As filed with the Securities and Exchange Commission on November 30, 1998
File Nos. 33-95026, 811-9060
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. 4 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 5
HOLLAND SERIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
375 Park Avenue
New York, New York 10152
(Address of Principal Executive Offices)
Registrant's Telephone Number: (800) 304-6552
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WILLIAM E. VASTARDIS, Secretary and Treasurer
Investors Capital Services, Inc. c/o Holland Series Fund, Inc.
600 Fifth Avenue, 26th Floor
New York, New York 10020
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(Name and Address of Agent for Service)
Copies to:
Gary Schpero, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
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It is proposed that this filing will become effective (check appropriate box)
/ X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485.
Registrant has registered an indefinite number of shares pursuant to Rule 24f-2
under the Investment Company Act of 1940. The Registrant completed its fiscal
year ended September 30, 1998, and filed the notice under Rule 24f-2 on
November 25, 1998 for such fiscal year.
N-1A Item No.
HOLLAND SERIES FUND, INC.
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Under the Securities Act of 1933
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Location in Prospectus and
N-1A Item No. Statement of Additional Information
Item 1. Cover Page..................................... Cover Page of Prospectus
Item 2. Synopsis....................................... Prospectus Summary, The Fund's Expenses
(in Prospectus)
Item 3. Condensed Financial
Information.................................... Financial Highlights and The Fund's
Performance (in Prospectus), Financial
Statements, (in Statement of Additional
Information)
Item 4. General Description of
Registrant..................................... Investment Objectives and Policies;
Additional Information; Investment
Limitations; Risk Factors; Appendix (in
Prospectus) Additional Information on
Portfolio Instruments and Investment
Policies, Investment Restrictions (in
Statement of Additional Information),
Item 5. Management of the Fund......................... Management of the Fund (in
Prospectus
and Statement of Additional Information)
Item 5A. Management's Discussion
of Fund Performance ........................... Not Applicable
Item 6. Capital Stock and Other
Securities..................................... Additional Information- Dividends and
Distributions; Taxes, Organization of the
Fund (in Prospectus), Shareholder
Inquiries (in Prospectus) Additional
Information--Description of Shares
(Statement of Additional Information)
Item 7. Purchase of Securities
Being Offered.................................. Purchase of Shares, Shareholder Services,
Additional Information --- Determination
of Net Asset Value (in Prospectus)
Item 8. Redemption or Repurchase....................... Redemption of Shares (in Prospectus and
Statement of Additional Information)
Item 9. Legal Proceedings.............................. Not Applicable
Location in
Part B Statement of Additional Information
Item 10. Cover Page..................................... Cover Page of Statement of
Additional
Information
Item 11. Table of Contents.............................. Table of Contents
Item 12. General Information and
History........................................ Not Applicable
Item 13. Investment Objectives and
Policies....................................... Additional Information on Portfolio
Instruments and Investment Policies;
Investment Restrictions
Item 14. Management of the
Registrant..................................... Management of the Fund
Item 15. Control Persons and
Principal Holders of
Securities..................................... Control Persons, Principal Holder of
Securities
Item 16. Investment Advisory and
Other Services................................. Management of the Fund, Additional
Information
Item 17. Brokerage Allocation........................... Portfolio Transactions and Brokerage
Item 18. Capital Stock and Other
Securities..................................... Not Applicable
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered.................................. Determination of Net Asset Value
Item 20. Tax Status..................................... Taxation
Item 21. Underwriters................................... Management of the Fund, Administrator
Item 22. Calculation of
Performance Data............................... Performance Data
Item 23. Financial Statements........................... Financial Statements
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Part C
.........Information required to be included in Part C is set
forth under the appropriate Item, so numbered, in Part C to this Registration
Statement.
HOLLAND BALANCED FUND
Holland Balanced Fund (the "Fund") is a no-load diversified portfolio
of Holland Series Fund, Inc., an open-end management investment company. The
Fund is designed to provide investors with a convenient and professionally
managed vehicle for seeking a high total investment return. Total investment
return is the aggregate of dividend and interest income and realized and
unrealized capital value changes. The Fund seeks to achieve its objective
through a combined portfolio of equity and investment grade fixed-income
securities. There can be no assurance that the Fund will achieve its investment
objective. See "Risk Factors."
Shares may be purchased directly from AMT Capital Securities, L.L.C.
(the "Distributor"), 600 Fifth Avenue, New York, NY 10020.(800) 30-HOLLAND
[800-304-6552], or from securities dealers which have entered into selected
dealer agreements with the Distributor. The minimum initial purchase is $1,000
and the minimum subsequent purchase is $500. See "Purchase of Shares." A
shareholder may redeem his or her shares at any time at their net asset value.
See "Redemption of Shares."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus is a concise statement of information about the Fund
that is relevant to making an investment in the Fund. This Prospectus should be
retained for future reference. A statement containing additional information
about the Fund, dated November 30, 1998 (the "Statement of Additional
Information"), has been filed with the Securities and Exchange Commission and
can be obtained, without charge, by calling or by writing the Distributor at the
above telephone number or address. The Statement of Additional Information is
hereby incorporated by reference into this Prospectus.
HOLLAND & COMPANY L.L.C.--INVESTMENT ADVISER
AMT CAPITAL SECURITIES, L.L.C.--DISTRIBUTOR
The date of this Prospectus is November 30, 1998.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed information
appearing elsewhere in this Prospectus and in the Statement of Additional
Information.
The Fund and Its Investment Objective
The Fund is a no-load diversified investment portfolio of the Holland
Series Fund, Inc., an open-end management investment company incorporated in
Maryland on June 27, 1995. The Fund is designed to provide investors with a
convenient and professionally managed vehicle for seeking a high total
investment return. Total investment return is the aggregate of dividend and
interest income and realized and unrealized capital value changes. The Fund
seeks to achieve its objective through a combined portfolio of equity and
investment grade fixed-income securities. There can be no assurance that the
Fund will achieve its investment objective. See "Investment Objective and
Policies."
The Investment Adviser
Holland & Company L.L.C. (the "Investment Adviser") serves as the Fund's
investment adviser. For its services as investment adviser, the Fund pays the
Investment Adviser a monthly fee at an annual rate of 0.75% of the Fund's
average daily net assets. While the advisory fee is higher than that paid by
most investment companies (which includes money market funds) the Investment
Adviser believes the advisory fee is comparable to that of other investment
companies with similar investment objectives. See "Management of the Fund."
Purchasing Shares
Shares of the Fund may be purchased without any sales charges at its net
asset value next determined after receipt of the order by submitting an Account
Application to the Distributor and either wiring federal funds to the
Distributor's "Fund Purchase Account" at Unified Advisers, Inc. (the "Transfer
Agent") or mailing a check or money order to the Transfer Agent to be deposited
in such account. Shares may be purchased directly from the Distributor or from
other securities dealers with whom the Distributor has entered into selected
dealer agreements. Investors may be charged a fee if they effect transactions in
fund shares through a broker or agent. The Fund is available for sale in all 50
states. For information about the Fund's availability, contact an account
representative at the Distributor.
The minimum initial investment is $1,000 although this minimum may be
waived from time to time at the discretion of the Fund. The minimum amount for
subsequent investment is $500 and may be waived from time to time at the
discretion of the Fund. There are no sales commissions (loads) or 12b-1 fees.
For more information, refer to "Purchase of Shares."
Redemption of Shares
Shares of the Fund may be redeemed, without charge, at the next determined
net asset value after receipt by either the Transfer Agent or Distributor of the
redemption request. There is no redemption fee. For more information, refer to
"Redemption of Shares."
Dividends and Distributions
The Fund intends to distribute its
income quarterly and capital gains annually.
All distributions are reinvested automatically,
unless otherwise specified in writing by the
investor, in shares of the Fund. See
"Additional Information" and "Shareholder
Services."
Risk Factors
Prospective Investors should consider
certain risks associated with an investment in
the Fund. See "Risk Factors."
THE FUND'S EXPENSES
The following expense table is provided to assist investors in
understanding the various costs and expenses that an investor will incur, either
directly or indirectly, as a shareholder in the Fund, which are calculated as a
percentage of average daily net assets. These are the only fund related expenses
that an investor bears.
Management fees, after waivers 0.43%
Other expenses (after expense 1.07%
reimbursement)
Total Fund operating expenses 1.50%
(after fee waivers)
See "Management of the Fund" for a description of fees and expenses. "Other
expenses" includes fees for shareholder services, custodial, administration,
dividend disbursing and transfer agency fees, legal and accounting fees,
printing costs and registration fees. The Investment Adviser has voluntarily
agreed to cap the total annual operating expenses at 1.50% (on an annualized
basis) of the Fund's average daily net assets. Without such cap, management
fees, other expenses and total annual operating expenses for the year ended
September 30, 1998 would have been 0.75%, 1.08% and 1.83%, respectively. See
"Management of the Fund."
Example: The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Fund. These amounts are based upon payments by
the Fund of operating expenses set forth in the table above, and are also based
upon the following assumptions:
A shareholder would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
After 1 year $ 15
After 3 years $ 47
After 5 years $ 82
After 10 years $179
This example should not be considered a representation of future expenses and
actual expenses may be greater or less than those shown. Moreover, while the
example assumes a 5% annual return, the Fund's performance will vary and may
result in a return greater or less than 5%.
FINANCIAL HIGHLIGHTS
The financial highlights for the period October 2, 1995 (commencement of
investment operations) to September 30, 1996, the year ended September
30, 1997, and year ended September 30, 1998, in the following table has
been audited by PricewaterhouseCoopers LLP, independent accountants. The audited
financial statements for the year ended September 30, 1998 are incorporated by
reference in the Statement of Additional Information. The financial highlights
should be read in conjunction with the financial statements which can be
obtained upon request without charge by calling (800) 304-6552.
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For the
Period From
For a share outstanding throughout the period Year Ended Year Ended October 2,1995*
September 30, September 30, to September 30,
1998 1997 1996
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Per Share Data
Net asset value, beginning of period $13.70 $11.39 $10.00
Increases From Investment Operations:
Net investment income 0.28 0.26 0.23
Net realized and unrealized gains on investments 0.05 2.30 1.33
---- ---- ----
Total from investment operations 0.33 2.56 1.56
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Dividends and Distributions From:
Net investment income (0.29) (0.25) (0.17)
Net realized gain on investments - (0.00) # -
------
Total Dividends and Distributions (0.29) (0.25) (0.17)
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Net asset value, end of period $13.74 $13.70 $11.39
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Total Return (c) 2.43% 22.71% 15.65% (a)
Ratios/Supplemental Data
Net assets, end of period (000's) $30,041 $26,788 $7,606
Ratio of expenses to average net assets after fee waivers 1.50% 1.50% 1.50% (b)
and reimbursement of other expenses
Ratio of expenses to average net assets before fee waivers 1.83% 2.55% 4.81% (b)
and reimbursements of other expenses
Ratio of net investment income to average net assets after fee 2.05% 2.31% 2.36% (b)
waivers and reimbursement of other expenses
Ratio of net investment income (loss)to average net assets before fee 1.72% 0.31% 0.96%
waivers and reimbursement of other expenses
Portfolio turnover 16.49% 5.07% 5.04%
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* Commencement of investment operations
# Rounds to less than 0.01.
(a) Not annualized
(b) Annualized
(c) Total return would have been lower had certain expenses not been waived
or reimbursed.
INVESTMENT OBJECTIVE AND POLICIES
The Fund is designed to provide investors with a convenient and
professionally managed vehicle for seeking a high total investment return. This
is a fundamental investment objective and may not be changed without the
affirmative vote of the holders of a majority of the Fund's outstanding voting
securities, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"). Total investment return is the aggregate of dividend and interest
income and realized and unrealized capital value changes. The Fund seeks to
achieve its objective through a combined portfolio of equity and investment
grade fixed-income securities. The Investment Adviser will have discretion to
determine the proportion of the Fund's portfolio that will be invested in equity
and investment grade fixed-income securities at any particular time, depending
on the Investment Adviser's view of existing and anticipated market and economic
conditions. The Investment Adviser will seek to identify promising markets,
asset classes and securities which it believes have better than average
potential for price appreciation and minimal inherent risk. A key component of
the Investment Adviser's approach is seeking to recognize investment situations
in which asset classes or individual securities have been fundamentally
mispriced by investor sentiment or other market forces. Where the Investment
Adviser believes such opportunities exist, the Fund's assets will be positioned
in an effort to produce long-term price performance. Under ordinary market
conditions, the Fund will have at least 50% of its total assets invested in
equity securities, at least 25% of its total assets invested in investment grade
fixed-income securities and may invest up to 25% of its total assets in high
quality money market securities. No assurance can be given that the Fund will be
able to achieve its investment objective.
Equity securities consist of common and preferred stock (including
convertible preferred stock), bonds, notes and debentures convertible into
common or preferred stock, stock purchases warrants and rights, equity interests
in trusts, partnerships, joint ventures or similar enterprises and American,
Global or other types of depositary receipts. Most of the equity securities
purchased by the Fund are expected to be traded on a domestic or international
stock exchange or in an over-the-counter market.Fixed-income securities in which
the Fund may invest consist of U.S. government securities, U.S. and non-U.S.
corporate debt obligations and sovereign debt obligations issued by governments
and governmental entities, including supranational organizations such as the
World Bank. The Investment Adviser will have discretion to invest in the full
range of maturities of fixed-income securities. The Fund will invest only in
instruments which are rated Baa or better by Moody's Investors Service, Inc.
("Moody's") or BBB or better by Standard & Poor's Corporation ("S&P"), or which
are determined by the Fund's investment adviser to be of quality comparable to
instruments so rated. See Appendix A for a description of bond ratings. The Fund
may invest up to one-third of its total assets in foreign securities. The Fund
also may purchase securities on a when-issued or delayed delivery basis. The
Fund attempts to reduce overall exposure to risk from declines in securities
prices by spreading its investments over many different companies in a variety
of industries.
The Fund also reserves the right to invest a portion of its assets in
high quality money market securities, for cash management purposes, pending
investment in accordance with the Fund's investment objective and policies, to
meet operating expenses and redemption requests and to meet its obligations
pursuant to its investment activities. When the Investment Adviser determines
that market conditions so warrant, the Fund may invest all of its assets in high
quality money market securities for temporary defensive purposes. Money market
securities in which the Fund may invest include obligations issued or guaranteed
by the U.S. government, its agencies or instrumentalities, obligations
(including certificates of deposit, time deposits, demand deposits and bankers'
acceptances) of banks, commercial paper and repurchase agreements with respect
to securities in which the Fund may invest. The Fund will invest only in
commercial paper that is rated A-1 or A-2 by S&P, or P-1 or P-2 by Moody's or,
if not rated, issued by companies having an outstanding debt issue rated BBB or
better by S&P, or Baa or better by Moody's. The proportion of the Fund's assets
that is invested in money market securities will vary from time to time.
The Fund's investment policies (other than its investment objective)
are not fundamental and may be changed by the Board of Directors of the Fund
(the "Directors") without the approval of shareholders.
INVESTMENT LIMITATIONS
The Fund may not:
(1) purchase the securities of any one issuer, other than securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
if immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in such issuer or the Fund would own more than
10% of the outstanding voting securities of such issuer, except that up to 25%
of the value of the Fund's total assets may be invested without regard to this
restriction;
(2) borrow money (including entering into reverse repurchase agreements)
except as a temporary measure for extraordinary or emergency purposes, and in no
event in excess of 15% of the value of the Fund's total assets at the time the
borrowing is made, except that for the purpose of this restriction, short-term
credits necessary for settlement of securities transactions are not considered
borrowings (the Fund will not purchase any securities at any time while such
borrowings exceed 5% of the value of its total assets); or
(3) invest more than 25% of the total assets of the Fund in the securities
of issuers having their principal activities in any particular industry, except
for obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities or by any state, territory or any possession of the United
States or any of their authorities, agencies, instrumentalities or political
subdivisions, or with respect to repurchase agreements collateralized by any of
such obligations (for purposes of this restriction, supranational issuers will
be considered to comprise an industry as will each foreign government that
issues securities purchased by the Fund.
The limitations contained above may be changed only with the
affirmative vote of the holders of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act. The percentage limitations contained
above as well as elsewhere in this Prospectus and in the Statement of Additional
Information apply only at the time of purchase and the Fund will not be required
to dispose of securities upon subsequent fluctuations in market value.
RISK FACTORS
Changes in Interest Rates
The market value of the Fund's fixed-income securities and the portion
of the Fund's net asset value attributable to fixed-income securities will
generally fall when interest rates rise and rise when interest rates fall. In
general, fixed-income securities with longer maturities will be subject to
greater volatility resulting from interest rate fluctuations than will
fixed-income securities with shorter maturities.
Foreign Securities
Investment in securities of foreign issuers may involve risks arising
from non-U.S. accounting, auditing and financial reporting standards and less
publicly available information about issuers, from restrictions on foreign
investment and repatriation of capital, from differences between U.S. and
foreign securities markets, including less volume, much greater price volatility
in and relative illiquidity of foreign securities markets, different trading and
settlement practices and less government supervision and regulation, from
changes in currency exchange rates, from high and volatile rates of inflation,
from economic, social and political conditions and, as with domestic
multinational corporations, from fluctuating interest rates. Additionally,
certain amounts of the Fund's income may be subject to withholding taxes in the
foreign countries in which it invests.
Repurchase Agreements
The Fund may invest in repurchase agreements. Repurchase agreements
are investments which are used from time to time to obtain a return on available
cash. Entering into a repurchase agreement involves the acquisition by the Fund
from a broker-dealer or bank of an underlying security, most typically a debt
instrument, subject to the obligation of the seller to repurchase, and the Fund
to resell, usually not more than one week after its purchase, the instrument at
a fixed price in excess of the Fund's purchase price, such excess representing
the Fund's return on the repurchase agreement. Transaction costs may be incurred
by the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, in the
event of a default by or if bankruptcy proceedings are commenced with respect
to, the seller of the securities, realization on the securities by the Fund may
be delayed or limited and the Fund could experience a loss.
Securities with Limited Trading Market
The Fund may invest up to 15% of the value of its total assets in
illiquid securities, such as "restricted securities" which are illiquid, and
securities that are not readily marketable. If the Fund has a substantial
position in securities with limited trading markets, its activities could have
an adverse effect upon the liquidity and marketability of those securities.
Investments in securities which are "restricted" may involve added expenses
should the Fund be required to bear registration costs with respect to such
securities and could involve delays in disposing of such securities which might
have an adverse effect upon the price and timing of sales of such securities and
the liquidity of the Fund with respect to redemptions. Restricted securities and
securities for which there is a limited trading market may be significantly more
difficult to value due to the unavailability of reliable market quotations for
such securities, and investment in such securities may have an adverse impact on
net asset value.
Dependence on Certain Individual
Michael Holland is primarily responsible for the day-to-day management
of the Fund's portfolio. The loss of Michael Holland's services (due to
termination of employment, death, disability or otherwise) could adversely
affect the conduct of the Fund's business and its prospects for the future.
There can be no assurance that a suitable replacement could be found for Michael
Holland.
Borrowing
The Fund may borrow up to 15% of the value of its total assets in
certain limited circumstances. Borrowing can increase the opportunity for
capital appreciation when security prices rise and increase the risk of loss
when prices decline. Interest costs of borrowing are an expense that otherwise
would not be incurred and this could reduce the net investment income of the
Fund.
MANAGEMENT OF THE FUND
Board of Directors
The Board of Directors of the Fund consists of five individuals, four
of whom are not "interested persons" of the Fund as defined in the 1940 Act.
The Directors of the Fund are responsible for the overall
supervision of the operations of the Fund and perform the various duties imposed
on the directors of investment companies by the 1940 Act.
Advisory Arrangements
The Investment Adviser acts as the investment adviser to the Fund and
provides the Fund with management and investment advisory services. The
Investment Adviser also offers portfolio management and portfolio analysis
services to individuals and institutions.
The investment advisory agreement with the Investment Adviser (the
"Investment Advisory Agreement") provides that, subject to the direction of the
Board of Directors of the Fund, the Investment Adviser is responsible for the
actual management of the Fund's portfolio. The responsibility for making
decisions to buy, sell or hold a particular security rests with the Investment
Adviser, subject to review by the Board of Directors. The Investment Adviser
also is obligated to provide all the office space, facilities, equipment and
personnel necessary to perform its duties under the Investment Advisory
Agreement.
The Investment Adviser receives monthly compensation at the annual
rate of 0.75% of the average daily net assets of the Fund. For the years ended
September 30, 1998, 1997, and 1996, the investment advisory fee, net of waivers,
was $122,972, $0 and $0, respectively. The Investment Adviser may waive all
or part of its fee from time to
time in order to increase the Fund's net income available for distribution to
shareholders. The Fund will not be required to reimburse the Investment Adviser
for any advisory fees waived. In addition, the Investment Adviser has
voluntarily agreed to cap total operating expenses at 1.50%(on an annualized
basis) of the Fund's average daily net assets. The Investment Adviser may from
time to time, at its own expense, provide compensation to certain selected
dealers for performing administrative services for their customers. These
services include maintaining account records, processing orders to purchase and
redeem Fund shares and responding to certain customer inquiries. Such
compensation does not represent an additional expense to the Fund or its
shareholders, since it will be paid from the assets of the Investment Adviser.
The Fund is responsible for paying certain expenses incurred in its
operations, including, among other things, the investment advisory and
administrative fees, legal and audit fees, unaffiliated Directors' fees and
expenses, custodian and transfer agency fees, certain insurance premiums,
accounting and pricing costs, federal and state registration fees, the costs of
issuing and redeeming shares, costs of shareholder meetings, any extraordinary
expenses and certain of the costs of printing proxies, shareholders reports,
prospectuses and statements of additional information. The Fund also pays for
brokerage fees and commissions in connection with the purchase and sale of
portfolio securities.
The Investment Adviser is a limited liability company organized under
the laws of New York State and it is a registered investment adviser under the
Investment Advisers Act of 1940, as amended.The Investment Adviser is controlled
by Michael Holland, its managing member and owner of a 99% interest in
the limited liability company. Michael Holland is primarily responsible for
the day-to-day
management of the Fund's portfolio. Michael Holland's money management and
entrepreneurial skills have been employed on behalf of a number of leading asset
management and investment banking companies. At The Blackstone Group from
January 1994 through June 1995, he was a General Partner and Chief Executive
Officer of Blackstone Alternative Asset Management, where he supervised the
management of the firm's partnership investment fund. Prior to that, he served
as Vice Chairman at Oppenheimer & Co., from March 1992 through January 1994,
where he helped launch and manage a number of closed-end mutual funds.
From 1989 to 1992 Michael Holland was Chairman & Chief Executive
Officer of Salomon Brothers Asset Management Inc. Before that he was President
and Chief Executive Officer of First Boston Asset Management Corporation, where
client assets grew to approximately $6 billion under his leadership. A
graduate of Harvard College and Columbia University Graduate School
of Business Administration, Michael Holland began his career at J.P. Morgan
& Co. in 1968.
Michael Holland makes frequent appearances on television programs such
as Moneyline with Lou Dobbs, CNN, Bloomberg Business News and CNBC and is
perhaps best known as a regular panelist on Wall $treet Week
with Louis Rukeyser.
Administrator
Investors Capital Services, Inc., (the "Administrator") acts as
the Fund's administrator pursuant to an
administration agreement (the "Administration Agreement"). Pursuant to the
Administration Agreement, the Administrator is responsible for providing
administrative services to the Fund and assists in managing and supervising all
aspects of the general day-to-day business activities and operations of the Fund
other than investment advisory activities, including certain accounting,
clerical, bookkeeping, custodial, transfer agency, dividend
disbursing, compliance and related services, Blue Sky compliance, corporate
secretarial services and assistance in the preparation and filing of tax returns
and reports to shareholders and the Securities and Exchange Commission
(the "Commission"). The Fund pays the Administrator a
monthly fee at the annual rate of 0.15% of the Fund's average daily net assets
and the Administrator is entitled to reimbursement from the Fund for its
out-of-pocket expenses incurred under the Administration Agreement. Pursuant to
the Administration Agreement, the Administrator will be paid a minimum annual
fee of $50,000 for services provided to the Fund.
Transfer Agent
Unified Advisers, Inc. acts as the Fund's
Transfer Agent pursuant to a transfer agency, dividend disbursing agency and
shareholder servicing agency agreement (the "Transfer Agent Agreement").
Pursuant to the Transfer Agent Agreement, the Transfer Agent is responsible for
the issuance, transfer and redemption of shares and the opening and maintenance
of shareholder accounts. The Fund pays the Transfer Agent a monthly fee of $1.50
per shareholder account subject to a minimum of $1,500 per month and the
Transfer Agent is entitled to reimbursement from the Fund for out-of-pocket
expenses incurred by the Transfer Agent under the Transfer Agent Agreement.
Year 2000 Problem
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Investment Adviser, Administrator and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The
Investment Adviser and the Administrator are taking steps that they believe are
reasonably designed to address the Year 2000 Problem with respect to computer
systems that they use and to obtain reasonable assurances that comparable steps
are being taken by the Fund's other major service providers. At this time,
however, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the Fund nor can there be any assurance that the Year 2000
Problem will not have an adverse effect on the companies whose securities are
held by the Fund or on global markets or economies, generally.
PURCHASE OF SHARES
The Fund is offering its shares at a public offering price equal to
the net asset value. The Fund has no sales charge for purchases of its shares.
Investors may be charged a fee if they effect transactions in fund shares
through a broker or agent. Shares may be purchased directly from the Distributor
or from other securities dealers with whom the Distributor has entered into
selected dealer agreements. The minimum initial investment of the Fund is
$1,000. The minimum subsequent purchase is $500. The Fund reserves the right to
waive the minimum initial investment amount and minimum subsequent purchase
amount.
The offering of shares of the Fund is continuous and purchases of shares of
the Fund may be made on any day the New York Stock Exchange is open for business
(a "Business Day"). The Fund offers shares at a public offering price equal to
the net asset value next determined after receipt of a purchase order by the
Transfer Agent. Any order may be rejected by the Distributor, Transfer Agent or
the Fund. Neither the Distributor, Transfer Agent nor the selected dealers are
permitted to withhold placing orders to benefit themselves by a price change.
The Fund reserves the right to suspend the sale of its shares to the public in
response to conditions in the securities market or otherwise, and may thereafter
resume the sale of its shares from time to time. Shares purchased will be held
in the shareholder's account by the Transfer Agent. Share certificates will not
be issued by the Transfer Agent.
Purchases of shares can be made by wire transfer, check or money order.
Share purchase orders are effective on the date the completed Account
Application and check are received and date-stamped by the Transfer Agent. The
shareholder's bank may impose a charge to execute a wire transfer. The wiring
instructions for purchasing shares of the Fund are:
Fifth Third Bank
Cincinnati, OH
ABA # 042000314
Attn: Fifth Third - Central Indiana
Acct: 747-88013
Benf: Holland Balanced Fund
F/F/C (Shareholder's Account at Fund)
Share purchase orders made with a check or money order should be mailed to the
following address:
Holland Balanced Fund
c/o Unified Advisers, Inc.
P.O. Box 6110
Indianapolis, IN 46206-6110
For a share purchase order to become effective on a particular Business Day,
prior to the close of the New York Stock Exchange (normally 4:00 p.m. Eastern
time), (i) in the case of a wire transfer payment, a purchaser must call
the Transfer Agent at (800)249-0763 to inform the Fund of the incoming wire
transfer or (ii) in the case of payment by check or money order, a complete
share purchase order must be actually received by the Transfer Agent. If the
Fund receives notification of a wire transfer or a complete share purchase order
after the above-mentioned cut-off times, such purchase order shall be executed
as of the next determined net asset value.
REDEMPTION OF SHARES
The Fund will redeem all full and fractional shares of the Fund upon
request of shareholders. The redemption price is the net asset value per share
next determined after receipt by the Transfer Agent or Distributor (or selected
dealers) of proper notice of redemption as described below. Shareholders
liquidating their holdings will receive upon redemption all dividends reinvested
through the date of redemption. If notice of redemption is received by the
Transfer Agent or Distributor (or selected dealers) on any Business Day, the
redemption will be effective on the date of receipt. Payment will ordinarily be
made by wire on the next Business Day, but, in any case, within no more than
seven Business Days from the date of receipt. If the notice is received on a day
that is not a Business Day or after the above-mentioned cut-off times, the
redemption notice will be deemed received as of the next Business Day. The value
of shares at the time of redemption may be more or less than the shareholder's
cost depending on the market value of the securities held by the Fund at such
time.
A shareholder may elect to receive payment upon redemption of their
shares in the form of a wire or check. There is no charge imposed by the Fund to
redeem shares of the Fund; however, in the case of a redemption by wire, a
shareholder's bank may impose its own wire transfer fee for receipt of the wire.
Redemptions may be executed in any amount requested by the shareholder up to the
amount such shareholder has invested in the Fund.
A shareholder wishing to redeem shares may do so by mailing proper
notice of redemption directly to the Transfer Agent, Unified Advisers, Inc.,
P.O. Box 6110, Indianapolis, IN 46206-6110. Proper notice of redemption may be
accomplished by a written letter requesting redemption. The notice requires the
signature of all persons in whose names the shares are registered, signed
exactly as their names appear on the Transfer Agent's register. The signatures
on the notice must be guaranteed by a national bank or other bank which is a
member of the Federal Reserve System (not a savings bank) or by a member firm of
any national or regional securities exchange or other eligible guarantor
institution. Notarized signatures are not sufficient. In certain instances, the
Transfer Agent may require additional documents such as, but not limited to,
trust instruments, death certificates, appointments as executor or administrator
or certificates of corporate authority. For shareholders redeeming directly with
the Transfer Agent, payment will be mailed within seven days of receipt of a
proper notice of redemption. The Fund reserves the right to reject any order for
redemption.
Redemption by Wire
To redeem shares, a shareholder or any authorized agent (so designated
on the Account Application Form) must provide the Transfer Agent or Distributor
(or selected dealers) with the dollar or share amount to be redeemed, the
account to which the redemption proceeds should be wired (which account shall
have been previously designated by the shareholder on its Account Application
Form), the name of the shareholder and the shareholder's account number.
A shareholder may change its authorized agent or the account
designated to receive redemption proceeds at any time by writing to the Transfer
Agent or Distributor (or selected dealers) with an appropriate signature
guarantee. Further documentation may be required when deemed appropriate by the
Transfer Agent.
Telephone Redemption
A shareholder may request redemption by calling the Transfer Agent at
(800) 249-0763 or the Distributor at (800) 30-HOLLAND [1-800-304-6552] (or
selected dealers at their number). Telephone redemption is made available to
shareholders of the Fund on the Account Application Form. Shareholders should
realize that by making redemption requests by telephone, they may be giving up a
measure of security that they may have if they were to redeem their shares in
writing. The Fund reserves the right to refuse a telephone request for
redemption if it is believed advisable to do so. Procedures for redeeming shares
by telephone may be modified or terminated at any time by the Fund. Neither the
Fund nor the Transfer Agent will be liable for following redemption instructions
received by telephone, which are reasonably believed to be genuine, and the
shareholder will bear the risk of loss in the event of unauthorized or
fraudulent telephone instructions. The Fund and the Transfer Agent will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine. The Fund and/or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent instructions in the absence of following these
procedures. The Fund or the Transfer Agent may require personal identification
codes. Checks will be made payable to the registered shareholders and sent to
the address of record on file with the Transfer Agent. Payments by wire will
only be made to the registered holders through pre-existing bank account
instructions. No bank instruction changes will be accepted via telephone.
Small Accounts
Under the Fund's present policy, it reserves the right to redeem upon
not less than 30 days' notice, the shares in an account which has a value of
$500 or less if the reduction in value is the result of shareholder redemptions
or transfers and not as a result of a decline in the net asset value. However,
any shareholder affected by the exercise of this right will be allowed to make
additional investments prior to the date fixed for redemption to avoid
liquidation of the account.
THE FUND'S PERFORMANCE
Total Return
From time to time, the Fund may advertise certain information about
its performance. The Fund may present its "average annual total return" over
various periods of time. Such total return figures show the average annual
percentage change in value of an investment in the Fund from the beginning date
of the measuring period to the end of the measuring period. These figures
reflect changes in the price of the Fund's shares and assume that any income
dividends and/or capital gains distributions made by the Fund during the period
were reinvested in shares of the Fund. Figures may be given for the most current
one-, five- and ten-year periods (or the life of the Fund, if it has not been in
existence for any such period) and may be given for other periods as well. When
considering "average" total return figures for periods longer than one year, it
is important to note that the Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
In addition, the Fund may make available information as to its respective
"yield" and "effective yield" over a thirty-day period, as calculated in
accordance with the Commission's prescribed formula. The "effective yield"
assumes that the income earned by an investment in the Fund is reinvested, and
will therefore be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.
Furthermore, in reports or other communications to shareholders or in
advertising material, the Fund may compare its performance with that of other
mutual funds as listed in the rankings prepared by Lipper Analytical Services,
Inc. or similar independent services which monitor the performance of mutual
funds, other industry or financial publications or financial indices such as the
Standard & Poor's Composite Index of 500 Stocks or a composite benchmark index.
It is important to note that the total return figures are based on historical
earnings and are not intended to indicate future performance.
SHAREHOLDER SERVICES
The Fund offers a number of shareholder services designed to
facilitate investment in its shares. Full details as to each of such services,
copies of the various plans described below and instructions as to how to
participate in the various services or plans, or how to change options with
respect thereto, can be obtained from the Fund or the Distributor.
Investment Account. Each shareholder whose account is maintained at
the Transfer Agent has an Investment Account and will receive statements from
the Transfer Agent after each share transaction, including reinvestment of
dividends and capital gains distributions, showing the activity in the account
since the beginning of the year. Shareholders may make additions to their
Investment Account at any time by mailing a check directly to the Transfer
Agent.
Automatic Investment Plan. An investor who opens an account and wishes
to make subsequent, periodic investments in a Fund by electronic funds transfer
from a bank account may establish an Automatic Investment Plan on the account.
The investor specifies the frequency (monthly, quarterly or yearly) and the
automatic investment amount ($50 or more).
Automatic Clearing House Purchases. An investor may, at his or her
request, make additional investments into the Fund by giving his or her bank a
voided check with pre-arranged instructions to withdraw funds from his or her
bank account and deposit such funds into his or her Holland Balanced Fund
account.
Automatic Reinvestment of Dividends and Capital Gains Distributions.
All dividends and capital gains distributions are reinvested automatically in
full and fractional shares of the Fund, without sales charge, at the net asset
value per share next determined on the ex-dividend date of such distribution. A
shareholder may at any time, by written notification to the Transfer Agent,
elect to have subsequent dividends or both dividends and capital gains paid in
cash rather than reinvested, in which event payment will be mailed on the
payment date.
IRAs. A prototype IRA is available generally for all working
individuals who receive compensation (which for self-employed individuals
includes earned income) for services rendered and for all individuals who
receive alimony or separate maintenance payments pursuant to a divorce or
separation instrument. Contributions to an IRA made available by the Fund may be
invested in shares of the Fund. Shareholders should consult with a financial
adviser regarding an IRA.
Shareholders may inquire about their Fund accounts by
calling the Transfer Agent at (800) 249-0763. Also, shareholders can receive the
net asset value per share of the Fund by calling the toll-free number.
ADDITIONAL INFORMATION
Dividends and Distributions
It is the Fund's intention to distribute all its net investment
income, if any. Dividends from such net investment income are paid quarterly.
All net realized long-term or short-term capital gains, if any, are
distributed to
the Fund's shareholders at least annually. Dividends and distributions will be
reinvested automatically in shares of the Fund, without sales charge, at
the net asset value per share next determined on the
ex-dividend date of such distribution.. Shareholders may elect in writing
to receive any such
dividends or distributions, or both, in cash. Dividends and distributions are
taxable to shareholders as discussed below whether they are reinvested in shares
of the Fund or received in cash.
Determination of Net Asset Value
The net asset value of the shares of the Fund is determined once daily
as of the time of the close of regularly scheduled trading on the New York Stock
Exchange on each day on which such Exchange is open for trading. The net asset
value per share is computed by dividing the sum of the value of the securities
held by the Fund plus any cash or other assets (including interest and dividends
accrued but not yet received) minus all liabilities (including accrued expenses)
by the total number of shares outstanding at such time, rounded to the nearest
cent. Expenses, including the investment advisory fees payable to the Investment
Adviser, are accrued daily.
Portfolio securities which are traded on stock exchanges are valued at
the last sale price as of the close of business on the day the securities are
being valued, or, lacking any sales, at the mean between closing bid and asked
prices. Securities traded in the over-the-counter market, including money market
securities, are valued at the most recent bid prices as obtained from one or
more dealers that make markets in the securities. Money market securities with
maturities of sixty days or less are valued at amortized cost which approximates
market value. Portfolio securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest and most
representative market. Securities that are primarily traded on foreign exchanges
generally are valued at the preceding closing values of such securities on their
respective exchanges, except that when an occurrence subsequent to the time a
value was so established is likely to have changed such value, then the fair
value of those securities may be determined by consideration of other factors or
under the direction of the Board of Directors. In valuing assets, prices
denominated in foreign currencies are converted to U.S. dollar equivalents at
the current exchange rate. Securities may be valued by independent pricing
services which use prices provided by market-makers or estimates of market
values obtained from yield data relating to instruments or securities with
similar characteristics. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund.
Taxes
The following discussion is only a brief summary of some of the important
tax considerations affecting the Fund and its shareholders. No attempt is made
to present a detailed explanation of all federal, state, local and foreign
income tax considerations, and this discussion is not intended as a substitute
for careful tax planning. Accordingly, potential investors are urged to consult
their own tax advisers with specific reference to their own tax situation.
If in any year the Fund should fail to
qualify as a regulated investment company, the Fund would be subject to federal
income tax in the same manner as an ordinary corporation and distributions to
shareholders would be taxable to such holders as ordinary income to the extent
of the earnings and profits of the Fund. Such distributions qualify for the
dividends-received deduction available to corporate shareholders. Distributions
in excess of earnings and profits would be treated as a tax-free return of
capital, to the extent of a holder's basis in its shares, and any excess, as a
long- or short-term capital gain.
Distributions paid by the Fund from net investment income are
designated by the Fund as "ordinary income dividends" and, whether paid in cash
or reinvested in additional shares, will be taxable to Fund shareholders that
are otherwise subject to tax as ordinary income. A portion of the Fund's
ordinary income dividends may be eligible for the dividends-received deduction
for corporations if certain requirements are met. Distributions made from the
Fund's net capital gain which are designated by the Fund as "capital gains
dividends" are taxable to shareholders as long-term capital gains, regardless of
the length of time the shareholder has owned Fund shares. Shareholders receiving
distributions from the Fund in the form of additional shares will be treated for
federal income tax purposes as receiving a distribution in an amount equal to
the net asset value of the additional shares on the date of such a distribution.
Gain or loss, if any, recognized on the sale or other disposition of
shares of the Fund will be taxed as capital gain or loss if the shares are
capital assets in the shareholder's hands. Generally, a shareholder's gain or
loss will be a long-term gain or loss if the shares have been held for more than
one year. The maximum tax rate on any long-term capital gain on securities held
for more than 12 months is 20%. If a shareholder sells or otherwise disposes of
a share of the Fund before holding it for more than six months, any loss on
the sale or other disposition of such share shall be treated as a long-term
capital loss to the extent of any capital gain dividends received by the
shareholder with respect to such share. A loss realized on a sale or
exchange of shares may be disallowed if other shares are acquired within a
61-day period beginning 30 days before and ending 30 days after the date that
the shares are disposed of.
Dividends and distributions by the Fund are generally taxable to the
shareholders at the time the dividend or distribution is made. Any dividend
declared in October, November or December of any year, however, that is payable
to shareholders of record on a specified date in such months will be deemed to
have been received by the shareholders and paid by the Fund on December 31 of
such year in the event such dividends are actually paid during January of the
following year.
The Fund may be required to withhold federal income tax at a rate of
31% ("backup withholding") from dividends and redemption proceeds paid to
non-corporate shareholders. This tax may be withheld from dividends if (i) the
shareholder fails to furnish the Fund with the shareholder's correct taxpayer
identification number, (ii) the Internal Revenue Service ("IRS") notifies the
Fund that the shareholder has failed to report properly certain interest and
dividend income to the IRS and to respond to notices to that effect, or (iii)
when required to do so, the shareholder fails to certify that he or she is not
subject to backup withholding.
Organization of the Fund
The Fund is a diversified portfolio of Holland Series Fund, Inc. (the
"Series Fund"), an open-end management investment company, which was
incorporated under Maryland law on June 27, 1995. The Series Fund has an
authorized capital of 1,000,000,000 shares of Common Stock, par value $0.01 per
share. Holland Balanced Fund currently is the only organized portfolio. The
Board of Directors may, in the future, authorize the issuance of additional
classes of capital stock representing shares of additional investment
portfolios. All shares of each fund will have equal voting rights and each
shareholder is entitled to one vote for each full share held and fractional
votes for fractional shares held and will vote on the election of Directors and
any other matter submitted to a shareholder vote. The Series Fund is not
required and does not intend to hold meetings of shareholders. The Fund has
undertaken to call a meeting of shareholders upon a written request of 10% of
the Fund's outstanding shares, for the purpose of voting on removal of one or
more directors and the Fund will assist shareholder communications with regard
to such a meeting, as provided under Section 16(c) of the 1940 Act. Shares of
the Fund will, when issued, be fully paid and non-assessable and have no
preemptive or conversion rights. Each share is entitled to participate equally
in dividends and distributions declared by the Fund and in the net assets of the
Fund on liquidation or dissolution after satisfaction of outstanding
liabilities.
Shareholder Inquiries
Shareholder inquiries may be addressed to the Fund or the Distributor
at the addresses or telephone numbers set forth on the cover page of this
Prospectus.
APPENDIX A
Description of Bond Ratings*
Moody's Investors Service, Inc.
Aaa: Bonds which are rated Aaa are judged to be of the best quality
and carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are 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 or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A 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 which are rated Baa 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.
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.
Standard & Poor's Corporation
AAA: Debt rated AAA has the highest
rating assigned by Standard & Poor's. Capacity
to pay interest and repay principal is
extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and 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: Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
APPENDIX B
Description of Commercial Paper Ratings
Moody's Investors Service, Inc.
Prime 1--Issuers (or related supporting institutions) rated "Prime-1"
have a superior ability for repayment of senior short-term debt obligations.
"Prime-1" repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers (or related supporting institutions) rated "Prime-2"
have a strong ability for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
Standard & Poor's Corporation
A-1--This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
Table of Contents
Page
HOLLAND BALANCED FUND
PROSPECTUS SUMMARY................................... 2
THE FUND'S EXPENSES.............................. 3
FINANCIAL
HIGHLIGHTS..................................... 4
INVESTMENT OBJECTIVE AND POLICIES.................... 6
INVESTMENT LIMITATIONS............................... 6
RISK FACTORS......................................... 7
MANAGEMENT OF THE FUND............................... 6
PURCHASE OF SHARES................................... 7
REDEMPTION OF SHARES................................. 9
THE FUND'S PERFORMANCE............................... 12
SHAREHOLDER SERVICES................................. 13
ADDITIONAL INFORMATION............................... 13
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND,
THE DISTRIBUTOR OR THE INVESTMENT ADVISER. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
- --------
* As described by the rating companies themselves.
STATEMENT OF ADDITIONAL INFORMATION
HOLLAND BALANCED FUND
600 Fifth Avenue, New York, New York 10020
Phone No. (800) 30-HOLLAND [800-304-6552]
----------------
Holland Balanced Fund (the "Fund") is a no-load diversified
portfolio of Holland Series Fund, Inc., an open-end management investment
company. The Fund is designed to provide investors with a convenient and
professionally managed vehicle for seeking a high total investment return. Total
investment return is the aggregate of dividend and interest income and realized
and unrealized capital value changes. The Fund seeks to achieve high total
investment return from a combined portfolio of equity and investment grade
fixed-income securities. There can be no assurance that the Fund's objective
will be attained.
----------------
This Statement of Additional Information of the Fund is not a
prospectus and should be read in conjunction with the prospectus of the Fund,
dated November 30, 1998 (the "Prospectus"), which has been filed with the
Securities and Exchange Commission and can be obtained, without charge, by
calling or by writing the Fund at the above telephone number or address. This
Statement of Additional Information has been incorporated by reference into the
Prospectus.
----------------
Holland & Company L.L.C. - Investment Adviser
AMT Capital Securities, L.L.C. - Distributor
----------------
The date of this Statement of Additional Information is November 30, 1998.
Table of Contents
Page
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS AND INVESTMENT POLICIES..... 3
INVESTMENT RESTRICTIONS..................................................... 4
MANAGEMENT OF THE FUND...................................................... 6
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES......................... 8
REDEMPTION OF SHARES........................................................ 9
PORTFOLIO TRANSACTIONS AND BROKERAGE......................................... 9
DETERMINATION OF NET ASSET VALUE............................................ 10
PERFORMANCE DATA............................................................ 10
SHAREHOLDER SERVICES........................................................ 11
DIVIDENDS AND DISTRIBUTIONS................................................. 12
TAXATION.................................................................... 12
ADDITIONAL INFORMATION...................................................... 16
FINANCIAL STATEMENTS............................................ ............17
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS AND
INVESTMENT POLICIES
Repurchase Agreements
.........The Fund may enter into repurchase
agreements. A repurchase agreement is a
transaction in which the seller of a security
commits itself at the time of the sale to
repurchase that security from the buyer at a
mutually agreed upon time and price. Repurchase
agreements may be characterized as loans which are
collateralized by the underlying securities. The
Fund will enter into repurchase agreements only
with respect to obligations that could otherwise be
purchased by the Fund. The Fund will enter into
repurchase agreements only with dealers, domestic
banks or recognized financial institutions which,
in the opinion of the investment adviser, Holland &
Company, L.L.C. (the "Investment Adviser") based on
guidelines established by the Fund's Board of
Directors (the "Directors"), are deemed creditworthy.
The Investment
Adviser will monitor the value of the securities
underlying the repurchase agreement at the time the
transaction is entered into and at all times during
the term of the repurchase agreement to ensure that
the value of the securities always equals or
exceeds the repurchase price. The Fund requires
that additional securities be deposited if the
value of the securities purchased decreases below
their resale price and does not bear the risk of a
decline in the value of the underlying security
unless the seller defaults under the repurchase
obligation. In the event of default by the seller
under the repurchase agreement, the Fund could
experience losses that include: (i) possible
decline in the value of the underlying security
during the period while the Fund seeks to enforce
its rights thereto; (ii) additional expenses to the
Fund for enforcing those rights; (iii) possible
loss of all or part of the income or proceeds of
the repurchase agreement; and (iv) possible delay
in the disposition of the underlying security
pending court action or possible loss of rights in
such securities. Repurchase agreements with
maturities of more than seven days will be treated
as illiquid securities by the Fund.
Firm Commitments and When-Issued Securities
.........The Fund may purchase securities
on a firm commitment basis, including when-issued
securities. Securities purchased on a firm
commitment basis are purchased for delivery beyond
the normal settlement date at a stated price and
yield. No income accrues to the purchaser of a
security on a firm commitment basis prior to
delivery. Such securities are recorded as an asset
and are subject to changes in value based upon
changes in the general level of interest rates.
Purchasing a security on a firm commitment basis
can involve a risk that the market price at the
time of delivery may be lower than the agreed upon
purchase price, in which case there could be an
unrealized loss at the time of delivery. The Fund
will only make commitments to purchase securities
on a firm commitment basis with the intention of
actually acquiring the securities, but may sell
them before the settlement date if it is deemed
advisable. The Fund will establish a segregated
account in which it will maintain liquid assets in
an amount at least equal in value to the Fund's
commitments to purchase securities on a firm
commitment basis. If the value of these assets
declines, the Fund will place additional liquid
assets in the account on a daily basis so that the
value of the assets in the account is equal to the
amount of such commitments.
Borrowing
.........The Fund may borrow in certain
limited circumstances. See "Investment
Limitations." Borrowing creates an opportunity for
increased return, but, at the same time, creates
special risks. For example, borrowing may
exaggerate changes in the net asset value of the
Fund's portfolio. Although the principal of any
borrowing will be fixed, the Fund's assets may
change in value during the time the borrowing is
outstanding. The Fund may be required to liquidate
portfolio securities at a time when it would be
disadvantageous to do so in order to make payments
with respect to any borrowing, which could affect
the investment manager's strategy and the ability
of the fund to comply with certain provisions of
the Internal Revenue Code of 1986, as amended (the
"Code") in order to provide "pass-though" tax
treatment to shareholders. Furthermore, if the
Fund were to engage in borrowing, an increase in
interest rates could reduce the value of the Fund's
shares by increasing the Fund's interest expense.
Warrants
.........The Fund may invest in warrants,
which are securities permitting, but not
obligating, their holder to subscribe for other
securities. Warrants do not carry the right to
dividends or voting rights with respect to their
underlying securities, and they do not represent
any rights in assets of the issuer. An investment
in warrants may be considered speculative. In
addition, the value of a warrant does not
necessarily change with the value of the underlying
securities and a warrant ceases to have value if it
is not exercised prior to its expiration date.
Foreign Securities
.........In addition to risks identified in the Prospectus, other
investment risks associated with foreign securities include the possible seizure
or nationalization of foreign assets and the possible establishment of exchange
controls, expropriation, confiscatory taxation, other foreign governmental laws
or restrictions which might affect adversely payments due on securities held by
the Fund, the lack of extensive operating experience of eligible foreign
subcustodians and legal limitations on the ability of the Fund to recover assets
held in custody by a foreign subcustodian in the event of the subcustodian's
bankruptcy. Brokerage commissions and other transaction costs on foreign
securities exchanges are generally higher than in the United States. Finally, in
the event of a default in any such foreign obligations, it may be more difficult
for the Fund to obtain or enforce a judgment against the issuers of such
obligations.
Sovereign Debt
.........Investment in certain debt
obligations issued or guaranteed by a government,
its agencies or instrumentalities ("Sovereign
Debt") involves a high degree of risk. The
governmental entity that controls the repayment of
Sovereign Debt may not be willing or able to repay
the principal and/or interest when due in
accordance with the terms of such debt. Holders of
Sovereign Debt, including the Fund, may be
requested to participate in the rescheduling of
such debt and to extend further loans to
governmental entities. A foreign sovereign itself
would not be subject to traditional bankruptcy
proceedings by which Sovereign Debt on which it has
defaulted may be collected in whole or in part, and
certain sovereign entities may not be subject to
such proceedings. Further, the Fund may have
difficulty disposing of certain Sovereign Debt
obligations, as there may be a thin trading market
for such securities.
INVESTMENT RESTRICTIONS
.........In addition to the investment
restrictions set forth in the Prospectus, the Fund
has adopted the following restrictions and policies
relating to the investment of its assets and its
activities. The Fund may not:
1. Make investments for the
purpose of exercising control or
management.
2. Purchase securities of other investment companies except as permitted
under the Investment Company Act of 1940, as amended (the "1940 Act")
or in connection with a merger, consolidation,
acquisition or reorganization.
3. Purchase or sell real estate, provided that the Fund may invest in
securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein.
4. Purchase or sell commodities or commodity contracts.
5. Underwrite securities of other issuers except insofar as the Fund may
be deemed an underwriter under the Securities Act of 1933, as amended
(the "Securities Act") in selling portfolio securities.
6. Make loans, except that
(a) the Fund may purchase and hold debt
securities in accordance with its
investment objective(s) and policies, (b)
the Fund may enter into repurchase
agreements with respect to portfolio
securities, subject to applicable
limitations of its investment policies,
and (c) delays in the settlement of
securities transactions will not be
considered loans.
7. Purchase any securities on margin, except that the Fund may (i)
purchase delayed delivery or when issued securities, and (ii) obtain
such short-term credits as may be necessary for the clearance of
purchases and sales of portfolio securities.
8. Sell securities short.
9. Purchase securities of issuers which it is restricted from selling to
the public without registration under the Securities Act if by reason
thereof the value of its aggregate investment in such securities
will exceed 10% of its total assets.
10. Write, purchase or sell puts, calls, straddles, spreads or combinations
thereof.
11. Purchase or sell interests in oil, gas or other mineral exploration or
development programs provided, however, that this shall not prohibit
the Fund from purchasing publicly traded securities of companies
engaging in whole or in part in such activities.
12. Purchase or retain any
securities of an issuer if one or more
persons affiliated with the Fund owns
beneficially more than 1/2 of 1% of the
outstanding securities of such issuer and
such affiliated persons so owning 1/2 of
1% together own beneficially more than 5%
of such securities.
13. Invest more than 5% of
its total assets in securities of
unseasoned issuers (other than securities
issued or guaranteed by U.S. federal or
state or foreign governments or agencies,
instrumentalities or political
subdivisions thereof) which, including
their predecessors, have been in operation
for less than three years.
14. Invest in 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 or if, as a result,
more than 2% of the Fund's net assets
would be invested in warrants that are not
listed on the American Stock Exchange or
the New York Stock Exchange.
Investment restrictions (1) through (6) described above and
the restrictions discussed under "Investment Limitations" in the Prospectus are
fundamental policies of the Fund and may be changed only with the affirmative
vote of the holders of a majority of the Fund's outstanding voting securities,
as defined in the 1940 Act.
Restrictions (7) through (14) are non-fundamental policies of the Fund and may
be changed by a majority of the Board of Directors of the Fund. Whenever an
investment policy or limitation states a maximum percentage of the Fund's assets
in any security or other asset, such percentage limitation shall be determined
immediately after and as a result of the Fund's acquisition of such security or
other asset. Accordingly, any later increase or decrease in a percentage
resulting from a change in values, net assets or other circumstances will not be
considered when determining whether that investment complies with the Fund's
investment policies and limitations.
MANAGEMENT OF THE FUND
Directors and Officers
The Directors and executive officers of the Fund and their
principal occupations for at least the last five years are set forth below.
Unless otherwise noted, the address of each executive officer and Director is
375 Park Ave., New York, New York 10152.
<TABLE>
<S> <C> <C>
Name and Address Position with the Company Principal Occupation
During Past Five Years
Michael F. Holland*/ Director and President Holland & Company L.L.C., Chairman,
Age: 54 6/95 - present; The Blackstone
Group, general partner, 1/94 -
5/95; Oppenheimer & Company Inc.,
Vice Chairman, 3/92 - 1/94; Salomon
Brothers Asset Management Inc.,
Chairman and Chief Executive
Officer, 5/89 - 3/92; Salomon
Brothers Inc., Managing Director
5/89 - 3/92.
Sheldon S. Gordon Director, Chairman Union Bancaire Privee
Age: 62 International, Inc., Chairman 9/96
- Present; Blackstone Alternative
Union Bancaire Priveee International Asset Management L.P., Chairman
1330 6th Avenue 1/93 - 9/96; The Blackstone Group,
New York, NY 10019 general partner 4/91 - 5/95;
Blackstone Europe, Chairman, 4/91 -
6/93; Stamford Capital Group, Inc.,
Chairman and Chief Executive
Officer, 1/85 - 8/90.
*/ interested person as defined in the 1940 Act.
Herbert S. Winokur, Jr. Director Capricorn Investors, L.P., Managing
Age: 54 General Partner, 9/87 - present.
Capricorn Management
72 Cummings Point Road
Stamford, CT 06902
*/ interested person as defined in the 1940 Act.
Desmond G. FitzGerald Director North American Properties Group,
Age: 54 Chairman, 1/87 - present; North
American Housing Corp., Chairman,
North American Properties Group 12/86 - 8/93.
2015 West Main Street
Stamford, CT 06902
Jeff Tarr Director Junction Advisors, Chairman, 1/81 -
Age: 53 present.
Junction Advisers, Inc.
9 West 57th Street, Suite 4650
New York, NY 10019
William E. Vastardis Secretary and Treasurer Investors Capital Services, Inc.
Age: 43 (formerly AMT Capital Services,
Investors Capital Services, Inc. Inc.), Managing Director Head of
600 Fifth Avenue, 26th Floor Fund Administration 3/92 -
New York, NY 10020 present; Vanguard Group Inc., Vice
President, 1/87 - 4/92.
Carla E. Dearing Assistant Treasurer Investors Capital Services, Inc.
Age: 36 (formerly AMT Capital Services,
Investors Capital Services, Inc. Inc.), President, 1/92 - present;
600 Fifth Avenue, 26th Floor Morgan Stanley & Co., Vice
New York, NY 10020 President, 11/88 - 1/92.
</TABLE>
Pursuant to the terms of the Fund's investment advisory agreement and
administration agreement, the Investment Adviser or Investors Capital Services,
Inc. (the "Administrator") pays all compensation of officers and employees of
the Fund and the Investment Adviser pays the fees of all Directors of the Fund
who are affiliated persons of the Investment Adviser. The Fund pays each
unaffiliated Director an annual fee, paid quarterly, of $3,000 plus $500 per
meeting attended and pays all Directors' actual out-of-pocket expenses
relating to attendance at meetings. The Fund does not provide any pension
or retirement benefits to its Directors.
<TABLE>
<S> <C> <C> <C>
Director's Compensation Table for the Year Ended September 30, 1998
Director Aggregate Pension or Total Compensation
Compensation from Retirement Benefits From Registrant and
Registrant Accrued as Part of Fund Complex Paid to
Fund Expenses Directors
Michael F. Holland $0 $0 $0
Sheldon S. Gordon $6,250 $0 $6,250
Herbert S. Winokur, Jr. $6,250 $0 $6,250
Desmond FitzGerald $6,250 $0 $6,250
Jeff C. Tarr $5,750 $0 $5,750
</TABLE>
- --------
*/ interested person as defined in the 1940 Act.
Pursuant to the terms of the Fund's investment advisory agreement and
administration agreement, the Investment Adviser or Investors Capital Services,
Inc. (the "Administrator") pays all compensation of officers and employees of
the Fund and the Investment Adviser pays the fees of all Directors of the Fund
who are affiliated persons of the Investment Adviser. The Fund pays each
unaffiliated Director an annual fee, paid quarterly, of $3,000 plus $500 per
meeting attended and pays all Directors' actual out-of-pocket expenses relating
to attendance at meetings. The Fund does not provide any pension or retirement
benefits to its Directors.
<TABLE>
<S> <C> <C> <C>
Director's Compensation Table for the Year Ended September 30, 1998
Director Aggregate Pension or Total Compensation
Compensation from Retirement Benefits From Registrant and
Registrant Accrued as Part of Fund Complex Paid to
Fund Expenses Directors
Michael F. Holland $0 $0 $0
Sheldon S. Gordon $6,250 $0 $6,250
Herbert S. Winokur, Jr. $6,250 $0 $6,250
Desmond FitzGerald $6,250 $0 $6,250
Jeff C. Tarr $5,750 $0 $5,750
</TABLE>
Management and Advisory Arrangements
Reference is made to "Management of the Fund Advisory
Arrangements" in the Prospectus for certain information concerning the
management and advisory arrangements of the Fund.
The investment advisory agreement dated September 28, 1995
with the Investment Adviser (the "Investment Advisory Agreement") provides that,
subject to the direction of the Board of Directors of the Fund, the Investment
Adviser is responsible for the actual management of the Fund's portfolio. The
responsibility for making decisions to buy, sell or hold a particular security
rests with the Investment Adviser, subject to review by the Board of Directors.
The Investment Adviser provides the portfolio manager for the Fund, who
considers analyses from various sources, makes the necessary investment
decisions and places transactions accordingly. As compensation for its services
to the Fund, the Investment Adviser receives monthly compensation at the annual
rate of 0.75% of the average daily net assets of the Fund. For the year ended
September 30, 1998, the Investment Adviser received net fees of $122,972 after
voluntary fee waivers of $92,289. For the year ended September 30, 1997, the
Investment Adviser voluntarily waived all fees payable to
it by the Fund, totaling $118,211, and reimbursed $46,628, of
expenses of the Fund. For the period from October 2, 1995
(commencement of operations) to September 30, 1996, the Investment Adviser
waived all fees payable to it by the Fund, totaling $38,075 and reimbursed
$131,302 of expenses of the Fund.
Investment decisions for the Fund are made independently from
those of other accounts managed by the Investment Adviser. Securities held by
the Fund also may be held by, or be appropriate investments for, other
investment advisory clients of the Investment Adviser. Because of different
objectives or other factors, a particular security may be bought for one or more
clients when one or more clients are selling the same security. If purchases or
sales of securities for the Fund or other advisory clients of the Investment
Adviser arise for consideration at or about the same time, transactions in such
securities will be made, insofar as feasible, for the respective funds and
clients in a manner deemed equitable to all. To the extent that transactions on
behalf of more than one client of the Investment Adviser during the same period
may increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or the size of
the position obtained or sold.
The Investment Advisory Agreement obligates the Investment
Adviser to provide investment advisory services and all the office space,
facilities, equipment and personnel necessary to perform its duties under the
Investment Advisory Agreement. The Fund pays all other expenses incurred in the
operation of the Fund including, among other things, taxes, expenses for legal
and auditing services, costs of printing proxies, stock certificates,
shareholder reports, prospectuses and statements of additional information,
charges of the custodian and the transfer agent, expenses of redemption of
shares, Securities and Exchange Commission (the "Commission") fees, expenses of
registering
the shares under federal and state securities laws, fees and expenses of
unaffiliated Directors, accounting and pricing costs (including the daily
calculation of net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Fund.
Unless earlier terminated as described below, the Investment
Advisory Agreement will remain in effect from year
to year if approved annually (a) by the Board of Directors of the Fund or by a
majority of the outstanding shares of the Fund and (b) by a majority of the
Directors who are not parties to such contract or interested persons (as defined
in the 1940 Act) of any such party. Such contract is not assignable and may be
terminated without penalty on 60 days' written notice at the option of either
party thereto or by the vote of the shareholders of the Fund. The continuation
of the Investment Advisory Agreement was most recently approved by the Board of
Directors on September 17, 1998, and by the sole shareholder, Michael F.
Holland, on June 28, 1995.
The Investment Adviser is controlled by Michael Holland, its
managing member and owner of a 99% interest in the limited liability company.
Administrator
Investors Capital Services, Inc. (the "Administrator") acts as
the Fund's administrator pursuant to an administration agreement (the
"Administration Agreement"). Pursuant to the Administration Agreement, dated
September 28, 1995, the Administrator is responsible for providing
administrative services to the Fund, and assists in managing and supervising all
aspects of the general day-to-day business activities and operations of the Fund
other than investment advisory activities including certain accounting,
auditing, clerical, bookkeeping, custodial, transfer agency, dividend
disbursing, compliance and related services, Blue Sky compliance, corporate
secretarial services and assistance in the preparation and filing of tax returns
and reports to shareholders and the Commission. The Fund pays the
Administrator a monthly fee at the annual rate of 0.15% of the Fund's average
daily net assets and the Administrator is entitled to reimbursement
from the Fund for its
out-of-pocket expenses incurred under the Administration Agreement. The
Administrator will be paid a minimum annual fee of $50,000 for services provided
to the Fund.
CONTROL PERSONS and PRINCIPAL HOLDERS OF SECURITIES
As of October 30, 1998, there were no persons holding 5 percent or more of the
outstanding shares of the Holland Balanced Fund.
REDEMPTION OF SHARES
Reference is made to "Redemption of Shares" in the Prospectus
for certain information as to the redemption and repurchase of Fund shares.
The right to redeem shares or to receive payment with respect
to any such redemption may only be suspended for any period during which trading
on the New York Stock Exchange is restricted as determined by the Commission
or such
Exchange is closed (other than customary weekend and holiday closings), for any
period during which an emergency exists as defined by the Commission as a
result of
which disposal of portfolio securities or determination of the net asset value
of the Fund is not reasonably practicable, and for such other periods as the
Commission may by order permit for the protection of shareholders of the Fund.
Shares are redeemable at the option of the Fund at net asset
value if, in the opinion of the Fund, ownership of the shares has or may become
concentrated to an extent which would cause the Fund to be deemed a personal
holding company within the meaning of the Code.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policy established by the Board of Directors, the
Investment Adviser is primarily responsible for the Fund's portfolio decisions
and the placing of the Fund's portfolio transactions. The Fund anticipates that
its annual portfolio turnover rate generally will not exceed 100%. The actual
portfolio turnover for the years ended September 30, 1998, 1997 and 1996 were
16.49%, 5.07% and 5.04%, respectively.
Fixed-income securities, certain short-term securities and
certain equities normally will be purchased or sold from or to issuers directly
or to dealers serving as market makers for the securities at a net price, which
may include dealer spreads and underwriting commissions. Equity securities may
also be purchased or sold through brokers who will be paid on commission. For
the years ended September 30, 1998, 1997 and 1996, the Fund paid brokerage
commissions of
$9,911, $6,846 and $3,976, respectively. In selecting brokers and dealers, it is
the policy of the Fund to obtain
the best results taking into account factors such as the general execution and
operational facilities of the brokers or dealer, the type and size of
transaction involved, the creditworthiness and stability of the broker or
dealer, execution and settlement capabilities, time required to negotiate and
execute the trade, research services and the Investment Adviser's arrangements
related thereto (as described below), overall performance, the dealer's risk in
positioning the securities involved and the broker's commissions and dealer's
spread or mark-up. While the Investment Adviser generally seeks the best price
in placing its orders, the Fund may not necessarily be paying the lowest price
available.
Notwithstanding the above, in compliance with Section 28(e) of
the Securities Exchange Act of 1934, as amended, the Investment Adviser may
select brokers
who charge a commission in excess of that charged by other brokers if the
Investment Adviser determines in good faith that the commission to be charged is
reasonable in relation to the brokerage and research services provided to the
Investment Adviser by such brokers. Research services generally consist of
research and statistical reports or oral advice from brokers regarding
particular companies, industries or general economic conditions. The Investment
Adviser may also, in compliance with applicable law, enter into arrangements
with brokers pursuant to which such brokers provide research in exchange for a
certain volume of brokerage transactions to be executed through such broker.
While the payment of higher commissions increases the Fund's costs, the
Investment Adviser does not believe that the receipt of such brokerage and
research services significantly reduces its expenses as the Fund's investment
manager. The Investment Adviser's arrangements for the receipt of research
services from brokers may create conflicts of interest.
Research services furnished to the Investment Adviser by
brokers who effect securities transactions for a Fund may be used by the
Investment Adviser in servicing other investment companies and accounts which it
manages. Similarly, research services furnished to the Investment Adviser by
brokers who effect securities transactions for other investment companies and
accounts which the Investment Adviser manages may be used by the Investment
Adviser in servicing the Fund. Not all of these research services are used by
the Investment Adviser in managing any particular account, including the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value of the shares of the Fund is determined
once daily Monday through Friday as of the time of the close of regularly
scheduled trading on the New York Stock Exchange on each day during which such
Exchange is open for trading. The New York Stock Exchange is not open on New
Year's Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Martin Luther King Day, Thanksgiving Day and Christmas Day. The net asset
value per share is computed by dividing the sum of the value of the securities
held by Fund plus any cash or other assets (including interest and dividends
accrued but not yet received) minus all liabilities (including accrued expenses)
by the total number of shares outstanding at such time, rounded to the nearest
cent. Expenses, including the investment advisory fees payable to the Investment
Adviser, are accrued daily.
Securities and assets for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund.
PERFORMANCE DATA
The Fund's "average annual total return" figures described and
shown in the Prospectus are computed according to a formula prescribed by the
Commission. The formula can be expressed as follows:
P(1+T)n=ERV
Where:
P = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical
$1,000 payment made at the beginning of the
1, 5, or 10 year periods at the end of such
periods, assuming reinvestment of all
dividends and distributions.
The total return as defined above for the Fund for the 12
month period ended September 30, 1998 and 1997 was 2.43% and 22.71%,
respectively. The total return from the Fund's commencement of investment
operations (October 2, 1995) through September 30, 1997 was 19.16% on an
annualized basis.
In addition to total return, the Fund may quote performance in
terms of a 30-day yield. The yield figures provided will be calculated according
to a formula prescribed by the Commission and can be expressed as follows:
(a-b)
Yield = 2[(cd +1) 6 - 1 ]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period(net of reimbursements).
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends.
d = the maximum offering price per share on the last day
of the period.
The yield as defined above for the Fund for the 30-day period
ended September 30, 1998 was 1.66%.
For the purpose of determining the interest earned (variable
"a" in the formula) on debt obligations that were purchased by the Fund at a
discount or premium, the formula generally calls for amortization of the
discount or premium; the amortization schedule will be adjusted monthly to
reflect changes in the market value of the debt obligations.
Under this formula, interest earned on debt obligations for
purposes of "a" above, is calculated by (1) computing the yield to maturity of
each obligation held by the Fund based on the market value of the obligation
(including actual accrued interest) at the close of business on the last day of
each month, or, with respect to obligations purchased during the month, the
purchase price (plus actual accrued interest), (2) dividing that figure by 360
and multiplying the quotient by the market value of the obligation (including
actual accrued interest as referred to above) to determine the interest income
on the obligation in the Fund's portfolio (assuming a month of 30 days) and (3)
computing the total of the interest earned on all debt obligations during the
30-day or one month period. Undeclared earned income, computed in accordance
with generally accepted accounting principles, may be subtracted from the
maximum offering price calculation required pursuant to "d" above.
The Fund's performance will vary from time to time depending
on market conditions, the composition of its portfolio and operating expenses.
Consequently, any given performance quotation should not be considered
representative of the performance of the Fund for any specified period in the
future. Because performance will vary, it may not provide a basis for comparing
an investment in shares of the Fund with certain bank deposits or other
investments that may pay a fixed return for a stated period of time. Investors
comparing the Fund's performance with that of other mutual funds should give
consideration to the nature, quality and maturity of the respective investment
companies' portfolio securities and market conditions. An investor's principal
is not guaranteed by the Fund.
SHAREHOLDER SERVICES
The Fund offers a number of shareholder services described
below which are designed to facilitate investment in its shares. Full details as
to each of such services and copies of the various plans described below can be
obtained from the Fund or AMT Capital Securities, L.L.C. (the "Distributor").
Investment Account
Each shareholder whose account is maintained at Unified
Advisers, Inc. (the "Transfer Agent"), P.O. Box 6110, Indianapolis, IN
46206-6110, has an Investment Account and will receive statements from the
Transfer Agent after each share transaction, including reinvestment of dividends
and capital gains distributions, showing the activity in the account since the
beginning of the year. Shareholders may make additions to their Investment
Account at any time by mailing a check directly to the Transfer Agent. Share
certificates will not be issued by the Transfer Agent.
Automatic Investment Plan
A shareholder may elect to establish an Automatic Investment
Plan pursuant to which funds will automatically be transferred from a bank
account to be invested in the Fund. The bank at which the bank account is
maintained must be a member of the Automated Clearing House. Automatic
investments can be no more frequent than monthly and must be a minimum of $50.
The Fund will debit the specified amount from the account and the proceeds will
be invested at the Fund's offering price determined on the date of the debit.
Automatic Clearing House Purchases
An investor may, at his or her request, make additional
investments into the Fund by giving his or her bank a voided check with
pre-arranged instructions to withdraw funds from his or her bank account and
deposit such funds into his or her Holland Balanced Fund account.
Automatic Reinvestment of Dividends and Capital
Gains Distributions
Unless specific instructions are given as to the method of
payment of dividends and capital gains distributions, dividends and
distributions will be reinvested automatically in additional shares of the Fund.
Such reinvestment will be at the net asset value of shares of the Fund, without
sales charge, as of the close of business on the ex-dividend date of the
dividend or distribution. Shareholders may elect in writing to receive either
their dividends or capital gains distributions, or both, in cash, in which event
payment will be mailed on the payment date.
Shareholders may, at any time, notify the Transfer Agent in
writing that they no longer wish to have their dividends and/or capital gains
distributions reinvested in shares of the Fund or vice versa and, commencing ten
days after receipt by the Transfer Agent of such notice, those instructions will
be effected.
Individual Retirement Accounts (IRA)
A prototype IRA is available, which has been approved as to
form by the Internal Revenue Service ("IRS"). Contributions to an IRA made
available by the Fund may be invested in shares of the Fund.
Investors Bank & Trust Company (The "Custodian") has agreed to
serve as custodian of the IRA and
furnish the services provided for in the Custodial Agreement. The Custodian will
charge each IRA an application fee as well as certain additional fees for its
services under the Custodial Agreement. In accordance with IRS regulations, an
individual may revoke an IRA within seven calendar days after it is established.
Contributions in excess of the allowable limits, premature
distributions to an individual who is not disabled before age 59-1/2 or
insufficient distributions after age 70-1/2 will generally result in substantial
adverse tax consequences.
For information required for adopting an IRA, including
information on fees, obtain the form of Custodial Agreement and related
materials, including disclosure materials, available from the Fund. Consultation
with a financial adviser regarding an IRA is recommended.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute all its net investment income,
if any. Dividends from such net investment income will be paid quarterly. All
net realized long-term or short-term capital gains, if any, will be
distributed to
the Fund's shareholders at least annually. See "Shareholder Services-Automatic
Reinvestment of Dividends and Capital Gains Distributions" for information
concerning the manner in which dividends and distribution may be reinvested
automatically in shares of the Fund.
TAXATION
The following is a general summary of certain federal income
tax considerations affecting the Fund and its shareholders and, except as
otherwise indicated, reflects provisions of the Code
as of the date of this Prospectus. No attempt is made to
present a detailed explanation of all federal, state, local and foreign income
tax considerations, and this discussion is not intended as a substitute for
careful tax planning. Accordingly, potential investors are urged to consult
their own tax advisors regarding an investment in the Fund.
The Fund
The Fund has qualified and intends to continue to qualify as a
"regulated investment company" for federal income tax purposes under Subchapter
M of the Code . In order to so qualify, the Fund must, among other things, (a)
derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to loans of securities, gains from the sale or
other disposition of stock or securities, or foreign currencies, or other income
derived with respect to its business of investing in such stock, securities or
currencies (including, but not limited to, gains from options, futures or
forward contracts); and (b) diversify its holdings so that, at the end of each
quarter of each taxable year, (i) at least 50% of the value of the Fund's assets
is represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies, and other securities which, with respect
to any one issuer, do not represent more than 5% of the value of the Fund's
assets nor more than 10% of the voting securities of such issuer, and (ii) not
more than 25% of the value of the Fund's assets is invested in the securities of
any issuer (other than U.S. Government securities or the securities of other
regulated investment companies) or of any two or more issuers that the Fund
controls and that are engaged in the same, similar or related trades or
businesses.
If the Fund qualifies as a regulated investment company and
distributes to its shareholders at least 90% of its net investment income (i.e.,
its investment company taxable income as that term is defined in the Code
without regard to the deductions for dividends paid), then the Fund will not be
subject to federal income tax on its net investment income and net capital gains
(i.e., the excess of the Fund's net long-term capital gain over its short-term
capital loss) if any, that it distributes to its shareholders in each taxable
year. However, the Fund would be subject to corporate income tax (currently at a
rate of 35%) on any undistributed net investment income, and net capital gain.
If the Fund retains amounts attributable to its net capital gain, the Fund
expects to designate such retained amounts as undistributed capital gains in a
notice to its shareholders who (i) will be required to include in income for
United States federal income tax purposes, as long-term capital gains, their
proportionate shares of the undistributed amount, (ii) will be entitled to
credit their proportionate shares of the 35% tax paid by the Fund on the
undistributed amounts against their federal income tax liabilities and to claim
refunds to the extent such credits exceed their liabilities and (iii) will be
entitled to increase their tax basis, for federal income tax purposes, in their
shares by an amount equal to 65% of the amount of undistributed capital gains
included in the shareholder's income.
In addition, the Fund will be subject to a nondeductible 4%
excise tax on the amount by which the aggregate income it distributes in any
calendar year is less than the sum of: (a) 98% of the Fund's ordinary income for
such calendar year; (b) 98% of the excess of capital gains over capital losses
(both long- and short-term) for the one-year period ending on October 31 of each
year; and (c) 100% of the undistributed ordinary income and gains from prior
years. For this purpose, any income or gain retained by the Fund that is subject
to corporate tax will be considered to have been distributed by year-end.
The Fund intends to distribute sufficient income so as to
avoid both corporate federal income tax and the excise tax.
If in any year the Fund should fail to qualify as
a regulated investment company, the Fund would be
subject to federal income taxe in the same manner as an
ordinary corporation and distributions to shareholders
would be taxable to such holders as ordinary income to
the extent of the earnings and profits of the Fund. Such
distributions qualify for the dividends-received deduction
abailable to corporate shareholders. Distributions in excess
of earnings and profits would be treated as a tax-free return
of capital, to the extent of a holder's basis in its shares,
and any excess, as a long-or-short-term capital gain.
The Fund may make investments that produce income that is not
matched by a corresponding cash distribution to the Fund, such as investments in
pay-in-kind bonds or in obligations such as certain Brady Bonds or zero coupon
securities having original issue discount (i.e., an amount equal to the excess
of the stated redemption price of the security at maturity over its issue
price), or market discount (i.e., an amount equal to the excess of the stated
redemption price of the security at maturity over its basis immediately after it
was acquired) if the Fund elects as it intends to accrue market discount on a
current basis. In addition, income may continue to accrue for federal income tax
purposes with respect to a non-performing investment. Any of the foregoing
income would be treated as income earned by the Fund and therefore would be
subject to the distribution requirements of the Code. Because such income may
not be matched by a corresponding cash distribution to the Fund, the Fund may be
required to dispose of other securities to be able to make distributions to its
investors.
The Fund's taxable income will in most cases be determined on
the basis of reports made to the Fund by the issuers of the securities in which
the Fund invests. The tax treatment of certain securities in which the Fund may
invest is not free from doubt and it is possible that an IRS examination of the
issuers of such securities or of the Fund could result in adjustments to the
income of the Fund. An upward adjustment by the IRS to the income of the Fund
may result in the failure of the Fund to satisfy the 90% distribution
requirement described herein necessary for the Fund to maintain its status as a
regulated investment company under the Code. In such event, the Fund may be able
to make a "deficiency dividend" distribution to its shareholders with respect to
the year under examination to satisfy this requirement. Such distribution will
be taxable as a dividend to the shareholders receiving the distribution (whether
or not the Fund has sufficient current or accumulated earnings and profits for
the year in which such distribution is made). A downward adjustment by the IRS
to the income of the Fund may cause a portion of the previously made
distribution with respect to the year under examination not to be treated as a
dividend. In such event, the portion of distributions to each shareholder not
treated as a dividend would be recharacterized as a return of capital and reduce
the shareholder's basis in the shares held at the time of the previously made
distributions. Accordingly, this reduction in basis could cause a shareholder to
recognize additional gain upon the sale of such shareholder's shares.
Income received by the Fund from sources outside the United
States may be subject to withholding and other taxes imposed by countries other
than the United States. Because the Fund's investments in foreign securities
will be limited, the Fund will not be eligible to elect to "pass-through" to its
shareholders any tax benefits associated with any foreign income taxes paid by
the Fund.
Certain of a Fund's investments in structured products may,
for federal income tax purposes, constitute investments in shares of foreign
corporations. If a Fund purchases shares in certain foreign investment entities,
called "passive foreign investment companies" ("PFICs"), the Fund may be subject
to U.S. federal income tax on a portion of any "excess distribution" or gain
from the disposition of the shares even if the income is distributed as a
taxable dividend by the Fund to its shareholders. Additional charges in the
nature of interest may be imposed on either a Fund or its shareholders with
respect to deferred taxes arising from the distributions or gains. If a Fund
were to invest in a PFIC and (if the Fund received the necessary information
available from the PFIC, which may be difficult to obtain) elected to treat the
PFIC as a "qualified electing fund" under the Code, in lieu of the foregoing
requirements, the Fund might be required to include in income each year a
portion of the ordinary earnings and net capital gains of the PFIC, even if not
distributed to the Fund, and the amounts would be subject to the 90% and excise
tax distribution requirements described above.
Alternatively, the Fund may elect to be governed by Section
1296 of the Code. If the election is
made, the Fund includes in income each year an amount equal to the excess, if
any, of the fair value of the PFIC stock as of the close of taxable year over
the Fund's adjusted basis in such stock. The Fund is allowed a deduction for the
excess, if any, of the adjusted basis of the PFIC stock over its fair market
value as of the close of the taxable year. However, such deductions are
allowable only to the extent of any net mark-to-market gains with respect to the
stock included by the Fund for prior taxable years. The tax basis of PFIC stock
is adjusted by the income and deductions recognized. Mark-to-market gains and
the allowable deductions will get ordinary gain/loss treatment. Additionally,
the holding period of PFIC stock will be deemed to begin on the first day of the
following tax year after making the election. For purposes of RIC qualification,
mark-to-market gain is treated as a dividend. Any income or loss recognized
under Section 1296 is treated as U.S. source. Because of the expansive
defination of a PFIC, it is possible that a Fund may invest a portion of its
assets in PFICs. It is not anticipated, however, that the portion of such
Fund's assets invested in PFICs will be material.
Under the Code, gains or losses attributable to fluctuations
in exchange rates which occur between the time a Fund accrues interest or other
receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time a Fund actually collects such receivables or pays such
liabilities are treated as ordinary income or ordinary loss. Similarly, gains or
losses from the disposition of foreign currencies, from the disposition of debt
securities denominated in a foreign currency, or from the disposition of a
forward contract denominated in a foreign currency which are attributable to
fluctuations in the value of the foreign currency between the date of
acquisition of the asset and the date of disposition also are treated as
ordinary gain or loss. These gains or losses, referred to under the Code as
"section 988" gains or losses, increase or decrease the amount of a Fund's net
investment income available to be distributed to its shareholders as ordinary
income, rather than increasing or decreasing the amount of a Fund's net capital
gain. Because section 988 losses reduce the amount of ordinary dividends a Fund
will be allowed to distribute for a taxable year, such section 988 losses may
result in all or a portion of prior dividends distributions for such year being
recharacterized as a non-taxable return of capital to shareholders, rather than
as ordinary dividend, reducing each shareholder's basis in his Fund shares. To
the extent that such distributions exceed such shareholder's basis, each
distribution will be treated as a gain from the sale of shares.
Shareholders
Distributions. Distributions to shareholders of ordinary
income dividends will be taxable as ordinary income whether paid in cash or
reinvested in additional shares. It is anticipated that a portion of such
dividends will qualify for the dividends received deduction generally available
for corporate shareholders under the Code. Shareholders receiving distributions
from the Fund in the form of additional shares will be treated for federal
income tax purposes as receiving a distribution in an amount equal to the fair
market value of the additional shares on the date of such distribution.
Consequently, if the number of Shares distributed reflects a market premium, the
amount distributed to shareholders would exceed the amount of the cash
distributed to nonparticipating shareholders.
Distributions to shareholders of net capital gain that are
designated by the fund as "capital gains dividends", will be taxable as
long-term capital gains, whether paid in cash or additional shares, regardless
of how long the shares have been held by such shareholders. These distributions
will not be eligible for the dividends-received deduction. The maximum federal
income tax rate currently imposed on individuals with respect to long-term
capital gain is 20%, whereas
the maximum federal income tax rate currently imposed on individuals with
respect to ordinary income (and short-term capital gains, which are taxed at the
same rates as ordinary income) is 39.6%. With respect to corporate taxpayers,
generally long-term capital gain is taxed at the same federal income tax rate
as ordinary income and short-term capital gain.
Investors considering buying shares just prior to a dividend
or capital gain distribution should be aware that, although the price of shares
purchased at that time may reflect the amount of the forthcoming distribution,
those who purchase just prior to a distribution will receive a distribution
which will nevertheless be taxable to them.
Dividends and distributions by the Fund are generally taxable
to the shareholders at the time the dividend or distribution is made (even if
paid or reinvested in additional shares). Any dividend declared by the Fund in
October, November or December of any calendar year, however, which is payable to
shareholders of record on a specified date in such a month and which is not paid
on or before December 31 of such year will be treated as received by the
shareholders as of December 31 of such year, provided that the dividend is paid
during January of the following year. Any distribution in excess of the Fund's
net investment income and net capital gain would first reduce a shareholder's
basis in his shares and, after the shareholder's basis is reduced to zero, would
constitute capital gains to a shareholder who holds his shares as capital
assets.
A notice detailing the tax status of dividends and
distributions paid by the Fund will be mailed annually to the shareholders of
the Fund.
Dispositions and Redemptions. Gain or loss, if any, recognized
on the sale or other disposition of shares of the Fund will be taxed as capital
gain or loss if the shares are capital assets in the shareholder's hands.
Generally, a shareholder's gain or loss will be a long-term gain or loss if the
shares have been held for more than one year. If a shareholder sells or
otherwise disposes of a share of the Fund before holding it for more than six
months, any loss on the sale or other disposition of such share shall be treated
as a long-term capital loss to the extent of any capital gain dividends received
by the shareholder with respect to such share. A loss realized on a sale or
exchange of shares may be disallowed if other shares are acquired within a
61-day period beginning 30 days before and ending 30 days after the date that
the shares are disposed of. If disallowed, the loss will be reflected by an
upward adjustment to the basis of the shares acquired.
-----------------------------
Investors should consult their own tax advisors regarding
specific questions as to the federal, state, local and foreign tax consequence
of ownership of shares in the Fund.
ADDITIONAL INFORMATION
Description of Shares
Holland Series Fund, Inc. was incorporated under Maryland Law
on June 27, 1995. The Fund currently is the only organized portfolio of Holland
Series Fund, Inc. Holland Series Fund, Inc. has an authorized capital of
1,000,000,000 shares of Common Stock, par value $0.01 per share. All shares are
of the same class. Shareholders of the Fund are entitled to one vote for each
full share held and fractional votes for fractional shares held and will vote on
the election of Directors and any other matter submitted to a shareholder vote.
Voting rights for Directors are not cumulative. Shares of the Fund issued are
fully paid and non-assessable and have no preemptive or conversion rights.
Redemption rights are discussed elsewhere herein and in the Prospectus. Each
share is entitled to participate equally in dividends and distributions declared
by the Fund and in the net assets of the Fund upon liquidation or dissolution
after satisfaction of outstanding liabilities. Stock certificates will not be
issued by the Transfer Agent.
Appropriate Investors
Investors should carefully consider the Prospectus and
Statement of Additional Information when determining whether the Fund is an
appropriate investment given their particular investment needs and preferences.
An investment in the Fund may provide diversification to an investor whose
assets are primarily invested in stocks or bonds alone. The Fund may be an
appropriate choice for conservative investors seeking to build wealth over time.
The Fund may also be an appropriate choice for: (i) those who want to leave the
all-important asset allocation decision to a professional manager; (ii)
investors who want to capture some of the stock market's growth potential but
with less risk than an all-equity portfolio; (iii) investors building capital
for education or retirement who are looking for a core investment vehicle; and
(iv) anyone who appreciates Michael Holland's approach to portfolio management.
Independent Accountants
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York,
New York 10036 has been selected as the independent accountants of the Fund. The
selection of independent accountants is subject to ratification by the Fund's
shareholders at any annual meeting of shareholders held by the Fund. The
independent accountants are responsible for auditing the financial statements of
the Fund.
Custodian and Fund Accounting Agent
Investors Bank & Trust Company, P.O. Box 1537, Boston,
Massachusetts 02205 acts as custodian and fund accounting agent of the Fund's
assets. The Custodian is responsible for safeguarding and controlling the Fund's
cash and securities, handling the delivery of securities and collecting interest
and dividends on the Fund's investments. The fund accounting agent is
responsible for maintaining the books and records and calculating the daily net
asset value of the Fund.
Transfer Agent
Unified Advisers, Inc., P.O. Box 6110, Indianapolis, IN
46206-6110 acts as the Fund's transfer agent. The Transfer Agent is responsible
for the issuance, transfer and redemption of shares and the opening, maintenance
and servicing of shareholder accounts.
Legal Counsel
Simpson Thacher & Bartlett, New York, New York, is counsel for
the Fund.
Reports to Shareholders
The fiscal year of the Fund ends on September 30 of each year.
The Fund sends to its shareholders at least semi-annually reports showing the
Fund's portfolio and other information. An annual report, containing financial
statements audited by independent accountants, is sent to shareholders each
year. At the end of each calendar year, shareholders will receive Federal income
tax information regarding dividends and capital gains distributions.
Additional Information
The prospectus and this Statement of Additional Information do
not contain all the information set forth in the Registration Statement and the
exhibits thereto, which the Fund has filed with the Commission, Washington,
D.C., under the Securities Act and the 1940 Act, to which reference is hereby
made.Information about the Fund can be reviewed and
copied at the Commission's Public Reference Room in
Washington, D.C. Information on the operation of
the public reference room may be obtained by
calling the Commission at 1-800-SEC-0330. Reports
and other information about the Fund are also
available on the Commission's internet site at
http://www.sec.gov and copies of this information
may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009.
FINANCIAL STATEMENTS
The Fund's annual Financial Statements for the year ended
September 30, 1998 are hereby incorporated by reference in this Statement of
Additional Information from the Fund's Annual Report filed with the Securities
and Exchange Commission on November 10, 1998. The Fund's annual report and
semi-annual report can be obtained without charge by calling the Fund at
(800) 30-HOLLAND [800-304-6552].
- --------
*/ interested person as defined in the 1940 Act.
PART C. OTHER INFORMATION
24. Financial Statements and Exhibits.
(a) Financial Statements included in
Part A:
Holland Balanced Fund
Financial Highlights for the year
ended September 30, 1998, for the year
ended September 30, 1997, and period
from October 2, 1995 (commencement of
investment operations) to September
30, 1996 are presented under the
heading "Financial Highlights" in the
Prospectus.
(b) Financial Statements included in
Part B:
Holland Balanced Fund
Statement of Net Assets dated
September 30, 1998
Statement of Operations for the
year ended September 30, 1998
Statement of Changes in Net Assets
for the year ended September 30,
1998, and for the year ended
September 30, 1997
Statement of Financial Highlights
for the year ended September 30,
1998, for the year ended September
30, 1997, and for the period from
October 2, 1995 (commencement of
investment operations) to
September 30, 1996
Independent Accountants' Report
dated October 27, 1998
(c) Exhibits:
Exhibit
Number Description
1(a) -- Registrant's Articles
of Incorporation
filed as Exhibit 1(a)
to Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
2 -- By-Laws, filed as
Exhibit 2 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
3 -- None.
4(a) -- None.
5(a) -- Advisory Agreement
between Registrant
and Holland & Company
L.L.C., dated
September 28, 1995,
filed as Exhibit 5(a)
to Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
6(a) -- Distribution
Agreement between
Registrant and AMT
Capital Services,
Inc., dated September
28, 1995, filed as
Exhibit 6(a) to
Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
6(b) -- Distribution
Agreement between
Registrant and AMT
Capital Securities,
.L.C., dated
September 28, 1998
(filed herewith).
7 -- None.
8 -- Custodian Agreement
between Registrant
and Investors Bank &
Trust Company, dated
September 28, 1995,
filed as Exhibit 8 to
Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
9(a) -- Administration
Agreement between
Registrant and AMT
Capital Services,
Inc., dated September
28, 1995, filed as
Exhibit 9(a) to
Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
9(b) -- Transfer Agency and
Service Agreement
between Registrant
and Investors Bank &
Trust Company, dated
September 28, 1995,
filed as Exhibit 9(b)
to Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
9(c) -- Transfer Agent
Agreement between
Registrant and
Unified Advisers,
Inc., dated February
9, 1996 filed as
Exhibit 9(c) to
Post-Effective
Amendment No. 1 to
Registrant's
registration
statement on Form
N-1A and is
incorporated by
reference herein.
9(d) -- Administration
Agreement between
Registrant and
Investors Capital
Services, Inc., dated
September 28, 1998
(filed herewith).
10 -- Opinion and Consent
of Piper & Marbury,
filed as Exhibit 10
to Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
11(a) -- Consent of
PricewaterhouseCoopers
LLP (filed herewith).
11(b) -- None.
12(a) --
Selected Per-Share
Data and Ratios for
the year ended
September 30, 1998,
for the year ended
September 30, 1997,
and the period from
October 2, 1995
(commencement of
investment operations)
to September 30, 1996,
incorporated herein by
reference from the
Registrant's Annual
Report dated October
27, 1998 and filed
November 10, 1998.
12(b) --
Statement of Net
Assets dated September
30, 1998, and
Statement of
Operations for the
year ended September
30, 1998, incorporated
herein by reference
from the Registrant's
Annual Report dated
October 27, 1998 and
filed November 10,
1998.
12(c) --
Statement of Changes
in Net Assets for the
year ended September
30, 1998, and for the
year ended September
30, 1997, incorporated
herein by reference
from the Registrant's
Annual Report dated
October 27, 1998 and
filed November 10,
1998.
12(d) --
Statement of Financial
Highlights for the
year ended September
30, 1998, for the year
ended September 30,
1997, and the period
from October 2, 1995
(commencement of
investment operations)
to September 30, 1996,
incorporated herein by
reference from the
Registrant's Annual
Report dated October
27, 1998 and filed
November 10, 1998.
12(e) --
Independent
Accountants' Report
dated October 27,
1998, incorporated
herein by reference
from the Registrant's
Annual Report dated
October 27, 1998 and
filed November 10,
1998.
13(a) -- Share Purchase
Agreement between
Registrant and
Holland & Company
L.L.C. dated
September 19, 1995,
filed as Exhibit
13(a) to
Pre-Effective
Amendment No. 1 to
Registrant's
Registration
Statement on Form
N-1A and is
incorporated by
reference herein.
14 -- None.
15 -- None.
16 -- Performance
information schedule
(filed herewith).
17 -- Financial Data
Schedule (filed
herewith)
25. Persons Controlled
by or under
Common Control with
Registrant
As of October 31, 1998, no shareholder is deemed a
control person: as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
26. Number of Holders of Securities
Title of Class Number of Record
Holders at December 31, 1997
Shares of Holland Balanced Fund
1730
27. Indemnification.
Reference is made to Article VII of
Registrant's Articles of Incorporation (Exhibit 1(a) filed
previously), Article VI of Registrant's By-laws, as amended
(Exhibit 2 filed previously), Paragraph 5 of the
Distribution Agreement between Registrant and AMT Capital
Securities, L.L.C. (filed herewith), Article 13 of the
Custodian Agreement between Registrant and Investors Bank &
Trust Company (Exhibit 8 filed previously), Paragraph 6 of
the Administration Agreement between Registrant and
Investors Capital Services, Inc. (filed herewith), and
Article 14 of the Transfer Agency Agreement between
Registrant and Investors Bank and Trust Company (Exhibit
9(b) filed previously), and Section 8 of the Transfer Agent
Agreement between Registrant and Unified Advisers, Inc.
(Exhibit 9(c) filed previously).
Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended (the
"Securities Act"), may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, Registrant understands
that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by Registrant of expenses incurred or paid by a
director, officer or controlling person of 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
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the
final adjudication of such issue.
28. Business and Other Connections of
Investment Adviser.
Holland & Company L.L.C. (the "Investment Adviser")
is a limited liability company organized under the laws of
New York State and it is an investment adviser registered
under the Investment Advisers Act of 1940 (the "Advisers
Act"). The Investment Adviser has not, in the past two
fiscal years, served as an investment adviser to any
registered investment company other than the Registrant.
The list required by this Item 28 of officers and
directors of the Investment Adviser, together with
information as to any other business, profession, vocation
or employment of a substantial nature engaged in by such
officers and directors during the past two years, is
incorporated herein by reference to Schedules A and D of
Form ADV filed by the Investment Adviser pursuant to the
Advisers Act (SEC File No. 801-49394).
29. Principal Underwriter.
(a) In addition to the Registrant, AMT Capital
Securities, L.L.C. currently acts as distributor to FFTW
Fund, Inc., Harding Loevner Funds, Inc., SAMCO Fund, Inc.
and TIFF Investment Program, Inc. AMT Capital Securities,
L.L.C. is registered with the Securities and Exchange
Commission as a broker/dealer and is a member of the
National Association of Securities Dealers, Inc.
(b) For each director or officer of AMT Capital Securities, L.L.C.
Name and Principal
Business Address Positions & Offices Positions & Offices
with Underwriter with Distributor with Registrant
Alan M. Trager Director, Chairman and None
600 Fifth Avenue Treasurer
26th Floor
New York, NY 10020
Arthur Goetchius President
600 Fifth Avenue
26th Floor
New York, NY 10020
Carla E. Dearing Vice President Assistant Treasurer
600 Fifth Avenue
26th Floor
New York, NY 10020
(c) Not applicable.
30. Location of Accounts and Records.
All accounts, books and other documents
required to be maintained by Section 31(a) of the 1940 Act,
and the rules thereunder will be maintained at the offices
of the Investment Adviser, Investors Capital Services, Inc.
(the "Administrator"), Unified Advisers, Inc. (the "Transfer
Agent"), and Investors Bank & Trust Company (the
"Custodian").
Holland & Company L.L.C.
375 Park Avenue
New York, New York 10152
Investors Capital Services, Inc.
600 Fifth Avenue, 26th Floor
New York, New York 10020
Unified Advisers, Inc.
P.O. Box 6110
Indianapolis, IN 46206-6110
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
31. Management Services.
Not applicable.
32. Undertakings.
not applicable
not applicable
Registrant hereby undertakes to furnish
each person to whom a Prospectus is delivered with a copy of
the Registrant's latest annual report to shareholders upon
request and without charge.
(d) Registrant hereby undertakes to call
a meeting of shareholders for the purpose of voting upon the
question of removal of one or more of Holland Balanced
Fund's Directors when requested in writing to do so by the
holders of at least 10% of Holland Balanced Fund's
outstanding shares of common stock and, in connection with
such meeting, to assist in communications with other
shareholders in this regard, as provided under Section 16(c)
of the 1940 Act.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, and the Investment
Company Act of 1940, as amended, the Registrant certifies
that it has duly caused this amendment to the Registration
Statement to be signed on its behalf by the undersigned
thereto duly authorized, in the City of New York and State
of New York on the 30th day of November, 1998.
HOLLAND SERIES FUND, INC.
By: /s/ Michael F. Holland
Michael F. Holland
President
Pursuant to the requirements of the
Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following person in
the capacities indicated on the 30th day of November, 1998.
Signature Title
/s/ Michael F. Holland Director and President
Michael F. Holland (Principal Executive Officer)
/__________*____________ Director
Sheldon S. Gordon
/__________*____________ Director
Herbert S. Winokur, Jr.
/__________*____________ Director
Desmond G. FitzGerald
/_________ *____________ Director
Jeff Tarr
/s/ William E. Vastardis Secretary and Treasurer
William E. Vastardis (Principal Financial and Accounting
Officer)
* Attorney-in-fact /s/ William E. Vastardis
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
EXHIBITS
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND THE
INVESTMENT COMPANY ACT OF 1940
_________________
HOLLAND SERIES FUND, INC.
HOLLAND SERIES FUND, INC.
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
6(b) Distribution Agreement between Registrant and AMT Capital
Securities, L.L.C., dated September 28, 1998.
9(d) Administration Agreement between Registrant and Investors
Capital Services, Inc., dated
September 28, 1998.
11(a) Consent of PricewaterhouseCoopers LLP
16 Performance information schedule
17 Financial Data Schedule
ADMINISTRATION AGREEMENT
AGREEMENT dated as of September 28, 1998,
by and between HOLLAND SERIES FUND, INC., a
Maryland corporation ("Fund"), and INVESTORS
CAPITAL SERVICES INC., a Delaware corporation
("Investors Capital").
WHEREAS, the Fund is registered as an
open-end management investment company under the
Investment Company Act of 1940, as amended (the
"1940 Act"), and offers shares of one series of its
common stock, par value $.01 per share, which have
been registered under the Securities Act of 1933,
as amended;
WHEREAS, Investors Capital is a service
company which provides management, administrative
and other services to investment companies and
other entities; and
WHEREAS, the Fund desires to retain
Investors Capital to render certain management and
administrative services, including supervision of
certain third party vendors to the Fund.
NOW, THEREFORE, in consideration of the
above premises and of other good and valuable
consideration the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Appointment of Administrator
The Fund hereby appoints Investors Capital
to act as administrator to the Fund for the period
and on the terms set forth in this Agreement. This
appointment applies to the existing series of the
Fund, as well as any future series provided (i) the
Fund does not object to Investors Capital in
writing or (ii) Investors Capital does not object
to the Fund in writing on the basis of the
capabilities of Investors Capital. Investors
Capital accepts such appointment and agrees to
render the services and provide, at its own
expense, the office space, furnishings and
equipment, and the personnel required by it to
perform the services on the terms and for the
compensation herein provided.
As further delineated on Schedule A of
this Agreement, which may be amended by the parties
from time to time Investors Capital shall provide
for, or assist in managing and supervising all
aspects of, the general day-to-day business
activities and operations of the Fund except for
investment advisory services, including custodial,
transfer agency, dividend disbursing, accounting,
auditing and legal services. Investors Capital
shall discharge such responsibilities subject to
the supervision and direction of the Fund's
officers and Board of Directors, and in compliance
with the objectives, policies and limitations set
forth in the Fund's registration statement,
Articles of Incorporation, By-Laws and applicable
laws and regulations. All agreements with third
parties shall be subject to review and approval by
the Fund's executive officers or Board of Directors.
2. Representation and Warranties of Investors
Capital
Investors Capital represents and warrants
to the Fund that:
A. Investors Capital is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware
and has full power and authority, corporate and
otherwise, to consummate the transactions
contemplated by this Agreement. Investors Capital
is duly qualified to carry out its business, and is
in good standing, in the State of New York.
B. The Board of Directors and
stockholders of Investors Capital have taken all
action required by law and Investors Capital 's
Certificate of Incorporation and By-Laws to
authorize the execution and delivery of this
Agreement by Investors Capital and the consummation
on behalf of Investors Capital of the transactions
contemplated by this Agreement. This Agreement
constitutes a legal, valid and binding obligation
of Investors Capital enforceable in accordance with
its terms. Neither the execution and delivery of
this Agreement, nor the consummation of the
transactions contemplated hereby, will result in a
breach of, or constitute a default under, or with
lapse of time or giving of notice or both will
result in a breach of or constitute a default
under, or otherwise give any party thereto the
right to terminate (a) any mortgage, indenture,
loan or credit agreement or any other agreement or
instrument evidencing indebtedness for money
borrowed to which Investors Capital is a party or
by which Investors Capital or any of its
properties is bound or affected, or pursuant to
which Investors Capital has guaranteed the
indebtedness of any person, or (b) any lease,
license, contract or other agreement to which
Investors Capital is a party or by which Investors
Capital or any of its properties is bound or
affected. Neither the execution and delivery of
this Agreement, nor the consummation of the
transactions contemplated hereby, will result in,
or require, the creation or imposition of any
mortgage, deed or trust, pledge, lien, security
interest, or other charge or encumbrance of any
nature upon or with respect to any of the
properties now or hereafter owned by Investors
Capital.
C. Neither the execution and delivery of
this Agreement nor the consummation of the
transactions contemplated hereby will violate any
provision of the Certificate of Incorporation or
By-Laws of Investors Capital.
D. Except such as have been obtained and
as are in full force and effect and subject to no
dispute, claim or challenge, no permit, license,
franchise, approval, authorization, qualification
or consent of, registration or filing with, or
notice to, any governmental authority is required
in connection with the execution and delivery by
Investors Capital of this Agreement or in
connection with the consummation by Investors
Capital of any transactions contemplated by this
Agreement, and no such permit, license, franchise,
approval, authorization, qualification or consent
of, registration or filing with, or notice to any
federal, state or local governmental authority is
required in connection with Investors Capital 's
business or operations as currently conducted or as
currently contemplated to be conducted. Investors
Capital has conducted its business and operations
in compliance with all applicable laws and
regulations.
3. Duties of the Fund
A. The Fund will deliver to Investors
Capital copies of each of the following documents
and will deliver to Investors Capital all future
amendments and supplements, if any:
(1) A certified copy of the Articles
of Incorporation of the Fund as amended
and currently in effect;
(2) A certified copy of the Fund's
By-Laws as amended and currently in effect;
(3) A copy of the resolution of the
Fund's Board of Directors authorizing this
Agreement;
(4) The Fund's registration statement
on Form N-1A as filed with, and declared
effective by, the U.S. Securities and
Exchange Commission ("SEC"), and all
amendments thereto;
(5) Each resolution of the Board of
Directors of the Fund authorizing the
original issue of its shares;
(6) Certified copies of the
resolutions of the Fund's Board of
Directors authorizing: (i) certain
officers and employees of Investors
Capital to give instructions to the Fund's
custodian and transfer agent as required
by agreements with such parties, and
(ii)certain officers and employees of
Investors Capital to sign checks and pay
expenses on behalf of the Fund;
(7) A copy of the current Advisory
Agreement between the Fund and Holland &
Company L.L.C.;
(8) A copy of the Transfer Agency
Agreement relating to the Fund;
(9) A copy of the Custody Agreement
relating to the Fund; and
(10) Such other certificates, documents
or opinions which Investors Capital may in
its reasonable discretion, deem necessary
or appropriate in the proper performance
of its duties.
B. The Fund will cooperate in
providing Investors Capital with all necessary
information to permit Investors Capital to perform
its duties hereunder.
C. The Fund certifies to Investors
Capital that as of the close of business on the
date of this Agreement, it has authorized
capitalization of one billion shares of its common
stock, $.01 par value (the "shares"), divided among
its series, and agrees that Investors Capital will
be promptly notified from time to time when the
Fund takes corporate action to increase the number
of authorized shares, including restoring redeemed
shares held in its treasury to the status of
authorized and unissued shares.
4. Services To Be Obtained Independently By
the Fund
The Fund shall, at its own expense,
provide for any of its own:
A. Organizational expenses;
B. Services of an independent
accountant;
C. Services of outside legal counsel
(including such counsel's review of the Fund's
registration statement, proxy materials and other
reports and materials prepared by Investors Capital
under this Agreement);
D. Services contracted for by the
Fund directly from parties other than Investors
Capital acting as administrator (or subcontracted
for by Investors Capital on behalf of the Fund,
subject to review and approval by the Fund's
executive officers or Board of Directors);
E. Trading operations and brokerage
fees, commissions and transfer taxes in connection
with the purchase and sale of securities for its
investment portfolio;
F. Investment advisory services;
G. Taxes, insurance premiums and
other fees and expenses applicable to its operation;
H. Costs incidental to any meeting of
shareholders including, but not limited to, legal
and accounting fees, proxy filing fees and costs
incidental to the preparation, printing and mailing
of any proxy materials;
I. Costs incidental to Directors'
meetings, including fees and expenses of Directors;
J. The salary and expenses of any
officer or employee of the Fund who is not also an
officer or employee of Investors Capital;
K. Services of the Fund's custodian
and depository banks;
L. Costs incidental to the
preparation, printing and distribution of its
registration statement and any amendments thereto,
and shareholder reports, including printing setup,
printing and mailing costs;
M. All registration fees and filing
fees required under the securities laws of the
United States and state regulatory authorities;
N. Fidelity bond and Director's and
officers' liability insurance;
O. Record retention costs of third
parties;
P. Distribution fees pursuant to any
distribution plan, if and when adopted pursuant to
Rule 12b-1 under the 1940 Act; and
Q. Litigation and indemnification
expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's
business.
5. Price, Charges and Instructions
In consideration of the services rendered
and expenses assumed by Investors Capital pursuant
to this Agreement, the Fund shall pay Investors
Capital a monthly fee at the annual rate of .15% of
its average daily net assets. Such sum shall be
paid in monthly installments by the tenth day of
each month for the previous month. This fee shall
be subject to an annual minimum of $25,000 for the
first year of operations and $50,000 annually
thereafter.
In addition, Investors Capital shall be
reimbursed for the reasonable cost of any and all
forms, including blank checks and proxies, used by
it in communicating with shareholders, Directors,
Fund management, or any regulatory agencies on
behalf of the Fund, or especially prepared for use
in connection with its obligations hereunder, as
well as the reasonable cost of postage, telephone,
telex and telecopy used in communicating with
shareholders, Directors, Fund management, or any
regulatory agencies on behalf of the Fund,
travel-related expenses when incurred on official
Fund business and microfilm used each year to
record the previous year's transactions in
shareholder accounts and computer tapes used for
reasonable permanent storage of records, permanent
storage costs for hard copy Fund records and
reasonable cost of insertion of materials in
mailing envelopes by outside firms. Prior to
ordering any forms in such supply as it estimates
will be adequate for more than two years' use,
Investors Capital shall obtain the written consent
of the Fund. All forms for which Investors Capital
has received reimbursement from the Fund shall be
and remain the property of the Fund until used.
At any time Investors Capital may apply to
any officer of the Fund or officer of the Fund's
investment adviser for instructions, and may
consult with legal counsel for the Fund, if
consented to by an officer of the Fund at the
expense of the Fund, with respect to any matter
arising in connection with the services to be
performed by Investors Capital under this Agreement
and Investors Capital shall not be liable and shall
be indemnified by the Fund for any action taken or
omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel.
Investors Capital shall be protected and
indemnified in acting upon any paper or document of
the Fund reasonably believed by it to be genuine
and to have been signed by the proper person or
persons and shall not be held to have notice of any
change of authority of any person, until receipt of
written notice thereof from the Fund. Investors
Capital shall also be protected and indemnified,
except where a stop order is in effect, in
recognizing transfer documents which Investors
Capital reasonably believes to bear the proper
manual or facsimile signature of the officers of
the Fund, and the proper counter-signatures of any
present or former transfer agent.
6. Limitation of Liability and Indemnification
A. Investors Capital shall provide
its services in a professional manner customarily
provided by leading mutual fund administration
companies. Investors Capital shall be responsible
for the performance of only such duties as are set
forth or contemplated herein or contained in
instructions given to it by the Fund which are not
contrary to this Agreement or that are mutually
agreed upon by both parties to this agreement.
Investors Capital shall have no liability for any
loss or damage resulting from the performance or
non-performance of its duties hereunder unless
caused by or resulting from the negligence or
misconduct of Investors Capital, its officers or
employees or the violation by any of such persons
of this Agreement. In any event, Investors Capital
shall not be liable for any consequential damages,
except to the extent resulting from its gross
negligence, bad faith, or willful misconduct.
B. The Fund shall indemnify and hold
Investors Capital harmless from all loss, cost,
damage and expense, including reasonable expenses
for counsel, incurred by it resulting from any
claim, demand, action or suit in connection with
any action or omission by it in the performance of
its duties hereunder, or as a result of acting upon
any instructions reasonably believed by it to have
been executed by a duly authorized officer of the
Fund, provided that this indemnification shall not
apply to actions or omissions of Investors Capital
, its officers or employees in cases of its or
their own negligence, bad faith, or misconduct or
the violation by any of such persons of this
Agreement.
C. The Fund will be entitled to
participate at its own expense in the defense, or,
if it so elects, to assume the defense of any suit
brought to enforce any liability subject to the
indemnification provided above, and if the Fund
elects to assume the defense, such defense shall be
conducted by counsel chosen by the Fund. In the
event the Fund elects to assume the defense of any
such suit and retain such counsel, Investors
Capital or any of its affiliated persons, named as
defendant or defendants in the suit, may retain
additional counsel unless the Fund shall have
specifically authorized the retaining of such
counsel.
7. Confidentiality
Investors Capital agrees that, except as
otherwise required by law, Investors Capital will
keep confidential all records and information in
its possession relating to the Fund or its
shareholders or shareholder accounts and will not
disclose the same to any person except at the
request or with the written consent of the Fund.
8. Compliance With Governmental Rules and
Regulations
The Fund assumes full responsibility for
complying with all applicable requirements of the
Securities Act of 1933, the 1940 Act and the
Securities Exchange Act of 1934, all as amended,
and any laws, rules and regulations of governmental
authorities having jurisdiction, except to the
extent that Investors Capital specifically assumes
any such obligations under the terms of this
Agreement.
Investors Capital shall maintain and
preserve for the period prescribed, such records
relating to the services to be performed by
Investors Capital under this Agreement as are
required pursuant to the 1940 Act and the
Securities Exchange Act of 1934. All such records
shall at all times remain the respective properties
of the Fund, shall be readily accessible during
normal business hours and shall be promptly
surrendered upon the termination of this Agreement
or otherwise on written request. Records shall be
surrendered in usable machine readable form.
9. Status of Investors Capital
Investors Capital shall be deemed to be an
independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Fund
from time to time, have no authority to act or
represent the Fund in any way or otherwise be
deemed an agent of the Fund.
Nothing herein shall be deemed to limit or
restrict Investors Capital 's right or that of any
of its affiliates or employees, to engage in any
other business or to devote time and attention to
the administration or other related aspects of any
other registered investment company or to render
services of any kind to any other corporation,
firm, individual or association.
10. Printed Matter Concerning the Fund or
Investors Capital
Neither the Fund nor Investors Capital
shall publish and circulate any printed matter
which contains any reference to the other party
without its prior written approval, excepting such
printed matter as refers in accurate terms to
Investors Capital's appointment under this
Agreement and excepting as may be required by
applicable laws or regulations.
11. Term, Amendment and Termination
This Agreement may be modified or amended
from time to time by mutual agreement between the
parties hereto. The Agreement shall remain in
effect until September 28, 1999, and shall
automatically be renewed annually thereafter unless
terminated by either party at the end of such
period or thereafter subject to the terms for
termination provided in this Section 11. Upon
termination of the Agreement, the Fund shall pay to
Investors Capital such compensation as may be due
under the terms hereof on the date of such
termination. Either party may terminate the
Agreement with sixty (60) days written notice.
If, during the term of the Agreement,
either of the parties hereto shall be in default in
the performance of any of its duties and
obligations hereunder (the defaulting party), the
other party hereto may give written notice to the
defaulting party and if such default shall not have
been remedied within thirty (30) days after such
written notice is given, then the party giving such
notice may terminate this Agreement by thirty-(30)
days written notice of such termination to the
defaulting party, but such termination shall not
affect any rights or obligations of either party
arising from or relating to such default under the
terms hereof. In the case of Investors Capital,
default shall be defined as "in the reasonable
judgement of the Fund, that Investors Capital's
performance is consistently below the industry
standard for comparable performance of mutual funds
administrative service providers".
12. Notices
Any notice or other communication
authorized or required hereunder shall be in
writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be
addressed (a)-if to the Fund, to its adviser at 375
Park Avenue, New York, NY, 10152, Attn: Michael F.
Holland, and (b)if to Investors Capital, 600 Fifth
Avenue, 26th Floor, New York, New York 10020,
Attention: Carla E. Dearing. Either party may
designate a different address by notice to the
other party. Any such notice or other
communication shall be deemed given when actually
received.
13. Non-Assignability
This Agreement shall not be assigned by
either of the parties hereto without the prior
consent in writing of the other party. Any
purported assignment in violation of this agreement
shall be void and of no effect.
14. Successors
This Agreement shall be binding on and
shall insure to the benefit of the Fund and
Investors Capital, and their respective successors
and permitted assigns.
15. Governing Law
This Agreement shall be governed by and
construed in accordance with the laws of the State
of New York.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their
officers designated below as of the day and year
above written.
ATTEST:
HOLLAND SERIES FUND, INC.
By:
ATTEST:
INVESTORS CAPITAL SERVICES, INC.
By:
SCHEDULE A
to
ADMINISTRATION AGREEMENT
between
HOLLAND SERIES FUND, INC.
and
INVESTORS CAPITAL SERVICES, INC.
Pursuant to the attached Administration Agreement,
Investors Capital Services, Inc. ("Investors
Capital ") will provide the following services to
Holland Series Fund, Inc.(the "Fund"):
1) Supervision of all third party
vendors to the Fund - Investors
Capital will supervise the quality
of service and competitiveness of
fees of all Fund vendors, except
the investment adviser and
sub-advisers. Investors Capital
will develop day-to-day working
relationships with existing
vendors as well as evaluate
alternative vendor candidates, as
reasonably requested by the Fund's
officers. The vendors that
Investors Capital will be
responsible for include:
a) Transfer and Dividend
Disbursing Agent, Fund
Accounting Agent and
Custodian - Investors
Capital will make
necessary efforts to
ensure that all legally
required functions are
performed at a high
quality level and at a
competitive fee.
Investors Capital will
strive to enhance the
service levels as well as
reporting capabilities.
b) Outside Counsel,
Independent Accountant
and Other Vendors -
Investors Capital will
coordinate communications
with all other Fund
vendors with a goal of
enhancing service levels
while controlling costs.
c) Insurance Providers -
Investors Capital will
identify potential
insurance providers and
evaluate the comparative
terms and costs of
fidelity bond and
Director's and Officer's
Errors and Omissions
coverage. Investors
Capital will continually
monitor the
appropriateness of the
chosen providers and
coverage.
d) Shareholder Servicing
Agent - Investors Capital
will oversee the
shareholder servicing of
the Fund.
2) Monitor and Report on Compliance -
Investors Capital will monitor the
Fund's compliance with the
regulations of Sub-Chapter M of
the Internal Revenue Code with
particular emphasis on the asset
diversification, income and
short-short tests. Investors
Capital will monitor the Fund's
compliance with the regulations of
the securities laws, particularly
the Investment Company Act of
1940, with particular emphasis on
the diversification, voting stock
and Rule 2a-7 tests. Investors
Capital will monitor all
Prospectus, Statement of
Additional Information and
Board-imposed compliance
limitations. Investors Capital
will report compliance status in
all required areas in a format and
at a frequency mutually agreed
upon between Fund officers and
Directors and Investors Capital,
including a quarterly review and
reporting pursuant to the Fund's
Code of Ethics policy.
3) Prepare and Monitor Annual
Compliance and Administrative
Calendar - Investors Capital will
prepare an annual calendar which
will include key dates in the
operations of the Fund, such as
Board and Audit Committee Meetings
and mailings, filing dates,
compliance monitoring and other
mutually agreed upon events.
Investors Capital will monitor the
calendar and report on status of
activity on a regular basis to
Fund officers.
4) Board of Directors' Meetings -
Investors Capital will prepare and
mail all necessary Resolutions,
Agenda, Powers of Attorney and
other material in advance of each
Board Meeting, and will prepare
and mail all Board written
consents. Investors Capital will
do a presentation to the Board of
the status of all administrative
and operations functions at each
meeting. Investors Capital will
coordinate other Vendor
presentations to the Board when
required. Investors Capital will
pay all required Directors' fees
and expenses, from the Fund's
accounts maintained with its
custodian, on a timely and
accurate basis.
5) Monthly Fund Management Reporting
- Investors Capital will collect,
review and summarize all Vendor
reports. Investors Capital will
prepare a monthly administrative
report which will include the
financial statements, a compliance
summary, expense ratio
calculations, portfolio turnover
ratio calculations and performance
calculations, and will prepare
other reasonably requested
activity reports.
6) Shareholder Reports - Investors
Capital will prepare the
semi-annual and annual financial
reports and footnotes required by
SEC regulation for reporting to
the shareholders of the Fund
("Shareholders") and the SEC.
Investors Capital will coordinate
with the Investment Adviser,
Sub-advisers, and Independent
Accountants to obtain the
appropriate letters to the
Shareholders. Investors Capital
will coordinate the printing of
the reports and mail to the
Shareholders as well as file
copies with the appropriate
regulatory authorities. Investors
Capital will respond to any
shareholder inquiries under the
direction of the Fund's officers.
8) SEC Filings - Investors Capital
will prepare for Fund officer
review all necessary filings and
make such filings on a timely
basis with the SEC. These will
include Form N-SAR, Rule 24e-2 and
24f-2 filings, proxy materials,
post-effective amendments to Form
N-1A and any other SEC filings.
9) Blue Sky Monitoring and Filings -
Investors Capital will monitor
Blue Sky compliance in each
jurisdiction and perform all
administrative functions,
including the making of necessary
filings on behalf of the Fund,
under the supervision of the
Fund's Distributor. Investors
Capital will report the status of
the Fund's registration of each
series of shares on a regular
basis to the Fund's Directors and
officers.
10) Other Filings - On behalf of the
Fund, Investors Capital will
prepare and file any other
documents required by federal,
state and other applicable laws
and regulations with the
appropriate jurisdiction,
including abandoned property
reports and state corporate law
filings.
11) Holdings Reconciliations -
Investors Capital will review
holdings reconciliations between
the Custodian and Fund Accounting
Agent and between the Investment
Adviser, Sub-advisers and the
Custodian/Fund Accounting Agent.
All discrepancies will be
researched and reported promptly
to the Fund's officers or
Directors.
12) Proxy Statement and Annual Meeting
- Investors Capital will prepare
all proxy materials, file them
with the SEC and mail them to the
Shareholders. Investors Capital
will set up the Annual Meeting,
prepare the agenda and script,
tabulate and solicit votes if
requested to do so by the Fund's
officers or Directors and perform
the duties of the inspector of the
elections.
13) Fund Expenses - Investors Capital
will review all Fund expenses and
strive to create efficiencies and
economies of scale wherever
possible. Investors Capital,
under supervision and direction of
Fund officers, will pay all Fund
bills in an accurate and timely
manner from the Fund's accounts
maintained with its custodian.
14) New Series Registration -
Investors Capital will assist
management in the preparation of
and filing with the SEC of all new
Series or other changes to the
Fund's prospectus and Statement of
Additional Information.
15) Office Facilities - Investors
Capital will maintain office
facilities and provide clerical
services and supplies in support
of the administration of the Fund
and will provide the Fund address
upon request.
16) Statistical Research Data -
Investors Capital will calculate
and disseminate all required
statistical research data required
to the relevant publications and
media.
17) Fund Officers - Investors Capital
will provide experienced
professionals to serve as Fund
officers (Secretary, Treasurer,
and/or Assistant Treasurer) and
perform the functions of these
offices.
18) Books and Records - Investors
Capital will oversee the
preparation and accuracy of,
maintain, and store the books and
records of the Fund.
19) Miscellaneous Regulatory Matters -
Investors Capital will provide
advice independently or with the
support of the Fund's counsel to
Fund management with respect to
regulatory matters affecting the
Fund.
20) General - Investors Capital will
make its staff available to
management to assist in or to
respond to any reasonable request
for Fund- or industry-related
information. If requested,
Investors Capital will make its
facilities available for a meeting
of the Fund's officers or
Directors. Investors Capital will
assist in any examination of the
Fund by the SEC, IRS or any other
regulatory agency.
DISTRIBUTION AGREEMENT
In consideration of the agreements
hereinafter contained, Holland Series Fund, Inc.
(the "Fund"), an open-end, management investment
company organized as a corporation under the laws
of the State of Maryland, has agreed that AMT
Capital Securities, L.L.C. ("AMT Capital") shall
be, for the period of this Agreement, the exclusive
distributor of shares of each series of the Fund
(the "Shares").
1. Services as Distributor
1.1 AMT Capital will act as
agent for the distribution of the Shares covered by
the registration statement, prospectus and
statement of additional information, all as defined
hereafter in Section 3 for the Fund then in effect
under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act").
1.2 AMT Capital agrees to
use its best efforts to solicit orders for the sale
of the Shares at the public offering price, as
determined in accordance with the registration
statement, and will undertake such advertising and
promotion as it believes is reasonable in
connection with such solicitation. AMT Capital
shall review and file such materials with the
Securities and Exchange Commission (the "SEC") and
the National Association of Securities Dealers,
Inc. (the "NASD") to the extent required by the
Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the 1940 Act and the rules and
regulations thereunder, and by the rules of the
NASD.
1.3 All activities by AMT
Capital as distributor of the Shares shall comply
with all applicable laws, rules and regulations,
including, without limitation, all rules and
regulations made or adopted by the SEC or by any
securities association registered under the 1934
Act.
1.4 AMT Capital acknowledges
that the only information provided to it by the
Fund is that contained in the registration
statement, the prospectus, the statement of
additional information and reports and financial
information referred to in Section 2.2 herein.
Neither AMT Capital nor any other person is
authorized by the Fund to give any information or
to make any representations, other than those
contained in such documents and any sales
literature or advertisements approved by
appropriate representatives of the Fund.
1.5 AMT Capital will
transmit any orders received by it for purchase or
redemption of shares of the Fund to Investors Bank
& Trust Company ("IBT") or any successor transfer
agent and dividend disbursing agent of which the
Fund has notified AMT Capital in writing.
1.6 AMT Capital will provide
to IBT or any successor to IBT of which the Fund
has notified AMT Capital in writing, or in the
alternative to a shareholder servicing agent
approved by the Board of Directors of the Fund,
such information or documents that it may require
or request from time to time in connection with
purchases and redemptions of Shares and the
establishment of accounts.
1.7 AMT Capital acknowledges
that, whenever in the judgment of the Fund's
officers such action is warranted for any reason,
including, without limitation, market, economic or
political conditions, those officers may decline to
accept any orders for, or make any sales of, the
Shares until such time as those officers deem it
advisable to accept such orders and to make such
sales.
1.8 AMT Capital will act only
on its own behalf as principal should it choose to
enter into selling agreements with selected dealers
or others.
2. Duties of the Fund
2.1 The Fund agrees at its
own expense to execute any and all documents, to
furnish any and all information and to take any
other actions that may be reasonably necessary in
connection with the qualification of the Shares for
sale in those states that AMT Capital may designate.
2.2 The Fund shall furnish
from time to time, for use in connection with the
sale of the Shares, such information and/or reports
with respect to the Fund and the Shares as AMT
Capital may reasonably request, all of which shall
be signed by one or more of the Fund's duly
authorized officers; and the Fund warrants that the
statements contained in any such reports, when so
signed by one or more of the Funds' officers, shall
be true and correct in all material respects. The
Fund shall also furnish AMT Capital upon request
with: (a) annual audits of the Fund's books and
accounts made by independent public accountants
regularly retained by the Fund, (b) semiannual
unaudited financial statements pertaining to the
Fund, (c) quarterly earnings statements prepared by
the Fund, (d) a monthly itemized list of the
securities in the portfolios of the Fund, (e)
monthly balance sheets as soon as practicable after
the end of each month and (f) from time to time
such additional information regarding the Fund's
financial condition as AMT Capital may reasonably
request.
3. Representations and Warranties
3.1 The Fund represents to
AMT Capital that all registration statements,
prospectuses and statements of additional
information filed by the Fund with the SEC under
the 1933 Act and the 1940 Act with respect to the
Shares have been carefully prepared in conformity
with the requirements of the 1933 Act, the 1940 Act
and the rules and regulations of the SEC
thereunder. As used in this Agreement the terms
"registration statement", "prospectus" and
"statement of additional information" shall mean
any registration statement, prospectus and
statement of additional information filed by the
Fund with the SEC and any amendments and
supplements thereto which at any time shall have
been filed with the SEC. The Fund represents and
warrants to AMT Capital that any registration
statement, prospectus and statement of additional
information, when such registration statement
becomes effective, will include all statements
required to be contained therein in conformity with
the 1933 Act, the 1940 Act and the rules and
regulations of the SEC; that all statements of fact
contained in any registration statement, prospectus
or statement of additional information will be true
and correct when such registration statement
becomes effective; and that neither any
registration statement nor any prospectus or
statement of additional information when such
registration statement becomes effective will
include an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading to a purchaser of the shares of any
Portfolio in the Fund.
3.2 AMT Capital may, but
shall not be obligated to, propose from time to
time such amendment or amendments to any
registration statement and such supplement or
supplements to any prospectus or statement of
additional information as, in the light of future
developments, may, in the opinion of AMT Capital's
counsel, be necessary or advisable. If the Fund
shall not propose such amendment or amendments
and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request
from AMT Capital to do so, AMT Capital may, at its
option, terminate this Agreement. The Fund shall
not file any amendment to any registration
statement or supplement to any prospectus or
statement of additional information without giving
AMT Capital reasonable notice thereof in advance;
provided, however, that nothing contained in this
Agreement shall in any way limit the Funds' right
to file at any time such amendments to any
registration statement and/or supplements to any
prospectus or statement of additional information,
of whatever character, as the Fund may deem
advisable, such right being in all respects
absolute and unconditional.
4. Expenses
AMT Capital shall furnish, at its
expense and without cost to the Fund, the services
of personnel to the extent that such services are
required to carry out its obligations under this
Agreement.
5. Indemnification
5.1 The Fund authorizes AMT
Capital and any dealers with whom AMT Capital has
entered into dealer agreements to use any
prospectus or statement of additional information
furnished by the Fund from time to time, in
connection with the sale of each Portfolio's
shares. The Fund agrees to indemnify, defend and
hold AMT Capital, its several officers and
directors, and any person who controls AMT Capital
within the meaning of Section 15 of the 1933 Act,
free and harmless from and against any and all
claims, demands, liabilities and expenses
(including the cost of investigating or defending
such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which AMT
Capital, its officers and directors, or any such
controlling person, may incur under the 1933 Act,
the 1940 Act or common law or otherwise, arising
out of or based upon any untrue statement or
alleged untrue statement of a material fact
contained in any registration statement, any
prospectus or any statement of additional
information, or arising out of or based upon any
omission or alleged omission to state a material
fact required to be stated in any registration
statement, any prospectus or any statement of
additional information, or necessary to make the
statements in any of them not misleading; provided,
however, that the Fund's agreement to indemnify AMT
Capital, its officers or directors, and any such
controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising
out of or based upon any statements or
representations made by AMT Capital or its
representatives or agents other than such
statements and representations as are contained in
any registration statement, prospectus or statement
of additional information and in such financial and
other statements as are furnished to AMT Capital
pursuant to paragraph 2.2 hereof; and further
provided that the Fund's agreement to indemnify AMT
Capital and the Fund's representations and
warranties hereinbefore set forth in paragraph 3
shall not be deemed to cover any liability to the
Fund or its shareholders to which AMT Capital would
otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of AMT
Capital's reckless disregard of its obligations and
duties under this Agreement. The Fund's agreement
to indemnify AMT Capital, its officers and
directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's
being notified of any action brought against AMT
Capital, its officers or directors, or any such
controlling person, such notification to be given
by letter or by telegram addressed to the Fund at
its principal office in New York, New York and sent
to the Fund by the person against whom such action
is brought, within ten days after the summons or
other first legal process shall have been served.
The failure so to notify the Fund of any such
action shall not relieve the Fund from any
liability that the Fund may have to the person
against whom such action is brought by reason of
any such untrue or alleged untrue statement or
omission or alleged omission otherwise than on
account of the Fund's indemnification agreement
contained in this paragraph 5.1. The Fund's
indemnification agreement contained in this
paragraph 5.1 and the Fund's representations and
warranties in this Agreement shall remain operative
and in full force and effect regardless of any
investigation made by or on behalf of AMT Capital,
its officers and directors, or any controlling
person, and shall survive the delivery of any of
the Fund's shares. This agreement of indemnity
will inure exclusively to AMT Capital's benefit, to
the benefit of its several officers and directors,
and their respective estates, and to the benefit of
the controlling persons and their successors. The
Fund agrees to notify AMT Capital promptly of the
commencement of any litigation or proceedings
against the Fund or any of its officers or
Directors in connection with the issuance and sale
of any of the Fund's shares.
5.2 AMT Capital agrees to
indemnify, defend and hold the Fund, its several
officers and directors, and any person who controls
the Fund within the meaning of Section 15 of the
1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses
(including the costs of investigating or defending
such claims, demands or liabilities and any counsel
fees incurred in connection therewith) that the
Fund, its officers or directors or any such
controlling person may incur under the 1933 Act,
the 1940 Act or common law or otherwise, but only
to the extent that such liability or expense
incurred by the Fund, its officers or directors or
such controlling person resulting from such claims
or demands shall arise out of or be based upon (a)
any unauthorized sales literature, advertisements,
information, statements or representations used or
made by AMT Capital or (b) any untrue or alleged
untrue statement of a material fact contained in
information, furnished in writing by AMT Capital to
the Fund and used in the answers to any of the
items of the registration statement or in the
corresponding statements made in the prospectus or
statement of additional information, or shall arise
out of or be based upon any omission or alleged
omission to state a material fact in connection
with such information furnished in writing by AMT
Capital to the Fund and required to be stated in
such answers or necessary to make such information
not misleading, provided, however, that AMT
Capital's agreement to indemnify the Fund and AMT
Capital's representations and warranties
hereinbefore set forth in paragraph 3 shall not be
deemed to cover any liability to AMT Capital to
which the Fund would otherwise be subject by reason
of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by
reason of the Fund's reckless disregard of its
obligations and duties under this Agreement. AMT
Capital's agreement to indemnify the Fund, its
officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon
AMT Capital's being notified of any action brought
against the Fund, its officers or directors, or any
such controlling person, such notification to be
given by letter or telegram addressed to AMT
Capital at its principal office in New York, New
York and sent to AMT Capital by the person against
whom such action is brought, within ten days after
the summons or other first legal process shall have
been served. The failure so to notify AMT Capital
of any such action shall not relieve AMT Capital
from any liability that AMT Capital may have to the
Fund, its officers or directors, or to such
controlling person by reason of any such untrue or
alleged untrue statement or omission or alleged
omission otherwise than on account of AMT Capital's
indemnification agreement contained in this
paragraph 5.2. AMT Capital agrees to notify the
Fund promptly of the commencement of any litigation
or proceedings against AMT Capital or any of its
officers or directors in connection with the
issuance and sale of any of the Fund's shares.
5.3 In case any action shall
be brought against any indemnified party under
paragraph 5.1 or 5.2, and such party shall notify
the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to
participate in, and, to the extent that it shall
wish to do so, to assume the defense thereof with
counsel satisfactory to such indemnified party. If
the indemnifying party opts to assume the defense
of such action, the indemnifying party will not be
liable to the indemnified party for any legal or
other expenses subsequently incurred by the
indemnified party in connection with the defense
thereof other than (a) reasonable costs of
investigation or the furnishing of documents or
witnesses and (b) all reasonable fees and expenses
of separate counsel to such indemnified party if
(i) the indemnifying party and the indemnified
party shall have agreed to the retention of such
counsel or (ii) the indemnified party shall have
concluded reasonably that representation of the
indemnifying party and the indemnified party by the
same counsel would be inappropriate due to actual
or potential differing interests between them in
the conduct of the defense of such action.
6. Effectiveness of Registration
None of the Shares shall be
offered by either AMT Capital under any of the
provisions of this Agreement and no orders for the
purchase or sale of the Shares hereunder shall be
accepted by the Fund if and so long as the
effectiveness of the registration statement then in
effect or any necessary amendments thereto shall be
suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as
required by Section 5(b)(2) of the 1933 Act is not
on file with the SEC; provided, however, that
nothing contained in this paragraph 6 shall in any
way restrict or have an application to or bearing
upon the Fund's obligation to repurchase its Shares
from any shareholder in accordance with the
provisions of the Fund's prospectus, statement of
additional information or articles of incorporation.
7. Notice to AMT Capital
The Fund agrees to advise AMT
Capital immediately in writing:
(a) of any request by the SEC for
amendments to the registration statement,
prospectuses or statements of additional information
then in effect or for additional information;
(b) in the event of the issuance by the
SEC of any stop order suspending the effectiveness
of the registration statement then in effect
or the initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue
any statement of a material fact made in the
registration statement, prospectus or statement of
additional information then in effect or that
requires the making of a change in such
registration statement, prospectus or statement of
additional information in order to make the
statements therein not misleading; and
(d) of all actions of the SEC with respect to any
amendment to any registration statement,
prospectus or statement of additional information
which may from time to time be filed with the SEC.
8. Term of Agreement
This Agreement shall continue
until two years after the date of this Agreement,
and thereafter shall continue automatically for
successive annual periods, provided such
continuance is specifically approved at least
annually by (i) the Fund's Board of Directors, or
(ii) by a vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of
the relevant Portfolios of the Fund, provided that
in either event the continuance is also approved by
the majority of the Directors of the Fund who are
not interested persons (as defined in the 1940 Act)
of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of
voting on such approval. This Agreement is
terminable, without penalty, on 60 days' notice by
the Fund's Board of Directors, by vote of the
holders of a majority of the Fund's shares, or on
60 days' notice by AMT Capital. This Agreement
will also terminate automatically in the event of
its assignment (as defined in the 1940 Act).
Please confirm that the foregoing
is in accordance with your understanding by
indicating your acceptance thereof at the place
below indicated, whereupon it shall become a
binding agreement between us.
Very truly yours,
HOLLAND SERIES FUND, INC.
By:/s/Michael F. Holland
Michael F. Holland
President
Accepted:
AMT CAPITAL SECURITIES, L.L.C.
By:
Date: ___________, 1998
Performance Information Schedule
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total Return
- --------------------------------------------------------------------------------------------------------------------
Date of Net Cap. Shares
Distribution Income Gains. Reinvested NAV Inception 1 Year
Holland Balanced Fund:
10/2/95 10.00 1,000.00 100
10/31/95 0.00000 0.00000 0.000 10.01 1,001.00
11/30/95 0.00000 0.00000 0.000 10.34 1,034.00
12/31/95 0.07000 0.00000 0.667 10.50 1,057.00
1/31/96 0.00000 0.00000 0.000 10.71 1,078.14
2/29/96 0.00000 0.00000 0.000 10.71 1,078.14
3/31/96 0.00000 0.00000 0.000 10.92 1,099.28
4/30/96 0.04500 0.00000 0.409 11.09 1,120.92
5/31/96 0.00000 0.00000 0.000 11.28 1,140.13
6/30/96 0.00000 0.00000 0.000 11.21 1,133.05
7/31/96 0.05000 0.00000 0.465 10.86 1,102.73
8/31/96 0.00000 0.00000 0.000 11.13 1,130.15
9/30/96 0.00000 0.00000 0.000 11.39 1,156.55
10/31/96 0.06000 0.00000 0.522 11.65 1,189.02
11/30/96 0.00000 0.00000 0.000 12.16 1,241.08
12/31/96 0.08570 0.00058 0.731 11.98 1,231.47
1/31/97 0.00000 0.00000 0.000 12.48 1,282.86
2/28/97 0.00000 0.00000 0.000 12.47 1,281.84
3/31/97 0.00000 0.00000 0.000 12.24 1,258.19
4/30/97 0.05000 0.00000 0.419 12.42 1,281.89
5/31/97 0.00000 0.00000 0.000 12.74 1,314.92
6/30/97 0.00000 0.00000 0.000 13.12 1,354.14
7/31/97 0.05000 0.00000 0.380 13.76 1,425.42
8/31/97 0.00000 0.00000 0.000 13.29 1,376.73
9/30/97 0.00000 0.00000 0.000 13.70 1,419.20 1,000.00 72.9927
10/31/97 0.06000 0.00000 0.457 13.05 1,357.84 956.76 73.31496
11/30/97 0.00000 0.00000 0.000 13.31 1,384.89 975.82 73.31496
12/31/97 0.10000 0.00000 0.791 13.17 1,380.75 972.90 73.87249
1/31/98 0.00000 0.00000 0.000 13.28 1,392.28 981.03 73.87249
2/28/98 0.00000 0.00000 0.000 13.83 1,449.94 1,021.66 73.87249
3/31/98 0.00000 0.00000 0.000 14.09 1,477.20 1,040.86 73.87249
4/30/98 0.05000 0.00000 0.366 14.23 1,497.09 1,054.88 74.1306
5/31/98 0.00000 0.00000 0.000 14.26 1,500.24 1,057.10 74.1306
6/30/98 0.00000 0.00000 0.000 14.29 1,503.40 1,059.33 74.1306
7/31/98 0.08000 0.00000 0.592 14.25 1,507.63 1,062.31 74.54794
8/31/98 0.00000 0.00000 0.000 13.14 1,390.20 979.56 74.54794
9/30/98 0.00000 0.00000 0.000 13.74 1,453.68 1,024.29 74.54794
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> HOLLAND BALANCED FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 26670
<INVESTMENTS-AT-VALUE> 29872
<RECEIVABLES> 130
<ASSETS-OTHER> 75
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30077
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 36
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 26443
<SHARES-COMMON-STOCK> 2186
<SHARES-COMMON-PRIOR> 1955
<ACCUMULATED-NII-CURRENT> 217
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 180
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3201
<NET-ASSETS> 30041
<DIVIDEND-INCOME> 326
<INTEREST-INCOME> 693
<OTHER-INCOME> 0
<EXPENSES-NET> 430
<NET-INVESTMENT-INCOME> 589
<REALIZED-GAINS-CURRENT> 293
<APPREC-INCREASE-CURRENT> (233)
<NET-CHANGE-FROM-OPS> 649
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 594
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7471
<NUMBER-OF-SHARES-REDEEMED> 4852
<SHARES-REINVESTED> 579
<NET-CHANGE-IN-ASSETS> 3253
<ACCUMULATED-NII-PRIOR> 189
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (113)
<GROSS-ADVISORY-FEES> 215
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 526
<AVERAGE-NET-ASSETS> 28701
<PER-SHARE-NAV-BEGIN> 13.70
<PER-SHARE-NII> .28
<PER-SHARE-GAIN-APPREC> .05
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 29
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.74
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference
in the Prospectus and Statement of Additional
Information constituting parts of this
Post-Effective Amendment No. 4 to the registration
statement on Form N-1A (the "Registration
Statement") of our report dated October 27, 1998,
relating to the financial statements and financial
highlights appearing in the September 30, 1998
Annual Report to Shareholders of Holland Balanced
Fund, which are also incorporated by reference into
the Registration Statement. We also consent to the
references to us under the heading "Financial
Highlights" in the Prospectus and under the heading
"Independent Accountants" in the Statement of
Additional Information.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 30, 1998
