAGE> 15
persons named as proxies will vote in favor of such adjournment those proxies
which they are entitled to vote in favor of such proposals. They will vote
against any such adjournment those proxies required to be voted against any of
such proposals. The costs of any additional solicitation and of any adjourned
session will be borne by Transamerica or its affiliates. Any proposals for which
sufficient favorable votes have been received by the time of the Special Meeting
will be acted upon and such action will be final regardless of whether the
Special Meeting is adjourned to permit additional solicitation with respect to
any other proposal.
IMPORTANT--WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT
IN THE ENCLOSED ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE AND IS INTENDED FOR
YOUR CONVENIENCE. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) MAY SAVE THE
NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO ENSURE A QUORUM AT THE SPECIAL
MEETING. IF YOU CAN ATTEND THE SPECIAL MEETING AND WISH TO VOTE YOUR SHARES IN
PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
-14-
<PAGE> 16
APPENDIX 1
FUND SHARES OUTSTANDING
Holders of record of the shares of each Fund at the close of business
on May 10, 1999 (the "Record Date"), as to any matter on which they are entitled
to vote, will be entitled to one vote per share on all business of the Special
Meeting. The table below sets forth the number of shares outstanding for each
Fund as of May 10, 1999.
<TABLE>
<CAPTION>
Fund Number of Shares Outstanding
as of May 10, 1999
<S> <C>
Transamerica Premier Aggressive Growth Fund
Transamerica Premier Small Company Fund
Transamerica Premier Equity Fund
Transamerica Premier Value Fund
Transamerica Premier Index Fund
Transamerica Premier Balanced Fund
Transamerica Premier High Yield Bond Fund
Transamerica Premier Bond Fund
Transamerica Premier Cash Reserve Fund
</TABLE>
-15-
<PAGE> 17
APPENDIX 2
BENEFICIAL OWNERS OF 5% OR MORE OF FUND SHARES
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Name of Fund of Beneficial Owner of Beneficial Ownership Percent of Fund
- ------------ ------------------- ----------------------- ---------------
<S> <C> <C> <C>
</TABLE>
-16-
<PAGE> 18
APPENDIX 3
FUND SHARES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Name of Fund of Beneficial Owner of Beneficial Ownership Percent of Fund
- ------------ ------------------- ----------------------- ---------------
<S> <C> <C> <C>
</TABLE>
[For each Fund, all directors and executive officers of the Corporation as a
group...]
-17-
<PAGE> 19
APPENDIX 4
FUND ADVISORY FEE RATES, NET ASSETS
AND AGGREGATE ADVISORY FEES
The Net Assets and Aggregate Advisory Fees information in the table
below is each Fund's last fiscal year, which in each case ended December 31,
1998.
<TABLE>
<CAPTION>
Aggregate
Advisory
Fund Net Assets Advisory Fee Rate Fees*
- ---- ------------ ------------------------- ----------
<S> <C> <C> <C>
Transamerica Premier $177,495,688 0.85% of first $1 billion $502,217
Aggressive Growth Fund 0.82% of next $1 billion
0.80% over $2 billion
Transamerica Premier $209,390,410 0.85% of first $1 billion $400,544
Small Company Fund 0.82% of next $1 billion
0.80% over $2 billion
Transamerica Premier $290,320,821 0.85% of first $1 billion $2,029,581
Equity Fund 0.82% of next $1 billion
0.80% over $2 billion
Transamerica Premier $9,113,831 0.75% of first $1 billion $48,002
Value Fund 0.72% of next $1 billion
0.70% over $2 billion
Transamerica Premier $36,344,990 0.30% $90,474
Index Fund
Transamerica Premier $61,922,440 0.75% of first $1 billion $313,648
Balanced Fund 0.72% of next $1 billion
0.70% over $2 billion
Transamerica Premier $72,816,781 0.55% of first $1 billion $190,256
High Yield Bond Fund 0.52% of next $1 billion
0.50% over $2 billion
Transamerica Premier $17,342,517 0.60% of first $1 billion $94,177
Bond Fund 0.57% of next $1 billion
0.55% over $2 billion
Transamerica Premier $76,268,899 0.35% $233,663
Cash Reserve Fund
</TABLE>
* For the fiscal year ended 12/31/98, Transamerica Investment Services, Inc.
("TIS"), the investment advisor to each of the Funds, waived all or a
portion of the advisory fee payable by seven of the nine Funds. TIS waived
the entire advisory fee payable by the Premier Value Fund, Premier Index
Fund and Premier Cash Reserve Fund. TIS waived a portion of the advisory
fee payable by each of the Premier Aggressive Growth Fund, Premier Small
Company Fund, Premier High Yield Bond Fund and Premier Bond Fund, such
that the resulting advisory fee paid by each such Fund, net of the waiver,
was $384,631, $309,946, $119,076 and $66,742, respectively.
-18-
<PAGE> 20
APPENDIX 5
FUND ADVISORY FEE WAIVERS AND EXPENSE SUBSIDIES
SPECIFIED PERCENTAGES
<TABLE>
<CAPTION>
Fund Investor Institutional Class A Class M
Class Class
- ---- -------- ------------- ------- -------
<S> <C> <C> <C> <C>
Transamerica Premier Aggressive 1.40% N/A 1.50% 1.75%
Growth Fund
Transamerica Premier Small 1.40% N/A 1.50% 1.75%
Company Fund
Transamerica Premier Equity 1.50% N/A 1.60% 1.85%
Fund
Transamerica Premier Value Fund 1.20% N/A 1.30% 1.55%
Transamerica Premier Index Fund 0.25% N/A 0.50% 0.75%
Transamerica Premier Balanced 1.45% N/A 1.55% 1.80%
Fund
Transamerica Premier High Yield 0.90% 0.65% N/A N/A
Bond Fund
Transamerica Premier Bond Fund 1.30% N/A 1.40% 1.65%
Transamerica Premier Cash 0.25% N/A 0.60% 0.85%
Reserve Fund
</TABLE>
-19-
<PAGE> 21
APPENDIX 6
DATES RELATING TO INVESTMENT ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
Fund Former Former
Date of Investment Investment
Former Advisory Advisory
Investment Agreement Last Agreement Last
Commencement Advisory Approved By Approved by
of Operations Agreement Shareholders Directors
------------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
Transamerica Premier Aggressive Growth Fund 6/30/97 7/1/97 7/1/97 11/6/98
Transamerica Premier Small Company Fund 6/30/97 7/1/97 7/1/97 11/6/98
Transamerica Premier Equity Fund 10/2/95 10/2/95 10/2/95 11/6/98
Transamerica Premier Value Fund 3/31/98 7/1/97 3/31/98 11/6/98
Transamerica Premier Index Fund 10/2/95 10/2/95 10/2/95 11/6/98
Transamerica Premier Balanced Fund 10/2/95 10/2/95 10/2/95 11/6/98
Transamerica Premier High Yield Bond Fund 6/30/98 7/1/97 6/30/98 11/6/98
Transamerica Premier Bond Fund 10/2/95 10/2/95 10/2/95 11/6/98
Transamerica Premier Cash Reserve Fund 10/2/95 10/2/95 10/2/95 11/6/98
</TABLE>
-20-
<PAGE> 22
APPENDIX 7
DIRECTORS AND OFFICERS
ASSOCIATED WITH TIS
<TABLE>
<CAPTION>
Name Position with the Corporation
<S> <C>
Gary U. Rolle Board of Directors
Susan R. Hughes Treasurer and Chief Accounting Officer
</TABLE>
-21-
<PAGE> 23
APPENDIX 8
FEES PAID TO TSSC
<TABLE>
<CAPTION>
Fund Fiscal Aggregate Fee
Year End Paid to TSSC
(12b-1 Fees)
<S> <C> <C>
Transamerica Premier Aggressive Growth Fund 12/31/98 $147,716
Transamerica Premier Small Company Fund 12/31/98 $117,806
Transamerica Premier Equity Fund 12/31/98 $596,940
Transamerica Premier Value Fund 12/31/98 $16,004
Transamerica Premier Index Fund 12/31/98 $30,165
Transamerica Premier Balanced Fund 12/31/98 $104,547
Transamerica Premier High Yield Bond Fund 12/31/98 $867
Transamerica Premier Bond Fund 12/31/98 $39,239
Transamerica Premier Cash Reserve Fund 12/31/98 $6
</TABLE>
-22-
<PAGE> 24
Exhibit A
TRANSAMERICA INVESTORS, INC.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this __ day of _____, 1999, 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 series 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, (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
1
<PAGE> 25
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 Series 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
2
<PAGE> 26
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;
3
<PAGE> 27
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 of 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
4
<PAGE> 28
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 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
5
<PAGE> 29
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.
6
<PAGE> 30
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:
7
<PAGE> 31
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
8
<PAGE> 32
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.
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<PAGE> 33
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
10
<PAGE> 34
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,
11
<PAGE> 35
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.
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<PAGE> 36
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 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.
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
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<PAGE> 37
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.
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<PAGE> 38
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:
----------------------
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<PAGE> 39
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
Premier High-Yield Bond 0.55% of first $1 billion
0.52% of next $1 billion
0.50% over $2 billion
Premier Value 0.75% of first $1 billion
0.72% of next $1 billion
0.70% over $2 billion
<PAGE> 40
TRANSAMERICA INVESTORS, INC.
1150 South Olive Street
Los Angeles, CA 90015
The undersigned hereby appoints [____________] and [____________], and each of
them, as proxies of the undersigned (the "Proxies"), each with full power to
appoint his substitute, and hereby authorizes each of them to represent and vote
all the shares of common stock of Transamerica Investors, Inc. (the
"Corporation") held of record as of May 10, 1999 at the Special Meeting of
Shareholders to be held at the executive offices of the Corporation, 1150 South
Olive Street, Los Angeles, CA 90015 on June 16, 1999, at 10 a.m. (Pacific Time),
and at any and all of the adjournments(s) or postponements(s) thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENTS. In their discretion, the
Proxies are each authorized to vote upon such other business as may properly
come before the meeting and any adjournments or postponements of the meeting
unless otherwise prohibited by the undersigned. A shareholder wishing to vote in
accordance with the Board of Directors' recommendation need only sign and date
this proxy and return it in the envelope provided.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of a Special Meeting of Shareholders and the Proxy Statement with respect
thereto and hereby revoke(s) any proxy or proxies heretofore given. This proxy
may be revoked at any time before it is exercised.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND PROMPTLY RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE.
Note: Please sign exactly as the name(s) appear(s) on this proxy card. When
signing as attorney, executor, administrator, trustee, or guardian, please give
full title as such. If signing for a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
<PAGE> 41
PLEASE MARK VOTES AS IN THIS
EXAMPLE /X/
<TABLE>
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
- ---------------------------------
1. To approve the new investment advisory agreement / / / / / /
TRANSAMERICA PREMIER AGGRESSIVE between your Fund and Transamerica Investment
GROWTH FUND Services, Inc.
- ---------------------------------
</TABLE>
Mark box at right if an address change or comment has been noted on the / /
reverse side of this card
Please be sure to sign and date proxy. Date
- -------------------------------------- ---------------------------------------
Shareholder signs here Co-owner signs here
- -------------------------------------- ---------------------------------------
Please sign exactly as name appears to the left. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as such.
If signing for a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
RECORD DATE SHARES:
-2-
