Securities Act File No.
As filed with the Securities and Exchange Commission on November 4, 2002
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
IDEX Mutual Funds
(Exact Name of Registrant as Specified in Charter)
570 Carillon Parkway
St. Petersburg, Florida 33716
(Address of Principal Executive Offices) (Zip Code)
(800) 851-9777
(Registrant's Area Code and Telephone Number)
John K. Carter, Esq.
570 Carillon Parkway
St. Petersburg, Florida 33716
IDEX Mutual Funds
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on December 4, 2002
pursuant to Rule 488 under the Securities Act of 1933.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
Pursuant to Rule 429 under the Securities Act of 1933, this registration
statement relates to shares of beneficial interest previously registered on Form
N-1A (File No. 33-02659).
3
IDEX PBHG TECHNOLOGY & COMMUNICATIONS
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
888/233-4339
December 6, 2002
Dear Shareholder:
Your Board of Trustees has called a special meeting of shareholders of IDEX PBHG
Technology & Communications, to be held at 10:00 a.m., local time, on February
12, 2003, at the offices of IDEX Mutual Funds ("IDEX"), 570 Carillon Parkway,
St. Petersburg, Florida 33716, as adjourned from time-to-time (the "Special
Meeting").
The IDEX Board of Trustees (the "Board") has approved a reorganization (the
"Reorganization") of IDEX PBHG Technology & Communications ("Acquired Fund")
into IDEX PBHG Mid Cap Growth ("Acquiring Fund") (each a "Fund," collectively,
the "Funds"). AEGON/Transamerica Fund Advisers, Inc.("ATFA") serves as
investment adviser to both Funds. Pilgrim Baxter & Associates, Ltd. ("PBHG")
serves as sub-adviser to both Acquired Fund and Acquiring Fund. Acquired Fund
has an investment objective and policies that are similar in certain respects to
those of Acquiring Fund. The Reorganization is expected to result in operating
expenses that are lower for shareholders.
You are asked to vote to approve an Agreement and Plan of Reorganization. The
accompanying document describes the proposed transaction and compares the
policies and expenses of the Funds for your evaluation.
After careful consideration, the IDEX Board unanimously approved this proposal
and recommends that shareholders vote "FOR" the proposal.
A Proxy Statement/Prospectus that describes the Reorganization is enclosed. We
hope that you can attend the Special Meeting in person; however, we urge you, in
any event, to vote your shares by completing and returning the enclosed proxy
card, in the envelope provided, at your earliest convenience. You also may
INSTEAD vote by Internet, telephone, or facsimile by following the enclosed
instructions. If you choose one of these methods, DO NOT return your proxy card
unless you later decide to change your vote.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. IN ORDER TO
AVOID THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE ADJOURNMENTS,
PLEASE TAKE A FEW MINUTES TO READ THE PROXY STATEMENT/PROSPECTUS AND CAST YOUR
VOTE. IT IS IMPORTANT THAT YOUR VOTE BE RECEIVED NO LATER THAN 10:00 A.M. ON
FEBRUARY 12, 2003.
Alamo Direct ("Alamo") a professional solicitation firm, will assist you in the
voting process. As the date of the Special Meeting approaches, you may receive a
telephone call from Alamo reminding you to exercise your right to vote.
We appreciate your participation and prompt response in this matter and thank
you for your continued support.
Sincerely,
Brian C. Scott
President
4
IDEX MUTUAL FUNDS
IDEX PBHG Technology & Communications
570 Carillon Parkway
St. Petersburg, Florida 33716
(888) 233-4339
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
IDEX PBHG TECHNOLOGY & COMMUNICATIONS
TO BE HELD ON FEBRUARY 12, 2003
To the Shareholders:
A special meeting of shareholders of IDEX PBHG Technology & Communications is
scheduled for February 12, 2003 at 10:00 a.m., local time, at 570 Carillon
Parkway, St. Petersburg, Florida 33716, as adjourned from time-to-time (the
"Special Meeting").
At the Special Meeting, you will be asked to consider the following proposals:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets and liabilities of IDEX PBHG Technology &
Communications (the "Acquired Fund") by IDEX PBHG Mid Cap Growth (the
"Acquiring Fund") solely in exchange for shares of Acquiring Fund,
followed by the complete liquidation of Acquired Fund; and
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting in the discretion of the proxies
or their substitutes.
Shareholders of record at the close of business on November 15, 2002 are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement/Prospectus. Regardless of whether you
plan to attend the Special Meeting, PLEASE COMPLETE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD, OR VOTE BY TELEPHONE, BY FACSIMILE, OR THROUGH THE
INTERNET so that a quorum will be present and a maximum number of shares may be
voted. Proxies may be revoked at any time by executing and submitting a revised
proxy, by giving written notice of revocation to IDEX, or by voting in person at
the Special Meeting.
By Order of the Board of Trustees
John K. Carter
Vice President, Secretary &
General Counsel
December 6, 2002
5
INTRODUCTION............................................................................................ 8
SUMMARY................................................................................................. 9
The Proposed Reorganization.......................................................................... 9
Purchase and Redemption Information.................................................................. 10
Federal Income Tax Consequences of the Reorganization................................................ 10
Principal Risks of Investing in Acquiring Fund....................................................... 11
INVESTMENT OBJECTIVES AND POLICIES...................................................................... 11
Comparison of Investment Objectives and Primary Investment Strategies................................ 11
Comparison of Portfolio Characteristics.............................................................. 12
Relative Performance................................................................................. 12
Comparisons of Investment Techniques and Risks of the Funds.......................................... 13
COMPARISON OF FEES AND EXPENSES......................................................................... 14
Management Fees...................................................................................... 14
Administration Fees.................................................................................. 14
Distribution and Service Fees........................................................................ 14
Expense Limitation Arrangements...................................................................... 15
Expense Table........................................................................................ 15
Example.............................................................................................. 16
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND............................................................. 18
Investment Adviser................................................................................... 18
Sub-Adviser.......................................................................................... 19
Investment Personnel................................................................................. 19
Performance of Acquiring Fund........................................................................ 19
INFORMATION ABOUT THE REORGANIZATION.................................................................... 20
The Reorganization Plan.............................................................................. 20
Reasons for the Reorganization....................................................................... 21
Board Considerations................................................................................. 21
Tax Considerations................................................................................... 22
Expenses of the Reorganization....................................................................... 22
ADDITIONAL INFORMATION ABOUT THE FUNDS.................................................................. 22
Form of Organization................................................................................. 22
Distributor.......................................................................................... 22
Dividends and Other Distributions.................................................................... 22
Capitalization....................................................................................... 23
4
GENERAL INFORMATION ABOUT THE PROXY STATEMENT........................................................... 23
Solicitation of Proxies.............................................................................. 23
Voting Rights........................................................................................ 24
Other Matters to Come Before the Special Meeting..................................................... 25
Shareholder Proposals................................................................................ 25
Information About the Funds.......................................................................... 25
Reports to Shareholders.............................................................................. 26
MORE INFORMATION REGARDING THE FUNDS.................................................................... 27
APPENDIX A (FORM OF AGREEMENT AND PLAN OF REORGANIZATION) .............................................. 34
APPENDIX B (FUND MANAGER REPORT FOR ACQUIRING FUND)(4/30/02) ........................................... 48
(10/31/01) ......................................... 50
APPENDIX C (SECURITY OWNERSHIP OF CERTAIN BENEFICIAL AND RECORD OWNERS)................................. 52
7
PROXY STATEMENT/PROSPECTUS
IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(888) 233-4339
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
FEBRUARY 12, 2003
IDEX PBHG TECHNOLOGY & COMMUNICATIONS
RELATING TO THE REORGANIZATION INTO
IDEX PBHG MID CAP GROWTH (COLLECTIVELY, THE "FUNDS")
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to you in connection with a
special meeting of shareholders of IDEX PBHG Technology & Communications
scheduled to be held on February 12, 2003, as adjourned from time-to-time (the
"Special Meeting"). As more fully described in this Proxy Statement/Prospectus,
the purpose of the Special Meeting is to vote on a proposed reorganization (the
"Reorganization") of IDEX PBHG Technology & Communications (the "Acquired Fund")
into IDEX PBHG Mid Cap Growth (the "Acquiring Fund") (each a "Fund,"
collectively, the "Funds"), each a series of IDEX Mutual Funds ("IDEX"), an
open-end management investment company. Under an Agreement and Plan of
Reorganization, Acquired Fund would transfer all of its assets to Acquiring Fund
in exchange for shares of beneficial interest of Acquiring Fund and the
assumption by Acquiring Fund of Acquired Fund's liabilities. You are being asked
to vote on the Agreement and Plan of Reorganization through which this
transaction would be accomplished.
Because you, as a shareholder of Acquired Fund, are being asked to approve the
Reorganization that will result in a transaction in which you ultimately will
hold shares of Acquiring Fund, this Proxy Statement also serves as a Prospectus
for Acquiring Fund. The Reorganization will allow you to participate in a Fund
with a similar investment objective and certain similar strategies. Acquiring
Fund seeks to maximize long-term growth.
This Proxy Statement/Prospectus, which you should retain for future reference,
contains important information about Acquiring Fund that you should know before
investing. A Statement of Additional Information ("SAI") has been filed with the
U.S. Securities and Exchange Commission ("SEC"), contains additional information
about the Funds, and is incorporated herein by reference. For a more detailed
discussion of the investment objectives, policies, restrictions and risks of
each of the Funds, see the IDEX Prospectus, and the IDEX SAI, both dated
November 11, 2002, which is
8
incorporated herein by reference and may be obtained without charge by calling
1-(888) 233-4339. IDEX also provides periodic reports to its shareholders, which
highlight certain important information about the Funds, including investment
results and financial information. The IDEX annual report, dated October 31,
2001, is incorporated herein by reference. You may receive a copy of the most
recent IDEX annual report and semi-annual report, without charge, by contacting
IDEX, P.O. Box 9015, Clearwater, FL 33758-9015 or by calling (888) 233-4339.
You may also obtain proxy materials, reports and other information filed by
either Fund from the SEC's Public Reference Section (1-202-942-8090) or from the
SEC's internet website at www.sec.gov. Copies of materials may also be obtained,
after paying a duplicating fee, by electronic request at the following e-mail
address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES, OR DETERMINED THAT THIS PROXY STATEMENT/PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
DATE: DECEMBER 4, 2002
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For additional
information, you should consult the IDEX Prospectus, which is incorporated by
reference, and the Agreement and Plan of Reorganization, which is attached
hereto as Appendix A.
THE PROPOSED REORGANIZATION -- On September 9, 2002, the IDEX Board of Trustees
approved, with respect to each of the Funds, an Agreement and Plan of
Reorganization (the "Reorganization Plan"). Subject to approval of Acquired Fund
shareholders, the Reorganization Plan provides for:
- - the transfer of all of the assets of Acquired Fund to Acquiring Fund, in
exchange for shares of Acquiring Fund;
- - the assumption by Acquiring Fund of all of the liabilities of Acquired
Fund;
- - the distribution of shares of Acquiring Fund to the shareholders of
Acquired Fund; and
- - the complete liquidation of Acquired Fund.
The Reorganization is expected to be effective upon the close of business on
February 28, 2003, or on a later date as the parties may agree (the "Closing").
As a result of the Reorganization, each shareholder of Acquired Fund would
become a shareholder of Acquiring Fund. Each shareholder would receive a number
of full and fractional shares of Acquiring Fund equal to the aggregate value of
shares of Acquired Fund held by such shareholder as of the close of business on
the day of the Closing. As a result of the Reorganization, each owner of shares
of each class of Acquired Fund would become a shareholder of the same class of
shares of Acquiring Fund.
The Reorganization is intended to eliminate duplication of costs and other
inefficiencies arising from having two similar funds within IDEX. Shareholders
in the Fund, are expected to benefit from the elimination of this duplication
and from the larger asset base that will result from the Reorganization.
9
Approval of the Reorganization requires the affirmative vote of the lesser of
(i) a majority of the outstanding shares of the Fund, or (ii) 67% or more of the
shares represented at a meeting of shareholders at which the holders of more
than 50% of the outstanding shares are represented. In the event that the
shareholders of Acquired Fund do not approve the Reorganization, Acquired Fund
would continue to operate as a separate entity, and the IDEX Board of Trustees
would determine what further action, if any, to take.
AFTER CAREFUL CONSIDERATION, THE IDEX BOARD OF TRUSTEES UNANIMOUSLY APPROVED THE
PROPOSED REORGANIZATION. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION.
In considering whether to approve the Reorganization, you should note that:
- - Acquired Fund has an investment objective and certain policies that are
similar in many respects to the investment objective and policies of
Acquiring Fund. Both Acquired Fund and Acquiring Fund seek to maximize
long-term growth. Each Fund invests primarily in equity securities.
Acquired Fund invests primarily in equity securities of medium-sized
companies, but may invest in stocks of smaller or larger companies in
pursuit of its investment objective. Acquired Fund is a non-diversified
fund. Diversification is the practice of spreading a fund's assets over a
number of issuers to reduce risk. A non-diversified fund has the ability
to take larger positions in fewer issuers. Because the appreciation or
depreciation of a single security may have a greater impact on the net
asset value of a non-diversified fund, its share price can be expected to
fluctuate more than a diversified fund. Acquiring Fund is a diversified
fund.
- - Acquired Fund invests at least 80% of its assets in a non-diversified
portfolio of equity securities, which include common stocks, technology
stocks and small- or medium-sized companies.
- - Acquiring Fund invests at least 80% of its assets in a diversified
portfolio of equity securities, which include common stocks of
medium-sized companies.
- - The Funds have the same investment adviser, AEGON/Transamerica Fund
Advisers, Inc. ("ATFA"), located at 570 Carillon Parkway, St. Petersburg,
Florida 33716. ATFA has engaged Pilgrim Baxter & Associates, Ltd., 1400
Liberty Ridge Drive, Wayne, Pennsylvania 19087 to provide sub-advisory
services to Acquiring Fund.
- - The proposed Reorganization is expected to result in a reduction in total
operating expenses, including expenses net of applicable expense
reductions, for current shareholders of Acquired Fund.
For further information on fees and expenses, see "Comparison of Fees and
Expenses."
PURCHASE AND REDEMPTION INFORMATION -- The purchase and redemption provisions
for the Funds are the same. For additional information on purchase and
redemption provisions see "Comparison of Fees and Expenses" and "More
Information Regarding the Funds."
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION -- The Funds expect that
the Reorganization will
10
be considered a tax-free reorganization within the meaning of section
368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
As such you will not recognize a gain or loss as a result of the
Reorganization. See "Information About The Reorganization - Tax
Considerations."
PRINCIPAL RISKS OF INVESTING IN ACQUIRING FUND -- The Funds share similar
investment risks. Acquired Fund is subject to the principal investment
risks of investing in stocks, technology stocks and small-or medium-sized
companies; and Acquiring Fund is subject to the risks of investing in
stocks and medium-sized companies. For more information regarding the
risks of the Funds, see "Comparisons of Investment Techniques and Risks of
the Funds."
INVESTMENT OBJECTIVES AND STRATEGIES
COMPARISON OF INVESTMENT OBJECTIVES AND PRIMARY INVESTMENT STRATEGIES --
ACQUIRED FUND ACQUIRING FUND
------------- --------------
INVESTMENT Seeks growth of capital. Current income is incidental Seeks capital appreciation.
OBJECTIVE to this objective.
- Acquired Fund pursues its objective by - Acquiring Fund pursues its objective by
investing, under normal circumstances at least 80% investing, under normal circumstances, at least
INVESTMENT of its net assets in common stocks of small, 80% of its net assets in common stocks, issued by
STRATEGIES medium or large capitalization companies doing mid-sized companies with market capitalizations or
business in the technology and communication average revenues between $500 million and $10
sectors of the market. billion.
- Acquired Fund is non-diversified. This means - Acquiring Fund invests primarily in companies
that 25% or more of the Funds assets are invested in that have strong business momentum, earnings
the groups of industries within technology and growth and capital appreciation potential.
communications sectors.
- Under adverse market conditions, Acquired Fund - Under adverse market conditions, Acquiring
may take a temporary defensive position to maintain Fund may take a temporary defensive position to
liquidity when economic or market conditions are maintain liquidity when economic or market
unfavorable for profitable investing. Acquiring conditions are unfavorable for profitable
Fund may be unable to pursue its investment investing. Acquiring Fund may be unable to pursue
objective during that time. its investment objective during that time.
11
ACQUIRED FUND ACQUIRING FUND
------------- --------------
- PBHG uses its own fundamental research computer - PBHG uses its own fundamental research
models and proprietary measures of growth and computer models and proprietary measures of growth
business momentum in managing Acquiring Fund. and business momentum in managing Acquiring Fund.
ACQUIRED FUND ACQUIRING FUND
------------- --------------
- Acquired Fund is non-diversified. - Acquiring Fund is diversified.
INVESTMENT ATFA ATFA
ADVISER
SUB-ADVISER PBHG PBHG
PORTFOLIO Michael Ma Gary L. Pilgrim, CFA
MANAGERS
As you can see from the chart above, the investment objectives and strategies of
the Funds are similar. However, differences do exist, for example, Acquiring
Fund invests primarily in equity securities such as common stocks and
medium-sized companies, whereas Acquired Fund invests primarily in stocks,
technology stocks and small- and medium-sized companies.
Following the Reorganization, and in the ordinary course of business as a mutual
fund, certain holdings of Acquired Fund that were transferred to Acquiring Fund
in connection with the Reorganization may be sold. Such sales may result in
increased transactional costs for Acquiring Fund.
COMPARISON OF PORTFOLIO CHARACTERISTICS -- The following tables compare certain
characteristics of the portfolios of the Funds as of April 30, 2002:
RELATIVE PERFORMANCE -- The following table shows the average annual total
return for each Fund and the listed broad-based securities indexes. Average
annual total return is shown for each calendar year since 2001 in the case of
Acquired Fund and since 2000 in the case of Acquiring Fund. The indexes have an
inherent performance advantage over the Funds, since an index has no cash in its
portfolio, and incurs no operating expenses. An investor cannot invest in an
index. Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction of any
sales charges.
12
RUSSELL MID
CALENDAR YEAR/ SOUNDVIEW CAP GROWTH
PERIOD ENDED ACQUIRED FUND TECHNOLOGY INDEX ACQUIRING FUND INDEX
------------ ------------- ---------------- -------------- -----
12/31/00 N/A N/A (17.30)% (11.75)%
12/31/01 (50.88)% (40.39)% (37.29)% (20.15)%
COMPARISON OF INVESTMENT TECHNIQUES AND RISKS OF THE FUNDS -- The following is a
summary of the principal types of securities in which each Fund may invest and
strategies the Funds may employ in pursuit of their respective investment
objectives. As with any security, an investment in a Fund's shares involves
certain risks, including loss of principal. The Funds are subject to varying
degrees of risk. An investment in either Fund is not a deposit of a bank and is
not insured by the Federal Deposit Insurance Corporation or any other government
agency. The following discussion addresses the primary risks of investing in the
Funds. However, the fact that a particular risk is not identified as a main risk
for the Fund does not mean that the Fund is prohibited from investing its assets
in securities that give rise to that risk. It simply means that the risk is not
a main risk of the Fund. For further information regarding risks of investing in
the Funds, see the SAI.
STOCKS. While stocks have historically outperformed other investments over the
long term, they tend to go up and down more dramatically over the shorter term.
These price movements may result from factors affecting individual companies,
industries or the securities market as a whole. Because the stocks a Fund holds
fluctuate in price, the value of your investments in a Fund will go up and down.
SMALL- OR MEDIUM-SIZED COMPANIES. The Funds may invest in small- or medium-sized
companies, which involve greater risk than is customarily associated with more
established companies. Stocks of such companies may be subject to more abrupt or
erratic price movements than larger company securities. Small companies often
have limited product lines, markets, or financial resources, and their
management may lack depth and experience. Such companies usually do not pay
significant dividends that could cushion returns in a falling market.
INTERNET INVESTING. Internet and internet-related businesses can be affected by
specific risks including: aggressive product pricing due to competitive pressure
from numerous market entrants, short product cycles and product obsolescence,
among others. Companies in the rapidly changing fields of science and technology
often face high price volatility. The market price of technology companies may
be particularly susceptible to earnings disappointments, such as earning
projections that fail to materialize. Products and services that first appear
promising may not prove commercially successful or may become obsolete quickly.
This level of risk will increase to the extent the fund has significant exposure
to smaller or unseasoned companies, which may not have established products or
more experienced management. Increased volatility also is associated with
investments in this segment of the stock market (as opposed to investments in a
broader range of industries). The performance and volatility of the fund will
likely reflect that of this sector during down markets as well as during up
markets.
TECHNOLOGY STOCKS (ACQUIRED FUND). Securities of technology companies are
strongly affected by worldwide scientific and technological developments and
governmental policies, and therefore, are generally more volatile than
securities of companies not dependent upon or associated with technological
issues.
13
NON-DIVERSIFICATION (ACQUIRED FUND). A non-diversified fund has the ability to
take larger positions in a smaller number of issuers. To the extent a fund
invests a greater portion of its assets in the securities of a smaller number of
issuers, it may be more susceptible to any single economic, political or
regulatory occurrence than a diversified fund and may be subject to greater loss
with respect to its portfolio securities. However, to meet federal tax
requirements, at the close of each quarter the fund may not have more than 25%
of its total assets invested in any one issuer, and, with respect to 50% of its
total assets, not more than 5% of its total assets invested in any one issuer.
COMPARISON OF FEES AND EXPENSES
The following describes and compares the fees and expenses that you may pay if
you buy and hold shares of the Funds.
For further information on the fees and expenses of Acquiring Fund, see "More
Information Regarding the Funds." While the Reorganization is anticipated to
reduce the total operating expenses for current shareholders of the Acquired
Fund and will not affect the Acquiring Fund's management fees (as a percentage
of the Fund's average daily net assets), ATFA may be deemed to have a material
interest in the proposed Reorganization because combination of the Funds will
relieve ATFA of its obligation to pay sub-advisory fees to PBHG under the
sub-advisory agreement applicable to Acquired Fund (although ATFA will continue
to pay sub-advisory fees to PBHG with respect to the Acquiring Fund), and
because the proposed Reorganization is anticipated to reduce ATFA's obligations
under the expense limitation arrangements discussed below.
MANAGEMENT FEES - Each Fund pays a management fee:
FUND MANAGEMENT FEE
---- --------------
Acquired Fund 1.00% of the first $500 million of the Fund's average daily net
assets; and 0.90% of assets over $500 million. Expense Cap:
1.60% of the Fund's average daily net assets.
Acquiring Fund 0.80% of the first $500 million of the Fund's average daily net
assets; and 0.70% of assets over $500 million. Expense Cap:
1.40% of the Fund's average daily net assets.
ADMINISTRATION FEES - The Funds pay an administrative services fee to
AEGON/Transamerica Fund Services, Inc. on a cost incurred basis.
DISTRIBUTION AND SERVICES FEES - The distribution (12b-1) and services fees are
the same for both Funds for each respective class of shares. The fees are: 0.35%
for Class A shares, 1.00% for Class B, Class C and Class L shares, and 0.90% for
Class M shares.
14
EXPENSE LIMITATION ARRANGEMENTS: Expense limitation arrangements are in place
for both of the Funds. Under the terms of the expense limitation arrangements,
ATFA has agreed to limit the expenses of the Funds, excluding interest, taxes,
brokerage and extraordinary expenses. The current expense limitation arrangement
for each Fund will remain in effect through at least October 31, 2003. There can
be no assurance that the Expense limitation arrangements will continue or remain
at the same level after that date. The expense limitation for Acquired Fund is
1.60% and the expense limitation for Acquiring Fund is 1.40%. This information
and similar information is shown below in the table entitled "Annual Fund
Operating Expenses."
It is expected that combining the Funds will lower expenses currently borne by
investors in Acquired Fund.
The expenses of each Fund and estimated pro forma expenses giving effect to the
proposed Reorganization are shown in the table below. Expenses for the Funds are
based on the operating expenses incurred for the period ended April 30, 2002.
Pro forma fees and expenses show estimated fees and expenses of Acquiring Fund
after giving effect to the proposed Reorganization (Note: L shares commenced
operations on November 11, 2002). Pro forma numbers are estimated in good faith
and are hypothetical.
EXPENSE TABLE
ANNUAL FUND OPERATING EXPENSES (as a percentage of each Fund's average daily net
assets) For the Period ended 4/30/02
Distribution & Total Annual
service (12b-1) Fund Operating Expense Net Operating
Management Fees fees Other Expenses Expenses Reduction(1) Expenses
--------------- ---- -------------- -------- ------------ --------
ACQUIRING FUND
Class A shares 0.80% 0.35% 1.57% 2.72% 1.00% 1.72%
Class B shares 0.80% 1.00% 1.57% 3.37% 1.00% 2.37%
Class C shares 0.80% 1.00% 1.57% 3.37% 1.00% 2.37%
Class M shares 0.80% 0.90% 1.57% 3.27% 1.00% 2.27%
Class L shares(2) 0.80% 1.00% 1.57% 3.37% 1.00% 2.37%
ACQUIRED FUND
Class A shares 1.00% 0.35% 2.01% 3.36% 1.44% 1.92%
Class B shares 1.00% 1.00% 2.01% 4.01% 1.44% 2.57%
Class C shares 1.00% 1.00% 2.01% 4.01% 1.44% 2.57%
Class M shares 1.00% 0.90% 2.01% 3.91% 1.44% 2.47%
Class L shares(2) 1.00% 1.00% 2.01% 4.01% 1.44% 2.57%
Pro Forma - Acquiring
Fund including
Acquired Fund
Class A shares 0.80% 0.35% 1.49% 2.64% 0.89% 1.75%
Class B shares 0.80% 1.00% 1.49% 3.29% 0.89% 2.40%
Class C shares 0.80% 1.00% 1.49% 3.29% 0.89% 2.40%
Class M shares 0.80% 0.90% 1.49% 3.19% 0.89% 2.30%
Class L shares(2) 0.80% 1.00% 1.49% 3.29% 0.89% 2.40%
(1) Contractual arrangement with ATFA through 10/31/03 for expenses (other
than distribution and service (12b-1) fees that exceed 1.40%,on behalf of
Acquiring Fund, and 1.60% on behalf of Acquired Fund, excluding 12b-1
fees.
(2) L share information is included for your reference; these shares did not
commence operations until November 11, 2002.
15
EXAMPLE. This example is intended to help you compare the cost of investing in
each Fund and in the combined Funds on a pro forma basis. It shows the
cumulative expenses you would pay if you invested $10,000 and held your shares
for various time periods, with a 5% annual return and Fund operating expenses
remaining the same. This return is for illustration purposes and is not
guaranteed. Actual costs may be higher or lower.
16
If the shares are redeemed at the end of each period:
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS*
------- -------- -------- ---------
ACQUIRING FUND
Class A shares $715 $1,258 $1,826 $3,364
Class B shares $740 $1,243 $1,769 $3,443
Class C shares $240 $943 $1,669 $3,591
CLASS M SHARES $427 $1,004 $1,705 $3,564
CLASS L SHARES $440 $943 $1,669 $3,591
ACQUIRED FUND
Class A shares $734 $1,400 $2,087 $3,907
Class B shares $760 $1,390 $2,036 $3,986
Class C shares $260 $1,090 $1,936 $4,126
Class M shares $447 $1,150 $1,970 $4,100
Class L shares $460 $1,090 1,936 $4,126
PRO FORMA - ACQUIRING FUND
INCLUDING ACQUIRED FUND
Class A shares $718 $1,245 $1,798 $3,298
Class B shares $743 $1,230 $1,740 $3,376
Class C shares $243 $930 $1,640 $3,525
Class M shares $430 $991 $1,676 $3,499
Class L shares $443 $930 $1,640 $3,525
If the shares are not redeemed at the end of each period:
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS*
------- -------- -------- ---------
Acquiring Fund
Class A shares $715 $1,258 $1,826 $3,366
Class B shares $240 $943 $1,669 $3,445
Class C shares $240 $943 $1,669 $3,593
Class M shares $328 $1,004 $1,705 $3,566
Class L shares $240 $943 $1,669
Acquired Fund
Class A shares $734 $1,400 $2,087 $3,907
Class B shares $260 $1,090 $1,936 $3,986
Class C shares $260 $1,090 $1,936 $4,126
Class M shares $348 $1,150 $1,970 $4,100
Class L shares $260 $1,090 $1,936 $4,126
Pro Forma - Acquiring Fund
including Acquired Fund
Class A shares $718 $1,245 $1,798 $3,298
Class B shares $243 $930 $1,640 $3,376
Class C shares $243 $930 $1,640 $3,525
Class M shares $331 $991 $1,676 $3,499
Class L shares $243 $930 $1,640 $3,525
17
Class A and Class M shares of the Acquired Fund issued to a shareholder in
connection with the Reorganization will not be subject to any initial sales
charge. Class B, Class L and Class M shares of the Acquiring Fund issued to a
shareholder in connection with the Reorganization will be subject to the same
contingent deferred sales charge, if any, applicable to the corresponding shares
of the Acquired Fund held by that shareholder immediately prior to the
Reorganization.
In addition, the period that the shareholder held shares of the Acquired Fund
would be included in the holding period of the Acquiring Fund's shares for
purposes of calculating any contingent deferred sales charge. Similarly, Class B
shares of the Acquiring Fund issued to a shareholder in connection with the
Reorganization will convert to Class A shares eight years after the date that
the corresponding Class B shares of Acquired Fund were purchased by
shareholders. Likewise, Class M shares of Acquiring Fund issued to shareholder
in connection with the Reorganization will convert to Class A shares ten years
after the date that the corresponding Class M shares of Acquired Fund were
purchased by shareholders.
Purchases of shares of Acquiring Fund after the Reorganization will be subject
to the sales load structure described in table below for Acquiring Fund. This is
the same load structure that is currently in effect for Acquiring Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
CLASS OF SHARES
---------------
A B C L M
- - - - -
Maximum sales charge
(load) imposed on
purchases (as a % of 5.50% None None None 1.00%
offering price)
Maximum deferred sales
charge (load) (as a
percentage of purchase None(a) 5.00% None 2.00% 1.00%
price or redemption
proceeds, whichever is
lower)
(a) Certain purchases of Class A shares in amounts of $1 million or more are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND
INVESTMENT ADVISER -- AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is
Acquiring Fund's investment adviser. On April 30, 2002, the aggregate assets of
all of the mutual funds under the investment management of ATFA were
approximately $15.8 billion. IDEX has entered into an Investment Advisory
Agreement ("Advisory Agreement") on behalf of Acquiring Fund with ATFA wherein
ATFA supervises Acquiring Fund's investments and conducts its investment
program. The Advisory Agreement provides that ATFA will perform the following
services or cause them to be performed
18
by others to: (i) furnish investment advice and recommendations (ii) supervise
the purchase and sale of securities as directed by appropriate Fund officers,
and (iii) be responsible for the administration of the Fund. The Advisory
Agreement is not assignable and may be terminated without penalty upon 60 days
written notice at the option of either IDEX or ATFA, or by a vote of
shareholders of Acquiring Fund. Advisory fees are computed and accrued daily and
paid monthly.
SUB-ADVISER -- PBHG is Acquiring Fund's sub-adviser. On April 30, 2002, the
aggregate assets of all of the mutual funds under the investment management of
PBHG were approximately $10.5 billion. PBHG has overall responsibility for the
management of the Fund. ATFA and PBHG have entered into an agreement that
requires PBHG to provide investment sub-advisory, statistical and research
services to Acquiring Fund, supervise and arrange for the purchase and sale of
securities on behalf of the Fund, and provide for the maintenance and
compilation of records pertaining to the investment sub-advisory function. The
agreement with PBHG can be terminated by the Board of Trustees of IDEX upon 60
days' written notice of either party. Sub-Advisory fees are computed and accrued
daily and paid monthly.
INVESTMENT PERSONNEL -- The following individuals have responsibility for the
day-to-day management of Acquiring Fund:
- - GARY L. PILGRIM, CFA, leads a team of investment professionals for PBHG
Mid Cap Growth. Mr. Pilgrim is the president of Pilgrim Baxter, and has
been a growth stock manager for over 30 years. Mr. Pilgrim has managed
Acquiring Fund since March 2001.
PERFORMANCE OF ACQUIRING FUND -- The bar chart and table below provide an
indication of the risks of investing in Acquiring Fund by showing (on a calendar
year basis) Acquiring Fund's annual total return for its first calendar year of
operations and by showing (on a calendar year basis) how Acquiring Fund's
average annual returns for a one-year period compare to those of a broad-based
securities market index -- the Russell Mid Cap Growth Index. The information
below is based on the performance of the Class A shares of Acquiring Fund and
does not reflect the impact of sales charges. The bar chart and table assume
reinvestment of dividends and capital gains distributions. The Fund's past
performance is not an indication of how the Fund will perform in the future.
Class A Shares:
YEAR BY YEAR TOTAL RETURN as of 12/31/01 (%)(1)
Add bar chart to include (17.30)% for 2000; (37.29)% for 2001
During the period shown in the chart, Acquiring Fund's best
quarterly performance was 19.81% for the quarter ended June
30, 2001, and the Fund's worst quarterly performance was
(37.67)% for the quarter ended March 31, 2001.
(1) As of September 30, 2002, the end of the most recent
calendar quarter, the fund's year-to-date return for Class A
shares was (30.19)%.
19
The table below shows the average annual total returns of Acquiring Fund if you
average actual performance over various lengths of time, compared to the Russell
Mid Cap Growth Index. An index has an inherent performance advantage over
Acquiring Fund since it has no cash in its portfolio, imposes no sales charges
and incurs no operating expenses. An investor cannot invest directly in an
index. Additional information about Acquiring Fund is included in the section
"More Information Regarding the Funds."
AVERAGE ANNUAL TOTAL RETURNS (for the periods ended December 31, 2001)**
One Year Since March 1, 1999
-------- -------------------
Acquiring Fund
Return before taxes (40.74)% (0.55)%
Return after taxes on distributions* (40.74)% (0.79)%
Return after taxes on distributions
and sale of fund shares* (24.81)% (0.48)%
Russell Mid Cap Growth Class A (20.15)% 3.02%
* The after-tax returns are calculated using the historic highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes.
** Returns reflect the maximum sales load of 5.5% and include the
reinvestment of dividends and capital gains.
For more information about Acquiring Funds performance including a discussion of
factors that materially impact its performance, please see Appendix B.
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION PLAN -- The Reorganization Plan provides for the transfer of
all of the assets and liabilities of Acquired Fund to Acquiring Fund solely in
exchange for shares of Acquiring Fund. Acquired Fund will distribute the shares
of Acquiring Fund received in the exchange to its shareholders, and then
Acquired Fund will be liquidated.
After the Reorganization, each shareholder of Acquired Fund will own shares in
Acquiring Fund having an aggregate value equal to the aggregate value of shares
of Acquired Fund held by that shareholder as of the close of business on the
business day preceding the Closing.
Until the Closing, shareholders of Acquired Fund will continue to be able to
redeem their shares. Redemption requests received after the Closing will be
treated as requests received by Acquiring Fund for the redemption of its shares
received by the shareholder in the Reorganization.
The obligations of the Funds under the Reorganization Plan are subject to
various conditions, including approval of the shareholders of Acquired Fund. The
Reorganization Plan also requires that the Funds take, or cause to be taken, all
actions, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by the
Reorganization Plan. The Reorganization Plan may be terminated by
20
mutual agreement of the parties or on certain other grounds. For a complete
description of the terms and conditions of the Reorganization, see the
Reorganization Plan at Appendix A, which modifies the foregoing summary of the
Reorganization Plan in its entirety.
REASONS FOR THE REORGANIZATION -- The Reorganization is one of several
reorganizations that are proposed or have already taken place among various IDEX
funds. The IDEX complex has grown in recent years through the addition of many
funds. IDEX management has proposed the consolidation of several of the IDEX
funds that they believe have similar or compatible strategies. Fund performance
is also a key factor management considers when evaluating the funds to present
to the Board for its consideration. The Reorganization is designed to be part of
the proposed reduction of the substantial overlap in funds offered in the IDEX
complex, thereby helping to eliminate inefficiencies and confusion about
overlapping funds. IDEX also believes that the Reorganization may benefit
shareholders by resulting in a surviving fund with a greater asset base. This is
expected to provide greater investment opportunities for Acquiring Fund and the
potential to take larger portfolio positions. Based upon these considerations,
among others, the IDEX Board determined that the Funds should be reorganized.
BOARD CONSIDERATION -- The proposed Reorganization was presented to the IDEX
Board of Trustees for consideration and approval at a Special Meeting held
September 9, 2002. For the reasons discussed below, the Trustees, including all
of the Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940), determined that the interests of the shareholders of the
respective Funds would not be diluted as a result of the proposed
Reorganization, and that the proposed Reorganization was in the best interests
of the Funds and their shareholders.
The IDEX Board of Trustees, in recommending the proposed transaction, considered
a number of factors, including the following:
1. expense ratios and information regarding fees and expenses of Acquired
Fund and Acquiring Fund;
2. estimates that show that combining the Funds should result in lower
expense ratios because of economies of scale;
3. elimination of duplication of costs and inefficiencies of having two
similar funds;
4. the Reorganization would not dilute the interests of the Funds' current
shareholders;
5. the relative investment performance and risks of Acquiring Fund as
compared to Acquired Fund;
6. the similarity of Acquiring Fund's investment objectives, policies and
restrictions to those of Acquired Fund, and the fact that the Funds are
duplicative within the overall group of funds;
7. the tax-free nature of the Reorganization to Acquired Fund and its
shareholders;
8. the estimated costs to be incurred by Acquiring Fund and Acquired Fund as
a result of the Reorganization;
The Board also considered the future potential benefits to IDEX in that its
costs to administer both Funds may be reduced if the Reorganization is approved.
THE IDEX BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF ACQUIRED FUND APPROVE
THE REORGANIZATION.
21
TAX CONSIDERATIONS -- The Reorganization is intended to qualify for Federal
income tax purposes as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, pursuant to
this treatment, neither Acquired Fund, nor Acquiring Fund, is expected to
recognize any gain or loss for federal income tax purposes from the transactions
contemplated by the Reorganization Plan. As a condition to the closing of the
Reorganization, the Funds will receive an opinion from the law firm of Dechert
to the effect that the Reorganization will qualify as a tax-free reorganization
for Federal income tax purposes. That opinion will be based in part upon certain
assumptions and upon certain representations made by the Funds.
Immediately prior to the Reorganization, Acquired Fund will pay a dividend or
dividends which, together with all previous dividends, will have the effect of
distributing to the shareholders all of Acquired Fund's investment company
taxable income for taxable years ending on or prior to the Reorganization
(computed without regard to any deduction for dividends paid) and all of its net
capital gains, if any, realized in taxable years ending on or prior to the
Reorganization (after reduction for any available capital loss carryforward).
Such dividends will be included in the taxable income of Acquired Fund's
shareholders.
EXPENSES OF THE REORGANIZATION -- ATFA will pay all of the expenses relating to
the Reorganization, including, but not limited to, the costs of the proxy
solicitation and necessary filing with the SEC.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION -- Each of the Funds is a series of IDEX Mutual Funds, an
open-end management company organized as a Massachusetts business trust. IDEX is
governed by a Board of Trustees, which consists of ten Trustees. For more
information regarding the history of IDEX, please see the SAI.
DISTRIBUTOR -- AFSG Securities Corporation ("AFSG"), located at 4333 Englewood
Road NE, Cedar Rapids, Iowa 52499, is principal distributor for both Funds. AFSG
is an affiliate of IDEX and ATFA. ASFG underwrites and distributes all classes
of Fund shares and bears the expense of offering these shares to the public. The
Funds pay AFSG, or its agent, a fee for those services. Please see "More
Information Regarding the Funds," below, for additional information regarding
the fees paid to ASFG by the Funds.
DIVIDENDS AND OTHER DISTRIBUTIONS -- Each Fund pays dividends from net
investment income, and distributes net capital gains, if any, at least annually.
Dividends and distributions of each Fund are automatically reinvested in
additional shares of the respective class of the particular Fund, unless the
shareholder requests cash. There are no fees or sales charges on reinvestments.
If the Reorganization Plan is approved by shareholders of Acquired Fund, then as
soon as practicable before the Closing, Acquired Fund will pay its shareholders
a cash distribution of all undistributed net investment income and undistributed
realized net capital gains.
22
CAPITALIZATION -- The following table shows, on an unaudited basis, the
capitalization of each Fund as of April 30, 2002 and, on a pro forma basis, as
of April 30, 2002, giving effect to the Reorganization (Class L shares were not
offered until November 11, 2002):
NET ASSETS NET ASSET VALUE PER SHARE SHARES OUTSTANDING
---------- ------------------------- ------------------
ACQUIRING FUND
Class A Shares $24,357,668 $ 9.63 2,530,458
Class B Shares $34,422,136 $ 9.40 3,661,383
Class C Shares $9,150,823 $ 9.40 973,346
Class M Shares $4,936,617 $ 9.44 523,219
ACQUIRED FUND
Class A Shares $9,224,915 $ 1.61 5,732,197
Class B Shares $15,287,037 $ 1.56 9,777,355
Class C Shares $3,275,248 $ 1.56 2,094,798
Class M Shares $2,279,619 $ 1.57 1,451,515
PRO FORMA - ACQUIRING FUND
INCLUDING ACQUIRED FUND
Class A Shares $33,582,582 $ 9.63 3,488,812
Class B Shares $49,709,173 $ 9.40 5,287,421
Class C Shares $12,426,070 $ 9.40 1,321,725
Class M Shares $7,216,236 $ 9.44 764,830
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
SOLICITATION OF PROXIES -- Proxies are being solicited at the request of the
IDEX Board of Trustees. Solicitation of proxies is being made primarily by the
mailing of this Notice and Proxy Statement/Prospectus with its enclosures on or
about December 2, 2002. (Shareholders of Acquired Fund whose shares are held by
nominees, such as brokers, can vote their proxies by contacting their respective
nominee.) In addition to the solicitation of proxies by mail, employees of IDEX
and its affiliates, without additional compensation, may solicit proxies in
person or by telephone, telegraph, facsimile, or oral communication. The Funds
have retained Alamo a professional proxy solicitation firm, to assist with any
necessary solicitation of proxies. Shareholders of Acquired Fund may receive a
telephone call from Alamo asking the shareholder to vote. The estimated costs
for the services of Alamo are estimated to be approximately $32,495, plus
applicable postage.
23
In all cases where a proxy is solicited by telephone, Alamo is required to ask
the person to provide identifying registration data, including full name and
address, and, if known, the number of shares owned. If the shareholder is a
corporation or other entity, Alamo will ask for the title of the person and for
confirmation that the person is authorized to direct the voting of the shares.
Alamo will advise the shareholder that the shareholder can vote his or her
shares over the telephone and will ask if the shareholder would like to cast a
vote. Although Alamo's representative is permitted to answer questions about the
process, he or she is not permitted to recommend to the shareholder how to vote,
other than to read any recommendations set forth in the Proxy
Statement/Prospectus. Alamo will then record the shareholder's instructions on
the Proxy Card. Within 72 hours, the shareholder will be sent a confirmation of
his or her vote asking the shareholder to call Alamo immediately if his or her
instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Special Meeting, but does not wish
to give a proxy by telephone, the shareholder may still submit the proxy
originally sent with the Proxy Statement/Prospectus, attend in person, vote
online or by facsimile. Should shareholder require additional information
regarding the proxy or require replacement of the proxy, they may contact IDEX
Customer Service toll-free at (888) 233-4339.
A shareholder may revoke the accompanying proxy at any time prior to its use by
filing with IDEX a written revocation or duly executed proxy bearing a later
date. In addition, any shareholder who attends the Special Meeting of Acquired
Fund shareholders in person may vote by ballot at the Special Meeting, thereby
canceling any proxy previously given. However, attendance at the Special
Meeting, by itself, will not revoke a previously tendered proxy. The persons
named in the accompanying proxy will vote as directed by the proxy, but in the
absence of voting directions in any proxy that is signed and returned, they
intend to vote "FOR" the Reorganization proposal, and may vote in their
discretion with respect to other matters not now known to the IDEX Board of
Trustees that may be presented at the Special Meeting.
VOTING RIGHTS -- Shares of the Funds entitle their holders to one vote per share
as to any matter on which the holder is entitled to vote, and each fractional
share shall be entitled to a proportionate fractional vote.
Shareholders of Acquired Fund at the close of business on November 15, 2002 (the
"Record Date") will be entitled to be present at the Special Meeting to vote
with respect to their shares owned as of that Record Date. As of the Record
Date, ________ shares of Acquired Fund were outstanding and entitled to vote.
To become effective, the proposed Reorganization must be approved by a "vote of
the majority of the outstanding voting securities" of the Acquired Fund, as
defined in the 1940 Act. The "vote of a majority of the outstanding voting
securities" means the lesser of the vote of (i) 67% or more of the shares of
Acquired Fund entitled to vote thereon present at the Special Meeting if the
holders of more than 50% of such outstanding shares are present in person or
represented by proxy; or (ii) more than 50% of such outstanding shares of
Acquired Fund entitled to vote thereon.
Acquired Fund must have a quorum to conduct its business at the Special Meeting.
The holders of a majority of outstanding shares present in person or by proxy
shall constitute a quorum. In the absence of a quorum, a majority of
24
outstanding shares entitled to vote, present in person or by proxy, may adjourn
the meeting from time to time until a quorum is present.
If a shareholder abstains from voting as to any matter, or if a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on a matter, the shares
represented by the abstention or non-vote will be deemed present at the Special
Meeting for purposes of determining a quorum. However, abstentions and broker
non-votes will not be deemed represented at the Special Meeting for purposes of
calculating the vote on any matter. As a result, an abstention or broker
non-vote will have the same effect as a vote against the Reorganization. Prior
to the Special Meeting, IDEX expects that broker-dealer firms holding their
shares of the Funds in "street name" for their customers will request voting
instructions from their customers and beneficial owners.
To the knowledge of IDEX, as of November 15, 2002, no Trustee of IDEX
beneficially owned 1% or more of the outstanding shares of either Fund, and the
officers and Trustees of IDEX beneficially owned, as a group, less than 1% of
the shares of either Fund.
Appendix C hereto lists the persons that, as of November 15, 2002, owned
beneficially 5% or more of the outstanding shares of either Fund.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING -- The Board of Trustees does
not know of any matters to be presented at the Special Meeting other than those
described in this Proxy Statement/Prospectus. If other business should properly
come before the Special Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
SHAREHOLDER PROPOSALS -- The Funds are not required to hold regular annual
meetings and, in order to minimize their costs, do not intend to hold meetings
of shareholders unless so required by applicable law, regulation, regulatory
policy or if otherwise deemed advisable by the Funds' management. Therefore it
is not practicable to specify a date by which shareholder proposals must be
received in order to be incorporated in an upcoming proxy statement for an
annual meeting or to be submitted to shareholders of the Funds.
Shareholders wishing to submit proposals should send their written proposals to
the address set forth on the cover of this Proxy Statement/Prospectus a
reasonable time prior to the date of a meeting of shareholders to be considered
for inclusion in the proxy materials for a meeting. Timely submission of a
proposal does not, however, necessarily mean that the proposal will be included.
Persons named as proxies for any subsequent shareholder meeting will vote in
their discretion with respect to proposals submitted on an untimely basis.
INFORMATION ABOUT THE FUNDS -- Proxy materials, reports and other information
filed by IDEX, on behalf of the Funds, can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, NW, Washington,
DC 20549. The SEC maintains an Internet World Wide Web site (http://www.sec.gov)
which contains other information about the Funds.
25
REPORTS TO SHAREHOLDERS -- IDEX will furnish, without charge, a copy of the most
recent Annual Report and Semi-Annual Report regarding the Funds upon request.
Requests for such reports should be directed to IDEX Mutual Funds at P.O. Box
9015, Clearwater, FL 33758-9015, telephone (888) 233-4339.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
PLEASE NOTE: YOU ALSO MAY INSTEAD VOTE BY TELEPHONE, THROUGH THE INTERNET, OR BY
FACSIMILE BY FOLLOWING THE ENCLOSED INSTRUCTIONS. DO NOT RETURN YOUR PROXY CARD
IF YOU VOTE BY ONE OF THESE METHODS UNLESS YOU LATER DECIDE TO CHANGE YOUR VOTE.
_______________________________
John K. Carter, Vice President,
Secretary & General Counsel
December 6, 2002
26
MORE INFORMATION REGARDING THE FUNDS
DISTRIBUTION PLANS AND 12B-1 FEES. The Funds have adopted separate Distribution
Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940 ("1940
Act") (individually, a "12b-1 Plan," and collectively, the "12b-1 Plans"),
applicable to Class A, Class B, Class C, Class L and Class M shares of the
Funds.
The distributor for the Funds, AFSG Securities Corporation ("AFSG") receives the
sales fees or loads imposed on these shares (up to 5.50% of the offering price,
which includes the sales load) and re-allows a portion of those fees to the
sellers of the shares. AFSG also receives service and distribution fees under
the 12b-1 Plans as follows:
Distribution of Class A Shares. For these shares, the Funds may pay AFSG a
distribution fee of up to 0.35% annually which includes a service fee of 0.25%.
Fees are based on the average daily net assets of Class A shares. However, if
the service fees rise, the distribution fee is lowered so that the total fees
payable don't exceed 0.35% annually.
Distribution of Class B Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes an annual service fee of
0.25%.
Distribution of Class C Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes a service fee of 0.25%.
Distribution of Class L Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes a service fee of 0.25%.
Distribution of Class M Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 0.90%, which includes a service fee of 0.25%.
Because the Funds have 12b-1 Plans, even though Class B and Class C shares do
not carry an up-front sales load, the higher distribution and service fees
payable by those shares may, over time, be higher than the total fees paid by
owners of Class A and Class M shares.
OTHER EXPENSES. In addition to the management fee and other fees described
previously, each Fund pays other expenses, such as legal, audit, transfer agency
and custodian fees, and the compensation of Trustees who are not affiliated with
IDEX. Most Fund expenses are allocated proportionately among all of the
outstanding shares of IDEX.
PURCHASING SHARES
IDEX and AFSG reserve the right to reject any purchase order. Please note that
cash, travelers checks, third party checks, money orders and checks drawn on
non-U.S. banks (even if payment is effected through a U.S. bank) generally will
not be accepted. IDEX reserves the right to waive minimum investment amounts.
CHOOSING A SHARE CLASS. IDEX offers five shares classes for the Funds, Class A,
Class B, Class C, Class L and Class M. Effective November 11, 2002, Class C and
Class M were closed to new investors. Class A shares has an initial sales charge
of 5.50%, in most cases, and an annual 12b-1 fee of 0.35%; Class B has no
up-front sales charge, a deferred sales charge starting at 5.00% if you sell in
6 years or less, and an annual 12b-1 fee of 1.00%; Class C has no up-front sales
load and no deferred sales charge with an annual 12b-1 fee of 1.00%; Class L has
a 1.00% up-front sales load, with
27
an annual 1.00% 12b-1 fee and a contingent deferred sales charge of 2% if
redeemed during the first 12 months of purchase, and 1% if redeemed during the
second 12 months of purchase; and Class M has an initial sales charge of 1.00%
with a deferred sales charge of 1.00% if you sell in the first 18 months, and an
annual 12b-1 fee of 0.90%.
PRICE OF SHARES. When you buy shares, you pay Net Asset Value ("NAV") plus any
applicable sales charge. When you sell your shares, you receive NAV minus any
applicable deferred sales charge. Exchange orders are effected at NAV.
DETERMINATION OF NET ASSET VALUE. The NAV per share of each Fund is computed as
of the close of regular trading hours on the New York Stock Exchange (normally 4
p.m. Eastern time) on days when the Exchange is open. The Exchange is open
Monday through Friday, except on observation of the following holidays:
generally New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
Each Fund's NAV is generally based upon the market value of securities held in
the Fund's portfolio. If market prices are not available, the fair value of
securities is determined using procedures approved by the IDEX Board of
Trustees.
AUTOMATIC INVESTMENT PLAN. With an Automatic Investment Plan ("AIP"), a level
dollar amount is invested monthly and payment is deducted electronically from
your bank account. Call or write IDEX Customer service to establish an AIP.
MINIMUM ACCOUNT BALANCE. IDEX reserves the right to liquidate sufficient shares
to recover annual Transfer Agent fees should the investor fail to maintain
his/her account value at a minimum of $500. If your balance is below $250 due to
redemptions, your account will be charged a fee and be liquidated; any
applicable Contingent Deferred Sales Charge ("CDSC") will be deducted, and a
check will be mailed to you.
EXECUTION OF REQUESTS. Purchase and sale requests are executed at the NAV next
determined after the order is received in proper form by the Transfer Agent or
Distributor. A purchase order will be deemed to be in proper order form when all
of the required steps set forth in the IDEX prospectus under the section
"Shareholder Information" have been completed. If you purchase by wire, however,
the order will be deemed to be in proper order after the telephone notification
and the federal funds wire have been received. If you purchase by wire, you must
submit an application form in a timely manner. If an order or payment is
received after the close of regular trading on the New York Stock Exchange
(normally, 4:00pm Eastern Time), the shares will not be credited until the next
business day.
You will receive a confirmation of each new transaction in your account, which
also will show you the number of Fund shares you own including the number of
shares being held in safekeeping by the Transfer Agent for your account. You may
rely on these confirmations in lieu of certificates as evidence of your
ownership. IDEX does not issue share certificates on behalf of its funds.
TELEPHONE ORDERS. IDEX and its Transfer Agent will not be responsible for the
authenticity of phone instructions or losses, if any, resulting from
unauthorized shareholder transactions if they reasonably believe that such
instructions were genuine. IDEX and its Transfer Agent have established
reasonable procedures to confirm that instructions communicated by telephone are
genuine. These procedures include recording telephone instructions for exchanges
and expedited redemptions, requiring the caller to give certain specific
identifying information, and providing written confirmation to shareholders of
record not later than five days following such transaction. If IDEX and its
Transfer Agent do not employ these procedures, they may be liable for losses due
to unauthorized or fraudulent telephone instructions. To enjoy this
28
privilege, you must establish the privilege in advance, when you open your
account, or by adding this feature to your existing account.
EXCHANGE PRIVILEGES AND RESTRICTIONS. An exchange privilege is available. You
may exchange $500 or more of one fund for shares in the same class of another
fund. Any CDSC will be calculated from the date that you purchased your original
shares. Exchange requests may be made in writing to the Transfer Agent or by
calling IDEX Customer Service at (888) 233-4339. IDEX does not permit market
timing or excessive trading and has adopted special policies to discourage these
activities.
HOW TO REDEEM SHARES
Shares of the Funds will be redeemed at the NAV (less any applicable CDSC and/or
federal income tax withholding) next determined after receipt of a redemption
request in good form on any day that the New York Stock Exchange is open for
business. Payment by bank wire is subject to a $10 service fee, in addition to
the fees your bank may charge.
SYSTEMATIC WITHDRAWAL PLAN. You can establish a Systematic Withdrawal Plan
("SWP") either at the time you open your account or at a later date. Call IDEX
Customer Service at (888) 233-4339 for assistance. You must have a minimum
account balance of $10,000 for this privilege.
PAYMENTS. Payments to shareholders for shares redeemed or repurchased ordinarily
will be made within three days after receipt by the Transfer Agent of a written
request in good order. To request payment, you may also call IDEX Customer
Service at (888) 233-4339 and make your request using the automated IDEX
In-TouchSM system, by person-to-person, or by accessing your account on the
internet. Maximum amount per day is the lesser of your available balance or
$50,000.
The proceeds of your redemption may be paid by check, or by direct deposit to
your bank. Shares will normally re redeemed for cash, although each fund retains
the right to redeem its shares in kind under unusual circumstances in order to
protect the interests of shareholders by the delivery of securities selected
from its assets at its discretion.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER -- ATFA and IDEX have entered into an agreement on behalf of
Acquiring Fund wherein ATFA has agreed to provide investment advisory,
statistical and research services to the Fund, supervise and arrange for the
purchase and sale of securities on behalf of the Fund, and provide for the
maintenance and compilation of records pertaining to the sub-advisory function.
The agreement can be terminated by the IDEX Board upon 60 days written notice.
Investment management fees are computed and accrued daily and paid monthly. For
the year ended October 31, 2001, Acquiring Fund paid investment management fees
of $819,000 to ATFA.
ATFA has overall responsibility for the management of the Funds. However,
subject to the supervision of the IDEX Board, ATFA may hire sub-advisers to
assist with management of the funds.
PARENT COMPANY INFORMATION -- ATFA is a wholly-owned indirect subsidiary of
Western Reserve Life Assurance Co. of Ohio ("Western Reserve"); Western Reserve
is a wholly-owned indirect subsidiary of First AUSA Life Insurance Company
("First AUSA"); and First AUSA is wholly-owned by Transamerica Holding Company
LLC which is wholly-owned
29
by AEGON USA, Inc. ("AEGON USA"), a financial services holding company whose
primary emphasis is on life and health insurance, and annuity and investment
products. AEGON USA is a wholly-owned indirect subsidiary of AEGON N.V., a
Netherlands corporation and publicly traded international insurance group.
ADMINISTRATIVE AGENT -- AEGON/Transamerica Fund Services, Inc. ("ATFS") acts as
the administrative agent for IDEX and, as such, performs administrative
functions and the bookkeeping, accounting and pricing functions for the Funds.
(Prior to July 1, 2002, AFSG provided administrative services to the Fund.) For
these services, ATFS receives reimbursement from IDEX on behalf of the Funds on
a cost incurred basis.
SHAREHOLDER SERVICING AGENT (TRANSFER AGENT) - AEGON/Transamerica Investor
Services, Inc ("ATIS") acts as the transfer agent for the Funds. (Prior to
September 26, 2002, the transfer agent was named Idex Investor Services, Inc.)
As such, ATIS performs all shareholder servicing functions, including
transferring record ownership, processing purchase and redemption transactions,
answering inquiries, mailing shareholder communications and acting as the
dividend disbursing agent. For these services, ATIS receives an annual
per-account charge of $15.39 for each of its shareholder accounts in existence,
$2.73 for each new account opened, and $1.63 for each closed account.
FUND TRANSACTIONS -- Decisions as to the assignment of fund business for each
Fund and negotiation of commission rates are made by the respective Fund's
sub-adviser, whose policy is to obtain the "best execution" (prompt and reliable
execution at favorable security price) of all Fund transactions. The Advisory
Agreement and Sub-Advisory Agreement for each Fund specifically provide that in
placing portfolio transactions for a Fund, the Fund's sub-adviser may agree to
pay brokerage commissions for effecting a securities transaction in an amount
higher than another broker or dealer would have charged for effecting that
transaction as authorized, under certain circumstances, by the Securities
Exchange Act of 1934.
In selecting brokers and dealers and in negotiating commissions, a Fund's
sub-adviser considers a number of factors, including but not limited to:
The sub-adviser's knowledge of currently available negotiated commission
rates or prices of securities and other current transaction costs;
The nature of the security being traded;
The size and type of the transaction;
The nature and character of the markets for the security to be purchased
or sold;
The desired timing of the trade;
The activity existing and expected in the market for the particular
security;
The quality of the execution, clearance and settlement services;
Financial stability;
The existence of actual or apparent operational problems of any broker or
dealer; and
30
Research products and services provided.
In recognition of the value of the foregoing factors, the sub-adviser may place
portfolio transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker would have charged for
effecting that transaction. This is done if the sub-adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research provided by such broker viewed in terms of either
that particular transaction or of the overall responsibilities of the
sub-adviser.
A sub-adviser may also consider the sale or recommendation of a Fund's shares by
a broker or dealer to its customers as a factor in the selection of brokers or
dealers to execute portfolio transactions. In placing portfolio business with
brokers or dealers, a sub-adviser will seek the best execution of each
transaction, and all such brokerage placement must be consistent with the
Conduct Rules of the National Association of Securities Dealers, Inc.
DIVIDENDS, DISTRIBUTIONS & TAXES
DIVIDENDS AND DISTRIBUTIONS. IDEX generally distributes most or all of its net
earnings in the form of dividends. IDEX pays dividends and capital gains, if
any, annually. Dividends and distributions will be determined on a class basis.
Any dividends and distributions paid by IDEX will be automatically reinvested in
additional shares of the respective class of the Fund, unless you elect to
receive dividends in cash. When a dividend or distribution is paid, the NAV per
share is reduced by the amount of payment. You may, upon written request or by
completing the appropriate section of the Account Application, elect to have all
dividends and other distributions paid on a Class A, B, C, L and M shares in a
fund invested into another fund in the same share class.
FEDERAL TAXES. The Funds qualified, and expect to continue to qualify, as
regulated investment companies under the Internal Revenue Code. As a regulated
investment company, a Fund is not subject to federal income tax on ordinary
income and capital gains, if any, that it distributes to its shareholders.
Fund distributions are taxable as ordinary income to the extent they are
attributable to a Fund's net investment income, certain net realized foreign
exchange gains, and net short-term capital gains. They are taxable as long-term
capital gains (at the federal maximum rate of 20%) to the extent they are
attributable to the Fund's excess of net long-term capital gains over net
short-term capital losses. The tax status of any distribution is the same
regardless of how long you have been a shareholder in a Fund and whether you
elect to reinvest distributions or receive cash. Certain distributions paid by a
Fund in January may be taxable to shareholders as if they were received on the
prior December 31.
As of October 31, 2001, IDEX PBHG Mid Cap Growth had capital loss carryforwards
totaling $2,310,608, expiring on October 31, 2008. IDEX PBHG Technology &
Communications had capital loss carryforwards totaling $4,981,994, expiring on
October 31, 2008. The utilization of tax capital loss carryforwards from the
Acquired Fund may be limited.
You should rely on your own tax adviser for advice about particular federal,
state and local tax consequences of investing in mutual funds.
31
FINANCIAL HIGHLIGHTS FOR ACQUIRING FUND
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The financial highlights table is intended to help you understand Acquiring
Fund's financial performance for its shares for each period shown. No
information is shown for Class L shares, which did not commence operations until
after the periods shown. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund assuming
reinvestment of all dividends and distributions. This information through
October 31, 2001 has been derived from financial statements audited by
PricewaterhouseCoopers LLP, whose report, along with the IDEX financial
statements, are included in the IDEX Annual Report, which is available upon
request. The information for the period ended 4/30/02 is unaudited and is
included in the IDEX Semi-Annual Report, which is also available upon request.
FINANCIAL HIGHLIGHTS
IDEX PBHG MID CAP GROWTH
For a share of beneficial interest outstanding throughout each period:
INVESTMENT OPERATIONS DISTRIBUTIONS
----------------------------------------- --------------------------------------------
NET
NET ASSET REALIZED
VALUE, NET AND FROM NET FROM NET
YEAR OR BEGINNING INVESTMENT UNREALIZED TOTAL INVESTMENT REALIZED TOTAL
PERIOD ENDED OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
------------ --------- ------------- ----------- ---------- ------ ------------- -------------
Class A 04/30/2002 (5) 9.24 (0.08) 0.47 0.39 - - -
10/31/2001 (5) 20.94 (0.12) (11.58) (11.70) - - -
10/31/2000 14.80 (0.02) 6.47 6.45 - (0.31) (0.31)
10/31/1999 10.00 0.02 4.78 4.80 - - -
Class B 04/30/2002 (5) 9.05 (0.11) 0.46 0.35 - - -
10/31/2001 (5) 20.76 (0.21) (11.50) (11.71) - - -
10/31/2000 14.76 (0.16) 6.47 6.31 - (0.31) (0.31)
10/31/1999 10.00 (0.02) 4.78 4.76 - - -
Class C 04/30/2002 (5) 9.05 (0.10) 0.45 0.35 - - -
10/31/2001 (5) 20.76 (0.22) (11.49) (11.71) - - -
10/31/2000 14.76 (0.16) 6.47 6.31 - (0.31) (0.31)
Class M 04/30/2002 (5) 9.08 (0.10) 0.46 0.36 - - -
10/31/2001 (5) 20.79 (0.20) (11.51) (11.71) - - -
10/31/2000 14.77 (0.14) 6.47 6.33 - (0.31) (0.31)
10/31/1999 10.00 (0.01) 4.78 4.77 - - -
32
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------
RATIO OF EXPENSES TO
NET ASSETS, AVERAGE NET ASSETS (1)(3) NET INVESTMENT
NET ASSET END OF ------------------------- INCOME (LOSS) TO PORTFOLIO
YEAR OR VALUE, END PERIOD EXCLUDING AVERAGE NET TURNOVER
PERIOD ENDED OF PERIOD TOTAL RETURN(2) (000'S) CREDITS GROSS ASSETS (1)(3) RATE (4)
------------ --------- --------------- ------- ------- ----- ------------- --------
Class A 04/30/2002 (5) 9.63 4.24% 24,358 1.72 2.72 (1.59) 96.39
10/31/2001 (5) 9.24 (55.87)% 23,952 1.55 2.12 (0.91) 171.89
10/31/2000 20.94 43.78% 48,842 1.55 2.06 (0.80) 129.20
10/31/1999 14.80 48.06% 2,571 1.55 6.95 (0.88) 150.78
Class B 04/30/2002 (5) 9.40 3.86% 34,422 2.37 3.37 (2.24) 96.39
10/31/2001 (5) 9.05 (56.42)% 34,017 2.20 2.77 (1.56) 171.89
10/31/2000 20.76 43.07% 68,184 2.20 2.71 (1.45) 129.20
10/31/1999 14.76 47.63% 2,875 2.20 7.60 (1.53) 150.78
Class C 04/30/2002 (5) 9.40 3.86% 9,151 2.37 3.37 (2.24) 96.39
10/31/2001 (5) 9.05 (56.42)% 8,595 2.20 2.77 (1.56) 171.89
10/31/2000 20.76 43.07% 16,972 2.20 2.71 (1.45) 129.20
Class M 04/30/2002 (5) 9.44 3.98% 4,936 2.27 3.27 (2.14) 96.39
10/31/2001 (5) 9.08 (56.33)% 5,502 2.10 2.67 (1.46) 171.89
10/31/2000 20.79 43.17% 14,734 2.10 2.61 (1.35) 129.20
10/31/1999 14.77 47.70% 1,016 2.10 7.50 (1.43) 150.78
Notes to Financial Highlights
(1) Ratio of Expenses to Average Net Assets shows: Excluding Credits (net
expense ratio which is total expenses less fee waivers and reimbursements
by the investment adviser). Gross (total expenses not taking into account
fee waivers and reimbursements by the investment adviser or affiliated
brokerage and custody earnings credits, if any).
(2) Total Return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase for Class A or
Class C. Periods of less than one year not annualized.
(3) Periods of less than one year are annualized. The Ratio of Net Investment
Income (Loss) to Average Net Assets is based upon Net Investment Income
(Loss) prior to certain reclassifications as discussed in Note 1 of the
Notes to the Financial Statements.
(4) Periods of less than one year are not annualized.
(5) Calculated based on average number of shares outstanding during the
period.
The notes to the financial statements are an integral part of these statements.
33
APPENDIX A
AGREEMENT & PLAN OF REORGANIZATION
THIS AGREEMENT & PLAN OF REORGANIZATION (the "Plan") is made as of the 9th day
of September, 2002 by IDEX Mutual Funds (the "Company") with its principal place
of business at 570 Carillon Parkway, St. Petersburg, Florida 33716, on behalf of
IDEX PBHG Mid Cap Growth (the "Acquiring Fund") and IDEX PBHG Technology &
Communications (the "Acquired Fund"), separate series of the Company.
This Plan is intended to be, and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of Acquired
Fund to Acquiring Fund in exchange solely for Class A, Class B, Class C, Class L
and Class M voting shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares"), the assumption by Acquiring Fund of all liabilities of
Acquired Fund, and the distribution of Acquiring Fund Shares to the shareholders
of Acquired Fund in complete liquidation of Acquired Fund as provided herein,
all upon the terms and conditions hereinafter set forth in this Plan.
WHEREAS, the Company is an open-end, registered investment management company
and Acquired Fund owns securities which generally are assets of the character in
which Acquiring Fund is permitted to invest.
WHEREAS, the Trustees of the Company have determined that the exchange of all of
the assets of Acquired Fund for Acquiring Fund Shares, and the assumption of all
liabilities of Acquired Fund by Acquiring Fund, is in the best interests of
Acquiring Fund and its shareholders, and that the interests of the existing
shareholders of Acquiring Fund would not be diluted as a result of this
transaction.
WHEREAS, the Trustees of the Company have determined, with respect to Acquired
Fund, that the exchange of all of the assets of Acquired Fund for Acquiring Fund
Shares, and the assumption of all liabilities of Acquired Fund by Acquiring
Fund, is in the best interests of Acquired Fund and its shareholders, and that
the interests of the existing shareholders of Acquiring Fund would not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the Company, on behalf of Acquiring Fund and
Acquired Fund separately, hereby covenants and agrees to the following terms and
conditions:
1. TRANSFER OF ASSETS OF ACQUIRED FUND TO ACQUIRING FUND IN EXCHANGE FOR
ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES AND
THE LIQUIDATION OF ACQUIRED FUND
1.1 Subject to the requisite approval of the shareholders of Acquired
Fund and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the
Company will transfer all of Acquired Fund's assets, as set forth in
paragraph 1.2, to Acquiring Fund, and Acquiring Fund agrees in
exchange therefore: (i) to deliver to Acquired Fund the number of
full and fractional Class A, Class
34
B, Class C, Class L and Class M Acquiring Fund Shares determined by
dividing the value of Acquired Fund's net assets with respect to
each class, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one Acquiring Fund
Share of the same class, computed in the manner and as of the time
and date set forth in paragraph 2.2; and (ii) to assume all
liabilities of Acquired Fund. Such transactions shall take place at
the closing provided for in paragraph 3.1 (the "Closing").
1.2 The assets of Acquired Fund to be acquired by Acquiring Fund shall
consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by Acquired Fund
and any deferred or prepaid expenses shown as an asset on the books
of Acquired Fund on the closing date provided for in paragraph 3.1
(the "Closing Date") (collectively, "Assets").
1.3 Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. Acquiring
Fund shall also assume all of the liabilities of Acquired Fund,
whether accrued or contingent, known or unknown, existing at the
Valuation Date. On or as soon as practicable prior to the Closing
Date, Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions that,
together with all previous distributions, shall have the effect of
distributing to its shareholders (i) all of its investment company
taxable income and all of its net realized capital gains, if any,
for the period from the close of its last taxable year to the end of
the business day on the Closing; and (ii) any undistributed
investment company taxable income and net capital gain from any
period to the extent not otherwise distributed.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, Acquired Fund will distribute to Acquired Fund's shareholders
of record with respect to each class of its shares, determined as of
immediately after the close of business on the Closing Date (the
"Acquired Fund Shareholders"), on a pro rata basis within that
class, Acquiring Fund Shares of the same class received by Acquired
Fund pursuant to paragraph 1.1, and will completely liquidate. Such
distribution and liquidation will be accomplished, with respect to
Acquired Fund's shares, by the transfer of Acquiring Fund Shares
then credited to the account of Acquired Fund on the books of
Acquiring Fund to open accounts on the share records of Acquiring
Fund in the names of Acquired Fund Shareholders. The aggregate net
asset value of Class A, Class B, Class C, Class L and Class M
Acquiring Fund Shares to be so credited to Class A, Class B, Class
C, Class L and Class M Acquired Fund Shareholders shall, with
respect to each class, be equal to the aggregate net asset value of
Acquired Fund shares of the corresponding class owned by such
shareholders on the Closing Date. All issued and outstanding shares
of Acquired Fund will simultaneously be canceled on the books of
Acquired Fund, although share certificates representing interests in
shares of each class of Acquired Fund will represent a number of the
same class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with Section 2.3. Acquiring Fund shall not
issue certificates representing Acquiring Fund Shares in connection
with such exchange.
35
1.5 Ownership of Acquiring Fund Shares will be shown on the books of
Acquiring Fund's transfer agent. Shares of Acquiring Fund will be
issued in the manner described in Acquiring Fund's then-current
prospectus and statement of additional information.
1.6 Any reporting responsibility of Acquired Fund including, but not
limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the Securities and Exchange
Commission (the "Commission"), any state securities commission, and
any federal, state or local tax authorities or any other relevant
regulatory authority, is and shall remain the responsibility of
Acquired Fund.
2. VALUATION
2.1 The value of Assets shall be the value of such assets computed as of
immediately after the close of business of the New York Stock
Exchange and after the declaration of any dividends on the Closing
Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the then-current
prospectus and statement of additional information, and valuation
procedures established by the Company's Board of Trustees.
2.2 The net asset value of a Class A, Class B, Class C, Class L or Class
M Acquiring Fund Share shall be the net asset value per share
computed with respect to that class on the Valuation Date as of
immediately after the close of business of the New York Stock
Exchange and after the declaration of any dividends on the Valuation
Date, using the valuation procedures set forth in the then-current
prospectus or statement of additional information with respect to
Acquiring Fund, and valuation procedures established by the
Company's Board of Trustees.
2.3 The number of Class A, Class B, Class C, Class L and Class M
Acquiring Fund Shares to be issued (including fractional shares, if
any) in exchange for Acquired Fund's assets shall be determined by
dividing the value of the net assets with respect to Class A, Class
B, Class C, Class L and Class M shares of Acquired Fund, as the case
may be, determined using the same valuation procedures referred to
in paragraph 2.1, by the net asset value of the corresponding class
of Acquiring Fund Share, determined in accordance with paragraph
2.2.
2.4 All computations of value shall be made by Acquired Fund's
designated record keeping agent, and shall be subject to review by
the independent certified public accountants for IDEX.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be February 28, 2003, or such other date as
the parties may agree to in writing. All acts taking place at the
Closing shall be deemed to take place simultaneously as of
immediately after the close of business on the Closing Date unless
otherwise agreed to by the parties. The close of business on the
Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing
shall be held at the offices of the Company or at such other time
and/or place as the parties will agree.
3.2 The Company shall direct Investors Bank & Trust Company, as
custodian for Acquired Fund (the "Custodian"), to deliver, at the
Closing, a certificate of an authorized officer stating that (i)
Acquired Fund's
36
portfolio securities, cash, and any other assets ("Assets") shall
have been delivered in proper form to Acquiring Fund within two
business days prior to or on the Closing Date, and (ii) all
necessary taxes in connection with the delivery of the Assets,
including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made.
Acquired Fund's portfolio securities represented by a certificate
or other written instrument shall be transferred and delivered by
Acquired Fund as of the Closing Date for the account of Acquiring
Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. Acquired Fund shall direct
the Custodian to deliver portfolio securities and instruments
deposited with a securities depository, as defined in Rule 17f-4
under the Investment Company Act of 1940, as amended (the "1940
Act") as of the Closing Date by book entry in accordance with the
customary practices of such depositories and the custodian for
Acquiring Fund.
3.3 AEGON/Transamerica Investor Services, Inc., as transfer agent for
Acquired Fund (the "Transfer Agent"), shall deliver, on behalf of
Acquired Fund, at the Closing a certificate of an authorized
officer stating that its records contain the names and addresses
of Acquired Fund Shareholders and the number and percentage
ownership of outstanding Class A, Class B, Class C, Class L and
Class M shares owned by each such shareholder immediately prior to
the Closing.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio
securities of Acquiring Fund or Acquired Fund shall be closed to
trading or trading thereupon shall be restricted, or (b) trading
or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of the Board of Trustees of the
Company, accurate appraisal of the value of the net assets of
Acquiring Fund or Acquired Fund is impracticable, the Closing Date
shall be postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Company, on behalf of Acquired Fund, represents and warrants
to Acquiring Fund as follows:
(a) Acquired Fund is duly organized as a series of the Company,
which is a business trust duly organized and validly
existing under the laws of the State of Massachusetts, with
power under the Company's Declaration of Trust to own all of
its properties and assets and to carry on its business as it
is now being conducted;
(b) The Company is a registered open-end investment management
company, and its registration with the Commission as an
investment company under the 1940 Act, and the registration
of its shares under the Securities Act of 1933, as amended
("1933 Act"), are in full force and effect;
(c) No consent, approval, authorization, or order of any court
or governmental authority is required for the consummation
by Acquired Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act, and such as may be required by state
securities laws;
37
(d) The current prospectus and statement of additional information
of Acquired Fund and each prospectus and statement of
additional information of Acquired Fund used at all times
prior to the date of this Plan conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Company, on behalf of Acquired Fund
will have good and marketable title to the Assets to be
transferred to Acquiring Fund pursuant to paragraph 1.2 and
full right, power, and authority to sell, assign, transfer and
deliver such assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such assets,
the Company, on behalf of Acquiring Fund, will acquire good
and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as
might arise under the 1933 Act, other than as disclosed to
Acquiring Fund;
(f) Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Plan will not result, in (i)
a material violation of the Company's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Company, on behalf of
Acquired Fund is a party or by which it is bound, or (ii) the
acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Company, on behalf of
Acquired Fund, is a party or by which it is bound;
(g) material contracts or other commitments (other than this Plan)
that will be terminated with liability to it prior to the
Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
the Company, on behalf of Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or, to its
knowledge, threatened against Acquired Fund or any of its
properties or assets that, if adversely determined, would
materially and adversely affect its financial condition or the
conduct of its business. The Company, on behalf of Acquired
Fund, knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely
affects its business or its ability to consummate the
transactions herein contemplated;
(i) The Statement of Assets and Liabilities, including the
Schedule of Investments, at October 31, 2001 of Acquired Fund,
and the Statements of Operations and of Changes in Net Assets
and the Financial Highlights for the periods then ended, have
been audited by PricewaterhouseCoopers LLP, independent
certified public accountants. Such statements are in
accordance with generally accepted accounting principles
("GAAP") consistently applied, and such statements (copies of
which have been furnished to Acquiring Fund) present fairly,
in all material respects, the financial condition of Acquired
Fund as of such date in accordance with GAAP, and there are no
known contingent liabilities of Acquired
38
Fund required to be reflected on the balance sheet or in the
notes thereto;
(j) Since October 31, 2001 there has been no material adverse
change in Acquired Fund's financial condition, assets,
liabilities or business, other than changes occurring in the
ordinary course of business, or any incurrence by Acquired
Fund of indebtedness maturing more than one year from the date
such indebtedness was incurred, except as otherwise disclosed
to and accepted by Acquiring Fund. For the purposes of this
subparagraph (j), a decline in net asset value per share of
Acquired Fund due to declines in market values of securities
in Acquired Fund's portfolio, the discharge of Acquired Fund
liabilities, or the redemption of Acquired Fund shares by
shareholders of Acquired Fund shall not constitute a material
adverse change;
(k) On the Closing Date, all Federal and other tax returns and
reports of Acquired Fund required by law to have been filed by
such date (including any extensions) shall have been filed and
are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown
as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof, and to
the best of Acquired Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with
respect to such returns;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), Acquired Fund has met the
requirements of Subchapter M of the Code for qualification as
a regulated investment company and has elected to be treated
as such, has been eligible to and has computed its Federal
income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and
net capital gain (as defined in the Code) that has accrued
through the Closing Date, and before the Closing Date will
have declared dividends sufficient to distribute all of its
investment company taxable income and net capital gain for the
period ending on the Closing Date;
(m) All issued and outstanding shares of Acquired Fund are, and on
the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Company and
have been offered and sold in every state and the District of
Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state
securities laws. All of the issued and outstanding shares of
Acquired Fund will, at the time of Closing, be held by the
persons and in the amounts set forth in the records of the
Transfer Agent, on behalf of Acquired Fund, as provided in
paragraph 3.3. Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase
any of the shares of Acquired Fund, nor is there outstanding
any security convertible into any of Acquired Fund shares;
(n) The execution and performance of this Plan will have been duly
authorized prior to the Closing Date by all necessary action,
if any, on the part of the Trustees of the Company, on behalf
of Acquired Fund, and, subject to the approval of the
shareholders of Acquired Fund, this Plan will constitute a
valid and binding obligation of Acquired Fund, enforceable in
accordance with its terms, subject, as to
39
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(o) The information to be furnished by Acquired Fund for use in
registration statements, proxy materials and other documents
filed or to be filed with any federal, state or local
regulatory authority (including the National Association of
Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be
accurate and complete in all material respects and shall
comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
4.2 The Company, on behalf of Acquiring Fund, represents and warrants to
Acquired Fund as follows:
(a) Acquiring Fund is duly organized as a series of the Company,
which is a business trust duly organized and validly existing
under the laws of the State of Massachusetts, with power under
the Company's Declaration of Trust to own all of its
properties and assets and to carry on its business as it is
now being conducted;
(b) The Company is a registered open-end investment management
company, and its registration with the Commission as an
investment company under the 1940 Act and the registration of
its shares under the 1933 Act, including the shares of
Acquiring Fund, are in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by
Acquiring Fund of the transactions contemplated herein, except
such as have been obtained under the 1933 Act, the 1934 Act
and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information
of Acquiring Fund and each prospectus and statement of
additional information of Acquiring Fund used at all times
prior to the date of the Plan conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
materially misleading;
(e) On the Closing Date, the Company, on behalf of Acquiring Fund,
will have good and marketable title to Acquiring Fund's
assets, free of any liens of other encumbrances, except those
liens or encumbrances as to which Acquired Fund has received
notice and necessary documentation at or prior to the Closing;
(f) Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Plan will not result, in (i)
a material violation of the Company's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which Acquiring Fund is a party
or by which it is bound, or (ii) the acceleration of any
obligation, or the imposition of any penalty,
40
under any agreement, indenture, instrument, contract, lease,
judgment or decree to which Acquiring Fund, is a party or by
which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
Acquired Fund, no litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against
Acquiring Fund or any of its properties or assets that, if
adversely determined, would materially and adversely affect
its financial condition or the conduct of its business. The
Company, on behalf of Acquiring Fund, knows of no facts which
might form the basis for the institution of such proceedings
and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated;
(h) The Statement of Assets and Liabilities, including the
Schedule of Investments, at October 31, 2001 of Acquiring
Fund, and the Statements of Operations and of Changes in Net
Assets and the Financial Highlights for the periods then
ended, have been audited by PricewaterhouseCoopers, LLP
independent certified public accountants. Such statements are
in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to Acquired
Fund) present fairly, in all material respects, the financial
condition of Acquiring Fund as of such date in accordance with
GAAP, and there are no known contingent liabilities of
Acquiring Fund required to be reflected on the balance sheet
or in the notes thereto;
(i) Since October 31, 2001, there has not been any material
adverse change in Acquiring Fund's financial condition,
assets, liabilities or business, other than changes occurring
in the ordinary course of business, or any incurrence by
Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as
otherwise disclosed to and accepted by Acquired Fund. For
purposes of this subparagraph (i), a decline in net asset
value per share of Acquiring Fund due to declines in market
values of securities in Acquiring Fund's portfolio, the
discharge of Acquiring Fund liabilities, or the redemption of
Acquiring Fund Shares by shareholders of Acquiring Fund, shall
not constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns and
reports of Acquiring Fund required by law to have been filed
by such date (including any extensions) shall have been filed
and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown
as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof, and to
the best of Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been asserted with
respect to such returns;
(k) For each taxable year of its operation, Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification
as a regulated investment company and has elected to be
treated as such, has been eligible to and has computed its
Federal income tax under Section 852 of the Code, has
distributed all of its investment company taxable income and
net capital gain (as defined in the Code)
41
for periods ending prior to the Closing Date, and will do so
for the taxable year including the Closing Date;
(l) All issued and outstanding Acquiring Fund Shares are, and on
the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Company and
have been offered and sold in every state and the District of
Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state
securities laws. Acquiring Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase
any Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares;
(m) The execution, delivery and performance of this Plan will have
been fully authorized prior to the Closing Date by all
necessary action, if any, on the part of the Trustees of the
Company on behalf of Acquiring Fund and this Plan will
constitute a valid and binding obligation of Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(n) Acquiring Fund Shares to be issued and delivered to Acquired
Fund, for the account of Acquired Fund Shareholders, pursuant
to the terms of this Plan, will on the Closing Date have been
duly authorized and, when so issued and delivered, will be
duly and validly issued Acquiring Fund Shares, and will be
fully paid and non-assessable by the Company;
(o) The information to be furnished by Acquiring Fund for use in
the registration statements, proxy materials and other
documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all
material respects with Federal securities and other laws and
regulations applicable thereto; and
(p) That insofar as it relates to Company or Acquiring Fund, the
Registration Statement relating to Acquiring Fund Shares
issuable hereunder, and the proxy materials of Acquired Fund
to be included in the Registration Statement, and any
amendment or supplement to the foregoing, will, from the
effective date of the Registration Statement through the date
of the meeting of shareholders of Acquired Fund contemplated
therein (i) not contain any 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, in light
of the circumstances under which such statements were made,
not materially misleading provided, however, that the
representations and warranties in this subparagraph (p) shall
not apply to statements in or omissions from the Registration
Statement made in reliance upon and in conformity with
information that was furnished by Acquired Fund for use
therein, and (ii) comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations thereunder.
5. COVENANTS OF ACQUIRING FUND AND ACQUIRED FUND
5.1 Acquiring Fund and Acquired Fund each will operate its business in
the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include
the
42
declaration and payment of customary dividends and distributions,
and any other distribution that may be advisable.
5.2 Acquired Fund will call a meeting of shareholders of Acquired Fund
to consider and act upon this Plan and to take all other actions
necessary to obtain approval of the transactions contemplated
herein.
5.3 To the extent required by applicable law, the Company will call a
meeting of the shareholders of Acquired Fund to consider and act
upon this Plan and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.4 Acquired Fund covenants that the Class A, Class B, Class C, Class L
and Class M Acquiring Fund Shares to be issued hereunder are not
being acquired for the purpose of making any distribution thereof,
other than in accordance with the terms of this Plan.
5.5 Acquired Fund will assist Acquiring Fund in obtaining such
information as Acquiring Fund reasonably requests concerning the
beneficial ownership of Acquired Fund shares.
5.6 Subject to the provisions of this Plan, Acquiring Fund and Acquired
Fund will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Plan.
5.7 As soon as is reasonably practicable after the Closing, Acquired
Fund will make a liquidating distribution to its shareholders
consisting of the Class A, Class B, Class C, Class L and Class M
Acquiring Fund Shares received at the Closing.
5.8 Acquiring Fund and Acquired Fund shall each use its reasonable best
efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Plan as
promptly as practicable.
5.9 The Company, on behalf of Acquired Fund, covenants that it will,
from time to time, as and when reasonably requested by Acquiring
Fund, execute and deliver or cause to be executed and delivered all
such assignments and other instruments, and will take or cause to be
taken such further action as the Company, on behalf of Acquiring
Fund, may reasonably deem necessary or desirable in order to vest in
and confirm (a) the Company, on behalf of Acquiring Fund's, title to
and possession of Acquiring Fund's shares to be delivered hereunder,
and (b) the Company, on behalf of Acquiring Fund's, title to and
possession of all of the assets and otherwise to carry out the
intent and purpose of this Plan.
5.10 Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state blue sky or securities laws as may be
necessary in order to continue its operations after the Closing
Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED FUND
The obligations of the Company, on behalf of Acquired Fund, to consummate
the transactions provided for herein shall be subject, at the Company's
election, to the performance by the Company, on behalf of Acquiring Fund,
of all
43
the obligations to be performed by it hereunder on or before the Closing
Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Company, on behalf of
Acquiring Fund, and the Company contained in this Plan shall be true
and correct in all material respects as of the date hereof and,
except as they may be affected by the transactions contemplated by
this Plan, as of the Closing Date, with the same force and effect as
if made on and as of the Closing Date;
6.2 The Company, on behalf of Acquiring Fund, shall have performed all
of the covenants and complied with all of the provisions required by
this Plan to be performed or complied with by the Company, on behalf
of Acquiring Fund, on or before the Closing Date; and
6.3 Acquired Fund and Acquiring Fund shall have agreed on the number of
full and fractional Acquiring Fund Shares of each class to be issued
in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of the Company, on behalf of Acquiring Fund, to complete
the transactions provided for herein shall be subject, at the Company's
election, to the performance by Acquired Fund of all of the obligations to
be performed by it hereunder on or before the Closing Date and, in
addition thereto, the following conditions:
7.1 All representations and warranties of the Company, on behalf of
Acquired Fund, contained in this Plan shall be true and correct in
all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Plan, as of the
Closing Date, with the same force and effect as if made on and as of
the Closing Date;
7.2 The Company, on behalf of Acquired Fund, shall have performed all of
the covenants and complied with all of the provisions required by
this Plan to be performed or complied with by the Company, on behalf
of Acquired Fund, on or before the Closing Date;
7.3 The Company, on behalf of Acquired Fund and Acquiring Fund, shall
have agreed on the number of full and fractional Acquiring Fund
Shares of each class to be issued in connection with the
Reorganization after such number has been calculated in accordance
with paragraph 1.1;
7.4 Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its
shareholders (i) all of its investment company taxable income and
all of its net realized capital gains, if any, for the period from
the close of its last taxable year to 4:00 p.m. Eastern Time on the
Closing; and (ii) any undistributed investment company taxable
income and net realized capital gains from any period to the extent
not otherwise already distributed.
44
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND AND ACQUIRED
FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Company, on behalf of Acquired Fund or
Acquiring Fund, the other party to this Plan shall, at its option, not be
required to consummate the transactions contemplated by this Plan:
8.1 The Plan and the transactions contemplated herein shall have been
approved by the requisite vote, if any, of the holders of the
outstanding shares of Acquired Fund in accordance with the
provisions of the Company's Declaration of Trust, By-Laws,
applicable Massachusetts law and the 1940 Act, and certified copies
of the resolutions evidencing such approval shall have been
delivered to Acquiring Fund. Notwithstanding anything herein to the
contrary, Company, on behalf of Acquiring Fund or Acquired Fund, may
not waive the conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Plan or
the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed
necessary by the Company to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or
permit would not involve a risk of a material adverse effect on the
assets or properties of Acquiring Fund or Acquired Fund, provided
that either party hereto may for itself waive any of such
conditions;
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof
shall have been issued and, to the best knowledge of the parties
hereto, no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated under the
1933 Act; and
8.5 Dechert shall deliver an opinion addressed to the Company
substantially to the effect that, based upon certain facts,
assumptions, and representations, the transaction contemplated by
this Plan shall constitute a tax-free reorganization for Federal
income tax purposes, unless, based on the circumstances existing at
the time of the Closing, Dechert determines that the transaction
contemplated by this Plan does not qualify as such. The delivery of
such opinion is conditioned upon receipt by Dechert of
representations it shall request of the Company. Notwithstanding
anything herein to the contrary, the Company may not waive the
condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Company, on behalf of Acquiring Fund, represents and warrants to
the other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for
herein.
9.2 The expenses relating to the proposed Reorganization will be paid by
the Investment Adviser, AEGON/Transamerica Fund Advisers, Inc. The
costs of the Reorganization shall include, but not be limited to,
costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparation of the
45
Registration Statement, printing and distributing Acquiring Fund's
prospectus and Acquired Fund's proxy materials, legal fees,
accounting fees, securities registration fees, and expenses of
holding the shareholders' meeting.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
The representations, warranties and covenants contained in this Plan or in
any document delivered pursuant hereto or in connection herewith shall
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of
Acquired Fund and Acquiring Fund in sections 9.1 and 9.2 shall survive the
Closing.
11. TERMINATION
This Plan and the transactions contemplated hereby may be terminated and
abandoned by resolution of the Board of Trustees, at any time prior to the
Closing Date, if circumstances should develop that, in the opinion of the
Board, make proceeding with the Plan inadvisable.
12. AMENDMENTS
This Plan may be amended, modified or supplemented in such manner as may
be set forth in writing by the authorized officers of the Company;
provided, however, that following any meeting of the shareholders called
by the Company, on behalf of Acquired Fund, pursuant to paragraph 5.2 of
this Plan, no such amendment may have the effect of changing the
provisions for determining the number of Class A, Class B, Class C, Class
L and Class M Acquiring Fund Shares to be issued to Acquired Fund
Shareholders under this Plan to the detriment of such shareholders without
their further approval.
13. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
13.1 The Article and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Plan.
13.2 This Plan may be executed in any number of counterparts, each of
which shall be deemed to be an original.
13.3 This Plan shall be governed by and construed in accordance with the
laws of the State of Massachusetts without regard to its principles
of conflicts of laws.
13.4 This Plan shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation,
other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Plan.
13.5 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Company personally,
but shall bind only property of Acquired Fund, as provided in the
Declaration of Trust of the Company. The execution and
46
delivery by such officers shall not be deemed to have been made by
any of them individually or to impose any liability on any of them
personally, but shall bind only the property of each party.
IN WITNESS WHEREOF, the Company, on behalf of Acquired Fund and Acquiring Fund,
has caused this Plan to be approved and executed by its President.
IDEX Mutual Funds
By: _____________________________________
Name: Brian C. Scott
Title: President and Chief Executive Officer
47
APPENDIX B
IDEX PBHG MID CAP GROWTH
(formerly IDEX Pilgrim Baxter Mid Cap Growth)
OBJECTIVE/FOCUS
Long-term growth of capital by investing fund assets principally in common
stocks of medium capitalization companies.
MARKET ENVIRONMENT
Following the devastating events of September 11 and the brief corresponding
decline in market averages, stocks shook off some weak economic data and rose to
close the year strong. While investors alternately shifted their focus between
the latest news on terrorism and corporate earnings reports, many stocks started
to benefit from the continuing military success against the war on terrorism.
The Federal Reserve Board ("Fed") continued to try to revive the economy with
more interest rate cuts late in 2001.
During the first quarter of 2002, major market indexes produced widely varying
returns, as the economic recovery became increasingly visible. Keeping investors
on edge and weighing on stocks, however, were concerns surrounding corporate
accounting practices. In the broad market, the best returns generally came from
the value side of the ledger, reflecting investors' preference for lower risk,
non-technology names. Paradoxically, investors also favored those companies that
tend to be most sensitive to a recovering economy. In March, the Fed signaled
the end of a long period of declining interest rates by shifting the focus to
the potential for a more restrictive monetary policy going forward. Economic
forecasters generally raised their Gross Domestic Product forecasts during the
period.
PERFORMANCE
For the six months ended April 30, 2002, IDEX PBHG Mid Cap Growth underperformed
its benchmark, the Russell Mid Cap Growth Index. Please refer to the Performance
Table on the next page for additional information.
STRATEGY REVIEW
Negatively contributing to the fund's performance compared to its benchmarks
during the period were our holdings in the health care and technology sectors.
The fund derived positive performance at times from non-technology consumer
issues, including new holdings in retailing and restaurants. Later in the
period, we initiated a small finance sector weighting, which contributed a
positive return. Our selections in the services sector also fared well in the
early months of 2002. Although overall technology holdings made a negative
contribution, several semiconductor-related stocks did very well in the second
half of the period, as the first signs of a recovery in orders became apparent.
OUTLOOK
Our greatest challenge during the period was quickly repositioning the fund to
benefit from investors' preference for low-priced stocks late in 2001, while
finding companies with attractive relative earnings outlooks. Amid increasingly
favorable economic data, the markets have yet to turn the corner toward more
stable results.
Looking forward, we believe the fund is well positioned as investor sentiment
shifts from a defensive mentality to one of being more interested in rising
earnings and the potential for companies to grow and surprise investors on the
upside. A strengthening economy should bolster that possibility. We believe that
improving confidence in the investment outlook logically and historically favors
more growth-oriented investment disciplines. As always, we will continue to
search for companies that, based on our research, appear to have prospects for
above average, longer-term growth and that are expected to benefit from an
economy that continues to improve.
Gary Pilgrim
Fund Manager
Pilgrim Baxter & Associates, Ltd.
48
INVESTMENT STYLE
"Growth" reflects companies with the potential to increase earnings faster than
other companies. "Value" reflects companies that are thought to be undervalued
(low P/E) relative to their stock price. Blend is a mixture of both
philosophies.
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 4/30/02
From Inception
6 months 1 year Inception Date
-------- ------ --------- ----
Class A (NAV) 4.24% (21.60)% (0.65)% 3/1/99
Class A (POP) (1.49)% (25.91)% (2.41)% 3/1/99
Russell MCG(1) 6.97% (15.01)% 0.39% 3/1/99
Class B (NAV) 3.86% (22.41)% (1.41)% 3/1/99
Class B (POP) (1.14)% (26.29)% (2.03)% 3/1/99
Class C (NAV) 3.86% (22.41)% (15.97)% 11/1/99
Class M (NAV) 3.98% (22.24)% (1.28)% 3/1/99
Class M (POP) 1.94% (23.79)% (1.59)% 3/1/99
NOTES
1 The Russell Mid Cap Growth (Russell MCG) Index is an unmanaged index used
as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares.
Source: Standard & Poor's Micropal(R)(C) Micropal, Inc. 2001 -
1-800-596-5323 - http://www.micropal.com.
The performance data presented represents past performance, future results may
vary. Performance data does not reflect the deduction of taxes that would be
paid on fund distributions or the redemption of fund shares. Investment return
and principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
Public Offering Price (POP) returns include the reinvestment of dividends and
capital gains and reflect the maximum sales charge of 5.5% for A shares and 1%
for M shares or the maximum applicable contingent deferred sales charge (5% in
the 1st year, decreasing to 0% after 6 years) for Class B shares and 1% (during
the 1st 18 months) for Class M shares. Class C shares do not impose a sales
charge. Net Asset Value (NAV) returns include the reinvestment of dividends and
capital gains but do not reflect any sales charges.
Investments by Sector as a Percentage of Net Assets
This material must be preceded or accompanied by the current prospectus, which
includes specific content regarding the investment objectives and policies of
this fund.
49
IDEX PILGRIM BAXTER MID CAP GROWTH
OBJECTIVE/FOCUS
Long-term growth of capital by investing fund assets principally in common
stocks of medium capitalization companies.
MARKET ENVIRONMENT
The period was characterized by slowing economic growth, persistent layoffs,
decaying consumer confidence, and an easing monetary policy that failed to
stimulate the economy. High growth and technology-related stocks were hardest
hit as major market indices declined for most of the period. The one bright spot
was the second quarter, when market averages got a welcome and needed break from
the negative investor sentiment that had been plaguing markets and beating down
stocks. However, despite encouraging market returns, the outlook for renewed
earnings growth in the following months was challenged, as companies continued
to site deteriorating business conditions. This weighed on performance during
the latter part of the period and became magnified following the terrorist
attacks. Markets closed the period with a rebound in the month of October.
PERFORMANCE
For the fiscal year ended October 31, 2001, IDEX Pilgrim Baxter Mid Cap
underperformed its benchmark, the Russell Mid Cap Growth Index. Please refer to
the Performance Table on the next page for further information.
STRATEGY REVIEW
Most of the past year has been spent with dashed expectations for economic
recovery. One quarter after another has been predicted to be the bottom of the
economic downturn, with recovery, as the result of aggressive monetary easing
and fiscal stimulus, forecasted to follow soon after. Our challenge has been to
focus on those companies and sectors realizing growth as a result of solid
fundamentals. Over the past year, this has become increasingly difficult, as the
number of companies in this category has diminished amid the recessionary
environment. For the most part, we have looked to healthcare stocks to cushion
losses and help position the portfolio favorably for when the economy shifts. We
have also worked to reduce our exposure to business sensitive stocks,
particularly technology, which continued to disappoint investors, in favor of
those companies we believe have the potential to withstand economic uncertainty.
Our exposure to technology also declined due to the sector's overall
devaluation. Generally, however, we made very few adjustments to the fund in
response to the increased probability of recession or the terrorist attacks,
believing it more prudent to adhere to our long-term approach.
OUTLOOK
At this point, very few industries have been untouched by the slowdown in
business activity. Of course, the events of September 11th accelerated growing
uncertainty to the point where normal business abruptly halted and the pace of
the economic deceleration seems to have been magnified. Looking ahead, both
fiscal and monetary policies are critical. The primary concern of policymakers
centers on investor and business confidence. These are normal considerations in
a recession, but their urgency is magnified as a result of the terrorist
attacks.
Our task as growth managers does not change. We continue to pursue companies
that we believe have the best opportunities for growth in the quarters ahead.
While technology remains a major portion of the portfolio, healthcare has now
become the largest sector representation. Demographics and the pace of medical
advancements create more opportunities for this sector to grow. This is not a
top-down judgment; rather it is our view that opportunities in the healthcare
sector have expanded based on our company-by-company analysis. Going forward, we
will continue to emphasize companies that we believe lead their industries and
have large markets within which to grow. Our expectation is that these companies
will reemerge with rapid growth characteristics once we return to a more normal
market environment.
Gary Pilgrim
Fund Manager
Pilgrim Baxter & Associates, Ltd.
50
INVESTMENT STYLE
Growth reflects companies with the potential to increase earnings faster than
other companies. Value reflects companies that are thought to be undervalued
(low P/E) relative to their stock price. Blend is a mixture of both
philosophies.
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/01
From Inception
1 year Inception Date
------ --------- ----
Class A (NAV) (55.87)% (2.31)% 3/1/99
Class A (POP) (58.30)% (4.35)% 3/1/99
Russell MCG(1) (42.78)% (2.03)% 3/1/99
Class B (NAV) (56.42)% (3.05)% 3/1/99
Class B (POP) (58.60)% (4.15)% 3/1/99
Class C (NAV) (56.42)% (21.02)% 11/1/99
Class M (NAV) (56.33)% (2.94)% 3/1/99
Class M (POP) (57.20)% (3.30)% 3/1/99
NOTES
1 The Russell Mid Cap Growth (Russell MCG) Index is an unmanaged index used
as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares.
Source: Standard & Poor's
Micropal(R)(C) Micropal, Inc. 2001 - 1-800-596-5323 - http://www.micropal.com.
The performance data presented represents past performance, future results may
vary. Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Public Offering Price (POP) returns include the reinvestment of dividends and
capital gains and reflect the maximum sales charge of 5.5% for A shares and 1%
for M shares or the maximum applicable contingent deferred sales charge (5% in
the 1st year, decreasing to 0% after 6 years) for Class B shares and 1% (during
the 1st 18 months) for Class M shares. Class C shares do not impose a sales
charge. Net Asset Value (NAV) returns include the reinvestment of dividends and
capital gains but do not reflect any sales charges.
INVESTMENTS BY SECTOR AS A PERCENTAGE OF NET ASSETS
This material must be preceded or accompanied by the current prospectus, which
includes specific content regarding the investment objectives and policies of
this fund.
51
APPENDIX C
As of [date], the following persons owned beneficially, or of record, 5% or more
of the outstanding shares of Acquiring Fund:
% OF ACQUIRING FUND % OF ACQUIRING FUND
NAME AND ADDRESS BEFORE REORGANIZATION AFTER REORGANIZATION
As of [date], the following persons owned of record 5% or more of the
outstanding shares of Acquired Fund:
% OF ACQUIRED FUND BEFORE % OF ACQUIRED FUND AFTER
NAME AND ADDRESS REORGANIZATION REORGANIZATION
52
PART B
IDEX Mutual Funds
Statement of Additional Information
December 4, 2002
Acquisition of the Assets and Liabilities of
IDEX PBHG Technology & Communications (the "Acquired Fund")
570 Carillon Parkway, St. Petersburg, Florida 33716
By and in Exchange for Shares of
IDEX PBHG Mid Cap Growth (the "Acquiring Fund")
570 Carillon Parkway, St. Petersburg, Florida 33716
This Statement of Additional Information is available to the shareholders of
Acquired Fund in connection with a proposed transaction whereby all of the
assets and liabilities of Acquired Fund will be transferred to Acquiring Fund in
exchange for shares of Acquiring Fund.
This Statement of Additional Information of Acquiring Fund consists of this
cover page, proforma financial statements, and the following documents, each of
which was filed electronically with the Securities and Exchange Commission and
is incorporated by reference herein:
1. The Statement of Additional Information for IDEX Mutual Funds dated
November 11, 2002.
2. The Financial Statements of Acquired Fund and Acquiring Fund as included
in the IDEX Annual Report and the IDEX Semi-Annual Report filed on Form
N-30D for the year ended October 31, 2001 and the fiscal period ended
April 30, 2002, Registration No. 033-02659 (Annual Report filed December
28, 2001 and Semi-Annual Report filed June 27, 2002).
This Statement of Additional Information is not a prospectus. A Prospectus/Proxy
Statement dated December 4, 2002 relating to the reorganization of Acquired Fund
may be obtained, without charge, by writing to IDEX Mutual Funds at 570 Carillon
Parkway, St. Petersburg, Florida 33716 or calling (888) 233-4339. This Statement
of Additional Information should be read in conjunction with the
Prospectus/Proxy Statement.
53
PRO FORMA INFORMATION
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES (unaudited)
April 30, 2002
All numbers (except per share amounts) in thousands
IDEX PBHG
IDEX PBHG Mid Technology &
Cap Growth Communications Adjustments Pro Forma Fund
-------------------------------------------------------------------
ASSETS:
Investment securities, at market value $ 72,844 $ 30,659 $ - $ 103,503
Cash 24 15 - 39
Receivables:
Investment securities sold 330 - - 330
Shares of beneficial interest sold 13 56 - 69
Interest - - - -
Dividends 4 1 - 5
Due from investment adviser 29 29 - 58
Other 2 2 - 4
-------------------------------------------------------------------
Total Assets 73,246 30,762 - 104,008
-------------------------------------------------------------------
LIABILITIES:
Accounts payable:
Investment securities purchased 159 554 - 713
Shares of beneficial interest redeemed 25 28 - 53
Accrued liabilities:
Management and advisory fees - - - -
Distribution fees 46 21 - 67
Transfer agent fees and expenses 118 71 - 189
Other 31 21 - 52
-------------------------------------------------------------------
Total Liabilities 379 695 - 1,074
-------------------------------------------------------------------
Net Assets $ 72,867 $ 30,067 $ - $ 102,934
===================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest, unlimited shares
authorized 170,480 126,194 - 296,674
Undistributed net investment income (loss) or (distribution
in excess of net investment income) (751) (420) - (1,171)
Undistributed net realized gain (loss) from investments and
foreign currency transactions (105,757) (89,258) - (195,015)
Net unrealized appreciation (depreciation) of investments
and translation of foreign denominated
assets/liabilities 8,895 (6,449) - 2,446
-------------------------------------------------------------------
Net Assets $ 72,867 $30,067 $ - $ 102,934
===================================================================
Investment securities, at cost $ 63,947 $37,109 $ - $ 20,319
===================================================================
54
IDEX PBHG
IDEX PBHG Mid Technology &
Cap Growth Communications Adjustments Pro Forma Fund
-------------------------------------------------------------------
Net Assets: Class A $24,357 $ 9,225 $ - $ 33,582
Net Assets: Class B 34,422 15,287 - 49,709
Net Assets: Class C 9,151 3,275 - 12,426
Net Assets: Class M 4,937 2,280 - 7,217
-------------------------------------------------------------------
$72,867 $ 30,067 $ - $102,934
===================================================================
Outstanding Shares: Class A(a) 2,530 5,732 (4,773) 3,489
Outstanding Shares: Class B(a) 3,661 9,777 (8,151) 5,287
Outstanding Shares: Class C(a) 973 2,095 (1,746) 1,322
Outstanding Shares: Class M(a) 523 1,452 (1,210) 765
Net Asset Value: Class A $ 9.63 $ 1.61 $ 9.63
Net Asset Value: Class B $ 9.40 $ 1.56 $ 9.40
Net Asset Value: Class C $ 9.40 $ 1.56 $ 9.40
Net Asset Value: Class M $ 9.44 $ 1.57 $ 9.44
Offering Price: Class A $ 10.19 $ 1.70 $ 10.19
Offering Price: Class M $ 9.54 $ 1.59 $ 9.54
Amounts shown as " - " represent amounts that are zero or those that round to
less than $1,000.
See accompanying notes to unaudited pro forma financial statements.
55
PRO FORMA STATEMENT OF OPERATIONS (unaudited)
For the period from May 1, 2001 through April 30, 2002
All numbers (except per share amounts) in thousands
IDEX PBHG
IDEX PBHG Mid Technology &
Cap Growth Communications Adjustments Pro Forma Fund
----------------------------------------------------------------
Investment Income:
Interest $ 174 $ 24 $ - $ 198
Dividends 30 20 - 50
Less withholding taxes on foreign dividends (1) (1) - (2)
----------------------------------------------------------------
203 43 - 246
----------------------------------------------------------------
Expenses:
Management and advisory fees (b) 653 393 (53) 993
Transfer agent fees and expenses 818 513 - 1,331
Custody and accounting fees and expenses (c) 68 52 (1) 119
Registration fees 56 46 - 102
Trustees fees and expenses 2 1 (1) 2
Audit fees and expenses (d) 14 8 (8) 14
Other 173 111 - 284
Distribution and service fees:
Class A 94 41 - 135
Class B 385 196 - 581
Class C 99 49 - 148
Class M 56 28 - 84
----------------------------------------------------------------
Gross Expenses 2,418 1,438 (63) 3,793
Less fee waivers and reimbursements by the investment
adviser (728) (520) 141 (1,107)
----------------------------------------------------------------
Net Expenses 1,690 918 78 2,686
----------------------------------------------------------------
Net Investment Income (Loss) (1,487) (875) (78) (2,440)
----------------------------------------------------------------
Realized Gain (Loss) on Investments, Futures/Options
Contracts and Foreign Currency Transactions:
Net realized gain (loss) during the period on:
Investments (30,998) (33,635) - (64,633)
Futures/options contracts - - - -
Foreign currency transactions - - - -
----------------------------------------------------------------
(30,998) (33,635) - (64,633)
----------------------------------------------------------------
56
IDEX PBHG
IDEX PBHG Mid Technology &
Cap Growth Communications Adjustments Pro Forma Fund
----------------------------------------------------------------
Unrealized Gain (Loss) on Investments, Futures/Options
Contracts and Foreign Currency Transactions:
Net unrealized appreciation (depreciation) during the
period on:
Investments 10,049 9,405 - 19,454
Futures/options contracts - - - -
Translation of assets and liabilities denominated
in foreign currency - - - -
----------------------------------------------------------------
10,049 9,405 - 19,454
----------------------------------------------------------------
Net Gain (Loss) on Investments, Futures/Options
Contracts and Foreign Currency Transactions (20,949) (24,230) - (45,179)
----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ (22,436) $ (25,105) $ (78) $(47,619)
================================================================
Amounts shown as " - " represent amounts that are zero or those that round to
less than $1,000.
See accompanying notes to unaudited pro forma financial statements.
57
NOTES TO PRO FORMA FINANCIAL STATEMENTS
FOR REORGANIZATION BETWEEN
IDEX PBHG TECHNOLOGY & COMMUNICATIONS AND IDEX PBHG MID CAP GROWTH
APRIL 30, 2002
(UNAUDITED)
1. GENERAL INFORMATION AND BASIS FOR COMBINATION/PRESENTATION
The accompanying unaudited pro forma financial statements are presented to show
the effect of the proposed transaction whereby IDEX PBHG Mid Cap Growth (the
"Acquiring Fund") would acquire substantially all of the assets and assume
substantially all of the liabilities of PBHG Technology & Communications (the
"Fund") in exchange for Class A, B, C, L and M shares of Acquiring Fund (in like
proportion to the shares of the Fund) as described elsewhere in this Proxy
Statement/Prospectus.
Under the terms of the Agreement and Plan of Reorganization, the exchange of
assets of the Fund for Class A, B, C, L and M shares of Acquiring Fund will be
treated as a tax-free reorganization and accordingly will be accounted for as a
tax-free reorganization. The acquisition would be accomplished by an acquisition
of the net assets of the Fund in exchange for Class A, B, C, L and M shares of
Acquiring Fund at net asset value. The unaudited pro forma Schedule of
Investments and the unaudited pro forma Statement of Assets and Liabilities have
been prepared as though the acquisition had been effective on April 30, 2002.
The unaudited pro forma Statement of Operations has been prepared for the twelve
months ended April 30, 2002.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements and Schedules of Investments of the Fund and
Acquiring Fund, which are included in the IDEX Mutual Funds Semi-annual Report
dated April 30, 2002.
2. PRO FORMA ADJUSTMENTS
The accompanying unaudited pro forma Schedule of Investments and pro forma
Statement of Assets and Liabilities reflect changes as if the reorganization had
taken place on April 30, 2002. The unaudited Statement of Operations reflects
adjustments to certain expenses to reflect the funds' operations for the twelve
months ended April 30, 2002.
The Pro Forma adjustments below reflect the impact of the merger.
(a) To adjust shares outstanding of the Pro Forma fund based on combining the
Fund at Acquiring Fund's net asset value.
(b) Decrease in management fees due to a decrease in pro forma management fee
rate to 0.80% for Acquired Fund.
(c) To remove duplicate Custody fees.
(d) To remove duplicate Audit and accounting fees.
3. MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the investment adviser of
Acquiring Fund. Acquiring Fund pays ATFA a management fee calculated at an
annual rate of 0.80% on the first $500 million of Acquiring Fund's average daily
net assets and 0.70% on Acquiring Fund's average daily net assets over $500
million. This fee is calculated daily and paid monthly. ATFA and its affiliates
also provide certain administrative services to the Fund.
58
PRO FORMA SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 2002
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
COMMON STOCK
Basic Materials 0.5%
Chemicals
OM Group, Inc. 8,000 $ 534,000 - $ - 8,000 $ 534,000
---------- ---------- ----------
Communications 4.7%
Broadcasting 0.1%
Radio One, Inc. * - - 6,200 132,680 6,200 132,680
---------- ---------- ----------
Cable TV 0.0%
Adelphia Communications Corp. * - - 4,000 24,080 4,000 24,080
---------- ---------- ----------
Telecommunications Equipment 4.2%
Advanced Fibre Communications, Inc. * 41,400 734,436 - - 41,400 734,436
Harmonic, Inc. * - - 24,000 193,200 24,000 193,200
L-3 Communications Holdings, Inc. * 11,200 1,431,136 - - 11,200 1,431,136
Polycom, Inc. * - - 3,700 76,294 3,700 76,294
QUALCOMM, Inc. * - - 27,300 823,368 27,300 823,368
Terayon Communications Systems, Inc. * - - 26,100 62,640 26,100 62,640
UTStarcom, Inc. * 43,100 1,055,950 - - 43,100 1,055,950
---------- ---------- ----------
3,221,522 1,155,502 4,377,024
---------- ---------- ----------
Telecommunications Services 0.4%
AT&T Wireless Services, Inc. * - - 30,293 271,122 30,293 271,122
Extreme Networks, Inc. * - - 17,600 158,224 17,600 158,224
---------- ---------- ----------
- 429,346 429,346
---------- ---------- ----------
Consumer Cyclical 10.8%
Restaurants 3.7%
California Pizza Kitchen, Inc. * 3,000 70,200 - - 3,000 70,200
Darden Restaurants, Inc. 12,900 514,710 - - 12,900 514,710
Starbucks Corp. * 45,800 1,045,156 - - 45,800 1,045,156
Sonic Corp. * 19,900 583,269 - - 19,900 583,269
The Cheesecake Factory, Inc. 37,700 1,569,451 - - 37,700 1,569,451
---------- ---------- ----------
3,782,786 - 3,782,786
---------- ---------- ----------
Retail/Apparel 1.2%
Chico's FAS, Inc. 11,150 402,292 - - 11,150 402,292
59
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
Ross Stores, Inc. 20,600 836,566 - - 20,600 836,566
---------- ---------- ---------
1,238,858 - 1,238,858
---------- ---------- ---------
Retail/Broadline 2.5%
99 Cents Only Stores 39,733 1,234,902 - - 39,733 1,234,902
CDW Computer Centers, Inc. * 9,700 531,560 - - 9,700 531,560
Family Dollar Stores, Inc. 22,400 775,040 - - 22,400 775,040
---------- ---------- ---------
2,541,502 - 2,541,502
---------- ---------- ---------
Retail/Grocery 1.0%
Whole Foods Market, Inc. * 21,500 1,005,340 - - 21,500 1,005,340
---------- ---------- ---------
Retail/Specialty 2.4%
Bed, Bath & Beyond, Inc. * 18,000 669,060 - - 18,000 669,060
Dollar Tree Stores, Inc. * 6,400 244,096 - - 6,400 244,096
Michaels Stores, Inc. * 12,400 501,580 - - 12,400 501,580
O'Reilly Automotive, Inc. * 11,500 372,485 - - 11,500 372,485
Williams-Sonoma, Inc. * 12,000 691,320 - - 12,000 691,320
---------- ---------- ---------
2,478,541 - 2,478,541
---------- ---------- ---------
Consumer Non-Cyclical 32.7%
Biotechnology 1.3%
KLA-Tencor Corp. * - - 11,800 695,846 11,800 695,846
Pharmaceutical Product Development, Inc. * 14,000 352,520 - - 14,000 352,520
Varian, Inc. * 8,600 290,164 - - 8,600 290,164
---------- ---------- ---------
642,684 695,846 1,338,530
---------- ---------- ---------
Commercial Services/Business 3.6%
Concord EFS, Inc. * - - 4,800 151,795 4,800 151,795
Corporate Executive Board Company (The) * 36,800 1,398,400 - - 36,800 1,398,400
eBay, Inc. * - - 20,500 1,088,550 20,500 1,088,550
Overture Services, Inc. * - - 31,600 1,080,404 31,600 1,080,404
---------- ---------- ---------
1,398,400 2,320,749 3,719,149
---------- ---------- ---------
Commercial Services/Education 5.9%
Apollo Group, Inc. Class A * 56,400 2,162,376 - - 56,400 2,162,376
Career Education Corp. * 42,100 1,892,395 - - 42,100 1,892,395
Corinthian Colleges, Inc. * 33,500 1,972,815 - - 33,500 1,972,815
---------- ---------- ---------
6,027,586 - 6,027,586
---------- ---------- ---------
Commercial Services/Technology 6.4%
AOL Time Warner, Inc. * - - 31,300 595,326 31,300 595,326
Automatic Data Processing, Inc. - - 2,900 147,436 2,900 147,436
CACI International, Inc. Class A 23,800 718,141 - - 23,800 718,141
ChoicePoint, Inc. * 20,200 1,119,888 - - 20,200 1,119,888
60
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
Documentum, Inc. 35,200 683,584 9,700 188,374 44,900 871,958
Juniper Networks, Inc. * - - 14,300 144,573 14,300 144,573
Mercury Interactive Corp. * 12,600 469,602 14,800 551,596 27,400 1,021,198
The BISYS Group, Inc. * 53,700 1,836,540 4,500 153,900 58,200 1,990,440
---------- ---------- ---------
4,827,755 1,781,205 6,608,960
---------- ---------- ---------
Healthcare Products 2.2%
CYTYC Corp. * 19,600 307,916 - - 19,600 307,916
Varian Medical Systems, Inc. * 45,000 1,950,750 - - 45,000 1,950,750
---------- ---------- ---------
2,258,666 - 2,258,666
---------- ---------- ---------
Healthcare Services 12.5%
Accredo Health, Inc. * 14,800 958,004 - - 14,800 958,004
AdvancePCS 40,900 1,382,829 - - 40,900 1,382,829
Community Health Systems, Inc. * 32,900 954,758 - - 32,900 954,758
Cross Country, Inc. 12,300 372,198 - - 12,300 372,198
Express Scripts, Inc. 27,900 1,763,559 - - 27,900 1,763,559
Laboratory Corp. of America Holdings * 12,700 1,259,840 - - 12,700 1,259,840
LifePoint Hospitals, Inc. * 9,300 390,600 - - 9,300 390,600
Mid Atlantic Medical Services, Inc. 19,100 695,813 - - 19,100 695,813
Pediatrix Medical Group, Inc. * 27,900 1,311,021 - - 27,900 1,311,021
Province Healthcare Company * 21,700 835,667 - - 21,700 835,667
Renal Care Group, Inc. * 16,900 599,950 - - 16,900 599,950
Triad Hospitals, Inc. * 11,900 499,800 - - 11,900 499,800
Trigon Healthcare, Inc. * 9,600 966,336 - - 9,600 966,336
WellPoint Health Networks, Inc. * 12,000 900,960 - - 12,000 900,960
---------- ---------- ---------
12,891,335 - 12,891,335
---------- ---------- ---------
Pharmaceuticals 0.8%
First Horizon Pharmaceutical Corp. 15,300 398,412 - - 15,300 398,412
Medicis Pharmaceutical Corp. Class A * 8,100 433,755 - - 8,100 433,755
---------- ---------- ---------
2.9% 832,167 - 832,167
---------- ---------- ---------
Financial 2.0%
Banks
Associated Banc-Corp 6,950 260,347 - - 6,950 260,347
Commerce Bancorp, Inc. 10,300 508,717 - - 10,300 508,717
Greater Bay Bancorp. 18,800 629,612 - - 18,800 629,612
Investors Financial Services Corp. 8,500 625,940 - - 8,500 625,940
---------- ---------- ---------
2,024,616 - 2,024,616
---------- ---------- ---------
Savings & Loan 0.9%
Independence Community Bank Corp. 14,100 459,519 - - 14,100 459,519
61
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
New York Community Bancorp 14,200 421,172 - - 14,200 421,172
---------- ---------- ---------
880,691 - 880,691
---------- ---------- ---------
Industrial 8.6%
Aerospace/Defense 1.7%
Alliant Techsystems, Inc. * 16,300 1,755,510 - - 16,300 1,755,510
---------- ---------- ---------
Electronics 0.2%
Gemstar-TV Guide International, Inc. * - - 25,600 229,376 25,600 229,376
---------- ---------- ---------
Engineering/Construction 1.2%
Jacobs Engineering Group, Inc. 30,400 1,199,584 - - 30,400 1,199,584
---------- ---------- ---------
Environmental Control 2.2%
Mykrolis Corp. - - 29,200 430,408 29,200 430,408
Photon Dynamics, Inc. 9,800 474,712 - - 9,800 474,712
Waste Connections, Inc. 37,600 1,327,280 - - 37,600 1,327,280
---------- ---------- ---------
1,801,992 430,408 - 2,232,400
---------- ---------- ---------
Machinery-Diversified 3.3%
Applied Materials, Inc. * - - 43,600 1,060,352 43,600 1,060,352
FEI Company - - 6,600 174,438 6,600 174,438
Kulicke and Soffa Industries, Inc. * 43,500 789,090 16,200 293,868 59,700 1,082,958
Lam Research Corp. * 33,500 859,610 10,400 266,864 43,900 1,126,474
---------- ---------- ---------
1,648,700 1,795,522 3,444,222
---------- ---------- ---------
Technology 35.1%
Computers 1.7%
EMC Corp. * - - 15,700 143,498 15,700 143,498
Emulex Corp. * - - 40,200 1,165,398 40,200 1,165,398
Netscreen Technologies, Inc. - - 24,100 236,903 24,100 236,903
Western Digital Corp. * - - 29,400 181,986 29,400 181,986
---------- ---------- ---------
- 1,727,785 1,727,785
---------- ---------- ---------
Office/Business Equipment 1.4%
Cisco Systems, Inc. * - - 82,400 1,207,160 82,400 1,207,160
Jabil Circuit, Inc. * - - 12,700 259,207 12,700 259,207
---------- ---------- ---------
- 1,466,367 1,466,367
---------- ---------- ---------
Semiconductors 20.3%
Altera Corp. * - - 13,000 267,280 13,000 267,280
Benchmark Electronics, Inc. * - - 3,600 109,440 3,600 109,440
Broadcom Corp. Class A * 10,700 369,150 48,600 1,676,700 59,300 2,045,850
ChipPAC, Inc.-A - - 26,600 243,390 26,600 243,390
Conexant Systems, Inc. * - - 39,800 405,960 39,800 405,960
Cymer, Inc. * 15,500 732,685 - - 15,500 732,685
62
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
Finisar Corp. * - - 51,800 331,002 51,800 331,002
GlobespanVirata, Inc. 1,900 11,210 37,200 219,480 39,100 230,690
Integrated Circuit Systems, Inc. 8,400 167,160 - - 8,400 167,160
Intersil Corp. Class A + 55,900 1,500,915 32,300 867,255 88,200 2,368,170
Intel Corp. - - 10,900 311,849 10,900 311,849
Linear Technology Corp. - - 8,900 345,854 8,900 345,854
LSI Logic Corp. * - - 47,900 615,515 47,900 615,515
Marvell Technology Group, Ltd. * - - 31,000 1,116,000 31,000 1,116,000
Maxim Integrated Products, Inc. * - - 14,500 722,100 14,500 722,100
Microchip Technology, Inc. * 45,900 2,042,550 - - 45,900 2,042,550
Micron Technology, Inc. * - - 5,000 118,500 5,000 118,500
Microtune, Inc. - - 9,600 107,040 9,600 107,040
National Semiconductor Corp. * - - 2,100 66,192 2,100 66,192
Novellus Systems, Inc. * 26,500 1,256,100 6,700 317,580 33,200 1,573,680
Photronics, Inc. 14,500 479,515 - - 14,500 479,515
PMC - Sierra, Inc. * - - 21,000 326,760 21,000 326,760
QLogic Corp. * 19,800 905,058 - - 19,800 905,058
RF Micro Devices, Inc. * 15,000 261,000 43,500 756,900 58,500 1,017,900
Semtech Corp. * 33,100 1,058,538 - - 33,100 1,058,538
Silicon Laboratories, Inc. 15,900 470,004 - - 15,900 470,004
Taiwan Semiconductor Manufacturing
Company, Ltd. ADR * - - 24,000 424,800 24,000 424,800
Texas Instruments, Inc. - - 33,000 1,020,690 33,000 1,020,690
Vitesse Semiconductor Corp. * - - 26,700 159,666 26,700 159,666
Xilinx, Inc. * - - 28,500 1,076,160 28,500 1,076,160
---------- ---------- ---------
9,253,885 11,606,113 20,859,998
---------- ---------- ---------
Software 11.7%
Activision, Inc. * 19,100 601,268 6,600 207,768 25,700 809,036
Ariba, Inc. * - - 71,400 267,750 71,400 267,750
BEA Systems, Inc. * - - 12,200 130,784 12,200 130,784
Brocade Communications Systems, Inc. * - - 47,600 1,218,084 47,600 1,218,084
Electronic Arts, Inc. * 22,700 1,340,435 - - 22,700 1,340,435
Integrated Defense Technology, Inc. 22,000 658,900 - - 22,000 658,900
JDA Software Group, Inc. 38,700 1,170,288 - - 38,700 1,170,288
Microsoft Corp. * - - 26,400 1,379,664 26,400 1,379,664
PeopleSoft, Inc. * - - 9,800 227,066 9,800 227,066
Quest Software, Inc. * - - 10,800 140,400 10,800 140,400
Rational Software Corp. * - - 12,800 186,496 12,800 186,496
63
IDEX PBHG
IDEX PBHG MID CAP TECHNOLOGY &
GROWTH COMMUNICATIONS PRO FORMA FUND
------ -------------- --------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
Retek, Inc. * 33,100 781,127 3,400 80,237 36,500 861,364
Teradyne, Inc. * 28,000 922,600 19,100 629,345 47,100 1,551,945
THQ, Inc. * 13,300 466,298 6,900 241,914 20,200 708,212
Siebel Systems, Inc. * - - 41,700 1,008,723 41,700 1,008,723
Sun Microsystems, Inc. * - - 17,700 144,786 17,700 144,786
VERITAS Software Corp. * - - 9,200 260,728 9,200 260,728
---------- ---------- ---------
5,940,916 6,123,745 12,064,661
---------- ---------- ---------
---------- ---------- ---------
TOTAL COMMON STOCK MARKET VALUE 95.3% 68,187,036 29,918,724 98,105,760
---------- ---------- ---------
---------- ---------- ---------
TOTAL COMMON STOCK COST 59,290,183 36,300,122 95,590,305
---------- ---------- ---------
CONVERTIBLE PREFERRED STOCK
Communications 0.1%
Telecommunications Equipment
Nokia Corp. OY ADR - - 8,700 141,462 8,700 141,462
---------- ---------- ---------
---------- ---------- ---------
TOTAL CONVERTIBLE PREFERRED STOCK COST - 209,490 209,490
---------- ---------- ---------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- ----- --------- ----- --------- -----
SHORT-TERM SECURITIES 5.1%
Time Deposit
State Street Bank & Trust Eurodollar
Time Deposit
0.750% 5-1-2002 (cost $4,656,933) 4,656,933 $4,656,933 - - 4,656,933 $ 4,656,933
State Street Bank & Trust Eurodollar
Time Deposit
0.500% 5-1-2002 (cost $599,048) - - 599,048 599,048 599,048 599,048
----------- ---------- ------------
TOTAL SHORT-TERM MARKET VALUE 4,656,933 599,048 5,255,981
----------- ---------- ------------
----------- ---------- ------------
TOTAL SHORT-TERM COST 4,656,933 599,048 5,255,981
----------- ---------- ------------
TOTAL INVESTMENTS 100.6% 72,843,969 30,659,234 103,503,203
----------- ---------- ------------
----------- ---------- ------------
TOTAL INVESTMENTS COST 63,947,116 37,108,660 101,055,776
----------- ---------- ------------
OTHER ASSETS (LIABILITIES) -0.6% 23,274 (592,415) (569,141)
----------- ---------- ------------
NET ASSETS (100.0%) 100.0% $72,867,243 $30,066,819 $102,934,062
=========== ========== ============
64
PART C
OTHER INFORMATION
Item 15. Indemnification
A policy of insurance covering ATFA, its subsidiaries, AFSG and all of the
registered investment companies advised by ATFA insures the Registrant's
directors and officers and others against liability arising by reason of an
alleged breach of duty caused by any negligent act, error or accidental omission
in the scope of their duties.
Provisions relating to indemnification of the Registrant's Trustees and
employees are included in Registrant's Restatement of Declaration of Trust and
Bylaws, which are incorporated herein by reference.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons, or
otherwise, Registrant has been advised that in the opinion of the Commission
such indemnification may be against public policy as expressed in the Act and
may be, 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 Trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, 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 Act and will be governed by the final adjudication of
such issue.
Item 16. Exhibits
(1) Restatement of Declaration of Trust and all amendments are incorporated
herein by reference to the Registrant's Registration Statement on Form
N-1A (File 33-2659), Post-Effective Amendment No. 24, as filed with the
SEC on November 15, 1996.
(2) Amended and Restated By-Laws are incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 24, as filed with the SEC on November 15,
1996.
(3) Not Applicable
(4) Plan of Reorganization is filed herewith as Appendix A to the
Prospectus/Proxy Statement.
(5) See Exhibits 1 and 2.
(6) (a) Investment Advisory Agreement is incorporated herein by reference to
the Registrant's Registration Statement on Form N-1A (File No.
33-2659), Post-Effective Amendment No. 29, as filed with the SEC on
December 15, 1998.
(b) Sub-Advisory Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 29, as filed with the SEC on December
15, 1998.
65
(7) Underwriting Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 33, as filed with the SEC on December 17,
1999.
(8) Trustees Deferred Compensation Plan is incorporated herein by reference
to the Registrant's Registration Statement on Form N-1A (File No.
33-2154), Post-Effective Amendment No. 25, as filed with the SEC on
January 31, 1997.
(9) Custodian Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 49, as filed with the SEC on September 12,
2002.
(10) (a) Plans of Distribution under Rule 12b-1 are incorporated by
reference to Registrant's Registration Statement on Form N-1A (File
No.33-2659), Post-Effective Amendment No. 33, as filed with the SEC
on December 17, 1999.
(b) Amended and Restated Plan for Multiple Classes of Shares is
incorporated herein by reference to the Registrant's Registration
Statement on Form N-1A (File No. 33-2659), Post-Effective Amendment
No. 43, as filed with the SEC on December 14, 2002.
(11) Opinion and Consent of Counsel is filed herewith.
(12) Opinion and Consent of Dechert to be filed by post-effective amendment.
(13) Administrative Services Agreement, and Transfer Agent Agreement are
incorporated herein by reference to Post-Effective Amendment Nos. 49
and 24, respectively, to the Registrant's Registration Statement on
Form N-1A (File No 33-2659), as filed with the SEC on September 12,
2002 and November 15, 1996, respectively.
(14) Consent of Independent Certified Public Accountants is filed herewith.
(15) Not Applicable
(16) Powers of Attorney for the Registrant are filed herewith.
(17) (a) Form of proxy card is filed herewith.
(b) The Registrant's Annual Report, dated October 31, 2001, and its
Semi-Annual Report, dated April 30, 2002, are incorporated herein
by reference.
(c) Prospectus for IDEX Mutual Funds, dated November 11, 2002 is
incorporated herein by reference.
Item 17. Undertakings
1. The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act 17
CFR 230.145(c), the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information called for
by the other items of the applicable form.
66
2. The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
3. The undersigned registrant undertakes to file a post-effective amendment
to this registration statement upon the closing of the Reorganization
described in this registration statement that contains an opinion of
counsel supporting the tax matters discussed in this registration
statement.
67
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form N-14 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of St.
Petersburg and State of Florida on the 4th day of November, 2002.
IDEX Mutual Funds
By: /s/ Brian C. Scott
------------------
Brian C. Scott*
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Brian C. Scott President and Chief Executive Officer November 4, 2002
- ---------------------------
Brian C. Scott*
/s/ John R. Kenney Chairman November 4, 2002
- ---------------------------
John R. Kenney*
/s/ Peter R. Brown Vice Chairman November 4, 2002
- ---------------------------
Peter R. Brown*
/s/ Larry N. Norman Trustee November 4, 2002
- ---------------------------
Larry N. Norman*
/s/ Daniel Calabria Trustee November 4, 2002
- ---------------------------
Daniel Calabria*
/s/ Charles C. Harris Trustee November 4, 2002
- ---------------------------
Charles C. Harris*
/s/ William W. Short, Jr. Trustee November 4, 2002
- ---------------------------
William W. Short, Jr.*
68
Signature Title Date
--------- ----- ----
/s/ Jack E. Zimmerman Trustee November 4, 2002
- ---------------------------
Jack E. Zimmerman*
/s/ Leo J. Hill Trustee November 4, 2002
- ---------------------------
Leo J. Hill*
/s/ Janice B. Case Trustee November 4, 2002
- ---------------------------
Janice B. Case*
/s/ Russell A. Kimball, Jr. Trustee November 4, 2002
- ---------------------------
Russell A. Kimball, Jr.*
/s/John K. Carter
- ---------------------------
* John K. Carter, as attorney in-
fact, pursuant to powers of
attorney filed herewith.
69
EXHIBIT INDEX
(11) Opinion and Consent of Counsel
(12) Consent of Independent Certified Public Accountants
(14) None
(16) Powers of Attorney
(17)(a) Form of proxy card
70