Securities Act File No. 333-100863
- --------------------------------------------------------------------------------
As filed with the Securities and Exchange Commission on November 27, 2002
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1
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 shall hereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), shall determine.
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)
IDEX JANUS CAPITAL APPRECIATION
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
888/233-4339
December 2, 2002
Dear Shareholder:
Your Board of Trustees has called a special meeting of shareholders of IDEX
Janus Capital Appreciation, to be held at 11:00 a.m., local time, on February
12, 2003, at the offices of IDEX Mutual Funds ("IDEX"), 570 Carillon Parkway,
St. Petersburg, Florida 33716, or any adjournment(s) thereof, (the "Special
Meeting").
The IDEX Board of Trustees (the "Board") has approved a reorganization (the
"Reorganization") of IDEX Janus Capital Appreciation ("Acquired Fund") into IDEX
Transamerica Growth Opportunities ("Acquiring Fund") (each a "Fund,"
collectively, the "Funds"). AEGON/Transamerica Fund Advisers, Inc.("ATFA")
serves as investment adviser to both Funds. Janus Capital Management LLC
("Janus") serves as sub-adviser to Acquired Fund, and Transamerica Investment
Management, LLC ("TIM") serves as sub-adviser to Acquiring Fund. TIM is an
affiliate of both IDEX and ATFA. Acquired Fund has investment objectives and
policies that are similar in many 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 11:00 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
2
IDEX MUTUAL FUNDS
IDEX Janus Capital Appreciation
570 Carillon Parkway
St. Petersburg, Florida 33716
(888) 233-4339
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
IDEX JANUS CAPITAL APPRECIATION
TO BE HELD ON FEBRUARY 12, 2003
To the Shareholders:
A special meeting of shareholders of IDEX Janus Capital Appreciation is
scheduled for February 12, 2003 at 11:00 a.m., local time, at 570 Carillon
Parkway, St. Petersburg, Florida 33716, as may be 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 Janus Capital
Appreciation (the "Acquired Fund") by IDEX Transamerica Growth
Opportunities (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 2, 2002
3
Introduction 6
Expense Table 7
Summary 7
Comparison of Investment objectives and Primary Investment Strategies 7
Comparison of Fees and Expenses 9
Management Fees 9
Distribution and Service Fees 9
Administration Fees 9
Expense Limitation Fees 9
Purchase and Redemption Information 10
Federal Income Tax Consequences of the Reorganization 10
Principal Risks of Investing in Acquiring Fund 10
Relative Performance 10
Comparisons of Investment Techniques and Risks of the Funds 10
The Proposed Reorganization 11
Additional Information About the Reorganization 12
The Reorganization Plan 12
Reasons for the Reorganization 12
Board Considerations 12
Capitalization 12
Tax Considerations 13
Expenses of the Reorganization 13
Information About the Acquiring Fund 13
Performance of Acquiring Fund 13
Investment Adviser 16
Investment Personnel 16
Additional Information About the Funds 16
Form of Organization 16
Distributor 16
Dividends and Other Distributions 16
General Information About the Proxy Statement 16
Solicitation of Proxies 16
Voting Rights 17
Other Matters to Come Before the Special Meeting 18
Shareholder Proposals 18
Where to Obtain Information About the Funds 18
Reports to Shareholders 18
More Information Regarding the Funds 19
Appendix A 25
Appendix B 34
4
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 JANUS CAPITAL APPRECIATION
RELATING TO THE REORGANIZATION INTO
IDEX TRANSAMERICA GROWTH OPPORTUNITIES (COLLECTIVELY, THE "FUNDS")
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to you in connection with a
special meeting of shareholders of IDEX Janus Capital Appreciation 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 Janus Capital Appreciation (the "Acquired Fund") into
IDEX Transamerica Growth Opportunities (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 similar investment objectives and 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") dated November 29,
2002, 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,
dated November 11, 2002, and the IDEX SAI, dated November 11, 2002, each of
which is incorporated herein by reference and may be obtained without charge by
calling (888) 233-4339. Each of the Funds also provides periodic reports to its
shareholders, which highlight certain important information about the Funds,
including investment results and financial information. The annual report for
the Funds dated October 31, 2001, is incorporated herein by reference. You may
receive a copy of the most recent annual report and semi-annual report for the
Funds, 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 2, 2002
5
ANNUAL FUND OPERATING EXPENSES
(EXPENSES PAID FROM FUND ASSETS)
(PERCENTAGE OF NET ASSETS):
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. Pro forma numbers are
estimated in good faith and are hypothetical.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of each Fund's average daily net assets)
Total
Distribution Annual
& service Fund Net
Management (12b-1) Other Operating Expense Operating
Fees fees Expenses Expenses Reduction(1) Expenses
--------- --------- --------- --------- --------- ---------
Acquiring Fund
--------- --------- --------- --------- --------- ---------
Class A shares 0.80% 0.35% 1.70% 2.85% 1.13% 1.72%
--------- --------- --------- --------- --------- ---------
Class B shares 0.80% 1.00% 1.70% 3.50% 1.13% 2.37%
--------- --------- --------- --------- --------- ---------
Class C shares 0.80% 1.00% 1.70% 3.50% 1.13% 2.37%
--------- --------- --------- --------- --------- ---------
Class M shares 0.80% 0.90% 1.70% 3.40% 1.13% 2.27%
--------- --------- --------- --------- --------- ---------
Class L shares(2) 0.80% 1.00% 1.70% 3.50% 1.13% 2.37%
--------- --------- --------- --------- --------- ---------
Acquired Fund
--------- --------- --------- --------- --------- ---------
Class A shares 1.00% 0.35% 1.30% 2.65% 0.80% 1.85%
--------- --------- --------- --------- --------- ---------
Class B shares 1.00% 1.00% 1.30% 3.30% 0.80% 2.50%
--------- --------- --------- --------- --------- ---------
Class C shares 1.00% 1.00% 1.30% 3.30% 0.80% 2.50%
--------- --------- --------- --------- --------- ---------
Class M shares 1.00% 0.90% 1.30% 3.20% 0.80% 2.40%
--------- --------- --------- --------- --------- ---------
Class L shares(2) 1.00% 1.00% 1.30% 3.30% 0.80% 2.50%
--------- --------- --------- --------- --------- ---------
Pro Forma -
Acquiring Fund
including
Acquired Fund
--------- --------- --------- --------- --------- ---------
Class A shares 0.80% 0.35% 1.08% 2.23% 0.48% 1.75%
--------- --------- --------- --------- --------- ---------
Class B shares 0.80% 1.00% 1.08% 2.88% 0.48% 2.40%
--------- --------- --------- --------- --------- ---------
Class C shares 0.80% 1.00% 1.08% 2.88% 0.48% 2.40%
--------- --------- --------- --------- --------- ---------
Class M shares 0.80% 0.90% 1.08% 2.78% 0.48% 2.30%
--------- --------- --------- --------- --------- ---------
Class L shares(2) 0.80% 1.00% 1.08% 2.88% 0.48% 2.40%
--------- --------- --------- --------- --------- ---------
(1) Contractual arrangement with ATFA through 10/31/03 for expenses (other
than distribution/service (12b-1) fees) that exceed 1.50% for Acquired
Fund and 1.40% for Acquiring Fund.
(2) L share information is included for your reference; they did not commence
operations until November 11, 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.
COMPARISON OF INVESTMENT OBJECTIVES AND PRIMARY INVESTMENT STRATEGIES --
ACQUIRED FUND ACQUIRING FUND
------------- --------------
INVESTMENT
OBJECTIVE Seeks long-term growth of capital Seeks to maximize long-term growth
INVESTMENT - Acquired Fund pursues its - Acquiring Fund pursues its
STRATEGIES objective by investing objective by investing
principally in equity principally in equity
securities of medium-sized securities such as common
companies. stocks, preferred stocks,
rights, warrants and
- Medium-sized companies are securities convertible
those whose market into or exchangeable for
capitalizations, at the common stocks of small and
time of purchase, fall medium capitalization
within the range of the companies.
S&P Mid Cap 400 Index. As
of January 31, 2002, this - Acquiring Fund generally
range was $332 million to invests at least 65% of
$9.06 billion. its assets in a
diversified portfolio of
- Acquired Fund invests in equity securities. The
industries and stocks of companies issuing these
companies that the fund's securities are companies
manager believes are with small and
experiencing medium-sized market
6
ACQUIRED FUND ACQUIRING FUND
------------- --------------
favorable capitalization whose
demand for their products market capitalization or
and services, and are annual revenues are no
operating in favorable more than $5 billion at
competitive and regulatory the time of purchase.
environments.
- The Fund's manager selects
- Acquired Fund's manager stocks that are issued by
uses a "bottom up" U.S. companies, which, in
approach when choosing its opinion, show strong
securities for the Fund's potential for steady
portfolio. The fund's growth and high barriers
manager makes this to competition.
assessment by looking at
companies one at a time, - Acquiring Fund's manager
regardless of size, uses a "bottom up"
country of organization, approach to investing, and
place of principal builds the Fund's
business activity, or portfolio one company at a
other similar selection time.
criteria.
- It is the opinion of the
- Although themes may emerge Fund's manager that
in the Fund, stocks are companies with smaller and
usually selected without medium-sized
regard to any defined capitalization levels are
industry sector or other less actively followed by
similarly defined security analysts and
selection procedure. therefore they may be
Though income is not an undervalued, providing
objective of the Fund, strong opportunities for a
some holdings might rise in value.
produce incidental income.
- While Acquiring Fund
- While Acquired Fund invests principally in
invests principally in equity securities, it may
equity securities of also, to a lesser extent,
medium-sized companies, invest in debt securities
the Fund manager may, to a or other securities and
lesser extent, invest in investment strategies in
stocks of smaller or pursuit of its investment
larger companies, objective.
including some foreign
companies, or other - Acquiring Fund is
securities, and investment diversified.
strategies in pursuit of
the fund's investment - Acquiring Fund may also
objective. invest in cash or cash
equivalents for temporary
- Acquired Fund is defensive purposes when
non-diversified. market conditions warrant
(which is inconsistent
- Acquired Fund may also with the Fund's principal
invest in cash or cash investment strategies). To
equivalents for temporary the extent it is invested
defensive purposes when in these securities,
market conditions warrant Acquiring Fund may not be
(which is inconsistent able to achieve its
with the Fund's principal investment objective.
investment strategies). To
the extent it is invested
in these securities,
Acquiring Fund may not be
able to achieve its
investment objective.
INVESTMENT ADVISER ATFA ATFA
- ------------------ ---- ----
SUB-ADVISER Janus Capital Management LLC TIM
- ----------- ---------------------------- ---
PORTFOLIO MANAGERS Jonathan Coleman Christopher J. Bonavico, primary
manager and Kenneth F. Broad,
secondary manager
- ------------------ ---------------- --------------------------------
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, preferred
stocks, rights, warrants and securities convertible into or exchangeable for
common stocks of small and medium capitalization companies, whereas Acquired
Fund invests primarily in equity securities of medium-sized companies. Acquired
fund is non-diversified which means the 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,
such as Acquired fund. Acquiring fund invests in medium sized companies with a
market capitalization no greater than $5 billion, while Acquired Fund invests in
medium sized companies with a market capitalization up to $9.06 billion.
Acquired Fund's manager uses a "bottom-up" approach when choosing securities for
the funds portfolio; the Acquiring Fund's manager selects stocks that show:
- - strong potential for steady growth;
7
- - high barriers to competition
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 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. While the Reorganization is anticipated to
reduce the total operating expenses for current shareholders of Acquired Fund
and will not affect 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 Janus Capital Management LLC
under the sub-advisory agreement applicable to Acquired Fund (although ATFA will
continue to pay sub-advisory fees to its affiliate, TIM, 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.
For further information on the fees and expenses of Acquiring Fund, see "More
Information Regarding the Funds." MANAGEMENT FEES -- Each Fund pays a management
fee:
FUND FEE
---- ---
1.00% of the first $250 million of the
Acquired Fund Fund's average daily net assets; 0.90% of
the next $500 million of the Fund's average
daily net assets; 0.80% of the next $750
million of the Fund's average daily net
assets; and 0.70% of assets over $1.5
billion.
Expense Cap: 1.50% 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.
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
1.50% 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.
8
PURCHASES OF SHARES OF ACQUIRING FUND AFTER THE REORGANIZATION WILL BE SUBJECT
TO THE SALES LOAD STRUCTURE DESCRIBED IN THE TABLE BELOW FOR ACQUIRING FUND.
THIS IS THE SAME LOAD STRUCTURE THAT IS CURRENTLY IN EFFECT FOR ACQUIRED FUND.
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 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. Each Fund is subject to the principal investment risks
of investing in stocks and small-or medium-sized companies, and Acquiring
Fund is also subject to the risks of investing in convertible securities;
warrants and rights. For more information regarding the risks of the
Funds, see "Comparisons of Investment Techniques and Risks of the Funds."
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 1995 in the case of
Acquired Fund and since 2001 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.
CALENDAR INDEX -
YEAR/PERIOD ACQUIRED INDEX - S&P ACQUIRING RUSSELL
ENDED FUND MID CAP 400 FUND 2000
----- ---- ----------- ---- ----
12/31/95 36.6% 34.0% N/A N/A
- -------- --------- --------- ------- ---------
12/31/96 13.0% 17.5% N/A N/A
- -------- --------- --------- ------- ---------
12/31/97 12.2% 22.5% N/A N/A
- -------- --------- --------- ------- ---------
12/31/98 31.3% 17.9% N/A N/A
- -------- --------- --------- ------- ---------
12/31/99 119.2% 51.3% N/A N/A
- -------- --------- --------- ------- ---------
12/31/00 (37.7)% (11.8)% N/A N/A
- -------- --------- --------- ------- ---------
12/31/01 (40.5)% (0.6)% (17.7)% 2.5%
- -------- --------- --------- ------- ---------
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.
CONVERTIBLE SECURITIES. Acquiring Fund may invest in debt or preferred equity
securities convertible into, or exchangeable for, equity securities.
Traditionally, convertible securities have paid dividends or interest at rates
higher than common stocks but lower than nonconvertible securities. They
generally participate in the appreciation or depreciation of the underlying
stock into which they are convertible, but to a lesser degree. In recent years,
convertible securities have been developed which combine higher or lower current
income with options and other features.
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
9
their management may lack depth and experience. Such companies usually do not
pay significant dividends that could cushion returns in a falling market.
WARRANTS AND RIGHTS. Acquiring Fund may invest in warrants and rights. Warrants
and rights may be considered more speculative than certain other types of
investments because they do not entitle a holder to the dividends or voting
rights for the securities that may be purchased. They do not represent any
rights in the assets of the issuing company.
Also, the value of a warrant or right does not necessarily change with the value
of the underlying securities. A warrant or right ceases to have value if it is
not exercised prior to the expiration date.
THE PROPOSED REORGANIZATION -- On October 8, 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.
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 policies that are similar in
many respects to the investment objective and policies of Acquiring Fund.
Both Acquired Fund and Acquiring Fund seeks 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.
- - Acquiring Fund invests at least 65% of it's assets in a diversified
portfolio of equity securities, which include common stocks, rights,
warrants and securities convertible into or exchangeable for common stocks
issued by companies with small and medium-sized market capitalization.
- - 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 Transamerica Investment Management, LLC
("TIM"), 1150 South Olive Street, Suite 2700, Los Angeles, California
90015 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 information on fees and expenses, see "Comparison of Fees and Expenses."
10
ADDITIONAL 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 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
October 8, 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;
9. and the performance of similar funds managed by TIM.
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.
CAPITALIZATION -- The following table shows, on an unaudited basis, the
capitalization of each Fund as of 4/30/02 and, on a pro forma basis, as of
4/30/02, giving effect to the Reorganization (Class L shares were not offered
until November 11, 2002, so information is not included for that share class):
11
NET ASSET VALUE
NET ASSETS PER SHARE SHARES OUTSTANDING
---------- --------- ------------------
ACQUIRING FUND
- -------------- ---------- --------- ------------------
Class A Shares $ 6,669,821 $ 5.87 1,137,094
----------- ----------- -----------
Class B Shares $ 6,992,970 $ 5.76 1,213,828
----------- ----------- -----------
Class C Shares $ 1,842,647 $ 5.76 319,843
----------- ----------- -----------
Class M Shares $ 1,252,883 $ 5.78 216,870
----------- ----------- -----------
ACQUIRED FUND
----------- ----------- -----------
Class A Shares $56,477,360 $ 13.17 4,289,785
----------- ----------- -----------
Class B Shares $65,543,491 $ 12.61 5,198,404
----------- ----------- -----------
Class C Shares $12,819,125 $ 12.61 1,016,715
----------- ----------- -----------
Class M Shares $15,253,146 $ 12.69 1,201,707
----------- ----------- -----------
PRO FORMA - ACQUIRING
FUND INCLUDING
ACQUIRED FUND
----------- ----------- -----------
Class A Shares $63,147,181 $ 5.87 10,765,552(1)
----------- ----------- -----------
Class B Shares $72,536,461 $ 5.76 12,590,754(1)
----------- ----------- -----------
Class C Shares $14,661,772 $ 5.76 2,544,965(1)
----------- ----------- -----------
Class M Shares $16,506,029 $ 5.78 2,857,145(1)
----------- ----------- -----------
(1) The net assets of Acquired Fund will be converted to shares based on
Acquiring Fund's net asset value per share.
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.
THE IDEX BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF ACQUIRED FUND APPROVE
THE REORGANIZATION.
INFORMATION ABOUT ACQUIRING FUND
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 2000 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.
12
One year total return as of 12/31/01 (%)(1)
[INSERT BAR GRAPH] - (17.69)%
During the period shown in the chart, Acquiring Fund's
best quarterly performance was 23.35% for the quarter
ended 12/31/01, and the Fund's worst quarterly
performance was - (34.23)% for the quarter ended
3/31/01.
(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
(19.66)%.
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
2000 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."
Since
inception
December 31, 2001** One Year (3/1/2000)
- ---------------------------------------------------------
Acquiring Fund
- ---------------------------------------------------------
Return before taxes (22.2)% (29.8)%
- ---------------------------------------------------------
Return after taxes on
distributions* (22.2)% (29.8)%
- ---------------------------------------------------------
Return after taxes on
distributions and
sale of fund shares* (13.5)% (21.4)%
- ---------------------------------------------------------
Russell 2000 Class A 2.5% (7.5)%
- ---------------------------------------------------------
* 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.
SHAREHOLDER FEES (fees paid directly from your investment)
CLASS OF SHARES
- ---------------------------------------------------------------------------------------
A B C L M
- ---------------------------------------------------------------------------------------
Maximum sales
charge (load)
imposed on 5.50% None None None 1.00%
purchases (as a
% of offering
price)
- ---------------------------------------------------------------------------------------
Maximum
deferred sales
charge (load)
(as a percentage
of purchase price
or redemption
proceeds,
whichever is
lower) None(a) 5.00% None 2.00% 1.00%
- ---------------------------------------------------------------------------------------
(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.
ANNUAL FUND OPERATING EXPENSES - Please see "Annual Fund Operating Expenses
(Acquiring Fund)" above.
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.
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 $1,284 $1,877 $3,474
------ ------ ------ ------
Class B shares $ 740 $1,269 $1,821 $3,554
------ ------ ------ ------
Class C shares $ 240 $ 969 $1,721 $3,700
------ ------ ------ ------
Class M shares $ 427 $1,030 $1,756 $3,673
------ ------ ------ ------
13
Class L shares $ 440 $ 969 $1,721 $3,700
------ ------ ------ ------
Acquired Fund
------ ------ ------ ------
Class A shares $ 728 $1,256 $1,810 $3,313
------ ------ ------ ------
Class B shares $ 753 $1,241 $1,753 $3,392
------ ------ ------ ------
Class C shares $ 253 $ 941 $1,653 $3,541
------ ------ ------ ------
Class M shares $ 440 $1,003 $1,688 $3,514
------ ------ ------ ------
Class L shares $ 453 $ 941 $1,653 $3,541
------ ------ ------ ------
Pro Forma - Acquiring Fund
including Acquired Fund
------ ------ ------ ------
Class A shares $ 718 $1,165 $1,638 $2,938
------ ------ ------ ------
Class B shares $ 743 $1,147 $1,576 $3,016
------ ------ ------ ------
Class C shares $ 243 $ 847 $1,476 $3,170
------ ------ ------ ------
Class M shares $ 430 $ 909 $1,513 $3,144
------ ------ ------ ------
Class L shares $ 443 $ 847 $1,476 $3,170
------ ------ ------ ------
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 $1,284 $1,877 $3,474
------ ------ ------ ------
Class B shares $ 240 $ 969 $1,721 $3,554
------ ------ ------ ------
Class C shares $ 240 $ 969 $1,721 $3,700
------ ------ ------ ------
Class M shares $ 328 $1,030 $1,756 $3,673
------ ------ ------ ------
Class L shares $ 240 $ 969 $1,721 $3,700
------ ------ ------ ------
Acquired Fund
------ ------ ------ ------
Class A shares $ 728 $1,256 $1,810 $3,313
------ ------ ------ ------
Class B shares $ 253 $ 941 $1,653 $3,392
------ ------ ------ ------
Class C shares $ 253 $ 941 $1,653 $3,541
------ ------ ------ ------
Class M shares $ 341 $1,003 $1,688 $3,514
------ ------ ------ ------
Class L shares $ 253 $ 941 $1,653 $3,541
------ ------ ------ ------
Pro Forma - Acquiring Fund
including Acquired Fund
------ ------ ------ ------
Class A shares $ 718 $1,165 $1,638 $2,938
------ ------ ------ ------
Class B shares $ 243 $ 847 $1,476 $3,016
------ ------ ------ ------
Class C shares $ 243 $ 847 $1,476 $3,170
------ ------ ------ ------
Class M shares $ 331 $ 909 $1,513 $3,144
------ ------ ------ ------
Class L shares $ 243 $ 847 $1,476 $3,170
------ ------ ------ ------
Class A and Class M shares of 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 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 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 holding period of Acquiring Fund's shares for purposes of
calculating any contingent deferred sales charge. Similarly, Class B shares of
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 a 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.
14
For more information about Acquiring Fund's performance, including a discussion
of factors that materially impact its performance, please see Appendix B.
ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND
INVESTMENT ADVISER -- 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 $27.1 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 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 a vote of shareholders of Acquiring Fund. Advisory fees
are computed and accrued daily and paid monthly.
SUB-ADVISER -- TIM, an affiliate of ATFA, is Acquiring Fund's sub-adviser. On
April 30, 2002, the aggregate assets of all of the mutual funds under the
investment management of TIM were approximately $11.7 billion. TIM has overall
responsibility for the management of the Fund. ATFA and TIM have entered into an
agreement that requires TIM 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 TIM 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:
- - Christopher J. Bonavico, Vice President and Portfolio Manager of TIM, is
primary manager of Acquiring Fund. Mr. Bonavico has been manager of the
Transamerica Premier Aggressive Growth Fund and Transamerica Premier Small
Company Fund since 1999. He was manager of the Transamerica Premier Value
Fund from 1998 to 1999; manager of the Transamerica Premier Index Fund
from inception to 1998; and co-manager of the Transamerica Premier
Aggressive Growth Fund, Transamerica Premier Small Company Fund,
Transamerica Premier Balanced Fund and Transamerica Premier Index Fund
from 1998 to 1999. He joined TIM in 1993.
- - Kenneth F. Broad, Assistant Vice President and Portfolio Manager, TIM, is
co-manager of Acquiring Fund. Mr. Broad has been co-manager of the
Transamerica Premier Small Company Fund since 2001. Prior to joining TIM
in 2000, he was Vice President, Portfolio Manager and Analyst at Franklin
Templeton Investments from 1994 to 2000.
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, ATFA and TIM. 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.
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, 2002. (Shareholders of Acquired Fund whose shares are held by
nominees, such as brokers, can vote their proxies by contacting their
15
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 $31,025 plus applicable postage.
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 a 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,9,492,275.713 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 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 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.
As of November 15, 2002, no shareholder owned beneficially 5% or more of the
outstanding shares of either Fund.
16
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.
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 2, 2002
17
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 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
18
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 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 be 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 $86,000 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.
19
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"), which is wholly-owned by Transamerica Holding Company;
Transamerica Holding Company is wholly-owned 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 a 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
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.
20
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 Janus Capital Appreciation had capital loss
carryforwards totaling $26,385,453, expiring on October 31, 2008. IDEX
Transamerica Growth Opportunities had capital loss carryforwards totaling
$203,423 expiring on October 31, 2008. The utilization of tax capital loss
carryforwards from 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.
21
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. The information, for the fiscal
years ended 10/31/01, has been 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.
Investment Operations Distributions
------------------------------------------- -----------------------------------------
Net Asset From Net
Value, Net Net Realized From Net Realized
YEAR OR Beginning of Investment and Unrealized Total Investment Capital Total
PERIOD ENDED Period Income (Loss) Gain (Loss) Operations Income Gains Distributions
------------ ------------ ------------- -------------- ---------- ---------- -------- -------------
Class A 04/30/2002 (5) 4.81 (0.03) 1.09 1.06 -- -- --
10/31/2001 (5) 8.70 (0.07) (3.82) (3.89) -- -- --
10/31/2000 10.00 (0.02) (1.28) (1.30) -- -- --
Class B 04/30/2002 (5) 4.73 (0.05) 1.08 1.03 -- -- --
10/31/2001 (5) 8.66 (0.10) (3.83) (3.93) -- -- --
10/31/2000 10.00 (0.06) (1.28) (1.34) -- -- --
Class C 04/30/2002 (5) 4.74 (0.05) 1.07 1.02 -- -- --
10/31/2001 (5) 8.66 (0.11) (3.81) (3.92) -- -- --
10/31/2000 10.00 (0.06) (1.28) (1.34) -- -- --
Class M 04/30/2002 (5) 4.75 (0.05) 1.08 1.03 -- -- --
10/31/2001 (5) 8.67 (0.10) (3.82) (3.92) -- -- --
10/31/2000 10.00 (0.05) (1.28) (1.33) -- -- --
Ratios/Supplemental Data
--------------------------------------------------------------
Ratio of Expenses to Average Net
Assets (1)(3)
-------------------------------- Net
Net Assets Investment
Net Asset End of Income (Loss)
YEAR OR PERIOD Value, End Total Period Excluding to Average Portfolio
ENDED of Period Return (2) (000's) Credits Gross Net Assets(1)(3) Turnover Rate(4)
--------------- ----------- ---------- --------- --------- ----- ---------------- ----------------
Class A 04/30/2002(5) 5.87 22.09 6,670 1.72 2.85 (1.39) 11.33
10/31/2001(5) 4.81 (44.76) 3,807 1.55 2.83 (1.11) 58.64
10/31/2000 8.70 (12.96) 3,726 1.55 4.54 (1.23) 18.58
Class B 04/30/2002(5) 5.76 21.69 6,993 2.37 3.50 (2.04) 11.33
10/31/2001(5) 4.73 (45.35) 4,513 2.20 3.48 (1.76) 58.64
10/31/2000 8.66 (13.39) 4,366 2.20 5.19 (1.88) 18.58
Class C 04/30/2002(5) 5.76 21.69 1,843 2.37 3.50 (2.04) 11.33
10/31/2001(5) 4.74 (45.35) 1,530 2.20 3.48 (1.76) 58.64
10/31/2000 8.66 (13.39) 1,704 2.20 5.19 (1.88) 18.58
Class M 04/30/2002(5) 5.78 21.82 1,253 2.27 3.40 (1.94) 11.33
10/31/2001(5) 4.75 (45.26) 1,174 2.10 3.38 (1.66) 58.64
10/31/2000 8.67 (13.33) 2,090 2.10 5.09 (1.78) 18.58
22
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 Shares.
Periods of less than one year are 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.
23
APPENDIX A
AGREEMENT & PLAN OF REORGANIZATION
THIS AGREEMENT & PLAN OF REORGANIZATION (the "Plan") is made as of the 8th day
of October, 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 Transamerica Growth Opportunities (the "Acquiring Fund") and IDEX Janus
Capital Appreciation (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 the 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 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.
24
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.
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 the 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 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
25
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;
(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
26
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 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 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:
27
(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, 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 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;
28
(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) 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 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.
29
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 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.
30
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.
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 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.
31
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 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
32
APPENDIX B
IDEX TRANSAMERICA GROWTH OPPORTUNITIES
(FORMERLY IDEX TRANSAMERICA SMALL COMPANY) (4/30/02)
OBJECTIVE/FOCUS
Long-term growth by investing principally in equity securities such as common
and preferred stocks, rights, warrants and securities convertible into or
exchangeable for common stocks of small companies.
MARKET ENVIRONMENT
In one sense, market conditions during the six months ended April 30, 2002
favored the fund. Money fleeing overvalued large-cap sectors - most notably
technology, media and telecommunications - sought refuge in the small- and
mid-cap equities markets, giving a boost to prices. In another sense, market
trends ran contrary to our efforts. Investors showed a marked preference for
traditional value and/or cyclical stocks such as homebuilders, retailers and
consumer staples companies, rather than the secularly growing companies we seek
for the fund.
PERFORMANCE
For the six months ended April 30, 2002, IDEX Transamerica Growth Opportunities
outperformed its benchmark, the Russell 2000 Index. For more information, please
refer to the Performance Table on the next page. It should be noted that the new
benchmark and name are meant to more accurately describe the fund's longstanding
universe and objective, not a change to our investment strategy.
STRATEGY REVIEW
As always, our ideal candidate for investment is an individual growth stock in
the small- to mid-cap range (i.e., less than $5 billion market capitalization)
whose price does not exceed the company's intrinsic value. Our bottom-up
philosophy emphasizes discovery of quality companies that are benefiting from
secular trends - before their stock prices fully reflect the companies'
strengths and growth potential. Seasoned management, high returns on capital,
strong free cash flow reinvested to enhance shareholder value, and sustainable
competitive advantages are also essential.
Although the market showed a fondness for value stocks during this period, our
continued commitment to quality growth stocks paid off handsomely. The
overwhelming majority of the fund's holdings fared well, while two technology
stocks did exceptionally well.
One of these was Cymer, Inc., whose laser systems lower the cost of
semiconductor manufacturing by etching transistors more closely together.
Cymer's ability to cut costs for major customers - Intel, for example - has
given it a staggering 83 percent market share. After the September 11th
terrorist attack, investors turned decidedly negative about technology stocks of
all types, including Cymer. This allowed us to purchase the stock at a sizable
discount to the company's true value. It also illustrates why we never "paint an
industry with a single brush." Even in downtrodden sectors like technology, we
find good businesses, such as Expedia, Inc., the Internet travel company. We had
watched Expedia for some time and, after technology share prices plummeted, were
able to buy in at an attractive level. Spun out of Microsoft, Inc., Expedia's
proprietary technology allows tremendous efficiency. What's more, with travelers
eschewing less efficient travel providers (i.e., travel agents, airlines and
hotels) in favor of single-source solutions, Expedia's business is expanding
rapidly, contributing to record quarterly earnings this spring.
Unfortunately, we did not entirely miss the technology freefall. We had thought
that VeriSign, Inc., the provider of domain names for the Internet, possessed a
competitive advantage. But both cash flow and focus on the core business were
diverted by numerous acquisitions. Also, management proved weaker than expected
and provided overly optimistic projections. We exited the stock.
Having said so much about technology stocks, we should point out that the fund
is only slightly more weighted toward that sector than the benchmark index.
33
OUTLOOK
The economy, though still sluggish, is rebounding more quickly than we would
have thought six months ago. Although we do not expect to find as many stocks
"on sale" during the recovery, we are not concerned. For more than 30 years, our
research-intensive, fundamentals-centered investment process has uncovered
quality businesses riding the wave of fundamental change, regardless of economic
and market conditions.
Christopher J. Bonavico
Kenneth F. Broad
Co-Fund Managers
Transamerica Investment Management, LLC
COST BASIS
The "cost basis" of mutual fund shares is generally the amount paid for them,
including all reinvested distributions. Whenever shares are sold from a taxable
account, the cost basis is deducted from proceeds to determine the realized gain
or loss, which must be reported on your income tax return.
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 4/30/02
6 MONTHS 1 YEAR INCEPTION INCEPTION DATE
-------- ------ --------- --------------
Class A (NAV) 22.09% 14.56% (21.78)% 3/1/00
Class A (POP) 15.38% 8.26% (23.80)% 3/1/00
Index - Russell 2000(1) 20.03% 6.68% (4.28)% 3/1/00
Class B (NAV) 21.69% 13.64% (22.46)% 3/1/00
Class B (POP) 16.69% 8.64% (23.54)% 3/1/00
Class C (NAV) 21.69% 13.64% (22.46)% 3/1/00
Class M (NAV) 21.82% 13.84% (22.34)% 3/1/00
Class M (POP) 19.60% 11.70% (22.70)% 3/1/00
NOTES
1 The Russell 2000 (Russell 2000) 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.
Investing in small cap stocks generally involves greater risks and volatility.
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.
34
IDEX TRANSAMERICA GROWTH OPPORTUNITIES (FORMERLY, IDEX TRANSAMERICA SMALL
COMPANY) (10/31/01)
OBJECTIVE/FOCUS
Long-term growth by investing principally in equity securities such as common
and preferred stocks, rights, warrants and securities convertible into or
exchangeable for common stocks of small companies.
MARKET ENVIRONMENT
Market conditions this period were difficult as the slowdown in economic
activity and corporate profits produced negative equity market returns. The
economic decline broadened considerably as companies in nearly every sector
dealt with slowing demand, higher input costs, and an infrastructure sized for
the boom times of the late 1990's. Record capital raising over the past several
years created too many companies and too much productive capacity in many
sectors. This supply excess led both corporations and consumers to cut back on
spending. In a healthy corrective response, capital has been exiting areas of
over capacity. Of course the events of September 11th have further impacted
business and consumer confidence levels. Only the healthiest companies with
strong balance sheets are positioned to navigate this corrective storm. To
assist the recovery, the Federal Reserve has reduced interest to record low
levels and the Congress is nearing a significant economic stimulus plan. Equity
markets typically recover before the overall economy as investors anticipate the
upturn.
PERFORMANCE
For the fiscal year ended October 31, 2001, IDEX Transamerica Small Company
underperformed its benchmark, the Russell 2000. Please refer to the Performance
Table on the next page for additional information. While the shares of some of
the companies we invest in may underperform for any one-time period, we are
confident that each holding is well positioned to create shareholder value over
time.
STRATEGY REVIEW
Our philosophy is to invest in companies with strong management and good assets
in an area of positive change. These are businesses that are competitively
advantaged, and therefore create strong shareholder value. We also seek to
invest in secularly growing businesses that are expanding more rapidly than the
overall economy. We've invested in many new companies this year, with an
emphasis on companies that currently are generating excess cash flow. The fund
is diversified across industries including healthcare, financial services,
business services, and consumer cyclical.
Some of our top holdings include Techne Corp., Investment Technology Group, and
Global Payments, Inc. Techne is the global leader in supplying research
materials to the pharmaceutical industry. Research spending for drugs
consistently grows about 15% per year regardless of the economic climate, and
Techne's highly profitable business is expanding accordingly. ITG provides a
network for investment managers to transact securities without using a broker.
ITG's business is expanding 20% per year as client's interest in anonymity and
lower brokerage commissions is attracting volume to ITG's network. Since the
company has already spent to build its network, profit margins on new business
are a very high 70%. Global Payments, a processor of credit card transactions
for merchants in the U.S. and Canada, is a new holding. The company was not well
followed by Wall Street when it was spun off from its former parent NDC Corp.,
providing us the chance to invest early in this profitable business. Global
Payment's long term outlook is solid given the strong trend of payments moving
from cash and check to debit and credit cards.
OUTLOOK
Though it is still early, we are looking for the combination of company
rightsizings, government stimulus, and rate reductions to help alleviate
recession forces, and begin a recovery in corporate profits. Inflation remains
benign, and the speculation that drove the markets to excessive valuations has
been eliminated. These conditions present a favorable environment for high
quality businesses with strong fundamentals. We do not try to call markets. We
simply invest in companies with strong fundamentals. We believe our focus on
high quality companies best positions IDEX Transamerica Small Company for value
creation.
Christopher J. Bonavico
Kenneth F. Broad
Co-Fund Managers
Transamerica Investment Management, LLC
COST BASIS
The "cost basis" of mutual fund shares is generally the amount paid for them,
including all reinvested distributions. Whenever shares are sold from a taxable
account, the cost basis is deducted from proceeds to determine the realized gain
or loss, which must be reported on your income tax return.
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 10/31/01
35
1 YEAR FROM INCEPTION INCEPTION DATE
------ -------------- --------------
Class A (NAV) (44.76)% (35.45)% 3/1/00
Class A (POP) (47.80)% (37.60)% 3/1/00
Index - Russell 2000(1) (12.70)% (15.29)% 3/1/00
Class B (NAV) (45.35)% (36.05)% 3/1/00
Class B (POP) (48.08)% (37.60)% 3/1/00
Class C (NAV) (45.35)% (36.05)% 3/1/00
Class M (NAV) (45.26)% (35.96)% 3/1/00
Class M (POP) (46.35)% (36.35)% 3/1/00
NOTES
1 The Russell 2000 (Russell 2000) 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.
Investing in small cap stocks generally involves greater risks and volatility.
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.
36
PART B
IDEX Mutual Funds
Statement of Additional Information
November 29, 2002
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
IDEX Janus Capital Appreciation (the "Acquired Fund") IDEX Transamerica Growth Opportunities (the
570 Carillon Parkway, St. Petersburg, Florida 33716 "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, pro forma 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 for 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 November 29, 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.
38
PRO FORMA SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 2002
IDEX TRANSAMERICA IDEX JANUS
GROWTH OPPORTUNITIES CAPITAL APPRECIATION PRO FORMA FUND
-------------------- ---------------------- ---------------------
% OF
DESCRIPTION TNA SHARES VALUE SHARES VALUE SHARES VALUE
----------- --- ------ ----- ------ ----- ------ -----
COMMON STOCK 84.1%
----
Basic Materials 0.2%
Chemicals
Praxair, Inc. -- $ -- 5,795 $ 330,895 5,795 $ 330,895
---------- ------------ -----------
Communications 10.4%
Advertising 4.0%
Lamar Advertising Company * 5,500 236,115 88,270 3,789,431 93,770 4,025,546
The Interpublic Group of Companies,
Inc. -- -- 47,010 1,451,669 47,010 1,451,669
TMP Worldwide, Inc. * -- -- 38,990 1,176,328 38,990 1,176,328
---------- ------------ -----------
236,115 6,417,428 6,653,543
---------- ------------ -----------
Broadcasting 3.2%
Cox Radio, Inc. Class A * -- -- 37,910 1,085,742 37,910 1,085,742
Entercom Communications Corp. * -- -- 21,180 1,106,655 21,180 1,106,655
Hispanic Broadcasting Corp. Class A * -- -- 47,935 1,285,617 47,935 1,285,617
USA Networks, Inc. * -- -- 62,985 1,883,881 62,985 1,883,881
---------- ------------ -----------
-- 5,361,895 5,361,895
---------- ------------ -----------
Publishing 0.3%
Valassis Communications, Inc. * -- -- 14,955 559,167 14,955 559,167
---------- ------------ -----------
Telecommunications Equipment 1.5%
EchoStar Communications Corp. * -- -- 89,155 2,425,016 89,155 2,425,016
---------- ------------ -----------
Telecommunications Services 1.4%
Crown Castle International Corp. * -- -- 309,165 2,256,904 309,165 2,256,904
---------- ------------ -----------
Consumer Cyclical 4.0%
Auto Parts/Equipment 0.2%
SPX Corp. -- -- 2,285 307,675 2,285 307,675
---------- ------------ -----------
Entertainment 0.3%
Westwood One, Inc. * -- -- 12,300 442,800 12,300 442,800
---------- ------------ -----------
Home Builders 1.2%
Clayton Homes, Inc. -- -- 33,995 581,315 33,995 581,315
NVR, Inc. -- -- 3,900 1,442,025 3,900 1,442,025
---------- ------------ -----------
-- 2,023,340 2,023,340
---------- ------------ -----------
Home Furnishings 0.2%
Mohawk Industries, Inc. * -- -- 5,620 361,535 5,620 361,535
---------- ------------ -----------
Housewares 0.2%
Gentex Corp. * 13,000 411,580 -- -- 13,000 411,580
---------- ------------ -----------
Lodging 0.4%
Starwood Hotels & Resorts
Worldwide, Inc. -- -- 18,260 690,228 18,260 690,228
---------- ------------ -----------
39
Restaurants 0.8%
Tricon Global Restaurants, Inc. * -- -- 20,590 1,298,405 20,590 1,298,405
---------- ------------ -----------
Retail/Grocery 0.5%
Dean Foods Company -- -- 22,670 839,243 22,670 839,243
---------- ------------ -----------
Retail/Specialty 0.2%
Fastenal Company -- -- 3,090 258,448 3,090 258,448
---------- ------------ -----------
Consumer Non-Cyclical 35.9%
Biotechnology 2.4%
KLA-Tencor Corp. * -- -- 20,350 1,200,040 20,350 1,200,040
Millipore Corp. -- -- 13,585 542,721 13,585 542,721
Quest Diagnostics, Inc. * -- -- 21,755 1,999,937 21,755 1,999,937
Symyx Technologies, Inc. * 17,500 343,700 -- -- 17,500 343,700
---------- ------------ -----------
343,700 3,742,698 4,086,398
---------- ------------ -----------
Commercial Services/Business 10.8%
Cendant Corp. * -- -- 134,385 2,417,586 134,385 2,417,586
Concord EFS, Inc. * -- -- 108,770 3,439,732 108,770 3,439,732
eBay, Inc. * -- -- 74,445 3,953,030 74,445 3,953,030
Moody's Corp. 18,500 806,230 38,375 1,672,383 56,875 2,478,613
NetRatings, Inc. * 40,000 552,800 -- -- 40,000 552,800
On Assignment, Inc. * 23,500 477,755 -- -- 23,500 477,755
Paychex, Inc. -- -- 79,733 2,976,433 79,733 2,976,433
Resources Connection, Inc. 7,200 191,088 -- -- 7,200 191,088
Robert Half International, Inc. * 14,000 367,640 42,470 1,115,262 56,470 1,482,902
---------- ------------ -----------
2,395,513 15,574,426 17,969,939
---------- ------------ -----------
Commercial Services/Education 2.3%
Apollo Group, Inc. Class A * -- -- 100,776 3,863,752 100,776 3,863,752
---------- ------------ -----------
Commercial Services/Personal 0.1%
Weight Watchers International, Inc. 1,800 67,968 -- -- 1,800 67,968
---------- ------------ -----------
Commercial Services/Technology 1.0%
Certegy, Inc. * -- -- 21,560 836,528 21,560 836,528
Global Payments, Inc. 20,200 776,084 -- -- 20,200 776,084
VeriSign, Inc. * 3,100 28,675 -- -- 3,100 28,675
---------- ------------ -----------
804,759 836,528 1,641,287
---------- ------------ -----------
Commercial Services/Transportation 1.7%
C.H. Robinson Worldwide, Inc. 25,000 786,750 -- -- 25,000 786,750
Expedia, Inc. Class A * 11,000 889,196 -- -- 11,000 889,196
Expeditors International of
Washington, Inc. 13,700 792,819 6,585 381,074 20,285 1,173,893
---------- ------------ -----------
2,468,765 -- 381,074 -- 2,849,839
---------- ------------ -----------
Food 0.2%
Dreyer's Grand Ice Cream, Inc. 7,000 326,620 -- -- 7,000 326,620
---------- ------------ -----------
Healthcare Products 5.5%
Apogent Technologies, Inc. * -- -- 61,550 1,427,960 61,550 1,427,960
Biomet, Inc. -- -- 1,055 29,783 1,055 29,783
C.R. Bard, Inc. -- -- 5,745 315,630 5,745 315,630
St. Jude Medical, Inc. * -- -- 48,995 4,076,874 48,995 4,076,874
Stryker Corp. -- -- 48,225 2,580,520 48,225 2,580,520
Techne Corp. * 26,400 704,616 -- -- 26,400 704,616
---------- ------------ -----------
704,616 8,430,767 9,135,383
---------- ------------ -----------
Healthcare Services 9.5%
AFLAC, Inc. -- -- 82,525 2,467,497 82,525 2,467,497
40
Anthem, Inc. -- -- 15,730 1,072,786 15,730 1,072,786
Community Health Systems, Inc. * -- -- 32,810 952,146 32,810 952,146
Enzon, Inc. * -- -- 87,805 3,269,858 87,805 3,269,858
First Health Group Corp. * -- -- 58,370 1,692,730 58,370 1,692,730
Health Management Associates, Inc. * -- -- 89,045 1,900,220 89,045 1,900,220
Laboratory Corp. of America
Holdings * -- -- 45,070 4,470,944 45,070 4,470,944
---------- ------------ -----------
-- 15,826,181 15,826,181
---------- ------------ -----------
Pharmaceuticals
Alcon, Inc. 2.4% -- -- 11,220 388,773 11,220 388,773
Forest Laboratories, Inc. * -- -- 24,035 1,854,060 24,035 1,854,060
King Pharmaceuticals, Inc. * -- -- 58,374 1,829,441 58,374 1,829,441
---------- ------------ -----------
-- 4,072,274 4,072,274
---------- ------------ -----------
Energy 3.0%
Oil and Gas Producers 2.3%
EOG Resources, Inc. 10,000 425,500 45,530 1,937,302 55,530 2,362,802
Ocean Energy, Inc. * -- -- 14,975 320,465 14,975 320,465
Pioneer Natural Resources Company -- -- 44,790 1,074,512 44,790 1,074,512
---------- ------------ -----------
425,500 3,332,279 3,757,779
---------- ------------ -----------
Oil and Gas Services 0.7%
Murphy Oil Corp. -- -- 11,525 1,087,384 11,525 1,087,384
---------- ------------ -----------
Financial 14.1%
Banks 2.5%
Capital One Financial Corp. -- -- 15,405 922,605 15,405 922,605
Commerce Bancorp, Inc. -- -- 11,580 571,936 11,580 571,936
North Fork Bancorp., Inc. -- -- 15,800 610,196 15,800 610,196
Northern Trust Corp. -- -- 40,100 2,130,112 40,100 2,130,112
---------- ------------ -----------
-- 4,234,849 4,234,849
---------- ------------ -----------
Financial - Diversified 3.6%
Berkshire Hathaway, Inc. * -- -- 1,510 3,673,830 1,510 3,673,830
Financial Federal Corp. 19,700 692,849 -- -- 19,700 692,849
M&T Bank Corp. -- -- 6,275 535,760 6,275 535,760
National Commerce Financial Corp. -- -- 39,245 1,098,468 39,245 1,098,468
---------- ------------ -----------
692,849 5,308,058 6,000,907
---------- ------------ -----------
Insurance 4.3%
Berkley Corp. -- -- 13,935 843,067 13,935 843,067
Everest Reinsurance Company -- -- 14,830 1,006,957 14,830 1,006,957
MGIC Investment Corp. -- -- 32,275 2,303,144 32,275 2,303,144
RenaissanceRe Holdings, Ltd. -- -- 10,990 1,288,028 10,990 1,288,028
XL Capital, Ltd. Class A -- -- 18,445 1,740,286 18,445 1,740,286
---------- ------------ -----------
-- 7,181,482 7,181,482
---------- ------------ -----------
Securities Brokers 3.7%
BlackRock, Inc. 17,000 782,000 -- -- 17,000 782,000
Charles Schwab Corp. -- -- 80,205 913,535 80,205 913,535
E*TRADE Group, Inc. * -- -- 60,100 453,154 60,100 453,154
Investment Technology Group, Inc. * 17,000 782,000 -- -- 17,000 782,000
Lehman Brothers Holdings, Inc. -- -- 25,555 1,507,745 25,555 1,507,745
T. Rowe Price Group, Inc. -- -- 36,235 1,270,761 36,235 1,270,761
W.P. Stewart & Company, Ltd. 17,100 485,982 -- -- 17,100 485,982
---------- ------------ -----------
2,049,982 4,145,195 6,195,177
---------- ------------ -----------
Industrial 3.2%
Environmental Control 0.2%
Allied Waste Industries, Inc. * -- -- 16,345 198,428 16,345 198,428
Mykrolis Corp. -- -- 7,756 114,323 7,756 114,323
---------- ------------ -----------
-- 312,751 312,751
---------- ------------ -----------
Machinery-Diversified 0.9%
41
Smith International, Inc. * -- -- 11,695 819,235 11,695 819,235
W. W. Grainger, Inc. -- -- 13,605 762,832 13,605 762,832
---------- ------------ -----------
-- 1,582,067 1,582,067
---------- ------------ -----------
Packaging & Containers 0.4%
Ball Corp. -- -- 15,025 714,439 15,025 714,439
---------- ------------ -----------
Transportation/Air 1.4%
Southwest Airlines Company -- -- 124,870 2,273,883 124,870 2,273,883
---------- ------------ -----------
Transportation/Railroad 0.1%
CSX Corp. -- -- 5,785 209,243 5,785 209,243
---------- ------------ -----------
Trucking & Leasing 0.2%
Forward Air Corp. * 13,600 369,512 -- -- 13,600 369,512
---------- ------------ -----------
Technology 10.7%
Computers 0.7%
International Game Technology * -- -- 19,855 1,249,872 19,855 1,249,872
---------- ------------ -----------
Semiconductors 6.6%
Celestica, Inc. -- -- 16,000 443,200 16,000 443,200
Cree, Inc. * -- -- 48,895 576,472 48,895 576,472
Cymer, Inc. * 18,200 860,314 -- -- 18,200 860,314
Intergrated Device Technology, Inc. * -- -- 114,605 3,213,524 114,605 3,213,524
National Semiconductor Corp. * -- -- 34,320 1,081,766 34,320 1,081,766
Novellus Systems, Inc. * -- -- 27,915 1,323,171 27,915 1,323,171
NVIDIA Corp. * -- -- 81,090 2,822,743 81,090 2,822,743
QLogic Corp. * 9,500 434,245 -- -- 9,500 434,245
TriQuint Semiconductor, Inc. * 24,959 253,084 -- -- 24,959 253,084
---------- ------------ -----------
1,547,643 9,460,876 11,008,519
---------- ------------ -----------
Software 3.4%
Barra, Inc. * 17,500 864,325 -- -- 17,500 864,325
Cadence Design Systems, Inc. * -- -- 42,470 869,786 42,470 869,786
Electronic Arts, Inc. * -- -- 60,955 3,599,393 60,955 3,599,393
Keane, Inc. * -- -- 22,800 356,592 22,800 356,592
---------- ------------ -----------
864,325 4,825,771 5,690,096
---------- ------------ -----------
Utilities 2.6%
Electric (0.6%) 0.5%
The AES Corp. * -- -- 111,830 896,877 111,830 896,877
---------- ------------ -----------
Gas (2.3%) 2.1%
Kinder Morgan, Inc. -- -- 71,090 3,441,467 71,090 3,441,467
---------- ------------ -----------
TOTAL COMMON STOCK MARKET VALUE 13,709,447 126,557,172 140,266,619
---------- ------------ -----------
TOTAL COMMON STOCK COST 12,034,405 134,426,345 146,460,750
---------- ------------ -----------
% OF
DESCRIPTION TNA PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
----------- --- --------- ----- --------- ----- --------- -----
SHORT-TERM SECURITES 16.8%
-----
Commercial Paper 6.0%
Citicorp CP 1.830% 5-1-2002 -- -- 7,000,000 7,000,000 7,000,000 7,000,000
Household Finance Company 1.840%
5-1-2002 -- -- 3,100,000 3,100,000 3,100,000 3,100,000
----------- ------------- -------------
-- 10,100,000 10,100,000
----------- ------------- -------------
Repurchase Agreements 0.0%
42
State Street Bank & Trust **
0.650% Repurchase Agreement
dated 4-30-2002 to be repurchased
at $51,166 on 5-1-2002 -- -- 51,165 51,165 51,165 51,165
----------- ------------- -------------
Time Deposit 1.8%
State Street Bank & Trust
Eurodollar Time Deposit 2,949,101 2,949,101 -- -- 2,949,101 2,949,101
----------- ------------- -------------
0.750% 5-1-2002
United States Government Agencies 9.0%
Federal Home Loan Bank 1.640%
5-10-2002 -- -- 15,000,000 15,000,000 15,000,000 15,000,000
----------- ------------- -------------
TOTAL SHORT-TERM SECURITIES MARKET VALUE 2,949,101 25,151,165 28,100,266
----------- ------------- -------------
----------- ------------- -------------
TOTAL SHORT-TERM SECURITIES COST 2,949,101 25,145,015 28,094,116
----------- ------------- -------------
----------- ------------- -------------
TOTAL INVESTMENTS MARKET VALUE 100.9% 16,658,548 151,708,337 168,366,885
----------- ------------- -------------
----------- ------------- -------------
TOTAL INVESTMENTS COST 14,983,506 159,571,360 174,554,866
----------- ------------- -------------
----------- ------------- -------------
OTHER ASSETS (LIABILITIES) -0.9% 99,773 (1,615,215) (1,515,442)
----------- ------------- -------------
NET ASSETS 100.0% $16,758,321 $ 150,093,122 $ 166,851,443
=========== ============= =============
See accompanying notes to unaudited pro forma financial statements.
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Presently non-income producing.
** Repurchase Agreement Collateral
Market Value and
Principal Amount Description Accrued Interest
---------------- ----------- ----------------
51,165 U.S. Treasury Notes 5.500%, 3/31/2003 $51,166
43
PRO FORMA INFORMATION (UNAUDITED)
All numbers (except per share amounts) in thousands
April 30, 2002
IDEX
TRANSAMERICA IDEX JANUS
GROWTH CAPITAL
OPPORTUNITIES APPRECIATION ADJUSTMENTS PRO FORMA FUND
----------------------------------------------------------------
ASSETS:
Investment securities, at market value $ 16,659 $ 151,657 $ -- $ 168,316
Repurchase agreements at market value -- 51 -- 51
Cash 28 -- -- 28
Receivables:
Investment securities sold 21 -- -- 21
Shares of beneficial interest sold 76 60 -- 136
Dividends -- 17 -- 17
Due from investment adviser 16 5 -- 21
Other -- 11 -- 11
----------------------------------------------------------------
Total Assets 16,800 151,801 -- 168,601
----------------------------------------------------------------
LIABILITIES:
Accounts payable:
Investment securities purchased -- 1,106 1,106
Shares of beneficial interest redeemed 12 205 217
Accrued liabilities:
Management and advisory fees -- -- --
Distribution fees 10 94 104
Transfer agent fees and expenses 13 228 241
Other 7 75 82
----------------------------------------------------------------
Total Liabilities 42 1,708 -- 1,750
----------------------------------------------------------------
Net Assets $ 16,758 $ 150,093 $ -- $ 166,851
================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest, unlimited shares authorized 21,569 447,895 -- 469,464
Undistributed net investment income (loss) or (distribution
in excess of net investment income) (118) (1,504) -- (1,622)
Undistributed net realized gain (loss) from investments and
foreign currency transactions (6,368) (288,431) -- (294,799)
Net unrealized appreciation (depreciation) of investments and
translation of foreign denominated assets/liabilities 1,675 (7,867) -- (6,192)
----------------------------------------------------------------
Net Assets $ 16,758 $ 150,093 $ -- $ 166,851
================================================================
Investment securities, at cost $ -- $ 20,319
================================================================
Net Assets: Class A $ 6,670 $ 56,477 $ -- $ 63,147
Net Assets: Class B 6,993 65,544 -- 72,537
44
Net Assets: Class C 1,842 12,819 -- 14,661
Net Assets: Class M 1,253 15,253 -- 16,506
----------------------------------------------------------------
$ 16,758 $ 150,093 $ -- $ 166,851
================================================================
Outstanding Shares: Class A 1,137 4,290 5,339(a) 10,766
Outstanding Shares: Class B 1,214 5,198 6,179(a) 12,591
Outstanding Shares: Class C 320 1,017 1,208(a) 2,545
Outstanding Shares: Class M 217 1,203 1,437(a) 2,857
Net Asset Value: Class A $ 5.87 $ 13.17 $ 5.87
Net Asset Value: Class B $ 5.76 $ 12.61 $ 5.76
Net Asset Value: Class C $ 5.76 $ 12.61 $ 5.76
Net Asset Value: Class M $ 5.78 $ 12.69 $ 5.78
Offering Price: Class A $ 6.21 $ 13.94 $ 6.21
Offering Price: Class M $ 5.84 $ 12.82 $ 5.84
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.
45
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
TRANSAMERICA IDEX JANUS
GROWTH CAPITAL
OPPORTUNITIES APPRECIATION ADJUSTMENTS PRO FORMA FUND
-----------------------------------------------------------------
Investment Income:
Interest $ 25 $ 495 $ -- $ 520
Dividends 24 261 -- 285
Less withholding taxes on foreign dividends -- -- -- --
-----------------------------------------------------------------
49 756 -- 805
-----------------------------------------------------------------
Expenses:
Management and advisory fees 98 1,918 (349)(b) 1,667
Transfer agent fees and expenses 96 1,540 -- 1,636
Custody and accounting fees and expenses 40 93 (1)(c) 132
Registration fees 46 72 -- 118
Trustees fees and expenses -- -- -- --
Audit fees and expenses 8 19 (8)(d) 19
Other 17 320 -- 337
Distribution and service fees:
Class A 15 250 -- 265
Class B 51 846 -- 897
Class C 17 173 -- 190
Class M 11 189 -- 200
-----------------------------------------------------------------
Gross Expenses 399 5,420 (358) 5,461
Less fee waivers and reimbursements by the investment adviser (148) (1000) 157 (e) (991)
-----------------------------------------------------------------
Net Expenses 251 (4,420) (201) 4,470
-----------------------------------------------------------------
Net Investment Income (Loss) (202) (3,664) 201 (3,665)
-----------------------------------------------------------------
Realized Gain (Loss) on Investments, Futures/Options Contracts
and Foreign Currency Transactions:
Net realized gain (loss) during the period on:
Investments (2,320) (158,189) -- (160,509)
Futures/options contracts -- -- -- --
Foreign currency transactions -- -- -- --
-----------------------------------------------------------------
(2,320) (158,189) -- (160,509)
-----------------------------------------------------------------
46
Unrealized Gain (Loss) on Investments, Futures/Options Contracts
and Foreign Currency Transactions:
Net unrealized appreciation (depreciation) during the period on:
Investments 4,180 79,821 -- 84,001
Futures/options contracts -- -- -- --
Translation of assets and liabilities denominated in foreign
currency -- -- -- --
-----------------------------------------------------------------
4,180 79,821 -- 84,001
-----------------------------------------------------------------
Net Gain (Loss) on Investments, Futures/Options Contracts and
Foreign Currency Transactions: 1,860 (78,368) -- (76,508)
-----------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 1,658 $ (82,032) $ 201 $ (80,173)
=================================================================
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.
47
NOTES TO PRO FORMA FINANCIAL STATEMENTS
FOR REORGANIZATION BETWEEN
IDEX JANUS CAPITAL APPRECIATION AND IDEX TRANSAMERICA GROWTH OPPORTUNITIES
APRIL 30, 2002
(UNAUDITED)
1. GENERAL INFORMATION AND BASIS FOR COMBINATION/PRESENTATION
The accompanying unaudited pro forma financial statements are an integral part
of the Proxy Statement/Prospectus within which they are contained and are
presented to illustrate the effects of the proposed merger whereby IDEX
Transamerica Growth Opportunities (the "Acquiring Fund") would acquire
substantially all of the assets and assume substantially all of the liabilities
of Janus Capital Appreciation (the "Fund") in exchange for Class A, B, C, L and
M shares of the Acquiring Fund (in like proportion to the shares of the Fund on
or about March 1, 2003). A full discussion of the proposed merger is described
elsewhere in the Proxy Statement/Prospectus.
The "Pro Forma Fund" as identified in these financial statements represents the
combined fund after the merger, with the Acquiring Fund treated as the
accounting survivor for financial reporting purposes. Management believes the
Acquiring Fund to be the accounting survivor since this fund's investment
object/style, fee and expense structure, and sub-adviser/portfolio manager would
all remain in tact with the combined fund.
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 the Acquiring Fund will
be treated and thereby accounted for as a tax-free reorganization. The
reorganization 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 the Acquiring Fund at net
asset value. Since Class L commenced operations November 11, 2002, no
information on Class L is reported in these proforma financial statements. 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 as though the acquisition had been effective on May
1, 2001 to report operations 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 the
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 pro forma Statement of Operations
has been prepared as though the acquisition had been effective on May 1, 2001 to
report operations of the combined funds for the twelve months ended April 30,
2002.
The Pro Forma adjustments below reflect the impact of the merger to:
(a) adjust shares outstanding of the Pro Forma fund based on combining the Fund
at the Acquiring Fund's net asset value;
(b) adjust management and advisory fees to reflect the Acquiring Fund's fee
rates based upon the Pro Forma Fund's average net assets for the period;
(c) remove duplicate custody fees and expenses;
(d) remove duplicate audit and accounting fees and expenses;
(e) adjust fee waivers and expense reimbursements by the adviser to reflect the
Acquiring Fund's expense limitation cap based upon the Pro Forma Fund's
average net assets for the period.
No adjustments have been made to investments owned on the Schedules of
Investments as the investments of the Fund are not unsuitable nor violate the
investment objectives of the Acquiring Fund.
3. Management Agreement and Other Transactions
48
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the investment adviser of the
Acquiring Fund. The Acquiring Fund pays ATFA a management fee calculated at an
annual rate of 0.80% on the first $500 million of the Acquiring Fund's average
daily net assets and 0.70% on the Acquiring Fund's average daily net assets over
$500 million. This fee is calculated daily and paid monthly. ATFA and its
affiliates also provide transfer agent and certain administrative services to
the funds.
49
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. 33, as filed with the SEC on December 17,
1999.
(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. 33, as filed with the SEC on December 17,
1999.
(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.
33-2659), 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 9/12/02.
(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 17, 2002.
(11) Opinion and Consent of Counsel is incorporated herein by Registrant's
reference to initial Registration stated as filed on Form N-14 (File No.
333-100863) as filed with the SEC on October 30, 2002.
(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, 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 Counsel is incorporated herein by
Registrant's reference to initial Registration stated as filed on Form
N-14 (File No. 333-100863) as filed with the SEC on October 30, 2002.
(17) (a)Form of proxy card Counsel is incorporated herein by Registrant's
reference to initial Registration stated as filed on Form N-14 (File No.
333-100863) as filed with the SEC on October 30, 2002.
(b)The Registrant's Annual Report, dated October 31, 2001, and its
Semi-Annual Report, dated April 30, 2002, are incorporated herein by
reference.
50
(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.
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.
51
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 26th 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 26, 2002
Brian C. Scott*
/s/ John R. Kenney
- ----------------------------------------- Trustee November 26, 2002
John R. Kenney*
/s/ Peter R. Brown
- ----------------------------------------- Chairman & Trustee November 26, 2002
Peter R. Brown*
/s/ Larry N. Norman
- ----------------------------------------- Vice Chairman & Trustee November 26, 2002
Larry N. Norman*
/s/ Daniel Calabria
- ----------------------------------------- Trustee November 26, 2002
Daniel Calabria
/s/ Charles C. Harris
- ----------------------------------------- Trustee November 26, 2002
Charles C. Harris*
/s/ William W. Short, Jr.
- ----------------------------------------- Trustee November 26, 2002
William W. Short, Jr.*
/s/ Jack E. Zimmerman
- ----------------------------------------- Trustee November 26, 2002
Jack E. Zimmerman*
/s/ Leo J. Hill
- ----------------------------------------- Trustee November 26, 2002
Leo J. Hill*
/s/ Janice B. Case
- ----------------------------------------- Trustee November 26, 2002
Janice B. Case*
/s/ Russell A. Kimball, Jr.
- ----------------------------------------- Trustee
Russell A. Kimball, Jr. * November 26, 2002
Trustee November 26, 2002
*Signed by John K. Carter as Attorney in Fact
52
EXHIBIT INDEX
(12) Consent of Independent Certified Public Accountants
53