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Securities Act File No. __________
As filed with the Securities and Exchange Commission on February 9, 2004
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
IDEX Mutual Funds
(Exact Name of Registrant as Specified in Charter)
570 Carillon Parkway
St. Petersburg, Florida 33716
(Address of Principal Executive Offices) (Zip Code)
(800) 851-9777
(Registrant's Area Code and Telephone Number)
John K. Carter, Esq.
570 Carillon Parkway
St. Petersburg, Florida 33716
IDEX Mutual Funds
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on March 10, 2004 pursuant
to Rule 488 under the Securities Act of 1933.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of
1940, as amended.
Pursuant to Rule 429 under the Securities Act of 1933, this registration
statement relates to shares of beneficial interest previously registered on
Form N-1A (File No. 33-02659).
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
888/233-4339
March 10, 2004
Dear Shareholder:
Your Board of Trustees has called a special meeting of shareholders of IDEX
LKCM Strategic Total Return (the "Acquired Fund"), to be held at 1:00 p.m.,
local time, on April 23, 2004 at the offices of IDEX Mutual Funds ("IDEX"), 570
Carillon Parkway, St. Petersburg, Florida 33716, or any adjournment(s) thereof
(the "Special Meeting").
The Board of Trustees of IDEX (the "Board") has approved a reorganization of
the Acquired Fund into IDEX Transamerica Value Balanced (the "Acquiring Fund"),
also a series of IDEX (the "Reorganization"). AEGON/Transamerica Fund Advisers,
Inc. serves as investment adviser to both the Acquired and the Acquiring Funds.
Luther King Capital Management Corporation serves as sub-adviser to the
Acquired Fund, and Transamerica Investment Management, LLC serves as
sub-adviser to the Acquiring Fund. The Acquired Fund has investment objectives
and policies that are similar in many respects to those of the Acquiring Fund.
The Reorganization is expected to improve trading efficiency and may eventually
realize economies of scale and lower operating expenses.
You are asked to vote to approve an Agreement and Plan of Reorganization. The
accompanying document describes the proposed Reorganization and compares the
policies and expenses of the Funds for your evaluation.
After careful consideration, the Board unanimously approved this proposal with
respect to the Acquired Fund and recommends that shareholders vote "FOR" the
proposal.
A Proxy Statement/Prospectus that describes the Reorganization is enclosed. We
urge you to vote your shares by completing and returning the enclosed proxy
card, in the envelope provided, or vote by Internet, facsimile or telephone, at
your earliest convenience.
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 1:00 P.M. ON
APRIL 23, 2004.
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 and Chief Executive Officer
IDEX MUTUAL FUNDS
570 Carillon Parkway
St. Petersburg, Florida 33716
(888) 233-4339
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
IDEX LKCM STRATEGIC TOTAL RETURN
TO BE HELD ON APRIL 23, 2004
To the Shareholders:
A special meeting of shareholders of IDEX LKCM Strategic Total Return (the
"Acquired Fund") is scheduled for April 23, 2004 at 1:00 p.m., local time, at
570 Carillon Parkway, St. Petersburg, Florida 33716, or as adjourned from
time-to-time (the "Special Meeting").
At the Special Meeting, you will be asked to consider the following proposals:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets and liabilities of the Acquired Fund
by IDEX Transamerica Value Balanced (the "Acquiring Fund") solely in
exchange for shares of the Acquiring Fund, followed by the complete
liquidation of the Acquired Fund; and
2. To transact such other business, that may properly come before the
Special Meeting, or any adjournment thereof.
Shareholders of record at the close of business on February 27, 2004 are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement/Prospectus. You are cordially
invited to attend the Special Meeting. Shareholders who do not expect to attend
the Special Meeting in person are requested to complete, date, and sign the
enclosed proxy card and return it promptly in the envelope provided for that
purpose. Your proxy card also provides instructions for voting via telephone,
facsimile or the Internet, so you may choose to take advantage of these voting
options. 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
Senior Vice President, Secretary &
General Counsel
March 10, 2004
TABLE OF CONTENTS
INTRODUCTION.....................................................................................................1
SUMMARY..........................................................................................................2
The Proposed Reorganization...................................................................................2
Comparison of Investment Objectives, Strategies and Management................................................2
Comparison of Principal Risks Involved in Investing in the Funds..............................................3
INVESTMENT STRATEGIES AND RISKS..................................................................................4
Principal Investment Strategies...............................................................................4
Comparison of Portfolio Characteristics.......................................................................5
Relative Performance..........................................................................................5
Securities and Investment Techniques..........................................................................6
COMPARISONS OF FEES AND EXPENSES.................................................................................6
Operating Expenses............................................................................................6
Example.......................................................................................................7
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND......................................................................9
Investment Adviser and Sub-Adviser............................................................................9
Investment Personnel..........................................................................................9
Performance of the Acquiring Fund............................................................................10
INFORMATION ABOUT THE REORGANIZATION............................................................................11
The Reorganization Plan......................................................................................11
Reasons for the Reorganization...............................................................................11
Board Considerations.........................................................................................11
Tax Considerations...........................................................................................12
Expenses of the Reorganization...............................................................................12
ADDITIONAL INFORMATION ABOUT THE FUNDS..........................................................................12
Form of Organization.........................................................................................12
Dividends and Other Distributions............................................................................12
Capitalization...............................................................................................13
GENERAL INFORMATION.............................................................................................13
Solicitation of Proxies......................................................................................13
Voting Rights................................................................................................14
Other Matters to Come Before the Meeting.....................................................................14
Shareholder Proposals........................................................................................14
Information about the Funds..................................................................................15
MORE INFORMATION REGARDING ACQUIRING FUND.......................................................................16
APPENDIX A.....................................................................................................A-1
APPENDIX B.....................................................................................................B-1
PROXY STATEMENT/PROSPECTUS
IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(888) 233-4339
INTRODUCTION
This Proxy Statement/Prospectus provides you with information about the
proposed transfer of all of the assets and liabilities of IDEX LKCM Strategic
Total Return (the "Acquired Fund"), a series of IDEX Mutual Funds, to IDEX
Transamerica Value Balanced (the "Acquiring Fund"), also a series of IDEX
Mutual Funds, solely in exchange for shares of the Acquiring Fund (the
"Reorganization"). Following the transfer of its assets and liabilities to the
Acquiring Fund in exchange for shares of the Acquiring Fund, the Acquired Fund
will distribute to you your portion of the shares of the Acquiring Fund it
receives in the Reorganization. You will receive Class A, B, C, L or M shares
of the Acquiring Fund having an aggregate value equal to the aggregate value of
that class of shares of the Acquired Fund held by you immediately prior to the
Reorganization. Following the Reorganization, the Acquired Fund will liquidate.
This Proxy Statement/Prospectus solicits your vote in connection with a special
meeting of shareholders, to be held on April 23, 2004, at which Acquired Fund
shareholders will vote on the Agreement and Plan of Reorganization
("Reorganization Plan") through which these transactions will be accomplished.
Because you, as a shareholder of the Acquired Fund, are being asked to approve
a transaction that will result in your holding shares of the Acquiring Fund,
this document also serves as a prospectus for the Acquiring Fund, whose
investment objective is to maximize long-term growth.
This Proxy Statement/Prospectus, which you should retain for future reference,
contains important information about the Acquiring Fund that you should know
before investing. A Statement of Additional Information ("SAI") dated March 10,
2004 relating to this Proxy Statement/Prospectus and containing additional
information about the Reorganization and the parties thereto, has been filed
with the U.S. Securities and Exchange Commission ("SEC") 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
Mutual Funds Prospectus and Statement of Additional Information dated March 1,
2003, each of which is incorporated herein by reference and is available,
without charge, by calling (888) 233-4339. The IDEX Mutual Funds annual report
relating to the Funds, dated October 31, 2003, is incorporated herein by
reference, and is available, without charge, 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) in
Washington, D.C., 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 Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549-0102.
The SEC 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: March 10, 2004
1
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For
additional information, you should consult the IDEX Mutual Funds Prospectus and
the Reorganization Plan, a copy of which is attached hereto as Appendix A.
THE PROPOSED REORGANIZATION -- On September 9, 2003, the Board of Trustees of
IDEX Mutual Funds approved the Reorganization Plan with respect to each of the
Funds. Subject to approval of the Acquired Fund shareholders, the
Reorganization Plan provides for:
- - the transfer of all of the assets of the Acquired Fund to the
Acquiring Fund, in exchange for shares of the Acquiring Fund;
- - the assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund;
- - the distribution of shares of the Acquiring Fund to the shareholders
of the Acquired Fund; and
- - the complete liquidation of the Acquired Fund as a series of IDEX
Mutual Funds.
The Reorganization is expected to be effective immediately after the close of
business on April 30, 2004, or on a later date as the parties may agree (the
"Closing"). As a result of the Reorganization, each shareholder of the Acquired
Fund will become a shareholder of the Acquiring Fund. Each shareholder will
hold, immediately after the Closing, shares of the same class of the Acquiring
Fund having an aggregate value equal to the aggregate value of the same class
of shares of the Acquired Fund held by that shareholder as of the close of
business on the day of the Closing.
The Reorganization is intended to eliminate duplication of costs and other
inefficiencies arising from having two mutual funds within the same family of
funds that are similar in many respects, as well as to assist in achieving
economies of scale. Shareholders in the Acquired Fund are expected to benefit
from the larger asset base and the termination of this duplication that will
result from the Reorganization.
Approval of the Reorganization Plan with respect to the Acquired Fund requires
the affirmative vote of a majority of the outstanding voting securities of the
Acquired Fund. In the event that the shareholders of the Acquired Fund do not
approve the Reorganization, the Acquired Fund will continue to operate as a
separate entity, and the IDEX Mutual Funds Board of Trustees will determine
what further action, if any, to take.
AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF IDEX MUTUAL FUNDS
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:
- - As described below, the Acquired Fund has investment objectives and
policies that are similar in many respects to the investment
objectives and policies of the Acquiring Fund.
- - The Funds have the same investment adviser, AEGON/Transamerica Fund
Advisers, Inc. (the "Investment Adviser"), 570 Carillon Parkway,
St. Petersburg, Florida 33716.
- - The proposed Reorganization offers potential reductions in total
operating expenses for shareholders of each of the Funds.
- - 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
Acquiring Fund."
- - 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 (the "Code"). As such, shareholders of either
Fund will not recognize gain or loss as a result of the
Reorganization. See "Information About the Reorganization - Tax
Considerations."
COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES AND MANAGEMENT - The investment
objectives and principal investment strategies of the Funds are similar in many
respects. The Funds' principal investment strategies and policies are described
in more detail below. There can be no assurance that either Fund will achieve
its stated objective.
2
ACQUIRED FUND ACQUIRING FUND
INVESTMENT OBJECTIVE Seek preservation of capital and Preservation of capital and
long-term growth. competitive investment returns.
PRINCIPAL STRATEGIES AND The Acquired Fund pursues its objective The Acquiring Fund pursues its
POLICIES by principally investing fund assets in objective by investing fund assets
both equity and fixed-income securities principally in income-producing
which include common stocks, securities common and preferred stocks, debt
convertible into common stock and obligations of U.S. issuers, some of
government and corporate bonds. which will be convertible into common
stocks; U.S. Treasury bonds, notes
and bills; money market funds; and
covered call options and put options.
INVESTMENT ADVISER AEGON/Transamerica Fund Advisers, Inc. AEGON/Transamerica Fund Advisers, Inc.
SUB-ADVISER Luther King Capital Management Transamerica Investment Management,
Corporation LLC
PORTFOLIO MANAGERS Luther King, Jr. and Scot C. Hollmann John C. Riazzi and Gary U. Rolle
COMPARISON OF PRINCIPAL RISKS INVOLVED IN INVESTING IN THE FUNDS -- Because the
Funds have similar investment objectives and policies, the principal risks of
an investment in the Funds are similar, although there are certain differences.
Similarities include, among others:
- - Each Fund invests in equity securities such as common stock. This type
of investment involves risks. While equity securities 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
securities a Fund holds fluctuate in price, the value of your
investments in a Fund goes up and down.
- - Each Fund invests in convertible securities. Convertible securities
may include corporate notes or preferred stock, but ordinarily are a
long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt
securities, the market value of convertible securities tends to
decline as interest rates increase and conversely, to increase as
interest rates decline. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar
quality. However, when the market price of the common stock underlying
a convertible security exceeds the conversion price, the price of the
convertible security tends to reflect the value of the underlying
common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a
yield basis, and thus may not depreciate to the same extent as the
underlying stock
- - Each Fund invests in fixed income securities. The value of these
securities may change daily based on changes in the interest rates,
and other market conditions and factors. These risks include, among
others: changes in interest rates; length of time to maturity; and
issuers defaulting on their obligations to pay interest or return
principle.
- - Each Fund may invest in cash or cash equivalents for temporary
defensive purposes when adverse market conditions exist (which is
inconsistent with the Funds' principal investment strategies). Under
these circumstances, the Funds may be unable to achieve their
investment objective.
Differences include, among others:
- - The Acquiring Fund may invest in financial contracts, such as covered
call options and covered put options. Investing in financial contracts
such as options involve additional risks and costs. Risks include:
inaccurate market predictions which may result in losses instead of
gains; and prices may not match so the benefits of the transaction
might be diminished and the fund may incur substantial losses.
3
INVESTMENT STRATEGIES AND RISKS
PRINCIPAL INVESTMENT STRATEGIES--
The investment strategies, restrictions and risks of the Funds are similar in
many respects, although there are certain differences. There can be no
assurance that any Fund will achieve its stated objective.
ACQUIRED FUND
- - The Acquired Fund seeks to invest in both equity and fixed-income
securities to achieve long-term capital appreciation. In selecting
such securities, the Fund's sub-adviser, Luther King Capital
Management Corporation ("Luther King"), looks for companies with
favorable fundamental characteristics. It considers factors such as:
management integrity; balance sheet quality; cash flow generation;
earnings and dividend growth record and outlook; profitability levels;
and market positions.
- - In some cases, some securities may be bought at an apparent discount
to their appropriate value, with the anticipation that they'll
increase in value over time.
- - The Acquired Fund seeks to achieve an income yield greater than the
average yield of the stocks in the S&P 500 Index.
- - The Acquired Fund invests mainly in the stocks and bonds of companies
with established operating histories and strong fundamental
characteristics. The majority of the stocks the fund buys will be
listed on a national exchange or traded on NASDAQ or domestic
over-the-counter markets.
- - Corporate debt securities in which the Acquired Fund invests will
generally have a strong rating within the four highest grades as
determined by Moody's or S&P.
- - As part of its income-oriented strategy, Luther King expects to invest
about 25% of the Acquired Fund's assets in fixed-income securities,
some of which will be convertible into common stocks, and no more than
20% of its assets in stocks that do not pay a dividend. Luther King
may sell fund securities when the stocks become overvalued or when the
stock lose their strong fundamentals.
- - While the Acquired Fund invests principally in common stocks and
corporate and government bonds, it may, to a lesser extent, invest in
convertible preferred stocks, corporate convertible bonds, or other
securities and investment strategies in pursuit of its investment
objective.
- - The Acquired Fund may take a temporary defensive position when the
securities trading markets or the economy are experiencing excessive
volatility or a prolonged general decline, or other adverse conditions
exist (which is inconsistent with the fund's principal investment
strategies). Under these circumstances, the Acquired Fund may be
unable to achieve its investment objective.
ACQUIRING FUND
- - In selecting stocks, the Acquiring Fund's sub-adviser, Transamerica
Investment Management, LLC ("TIM"), focuses on quality, liquid, large
capitalization stocks, using a "bottom up" screening process to
identify stocks that are statistically undervalued. When using a
"bottom-up" approach, TIM looks primarily at individual companies
against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be
recognized by the market at large.
- - TIM's ultimate goal is to choose stocks whose price has been driven
down by a market that has "over-reacted" to perceived risks. With this
approach, the Acquiring Fund seeks to achieve a dividend income yield
higher than that of the Russell 1000 Value Index ("Russell 1000
Index"), a widely recognized unmanaged index of market performance.
The Russell 1000 Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately
92% of the total market capitalization of the Russell 3000 Index.
- - TIM seeks to enhance returns in rising stock markets by increasing its
allocation to equity, then protect itself in falling stock markets by
reducing equity exposure and shifting into fixed-income investments,
as well as money market instruments.
- - The Acquiring Fund may also invest in cash or cash equivalents for
temporary defensive purposes when market conditions warrant (which is
inconsistent with the Fund's principal investment strategies). To the
extent it invests in these securities, the Fund may not be able to
achieve its investment objective.
4
COMPARISON OF PORTFOLIO CHARACTERISTICS -- The following tables compare certain
characteristics of the portfolios of the Funds as of October 31, 2003:
ACQUIRING FUND ACQUIRED FUND
Net Assets (thousands) $33,018 $53,524
Number of Holdings 149 67
Portfolio Turnover Rate 50% 32%
As a percentage of net assets:
U.S. Government Securities 6.4% 0.0%
U.S. Government Agency Obligations 8.7% 0.0%
Corporate Debt Securities 14.7% 7.0%
Convertible Bonds 0.0% 1.2%
Convertible Preferred Stocks 0.0% 3.6%
Common Stocks 57.5% 87.0%
Security Lending Collateral 8.4% 9.8%
Written Options (1.9)%
Liabilities in excess of other assets
Other assets in excess of liabilities 6.2% (8.6)%
100.0% 100.0%
TOP 10 HOLDINGS (AS A % OF NET ASSETS)
ACQUIRING FUND ACQUIRED FUND
FleetBoston Financial Corp. 7.5% General Electric Company 2.1%
Washington Mutual, Inc. 6.1% Microsoft Corp 2.0%
Sprint Corp. (FON Group) 4.4% Prudential Financial, Inc. - Units 2.0%
U.S. Treasury Bond 3.8% Citigroup, Inc. 2.0%
Fannie Mae 3.6% BP PLC - ADR 1.9%
The Walt Disney Company 3.6% Wal-Mart Stores, Inc. 1.9%
ALLTEL Corp. 2.8% The Home Depot, Inc. 1.9%
Bristol-Myers Squibb Co. 2.6% ALLTEL Corp. 1.9%
Merck & Co., Inc. 2.5% Cullen/Frost Bankers, Inc. 1.9%
Cox Communications, Inc. - Class A 2.3% Teva Pharmaceutical Industries, Ltd. - ADR 1.9%
RELATIVE PERFORMANCE -- The following table shows the average annual total
return for Class A shares of each Fund and its comparative index. Average
annual total return is shown for each calendar year since 1996 in the case of
the Acquiring Fund (which commenced operation in 1995) and since 1995 in the
case of the Acquired Fund (which commenced operation in 1994). The Indexes have
an inherent performance advantage over the Funds, since an index 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.
5
CALENDAR YEAR/
PERIOD ENDED ACQUIRED FUND S&P 500 INDEX(1) ACQUIRING FUND RUSSELL 1000 VALUE INDEX(2)
12/31/95 22.81% 37.53% N/A 38.36%
12/31/96 16.42% 22.95% 13.16% 21.64%
12/31/97 21.99% 33.35% 17.06% 35.18%
12/31/98 10.07% 28.58% 6.87% 15.63%
12/31/99 10.59% 21.04% (6.61)% 7.35%
12/31/00 (5.28)% (9.10)% 15.85% 7.01%
12/31/01 (1.69)% (11.88)% 0.01% (5.59)%
12/31/02 (10.65)% (22.09)% (14.23)% (15.52)%
12/31/03 21.72% 28.67% 20.96% 30.03%
1. The S&P 500 is composed of 500 selected common stocks that represent
approximately two-thirds of the total market value of all U.S. common stocks.
2. The Russell 1000 Value Index is a widely recognized unmanaged index of
market performance. The Russell 1000 Value Index measures the performance of
those Russell 1000 companies with lower price-to-book ratios and lower
forecasted growth values.
SECURITIES AND INVESTMENT TECHNIQUES -- The following is a summary of the
principal types of securities in which the Funds may invest and strategies they
may employ in pursuit of their investment objectives. As with any security, an
investment in a Fund involves certain risks, including loss of principal. The
Funds are subject to varying degrees of financial, market and credit risk. An
investment in the Funds 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 principal investments of, and the primary
risks of investing in, the Funds. However, the fact that a particular risk is
not identified does not mean that a Fund is prohibited from investing its
assets in investments that give rise to that risk.
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. Convertible securities may include corporate notes or
preferred stock, but ordinarily are a long-term debt obligation of the issuer
convertible at a stated exchange rate into common stock of the issuer. As with
all debt securities, the market value of convertible securities tends to
decline as interest rates increase and conversely, to increase as interest
rates decline. Convertible securities generally offer lower interest or
dividend yields than non-convertible securities of similar quality. However,
when the market price of the common stock underlying a convertible security
exceeds the conversion price, the price of the convertible security tends to
reflect the value of the underlying common stock. As the market price of the
underlying common stock declines, the convertible security tends to trade
increasingly on a yield basis, and thus may not depreciate to the same extent
as the underlying stock.
FIXED INCOME SECURITIES. The value of fixed income securities may change daily
based on changes in the interest rates, and other market conditions and
factors. These risks include, among others: changes in interest rates; length
of time to maturity; and issuers defaulting on their obligations to pay
interest or return principle.
OPTIONS (ACQUIRING FUND). Investing in financial contracts such as options
involve additional risks and costs. Risks include: inaccurate market
predictions which may result in losses instead of gains; and prices may not
match so the benefits of the transaction might be diminished and the fund may
incur substantial losses.
COMPARISONS 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. It is expected that combining the Funds
would allow shareholders of the Acquired Fund to realize economies of scale and
lower expenses. While the Reorganization will not affect the management fee
payable with respect to the Acquiring Fund (as a percentage of the Fund's
average daily net assets), the Investment Adviser may be deemed to have a
material interest in the proposed Reorganization because, as a result of the
combination of the assets of the Funds, the Investment Adviser may pay higher
sub-advisory fees, in the aggregate, to TIM, an affiliate of the Investment
Adviser. For further information on the fees and expenses of the Acquiring
Fund, see "More Information Regarding the Acquiring Fund."
OPERATING EXPENSES -- The current 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
6
incurred for the fiscal year ended October 31, 2003. Pro forma fees and
expenses show estimated fees and expenses of the Acquiring Fund after giving
effect to the proposed Reorganization as of October 31, 2003. 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)
DISTRIBUTION & TOTAL ANNUAL
MANAGEMENT SERVICE (12B-1) OTHER FUND OPERATING EXPENSE NET OPERATING
FEES FEES EXPENSES EXPENSES REDUCTION(1) EXPENSES
ACQUIRING FUND
Class A shares 0.75% 0.35% 1.10% 2.20% 0.65% 1.55%
Class B shares 0.75% 1.00% 1.10% 2.85% 0.65% 2.20%
Class C shares 0.75% 1.00% 1.10% 2.85% 0.65% 2.20%
Class L shares 0.75% 1.00% 1.11% 2.86% 0.66% 2.20%
Class M shares 0.75% 0.90% 1.10% 2.75% 0.65% 2.10%
ACQUIRED FUND
Class A shares 0.80% 0.35% 0.84% 1.99% 0.44% 1.55%
Class B shares 0.80% 1.00% 0.84% 2.64% 0.44% 2.20%
Class C shares 0.80% 1.00% 0.84% 2.64% 0.44% 2.20%
Class L shares 0.80% 1.00% 0.84% 2.64% 0.44% 2.20%
Class M shares 0.80% 0.90% 0.84% 2.54% 0.44% 2.10%
PRO FORMA -
ACQUIRING FUND
INCLUDING
ACQUIRED FUND
Class A shares 0.75% 0.35% 0.87% 1.97% 0.42% 1.55%
Class B shares 0.75% 1.00% 0.87% 2.62% 0.42% 2.20%
Class C shares 0.75% 1.00% 0.87% 2.62% 0.42% 2.20%
Class L shares 0.75% 1.00% 0.87% 2.52% 0.42% 2.20%
Class M shares 0.75% 0.90% 0.87% 2.62% 0.42% 2.10%
1. Through a contractual arrangement with the Fund, the Investment
Adviser has agreed to limit the expenses of the Funds through 2/28/2005 for
expenses (other than distribution and service fees (12b-1) fees) that exceed
1.20% for each Fund.
EXAMPLE -- This example is intended to help you compare the cost of investing
in the Funds and in the combined Funds on a pro forma basis. Your actual costs
may be higher or lower. The example assumes that you invest $10,000 in each
Fund and in the surviving Fund after the Reorganization for the time periods
indicated. The Example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same. The 5% return is
an assumption and is not intended to portray past or future investment results.
Based on the above assumptions, you would pay the following expenses if you
redeemed your shares at the end of each period shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
ACQUIRING FUND
Class A shares $699 $1,141 $1,609 $2,897
Class B shares $723 $1,122 $1,546 $2,974
Class C shares $223 $ 822 $1,446 $3,129
Class L shares $423 $ 824 $1,450 $3,138
Class M shares $410 $ 884 $1,483 $3,103
ACQUIRED FUND
Class A shares $699 $1,100 $1,525 $2,706
Class B shares $723 $1,079 $1,461 $2,783
Class C shares $223 $ 779 $1,361 $2,941
Class L shares $423 $ 779 $1,361 $2,941
Class M shares $410 $ 841 $1,398 $2,914
PRO FORMA -
ACQUIRING FUND
INCLUDING
ACQUIRED FUND
Class A shares $699 $1,096 $1,517 $2,688
Class B shares $723 $1,075 $1,453 $2,765
Class C shares $223 $ 775 $1,353 $2,923
Class L shares $423 $ 775 $1,353 $2,923
Class M shares $410 $ 837 $1,390 $2,896
7
You would pay the following expenses if you did not redeem your shares.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
ACQUIRING FUND
Class A shares $699 $1,141 $1,609 $2,897
Class B shares $223 $ 822 $1,446 $2,974
Class C shares $223 $ 822 $1,446 $3,129
Class L shares $223 $ 824 $1,450 $3,138
Class M shares $311 $ 884 $1,483 $3,103
ACQUIRED FUND
Class A shares $699 $1,100 $1,525 $2,706
Class B shares $223 $ 779 $1,361 $2,783
Class C shares $223 $ 779 $1,361 $2,941
Class L shares $223 $ 779 $1,361 $2,941
Class M shares $311 $ 841 $1,398 $2,914
PRO FORMA -
ACQUIRING FUND
INCLUDING
ACQUIRED FUND
Class A shares $699 $1,096 $1,517 $2,688
Class B shares $223 $ 775 $1,353 $2,765
Class C shares $223 $ 775 $1,353 $2,923
Class L shares $223 $ 775 $1,353 $2,923
Class M shares $311 $ 837 $1,390 $2,896
GENERAL INFORMATION
Class A and Class M shares of the Acquired Fund issued to a shareholder in
connection with the Reorganization will not be subject to any initial sales
charge. Class B, Class L and Class M shares of the Acquiring Fund issued to a
shareholder in connection with the Reorganization will be subject to the same
contingent deferred sales charge, if any, applicable to the corresponding class
of shares of the Acquired Fund held by that shareholder immediately prior to
the Reorganization.
In addition, the period that the shareholder held shares of the Acquired Fund
would be included in holding period of the Acquiring Fund's shares for purposes
of calculating any contingent deferred sales charge. Similarly, Class B shares
of the Acquiring Fund issued to a shareholder in connection with the
Reorganization will convert to Class A shares eight years after the date that
the corresponding Class B shares of the Acquired Fund were purchased by
shareholders. Likewise, Class M shares of the 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 the
Acquired Fund were purchased by shareholders.
Purchases of shares of the Acquiring Fund after the Reorganization will be
subject to the charges described in the table below. This is the same structure
that is currently in effect for the Acquired Fund.
8
TRANSACTION FEES ON NEW INVESTMENTS (FEES ARE PAID DIRECTLY FROM YOUR
INVESTMENT):
SHAREHOLDER FEES (fees paid directly from your investment) (Acquired Fund and
Acquiring Fund)
CLASS OF SHARES
----------------------------------------------------------------------
A B C(B) L M(B)
------- -------- ---- -------- --------
Maximum sales charge (load) imposed on purchases 5.50% None None None 1.00%
(as a percentage of offering price)
Maximum deferred sales charge (load) None(a) 5.00%(c) None 2.00%(d) 1.00%(e)
(as a percentage of offering price or redemption
proceeds, whichever is lower)
(a) Certain purchases of Class A shares in amounts of $1 million or more
are subject to a 1% contingent deferred sales charge for 24 months
after purchase.
(b) Class C and Class M shares currently are closed to new investors.
(c) Purchases of Class B shares are subject to a declining contingent
deferred sales charge if redeemed during the first six years of
purchase (5% - 1st year; 4% - 2nd year, 3% - 3rd year; 2% - 4th year;
and 1% - 5th and 6th years).
(d) Purchases of Class L shares are subject to a 2% contingent deferred
sales charge if redeemed during the first 12 months of purchase and 1%
if redeemed during the second 12 months.
(e) Purchases of Class M Shares are subject to a 1% contingent deferred
sales charge if redeemed within 18 months of purchase.
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND
INVESTMENT ADVISER AND SUB-ADVISER -- The Investment Adviser has overall
responsibility for the management of the Acquiring Fund. For such services, the
Acquiring Fund pays an investment advisory fee monthly at the annual rate of
0.75% of the first $500 million of the Fund's average daily net assets; 0.65%
of average daily net assets from $500 million to $1 billion and 0.60% of
average daily net assets over $1 billion. In turn, the Investment Adviser has
entered into a sub-advisory agreement with TIM to provide investment advisory
services to the Acquiring Fund. Pursuant to this agreement, TIM furnishes
investment advisory, statistical and research facilities, supervises and
arranges for the purchase and sale of securities on behalf of the Acquiring
Fund and provides for the compilation and maintenance of records pertaining to
such investment advisory services, subject to the control and supervision of
IDEX Mutual Fund's Board of Trustees and the Investment Adviser. For such
services, the Investment Adviser pays TIM 0.35% of the fund's average daily net
assets, less 50% of any amount it has reimbursed pursuant to the Acquiring
Fund's expense limitation arrangement.
INVESTMENT PERSONNEL -- The following individuals have responsibility for the
day-to-day management of the Acquiring Fund:
- - JOHN C. RIAZZI, CFA (Lead Equity Portfolio Manager) is Chief Executive
Officer and Portfolio Manager at TIM. Mr. Riazzi manages sub-advised
funds and separate accounts in the value discipline. Prior to joining
TIM in 2001, he was President and Chief Investment Officer for Dean
Investment Associates. Mr. Riazzi holds a B.A. in economics from
Kenyon College and is a Chartered Financial Analyst. He has 17 years
of investment experience.
- - GARY U. ROLLE, CFA (Portfolio Manager) is President and Chief
Investment Officer of TIM. Mr. Rolle is the Co-Manager of the
Transamerica Premier Balanced Fund and the Transamerica Premier Core
Equity Fund. Mr. Rolle also manages sub-advised funds and
institutional separate accounts in the growth discipline. He joined
Transamerica in 1967. Mr. Rolle holds a B.S. in chemistry and
economics from the University of California at Riverside and is a
Chartered Financial Analyst.
9
PERFORMANCE OF THE ACQUIRING FUND -- The bar chart and table shown below
provide an indication of the risks of investing in the Acquiring Fund by
showing (on a calendar year basis) changes in the Acquiring Fund's annual total
return from year to year and by showing (on a calendar year basis) how the
Acquiring Fund's average annual returns for one year and since inception,
compared to those of broad-based securities market indexes--the Russell 1000
Value Index and the Lehman Brothers Intermediate U.S. Government/Credit Index
("LBIGC"). Note that an index has an inherent performance advantage over the
Acquiring Fund since it imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The information in
the bar chart is based on the performance of the Class A shares of the
Acquiring Fund, although the bar chart does not reflect the deduction of the
sales load on Class A shares. If the bar chart included the sales load, returns
would be less than those shown. The Fund's past performance (before and after
taxes) is not an indication of how the Fund will perform in the future.
ACQUIRING FUND
One year total return as of 12/31/03 (%)
[BAR GRAPH]
During the period shown in the chart, Acquiring Fund's best quarterly
performance was 12.90% for the quarter ended 6/30/03, and the Fund's worst
quarterly performance was (13.27)% for the quarter ended 9/30/02.
The table below shows the average annual total returns of the Acquiring Fund
for the periods shown. The table, which includes applicable sales charges,
compares how the Acquiring Fund's average annual total returns for different
calendar periods compare to a broad-based securities market index.
DECEMBER 31, 2003* ONE YEAR FIVE YEAR SINCE INCEPTION OCTOBER 1, 1995
Acquiring Fund
Return before taxes 14.31% 1.19% 5.54%
Return after taxes on 13.59% 0.00% 4.18%
distributions**
Return after taxes on 0.35%
distributions and sale of fund 9.25% 4.03%
shares**
Russell 1000 Value(1) 30.03% 3.56% 11.28%
LBIGC(1) 4.31% 6.65% 6.93%
* Returns reflect the maximum sales load of 5.50% and include the
reinvestment of dividends and capital gains.
** 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.
(1) Lehman Brothers Intermediate U.S. Government/Credit Index and Russell
1000 Value are widely recognized unmanaged indexes of market
performance.
Additional information about the Acquiring Fund is included in the section,
"More Information Regarding the Acquiring Fund."
10
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION PLAN -- The Reorganization Plan provides for the transfer of
all of the assets and liabilities of the Acquired Fund to the Acquiring Fund
solely in exchange for Class A, B, C, L and M shares of the Acquiring Fund. The
Acquired Fund will distribute the shares of the Acquiring Fund received in the
exchange to its shareholders, and then the Acquired Fund will be liquidated.
After the Reorganization, each shareholder of the Acquired Fund will own shares
in the Acquiring Fund having an aggregate value equal to the aggregate value of
shares of the Acquired Fund held by that shareholder as of the close of
business on the business day preceding the Closing. Shareholders of Class A, B,
C, L and M shares of the Acquired Fund will receive shares of the corresponding
class of the Acquiring Fund. In the interest of economy and convenience, shares
of the Acquiring Fund will not be represented by physical certificates.
Generally, the liquidation and distribution will be accomplished by opening
accounts on the books of the Acquiring Fund in the names of the shareholders of
the Acquired Fund and transferring to those shareholders' accounts the same
class shares representing such shareholders' interest previously credited to
the account of the Acquired Fund. No sales charges or fees of any kind will be
charged to the shareholders of the Acquired Fund in connection with their
receipt of shares of the Acquiring Fund in the Reorganization.
Until the Closing, shareholders of the Acquired Fund will continue to be able
to redeem their shares. Redemption requests received after the Closing will be
treated as requests received by the 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 the 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. For a complete
description of the terms and conditions of the Reorganization, see the
Reorganization Plan at Appendix A, which qualifies in its entirety the
foregoing summary of the Reorganization Plan.
REASONS FOR THE REORGANIZATION -- The Funds have investment objectives,
strategies and risks that are similar in many respects. Because the Acquired
Fund may invest in similar types of securities as the Acquiring Fund, the Funds
are somewhat duplicative. In addition, the Reorganization would create a larger
Acquiring Fund, which should benefit shareholders of the Funds by spreading
costs across a larger, combined asset base, and which may allow shareholders of
the Acquired Fund to continue to participate in a professionally managed
portfolio at the same level of operating expenses. Also, a larger Acquiring
Fund offers the potential benefit of a more diversified portfolio of
securities, may improve trading efficiency, and may eventually realize
economies of scale and lower operating expenses.
The proposed Reorganization was presented to the Board of Trustees of IDEX
Mutual Funds for consideration and approval at a meeting held on September 9,
2003. 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) of IDEX Mutual Funds, 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 each of the Funds and its shareholders.
BOARD CONSIDERATIONS -- The Board of Trustees of IDEX Mutual Funds, in
recommending the proposed transaction, considered a number of factors,
including the following:
1. expense ratios and information regarding fees and expenses of the
Acquired Fund and the Acquiring Fund, which indicate that current
shareholders of the Acquired Fund will benefit from the Reorganization
by getting a comparable investment;
2. the Reorganization would allow shareholders of the Acquired Fund to
continue to participate in a professionally-managed portfolio. As
shareholders of the Acquiring Fund, these shareholders would continue
to be able to exchange into other mutual funds in the large IDEX fund
complex that offer the same class of shares in which a shareholder is
currently invested;
3. the Investment Adviser's undertaking to limit the expenses of the
Acquiring Fund to 1.20%, excluding 12b-1 fees, of its average daily
net assets through February 28, 2005, subject to possible recoupment
or revision in future years.
4. the Reorganization would not dilute the interests of either Funds'
current shareholders;
5. the relative investment performance and comparable risks of the
Acquiring Fund as compared to the Acquired Fund;
11
6. the similarity of the Acquiring Fund's investment objectives, policies
and restrictions to those of the Acquired Fund and the fact that the
Funds are somewhat duplicative within the overall group of funds;
7. elimination of duplication of costs and inefficiencies of having two
Funds that are similar in many respects; and
8. the tax-free nature of the Reorganization to each Fund and its
shareholders.
The Board also considered the future potential benefits to IDEX in that its
costs to administer both Funds may be reduced if the Reorganization is
approved.
THE BOARD OF TRUSTEES OF IDEX MUTUAL FUNDS RECOMMENDS THAT SHAREHOLDERS OF THE
ACQUIRED FUND APPROVE THE REORGANIZATION.
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 the Acquired Fund nor the 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 LLP 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, the 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 the 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 the
Acquired Fund's shareholders.
Both Funds have elected and qualified to be taxed as regulated investment
companies under Section 851-855 of the Code, and after the Reorganization, the
Acquiring Fund intends to continue to operate so as to qualify as a regulated
investment company. Following the distribution if the same class of shares to
shareholders, IDEX will terminate the Acquired Fund as a series of IDEX.
EXPENSES OF THE REORGANIZATION -- The Investment Adviser will bear the expenses
relating to the Reorganization, including but not limited to the costs of the
proxy solicitation. The costs of the Reorganization include, but are not
limited to, costs associated with preparation of the Acquiring Fund's
registration statement, printing and distributing the Acquiring Fund's
prospectus and the Acquired Fund's proxy materials, legal fees, accounting
fees, securities registration fees, and expenses of holding the shareholders'
meeting.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION -- Each of the Funds is a series of IDEX Mutual Funds, a
Massachusetts business trust that was formed by a Declaration of Trust dated
January 7, 1986. IDEX Mutual Funds is governed by a Board of Trustees. The IDEX
Board of Trustees consists of ten individuals, eight of whom are not
"interested persons" as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trustees are responsible for the overall
supervision of the operation of each Fund and perform the various duties
imposed on the Trustees of investment companies in the 1940 Act.
DISTRIBUTOR -- AFSG Securities Corporation (the "Distributor"), whose address
is 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, is the principal
distributor for 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 that Fund, unless the
shareholder elects to receive distributions in cash.
If the Reorganization Plan is approved by shareholders of the Acquired Fund,
then as soon as practicable before the Closing, the Acquired Fund will pay its
shareholders a cash distribution of all undistributed net investment income and
undistributed realized net capital gains.
12
CAPITALIZATION -- The following table shows on an unaudited basis the
capitalization of each Fund as of October 31, 2003 and on a pro forma basis as
of October 31, 2003, giving effect to the Reorganization:
NET ASSETS NET ASSET VALUE SHARES OUTSTANDING
(THOUSANDS) PER SHARE (THOUSANDS)
ACQUIRING FUND
Class A Shares $11,832 $11.49 1,030
Class B Shares $13,744 $11.46 1,199
Class C Shares $ 3,645 $11.46 318
Class L Shares $ 530 $11.46 46
Class M Shares $ 3,267 $11.47 285
ACQUIRED FUND
Class A Shares $31,224 $16.10 1,939
Class B Shares $15,997 $16.02 999
Class C Shares $ 2,650 $16.02 165
Class L Shares $ 206 $16.02 13
Class M Shares $ 3,447 $16.03 215
PRO FORMA -
ACQUIRING FUND
INCLUDING ACQUIRED
FUND
Class A Shares $43,056 $11.49 3,747
Class B Shares $29,741 $11.46 2,595
Class C Shares $ 6,295 $11.46 549
Class L Shares $ 736 $11.46 64
Class M Shares $ 6,714 $11.47 585
(1) The net assets of the Acquired Fund will be converted to shares based
on the Acquiring Fund's net asset value per share.
GENERAL INFORMATION
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 March 12 2004. (Shareholders of the Acquired Fund whose shares are held
by nominees, such as brokers, can vote their proxies by contacting their
respective nominee.) In addition to the solicitation of proxies by mail,
employees of IDEX and its affiliates, without additional compensation, may
solicit proxies in person or by telephone, telegraph, facsimile, or oral
communication. The Funds have retained ALAMO Direct (the "Solicitor"), a
professional proxy solicitation firm, to assist with any necessary solicitation
of proxies. Shareholders of the Acquired Fund may receive a telephone call from
the Solicitor asking the shareholder to vote. The estimated costs for the
services of the Solicitor are estimated to be approximately $22,500, plus
applicable postage.
In all cases where a proxy is solicited by telephone, the Solicitor 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, the Solicitor will ask for the title of the person
and for confirmation that the person is authorized to direct the voting of the
shares. The Solicitor 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 the Solicitor'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. The Solicitor 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
the Solicitor immediately if his or her instructions are not correctly
reflected in the confirmation.
13
If a shareholder wishes to participate in the Special Meeting, but does not
wish to give a proxy by telephone, the shareholder may still submit the proxy
originally sent with the Proxy Statement/Prospectus, attend in person, vote
online or by facsimile. Should shareholder require additional information
regarding the proxy or require replacement of the proxy, they may contact IDEX
Customer Service toll-free at (888) 233-4339.
A shareholder may revoke the accompanying proxy at any time prior to its use by
filing with IDEX a written revocation or duly executed proxy bearing a later
date. In addition, any shareholder who attends the Special Meeting of the
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 -- Only shareholders of the Acquired Fund at the close of
business on February 27, 2004 (the "Record Date") are entitled to vote (with
respect to their shares owned as of that Record Date) at the Special Meeting or
any adjournment thereof. At the close of business on Record Date, there were
_____ shares of the Acquired Fund issued and outstanding and entitled to vote.
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.
To become effective, the proposed Reorganization must be approved by a "vote of
the majority of the outstanding voting securities" of the Acquired Fund, as
defined in the 1940 Act. The "vote of a majority of the outstanding voting
securities" means the lesser of the vote of (i) 67% or more of the shares of
the 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
the Acquired Fund entitled to vote thereon.
The 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.
Security Ownership. To the knowledge of IDEX, as of February 27, 2004, 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.
To the knowledge of IDEX, as of February 27, 2004, no persons owned
beneficially or of record 5% or more of the outstanding shares of the Acquired
Fund.
OTHER MATTERS TO COME BEFORE THE MEETING -- The Funds do not know of any
matters to be presented at the meeting other than those described in this Proxy
Statement/Prospectus. If other business should properly come before the
meeting, the proxy holders will vote thereon in accordance with their best
judgment.
SHAREHOLDER PROPOSALS -- IDEX is not required to hold regular annual meetings
and, in order to minimize their costs, does not intend to hold meetings of
shareholders unless so required by applicable law, regulation, regulatory
policy or if otherwise deemed advisable by IDEX 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
Special Meeting or to be submitted to shareholders of IDEX.
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.
14
INFORMATION ABOUT THE FUNDS -- IDEX Mutual Funds is subject to the
informational requirements of the Securities Exchange Act and certain other
federal securities statutes, and files reports and other information with the
SEC. Proxy materials, reports and other information filed by 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 (at http://www.sec.gov) which contains other information
about the Funds.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETINGS MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
John K. Carter, Esq.
Senior Vice President,
Secretary & General Counsel
March 10, 2004
15
MORE INFORMATION REGARDING ACQUIRING FUND
SHAREHOLDER INFORMATION
This Proxy Statement/Prospectus relates to the separate classes of shares of
the Acquiring Fund: Class A, Class B, Class C, Class L and Class M, each of
which represents an identical interest in the Acquiring Fund's investment
portfolio, but is offered with different sales charges and distribution fee
(Rule 12b-1) arrangements. As described below and elsewhere in this Proxy
Statement/Prospectus, the contingent deferred sales load structure and
conversion characteristics of the Acquiring Fund shares issued to you in the
Reorganization will be the same as those that applied to the Acquired Fund
shares held by you immediately prior to the Reorganization, and the period that
you held the Acquired Fund shares will be included in the holding period of the
Acquiring Fund shares for purposes of calculating contingent deferred sales
charges and determining conversion rights. Purchases of the shares of the
Acquiring Fund after the Reorganization will be subject to the sales load
structure and conversion rights discussed below.
Shares of the Acquiring Fund will be available through broker/dealers, banks,
and other financial intermediaries that have an agreement with the Distributor.
A broker/dealer or other financial intermediary may charge fees in connection
with an investment in the Acquiring Fund.
NOTE: CLASS C AND CLASS M SHARES ARE CLOSED TO NEW INVESTORS.
OPENING AN ACCOUNT
If you are opening a fund account through a registered representative, he or
she can assist you with all phases of your investment.
If you are investing through an authorized dealer, the dealer is responsible
for opening your account and providing your taxpayer ID number. If you already
have an IDEX account, you do not need additional documentation.
IDEX or its agents may reject a request for purchase of shares at any time,
including any purchase under the exchange privilege.
NEW ACCOUNT APPLICATION
Fill out the New Account Application form which is included in this prospectus.
IRAs and other retirement accounts require a different application, which you
can request by calling 1-888-233-IDEX (4339) or visiting www.idexfunds.com. You
can avoid future inconvenience by signing up for any services you think you may
later use.
Note: On your application, be sure to include your social security number or
taxpayer identification number. If you don't, your account may be subject to
backup withholding, or be closed.
There are many ways that you can pay for your shares. The minimum initial
purchase per fund and per class is $1,000. There is a $50 minimum on additional
purchases. Purchases through regular investment plans, like the Automatic
Investment Plan, have no minimum to open an account, but you must invest at
least $50 monthly per fund.
The Securities and Exchange Commission (SEC) is taking an active interest in
money laundering because money laundering presents a serious risk to the
soundness of financial markets, opens financial service firms to criminal
liability, and can ruin the reputation of implicated firms. IDEX will not
accept money orders, traveler's checks, credit card convenience checks or cash.
Cashiers checks may be accepted, subject to approval by AEGON/Transamerica
Investor Services, Inc. (ATIS). Prior to September 26, 2002, ATIS was named
Idex Investor Services, Inc.
16
SHARE TRANSACTIONS
Depending on privileges established on your account, you may buy, sell or
exchange shares in several ways. You may do so in writing, by phone request or
you may access your account through the internet. You may make payments, or
receive payment for your redemptions, via an electronic funds transfer or by
check.
HOW TO SELL SHARES
Your request to sell your shares and receive payment may be subject to:
- the privileges or features established on your account such
as a systematic withdrawal plan (SWP) or telephone
transactions
- the type of account you have, and if there is more than one
owner
- the dollar amount you are requesting; redemptions over
$50,000 must be in writing and those redemptions greater than
$100,000 require a written request with a signature guarantee
- a written request or signature guarantee may be required if
there have been recent changes made to your account (such as
an address change) or other such circumstances. A signature
guarantee assures that a signature is genuine so that you are
protected from unauthorized account transactions. Financial
institutions such as banks, savings and loan associations,
trust companies, credit unions, broker-dealers, and member
firms of a national securities exchange may guarantee your
signature. Notarization is not an acceptable substitute.
There are several ways to request redemption of your shares:
- in writing (by mail or fax)
- by internet access to your account(s) at www.idexfunds.com
- by telephone request using our touch-tone automated system,
IDEX InTouch(SM), or by a person-to-person verbal request
The proceeds of your redemption may be paid by check, or by direct deposit to
your bank account subject to any restrictions that may be applicable. Purchases
will be held at IDEX until your funds have cleared or up to 15 calendar days
before they are eligible for redemption. Certain exceptions may apply.
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. Please see the SAI for more details.
CHECKWRITING SERVICE. (For Class A and Class C shares of IDEX Transamerica
Money Market only). If you would like to use the checkwriting service, mark the
appropriate box on the application or authorization form. The fund will send
you checks when it receives these properly completed documents. Checks must be
written for at least $250 and investments made by check or ACH must have been
in your account for at least 15 days before you can write checks against them.
A service fee of $10 applies for those checks written under $250. When the
check is presented for payment, the fund will redeem a sufficient number of
full and fractional shares in your account at that day's net asset value to
cover the amount of the check. Checks presented against your account in an
amount that exceeds your available balance will be returned for "insufficient
funds" and your account will incur a $20 service fee. Due to dividends accruing
on your account it is not possible to determine your account's value in advance
so you should not write a check for the entire value or try to close your
account by writing a check. A stop payment on a check may be requested for a
$20 service fee. If you request that a checkbook to be delivered overnight, you
will incur a $20 service fee. The payment of funds is authorized by the
signature(s) appearing on the IDEX application or authorization form. Each
signatory guarantees the genuineness of the other signatures.
17
The use of checks is subject to the rules of the IDEX designated bank for its
checkwriting service. IDEX has chosen UMB Bank n.a. as its designated bank for
this service. UMB Bank, n.a. or its bank affiliate (the "Bank") is appointed
agent by the person(s) signing the IDEX application or authorization form (the
"Investor(s)") and, as agent, is authorized and directed upon presentment of
checks to the Bank to transmit such checks to IDEX as requests to redeem shares
registered in the name of the Investor(s) in the amounts of such checks.
This checkwriting service is subject to the applicable terms and restrictions,
including charges, set forth in this prospectus. The Investor(s) agrees that
he/she is subject to the rules, regulations, and laws governing check
collection including the Uniform Commercial Code as enacted in the State of
Missouri, pertaining to this checkwriting service, as amended from time to
time. The Bank and/or IDEX has the right not to honor checks presented to it
and the right to change, modify or terminate this checkwriting service at any
time.
The checkwriting service is not available for tax-qualified retirement plans or
Class B, Class L or Class M shares of IDEX Transamerica Money Market.
HOW TO EXCHANGE SHARES
You can exchange $1,000 or more of one fund for shares in the same class of
another fund. Any CDSC will be calculated from the date you bought your
original shares. This means your new shares will be the same age as your old
shares, so your sales charge will not increase because of the exchange. The
minimum exchange to a new account is $1,000 unless an automatic investment plan
is established on the new account.
Prior to making exchanges into a fund that you do not own, read this prospectus
carefully. You can request share exchanges over the telephone unless you have
declined the privilege on your application. You can also exchange shares of the
same class automatically at regular intervals, from one fund to another.
SPECIAL SITUATIONS FOR EXCHANGING SHARES
- Class T shares may be exchanged for only Class A shares of
any IDEX fund, other than IDEX Janus Growth. Class A shares
of all IDEX funds are subject to distribution and service
(12b-1) fees.
- You may not exchange other classes of shares of the IDEX
funds for Class T shares.
- IDEX reserves the right to modify or terminate the exchange
privilege at any time upon 60 days written notice.
MARKET TIMING/EXCESSIVE TRADING
IDEX DOES NOT PERMIT MARKET TIMING OR EXCESSIVE TRADING AND HAS ADOPTED SPECIAL
POLICIES TO DISCOURAGE THIS ACTIVITY. IF YOU WISH TO ENGAGE IN SUCH PRACTICES,
WE REQUEST YOU DO NOT ATTEMPT TO PURCHASE SHARES OF ANY OF THE FUNDS.
Some investors try to profit from various short-term or frequent trading
strategies known as market timing; for example, switching money into mutual
funds when they expect prices to rise and taking money out when they expect
prices to fall, or switching from one fund to another and then back again after
a short period of time. As money is shifted in and out, a fund incurs expenses
for buying and selling securities. Excessive purchases, redemptions or
exchanges of Fund shares disrupt portfolio management, hurt fund performance
and drive fund expenses higher. These costs are borne by all shareholders,
including the long-term investors who do not generate these costs.
The exchange privilege is not intended as a vehicle for short-term or excessive
trading. Each fund may limit or terminate your exchange privileges or may not
accept future investments from you if you engage in excessive trading. In
determining excessive trading, we consider frequent purchases and redemptions
having similar effects as exchanges to be excessive trading. Four or more
exchanges in a quarter (3 months) will be considered excessive trading,
although each fund reserves the right to impose restrictions even if there are
less frequent transactions.
18
Specifically, each fund reserves the right to reject any request to purchase or
exchange shares that it determines may be disruptive to efficient fund
management and harmful to existing shareholders. Such a request could be
rejected because of the timing of the investment or because a history of
excessive trading by the shareholder or accounts under common control.
OTHER ACCOUNT INFORMATION
MINIMUM PURCHASES
- Initial Investment Per Fund and Per Class: $1,000;
- Subsequent Purchases: $50.
If your check, draft or electronic transfer is returned unpaid by your bank,
the Fund may charge a $15 fee.
PRICING OF SHARES
Each fund's price (NAV) is calculated on each day the New York Stock Exchange
(NYSE) is open for business.
The NAV of fund shares is not determined on days the NYSE is closed (generally
New Year's Day, Martin Luther King Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas). The NAV of each
class is calculated by dividing its assets less liabilities by the number of
its shares outstanding.
If IDEX receives your request in good order by regular closing time of the NYSE
(usually 4 p.m. New York time), you will pay or receive that day's NAV plus any
applicable sales charges. If later, it will be priced based on the next day's
NAV. Share prices may change when a fund holds shares in companies traded on
foreign exchanges that are open on days the NYSE is closed.
In determining NAV, each fund's portfolio investments are valued at market
value. Investments for which quotations are not readily available are valued at
fair value determined in good faith under the supervision of the Board of
Trustees.
MINIMUM ACCOUNT BALANCE
Due to the proportionately higher cost of maintaining customer accounts with
balances below the stated minimums for each class of shares, IDEX reserves the
right to close such accounts. However, IDEX will provide a 60-day notification
to you prior to assessing a minimum account fee, or closing any account. The
following describes the fees assessed to accounts with low balances:
No fees will be charged on:
- accounts opened within the preceding 24 months
- accounts with an active monthly Automatic Investment Plan
($50 minimum per fund)
- accounts owned by individuals which, when combined by social
security number, have a balance of $5,000 or more
- accounts in which the balance of all accounts for that
household exceeds $5000
If your balance is below $1,000 $25.00 (annualized) until
balance reaches $1,000 or
if the balance falls below
$25.00 the account will be
liquidated, as a fee.
19
TELEPHONE TRANSACTIONS
IDEX and ATIS are not liable for complying with telephone instructions which
are deemed by them to be genuine. IDEX and ATIS will employ reasonable
procedures to help ensure telephone instructions are genuine. In situations
where IDEX or ATIS reasonably believe they were acting on genuine telephone
instructions, you bear the risk of loss. These procedures may include requiring
personal identification, providing written confirmation of transactions, and
tape recording conversations. IDEX has the right to modify the telephone
redemption privilege at any time.
Telephone redemption with payment by check is not allowed within 10 days of a
change of registration/ address. Call IDEX Customer Service (1-888-233-IDEX
(4339)) or see the SAI for details. You may redeem up to $50,000 worth of
shares by phone and get your money by direct deposit to a pre-authorized bank
account. No fee is charged.
PROFESSIONAL FEES
Your financial professional may charge a fee for his or her services. This fee
will be in addition to any fees charged by IDEX. Your financial professional
will answer any questions that you may have regarding such fees.
REDEMPTIONS TRANSACTIONS PAID BY BANK WIRE
In most cases, IDEX can send your redemption money via a federal funds bank
wire. IDEX charges a $10 fee for this service, in addition to any fee your bank
may charge. For more details, call IDEX Customer Service (1-888-233-IDEX
(4339)) or see the SAI.
EMPLOYEE SPONSORED ACCOUNTS
If you participate in an employer sponsored plan and wish to make an allocation
change to your current fund selection, you or your Financial Advisor must
notify IDEX by phone or in writing. Please also remember to inform your
employer of the change(s) to your fund allocation. Documentation received from
your employer will be used to properly allocate your contributions. This
documentation will supersede all other prior instructions received from you or
your Financial Advisor. (Note: If you perform a partial or complete exchange to
a new fund selection, your current fund allocation will remain unchanged for
future contributions unless specified otherwise.)
REINVESTMENT PRIVILEGE
Within a 90 day period after you sell your shares, you have the right to
"reinvest" your money in any fund of the same class. You will not incur a new
sales charge if you use this privilege within the allotted time frame. Any CDSC
you paid on your shares will be credited to your account. You may reinvest the
proceeds of a Class B share sale (less the CDSC) in Class A shares without
paying the up-front sales charge. Send your written request to IDEX along with
your check for your reinvestment privileges.
STATEMENTS AND REPORTS
IDEX will send you a confirmation statement after every transaction that
affects your account balance or registration. Please review the confirmation
statement carefully and promptly notify IDEX in writing of any error or you
will be deemed to have ratified the transaction as reported to you. If you are
enrolled in the Automatic Investment Plan and invest on a monthly basis, you
will receive a quarterly confirmation. Information about the tax status of
income dividends and capital gains distributions will be mailed to shareholders
early each year.
Financial reports for the funds, which include a list of the holdings, will be
mailed twice a year to all shareholders.
A Historical Statement may be ordered for transactions of prior years.
20
SHARE CERTIFICATES
IDEX does not issue share certificates. If you are redeeming or exchanging
shares represented by certificates previously issued by IDEX, you must return
the certificates with your written redemption or exchange request. For your
protection, send your certificates by registered mail, but do not endorse them.
PERSONAL SECURITIES TRADING
IDEX permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy that has been adopted by the Board of
Trustees of IDEX. Access Persons must use the guidelines established by this
Policy for all personal securities transactions and are subject to certain
prohibitions on personal trading. The IDEX sub-advisers, pursuant to Rule 17j-1
and other applicable laws, and pursuant to the terms of the Policy, must adopt
and enforce their own Code of Ethics and Insider Trading Policies appropriate
to their particular business needs. Each sub-adviser must report to the Board
of Trustees on a quarterly basis with respect to the administration and
enforcement of such Policy, including any violations thereof which may
potentially affect IDEX.
DISTRIBUTIONS AND TAXES
Each of the funds intends to elect and qualify as a regulated investment
company under the Internal Revenue Code. As a regulated investment company, a
fund will not be subject to federal income tax on ordinary income and capital
gains, if any, that it distributes to its shareholders.
TAXES ON DISTRIBUTIONS FROM IDEX
The following summary does not apply to:
- qualified retirement accounts
- tax-exempt investors; or
- exempt-interest distributions from IDEX Federated Tax Exempt
Fund distributions are taxable to you 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 to you as
long-term capital gain (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 of the 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. The tax status of dividends and distributions for each
calendar year will be detailed in your annual tax statement or tax forms from
IDEX.
TAXES ON THE SALE OF SHARES
Any sale or exchange or redemption of fund shares may generate tax liability
(unless you are a tax-exempt investor or your investment is in a qualified
retirement or other tax- advantaged account). You will generally recognize
taxable gain or loss on a sale, exchange or redemption of your shares based
upon the difference between your cost (basis) in the shares and the amount you
receive for them. Any loss recognized on shares held for six months or less
will be treated as long-term capital loss to the extent of any capital gain
dividends that were received with respect to the shares.
If you receive an exempt-interest dividend on shares that are held by you for
six months or less, any loss on the sale or exchange of the shares will be
disallowed to the extent of such dividend amount.
21
WITHHOLDING TAXES
IDEX will be required to withhold 30% of any reportable income payments made to
a shareholder (which may include dividends, capital gain distributions, and
share redemption proceeds) if the shareholder has not provided IDEX with an
accurate taxpayer identification number in the manner required by IRS
regulations.
Please note that starting January 1, 2004, the withholding amount will change
to 29%.
UNCASHED CHECKS ISSUED ON YOUR ACCOUNT
If any check we issue related to your account is returned by the Post Office as
undeliverable, or remains outstanding (uncashed) for six months, we reserve the
right to reinvest check proceeds back into your open account at the net asset
value next calculated after reinvestment. If applicable, we will also change
your account distribution option from CASH to REINVEST. Interest does not
accrue on amounts represented by uncashed checks.
MINIMUM DIVIDEND CHECK AMOUNTS
To control costs associated with issuing and administering dividend checks, we
reserve the right to not issue checks under a specified amount. For accounts
with the CASH BY CHECK dividend distribution option, if the dividend payment
total is less than $10, the distribution will be reinvested into the account
and no check will be issued, though the account option for future distributions
will remain unchanged, subject to the preceding paragraph.
NON-RESIDENT ALIEN WITHHOLDING
If you are a non-U.S. investor, your financial professional should determine
whether Fund shares may be sold in your jurisdiction. Shareholders that are not
U.S. persons under the Internal Revenue Code are subject to different tax
rules. Dividends, capital gains and redemptions may be subject to non-resident
alien withholding.
Additionally, a valid IRS W-8 form is required if you are not a U.S. citizen or
resident alien. Documentary evidence may also be required if a U.S. address is
indicated or if your permanent address is not the same as your mailing address.
Please see the instructions on one of the new series of IRS W-8 forms.
OTHER TAX INFORMATION
This tax discussion is for general information only. In addition to federal
income taxes, you may be subject to state, local or foreign taxes on payments
received from IDEX. More information is provided in the SAI. You should also
consult your own tax advisor for information regarding all tax consequences
applicable to your investments in IDEX.
INVESTMENT POLICY CHANGES
IDEX Transamerica Equity, IDEX Jennison Equity Opportunity, IDEX PBHG Mid Cap
Growth, IDEX Isabelle Small Cap Value, IDEX T. Rowe Price Small Cap, IDEX Great
Companies -- Technology(SM), IDEX T. Rowe Health Sciences, IDEX PIMCO Real
Return TIPS, IDEX Janus Flexible Income, IDEX Transamerica Conservative
High-Yield Bond, IDEX Transamerica Convertible Securities, and IDEX Federated
Tax Exempt, as part of each fund's investment policy, invest at least 80% of
its assets (defined as net assets plus the amount of any borrowing for
investment purposes) in certain securities as indicated in this prospectus.
Shareholders will be provided with at least 60 days' prior written notice of
any changes in the 80% investment policy. Such notice will comply with the
conditions set forth in any applicable SEC rules then in effect.
22
HOW TO BUY SHARES TO OPEN A NEW ACCOUNT (FIRST-TIME IDEX INVESTORS)
By Mail Send your completed application and check payable to:
AEGON/Transamerica Investor Services, Inc., P.O. Box 9015,
Clearwater, Florida 33758-9015;
For Overnight Delivery: 570 Carillon Parkway,
St. Petersburg, Florida 33716
Through an Authorized Dealer The dealer is responsible for opening your account and providing IDEX with your Taxpayer
ID Number. The minimum order from an authorized dealer is $1,000 for all funds.
By Automatic Investment Plan Send your completed application, along with a check for your initial investment (if any),
payable to AEGON/Transamerica Investor Services, Inc., P.O. Box 9015, Clearwater, Florida
33758-9015.
TO ADD TO YOUR EXISTING ACCOUNT
By Check Make your check payable to AEGON/Transamerica Investor Services, Inc. and mail it to: P.O.
Box 9015, Clearwater, FL 33758-9015; or, for overnight delivery: 570 Carillon Parkway, St.
Petersburg, FL 33716. Third party checks, or checks endorsed to IDEX, will not be
accepted. All checks must be made payable to AEGON/Transamerica Investor Services, Inc.
IDEX will not accept money orders, traveler's checks, credit card convenience checks or
cash. Cashiers checks may be accepted, subject to approval by ATIS. NOTE: IDEX is also
unable to process check conversion transactions.
By 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. Your bank may require a 10-day
pre-note. Call or write IDEX Customer Service to establish an AIP.
By Telephone The electronic funds transfer privilege must be established in advance, when you open your
account, or by adding this feature to your existing account. Select "Electronic Bank Link"
on the Application or write to IDEX. Funds can then be transferred electronically from
your bank to IDEX. Call IDEX Customer Service to invest by phone, either through our
automated IDEX InTouch(SM) system (1-888-233-IDEX (4339)), or by speaking directly with your
representative. Your bank may require a 10-day pre-note. Shares will be purchased via
electronic funds when the money is received by IDEX, usually 2-4 business days after the
request.
Through Authorized Dealers If your dealer has already established your account for you, no additional documentation
is needed. Call your dealer to place your order. The dealer's bank may charge you for a
wire transfer. (IDEX currently does not charge for this service.) IDEX must receive your
payment within three business days after your order is accepted.
By the Internet You may request a transfer of funds from your bank account to IDEX. Visit our website at
www.idexfunds.com. Payment will be transferred from your bank account electronically.
Shares will be purchased via electronic funds when the money is received by IDEX, usually
2-4 business days after the request. Please contact IDEX at www.idexfunds.com.
By Payroll Deduction You may have money transferred regularly from your payroll to your IDEX account. Please
instruct your employer's payroll department to do so. Call IDEX Customer Service
(1-888-233-IDEX (4339)) to establish this deduction.
By Wire Transfer Request that your bank wire funds to IDEX. You must have an existing account to make a
payment by wire transfer. Ask your bank to send your payment to: Bank of America, NA,
Tampa, FL, ABA# 063100277, Credit: AEGON/Transamerica Investor Services
Acct #: 3601194554, Ref: Shareholder name, IDEX fund and account numbers.
23
TO RECEIVE PAYMENT BY HOW TO REQUEST YOUR REDEMPTION
Direct Deposit -- ACH (only for Call IDEX Customer Service (1-888-233-IDEX (4339)) to verify that this feature is in place
accounts that are not on your account. Maximum amount per day is the lesser of your balance or $50,000. Request
qualified retirement plans) an "ACH redemption" in writing, by phone (automated IDEX InTouch(SM) system (1-888-233-IDEX
(4339)) or person-to-person), or by internet access to your account. Payment should
usually be received by your bank account 3-5 banking days after your request. IDEX does
not charge for this payment option. Certain IRAs and Qualified Plans may not be eligible
for ACH redemptions.
Direct Deposit (electronic funds Call IDEX Customer Service (1-888-233-IDEX (4339)) to be sure this feature is in place on
transfer-federal funds bank your account. Maximum amount per day is the lesser of your available balance or $50,000
wire) (with a minimum of $1,000). Request an "Expedited Wire Redemption" in writing, or by phone
(person-to-person request). Payment should be received by your bank account the next
banking day after your request. IDEX charges $10 for this service. Your bank may charge a
fee as well.
Check to the address of record WRITTEN REQUEST:
Send a letter requesting a withdrawal to IDEX and include any share certificates you may
have. Specify the fund, account number, and dollar amount or number of shares you wish to
redeem. Mail to: AEGON/Transamerica Investor Services, Inc., P.O. Box 9015, Clearwater, FL
33758-9015. Attention: Redemptions. Be sure to include all account owners' signatures and
any additional documents, as well as a signature guarantee(s) if required (see "How To
Sell Shares").
TELEPHONE OR INTERNET REQUEST:
If your request is not required to be in writing (see "How To Sell Shares"), you may call
IDEX Customer Service (1-888-233-IDEX (4339)) and make your request using the automated
IDEX InTouch(SM) system (1-888-233-IDEX (4339)), 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.
If you request that a withdrawal check to be delivered overnight, a $20 overnight fee will
be assessed; for Saturday delivery, a $30 overnight fee will be assessed.
For your protection, if an address change was made in the last 10 days, IDEX requires a
redemption request in writing, signed and signature guaranteed by all shareholders.
Check to another party/address This request must be in writing, regardless of amount, with all account owners' signatures
guaranteed. Mail to: AEGON/Transamerica Investor Services, Inc., P.O. Box 9015,
Clearwater, FL 33758-9015. Attention: Redemptions.
Periodic automatic payment (by You can establish a Systematic Withdrawal Plan (SWP) either at the time you open your
direct deposit-ACH or check) account or at a later date. Call IDEX Customer Service (1-888-233-IDEX (4339)) for
assistance. You must have a minimum balance of $10,000 in your fund.
By Exchange You may request an exchange in writing, by phone (automated IDEX InTouch(SM) system
(1-888-233-IDEX (4339)) or person-to-person), or by accessing your account through the
internet.
Through an Authorized Dealer You may redeem your shares through an authorized dealer. (They may impose a service
charge.) Contact your Registered Representative or call IDEX Customer Service
(1-888-233-IDEX (4339)) for assistance.
NOTE: Purchases must be held at IDEX until the funds have cleared or up to 15 calendar days before they are eligible for
redemption. Certain exceptions may apply.
CHOOSING A SHARE CLASS
IDEX offers five share classes, each with its own sales charge and expense
structure. (An additional class, Class T, is offered through IDEX Janus Growth,
but Class T shares are not available to new investors.) The Class M shares have
an initial sales charge of 1.00% and a contingent deferred sales charge (CDSC)
of 1.00% if you redeem within 18 months of purchase. The sales charge and CDSC
only apply to shares purchased after February 28, 1999.
24
IDEX began offering the current Class C share on November 1, 1999. This new
Class C share has no initial or deferred sales charges. All shares that were
designated as Class C shares prior to March 1, 1999, which then converted to
Class M shares on that date, will continue as Class M shares. Effective
November 11, 2002, Class C and Class M shares were closed to new investors.
IDEX also began offering Class L shares on November 11, 2002. Class L shares
have no initial sales charge and a contingent deferred sales charge of 2.00% if
you redeem within the first 12 months of purchase and 1.00% if you redeem in
the second 12 months.
The amount of your investment and the amount of time that you plan to hold your
shares will determine which class of shares you should choose. You should make
this decision carefully because all of your future investments in your account
will be in the same share class that you designate when you open your account.
Your financial professional can help you choose the share class that makes the
best sense for you.
If you are investing a large amount and plan to hold your shares for a long
period, Class A, Class L or Class M shares may make the most sense for you. If
you are investing a lesser amount, you may want to consider Class B shares (if
you plan to invest for a period of at least 6 years) or Class C shares (if you
plan to invest for a period of less than 6 years).
IDEX may, at any time and in its sole discretion, add, delete, or change the
sales charges for any share class.
CLASS A SHARES -- FRONT LOAD
With Class A shares, you pay an initial sales charge only when you buy shares.
(The offering price includes the sales charge.) NOTE: You do not pay an initial
sales charge on Class A IDEX Transamerica Money Market purchases.
If you are investing $1 million or more (either as a lump sum or through any of
the methods described in this prospectus), you can purchase Class A shares
without any sales charge. However, if you redeem any of those shares within the
first 24 months after buying them, you will pay a 1.00% CDSC, unless they were
purchased through a 401k plan.
Also, for 401k plans only, IDEX will treat Class A share purchases in an amount
of less than $1 million that are sponsored by employers with 100 or more
eligible employees as if such purchases were equal to an amount more than $1
million.
25
CLASS C SHARES - CLASS M SHARES -
(CLOSED TO NEW CLASS L SHARES - (CLOSED TO NEW CLASS T SHARES -
CLASS A SHARES - CLASS B SHARES - INVESTORS) LEVEL AND INVESTORS) (CLOSED TO NEW
FRONT LOAD BACK LOAD LEVEL LOAD BACK LOAD LEVEL LOAD INVESTORS)
- - Initial sales No up-front No up-front No up-front Initial Initial
charge of 5.50% sales sales sales sales charge of sales charge of
(except for IDEX charge charge charge 1.00% 8.50% or
Janus Flexible less
Income, IDEX Deferred No deferred 12b-1 12b-1
Transamerica sales charge of sales distribution distribution - No 12b-1
Conservative 5.00% or charge and service and service distribution
High-Yield Bond, less on fees of fees of and
IDEX PIMCO Total shares you - 12b-1 1.00%* 0.90%* service
Return, IDEX sell within distribution (except for fees
PIMCO Real 6 years and service - Deferred the IDEX
Return TIPS, (see fees of sales charge of Federated - Sales
IDEX deferred 1.00%* 2.00% if Tax Exempt, charge
Transamerica sales you sell whose 12b-1 percentage
Convertible charge - No within 12 distribution can be
Securities and table) conversion to months of and service reduced in
IDEX Federated Class A purchase, fee is the same
Tax Exempt which - 12b-1 shares; and 1.00% 0.60%) four ways
is 4.75%) or distribution expenses do if you sell as Class A
less and service not within the - Deferred Shares
fees of decrease 2nd 12 sales charge of (see Class
- - no initial sales 1.00%* months of 1.00% if A Share
charge for IDEX purchase you sell Quantity
Transamerica - Automatic within 18 Discounts
Money Market conversion months of Table)
to Class A purchase
- - Discounts of shares
sales charge for after 8 - Automatic
larger years, conversion
investments (see reducing to Class A
Class A Share future Shares
Quantity annual after 10
Discount Table) expenses years,
reducing
- - 12b-1 future
distribution and annual
service fees of expenses
0.35%*
- - Lower annual expenses
than Class B, C
or M shares due
to lower 12b-1
distribution and
service fees
* See the asset allocation funds for additional information regarding
12b-1 fees.
26
CLASS B SHARES -- BACK LOAD
Class B shares are sold in amounts up to $250,000 per fund. With Class B
shares, you pay no initial sales charge when you invest, but you are charged a
CDSC when you sell shares you have held for six years or less, as described in
the table below.
Class B shares automatically convert to Class A shares after 8 years, lowering
annual expenses from that time on.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES
YEAR AFTER PURCHASING AS A % OF DOLLAR AMOUNT (SUBJECT TO CHANGE)
- --------------------- -------------------------------------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 1%
Sixth 1%
Seventh and Later 0%
CLASS C SHARES -- LEVEL LOAD
(Closed to new investors)
With Class C shares, you pay no initial sales charge or CDSC. There are 12b-1
distribution and service fees of up to 1.00% per year. (Except for the asset
allocation funds.)
CLASS L SHARES -- LEVEL LOAD
With Class L shares, you pay no initial sales charge. You will pay a 2% CDSC if
shares are redeemed during the first 12 months, and a 1.00% CDSC if redeemed
during the second 12 months.
AFSG may enter into agreements with brokers and dealers whereby such shares may
be subject to a CDSC for one year only, not the twenty-four month period
otherwise applicable to Class L shares.
CLASS M SHARES -- LEVEL LOAD
(Closed to new investors)
Class M shares are sold in amounts up to $1 million. With Class M shares, you
pay an initial sales charge of 1.00% based on offering price. (The offering
price includes the sales charge.) There are 12b-1 distribution and service fees
of 0.90% per year. If you redeem within 18 months from the date of purchase,
you will incur a CDSC of 1.00%.
Class M shares purchased on or after November 1, 1999 automatically convert to
Class A shares after 10 years, lowering annual expenses from that time on.
CONTINGENT DEFERRED SALES CHARGE
Your shares may be subject to a CDSC. Dividends and capital gains are not
subject to the sales charge. There is no charge on any increase in the value of
your shares. To ensure that you pay the lowest CDSC possible, the Fund will
always use the shares with the lowest CDSC to fill your redemption requests. If
your shares are worth less than when you bought them, the charge will be
assessed on their current, lower value. In some cases, the sales charge may be
waived.
27
CLASS A SALES CHARGE REDUCTIONS
You can lower the sales charge percentage in four ways:
- Substantial investments receive lower sales charge rates.
Please see the SAI for details on these reductions.
- The "rights of accumulation" allows you, your spouse and
minor children to include existing Class A shares (or Class T
shares of IDEX Janus Growth) as part of your current
investments for sales charge purposes. Certain qualified
groups are also eligible for rights of accumulation.
- A "letter of intent" allows you to count all Class A share
investments in an IDEX fund over the next 13 months, as if
you were making them all at once, to qualify for reduced
sales charges.
- By investing as part of a qualified group.
CLASS A SHARE QUANTITY DISCOUNTS
(ALL FUNDS EXCEPT IDEX JANUS FLEXIBLE INCOME, IDEX TRANSAMERICA CONSERVATIVE
HIGH-YIELD BOND, IDEX PIMCO TOTAL RETURN, IDEX PIMCO REAL RETURN TIPS, IDEX
TRANSAMERICA CONVERTIBLE SECURITIES, IDEX FEDERATED TAX EXEMPT AND IDEX
TRANSAMERICA MONEY MARKET)
SALES CHARGE AS % OF SALES CHARGE AS % OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED
- --------------------------------- -------------------- --------------------
Under $50,000 5.50% 5.82%
$50,000 to under $100,000 4.75% 4.99%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.75% 2.83%
$500,000 to under $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
CLASS A SHARE QUANTITY DISCOUNTS
(IDEX JANUS FLEXIBLE INCOME, IDEX TRANSAMERICA CONVERTIBLE SECURITIES,
IDEX PIMCO TOTAL RETURN, IDEX PIMCO REAL RETURN TIPS, IDEX TRANSAMERICA
CONSERVATIVE HIGH-YIELD BOND & IDEX FEDERATED TAX EXEMPT)
SALES CHARGE AS % OF SALES CHARGE AS % OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED
- --------------------------------- -------------------- --------------------
Under $50,000 4.75% 4.99%
$50,000 to under $100,000 4.00% 4.17%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.25% 2.30%
$500,000 to under $1,000,000 1.25% 1.27%
$1,000,000 and over 0.00% 0.00%
WAIVERS OF SALES CHARGES
WAIVER OF CLASS A AND CLASS T SALES CHARGES
Class A and Class T shares may be purchased without a sales charge by:
- Current or former IDEX trustees, directors, officers,
full-time employees or sales representatives of IDEX, ATFA,
any of the sub-advisers or any of their affiliates
- Directors, officers, full-time employees and sales
representatives of dealers having a sales agreement with
ATFA.
28
- Any trust, pension, profit-sharing or other benefit plan for
any of the foregoing persons.
- "Wrap" accounts for the benefit of clients of certain
broker-dealers, financial institutions or financial planners,
who have entered into arrangements with IDEX or AFSG.
Persons eligible to buy Class A and Class T shares at NAV may not
impose a sales charge when they re-sell those shares.
WAIVER OF CLASS A, CLASS B, CLASS L, CLASS M, AND CLASS T REDEMPTION CHARGES
You will not be assessed a sales charge for shares if you sell in the
following situations
- Following the death of the shareholder on redemptions from
the deceased person's account only. If this deceased person's
account is re-registered to another name, sales charges would
continue to apply to this new account.
- Following the total disability of the shareholder (as
determined by the Social Security Administration -- applies
only to shares held at the time the disability is
determined).
- On redemptions made under the Fund's systematic withdrawal
plan (may not exceed 12% of the account value on the day the
systematic withdrawal plan was established). NOTE: The amount
redeemed under this waiver does not need to be under a
systematic withdrawal plan. If it is not under a systematic
withdrawal plan, it is limited to one redemption per calendar
year up to 12% of your account balance at the time of
redemption.
- If you redeem your shares and reinvest the proceeds in the
same class of any fund within 90 days of redeeming, the sales
charge on the first redemption is waived.
MANAGEMENT OF THE FUND
INVESTMENT MANAGER -- The Investment Manager serves as the investment adviser
for the Acquiring Fund. The investment adviser hired TIM, as sub-adviser, to
furnish investment advice and recommendations. The investment adviser also
monitors the sub-adviser's buying and selling of securities and administration
of the Fund.
The Investment Manager is directly owned by Western Reserve Life Assurance Co.
of Ohio (78%) (Western Reserve) and AUSA Holding Company (22%) (AUSA), both of
which are indirect wholly-owned subsidiaries of AEGON N.V. Great Companies is a
30% owned indirect subsidiary of AUSA. AUSA is wholly-owned by Transamerica
Holding Company, which 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. TIM and the Distributor are affiliates of
ATFA and the Fund.
AEGON/Transamerica Series Fund, Inc. (ATSF) received an Order from the
Securities and Exchange Commission (Release IC-23379 dated August 5, 1998) that
permits ATSF and its investment adviser, the Investment Manager, subject to
certain conditions, and without the approval of shareholders to:
(1) employ a new unaffiliated sub-adviser for a fund pursuant to the terms
of a new investment sub-advisory agreement, either as a replacement for an
existing sub-adviser or as an additional sub-adviser;
(2) materially change the terms of any sub-advisory agreement; and
(3) continue the employment of an existing sub-adviser on sub-advisory
contract terms where a contract has been assigned because of a change of
control of the sub-adviser. In such circumstances, shareholders would receive
notice and information about the new sub-adviser within ninety (90) days after
the hiring of any new sub-adviser.
The Order was issued to ATSF and is applicable to all open-end management
investment companies advised by the Investment Manager, or a person
controlling, controlled by, or under common control with the Investment
Manager. Both
29
ATSF and IDEX are advised by the Investment Manager; thus the Order includes
both ATSF and IDEX. IDEX will also refer to this Order for any of the
transactions listed above.
DISTRIBUTION ARRANGEMENT -- IDEX has an Underwriting Agreement with the
Distributor. The Distributor is an affiliate of the Investment Manager, IDEX
and TIM. Under this agreement, the Distributor underwrites and distributes all
classes of fund shares and bears the expenses of offering these shares to the
public. The funds pay the Distributor, or its agent, fees for its services. Of
the distribution and service fees it receives for Class A and B shares, the
Distributor, or its agent, reallows or pays to brokers or dealers who sold them
0.25% of the average daily net assets of those shares. In the case of Class C,
L or M shares, the Distributor, or its agent, reallows its entire fee to those
sellers.
DISTRIBUTION PLANS AND 12B-1 FEES -- The Acquiring Fund has adopted a
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act ("12b-1 Plan"),
applicable to Class A, Class B, Class C, Class L and Class M shares. The
Distributor 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. The Distributor also
receives service and distribution fees under the 12b-1 Plans as follows:
Distribution of Class A Shares. For these shares, the Acquiring Fund may pay
the Distributor 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 Fund may pay the
Distributor 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 Fund may pay the
Distributor 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 Fund may pay the
Distributor 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 Fund may pay the
Distributor an annual distribution fee of up to 0.90%, which includes a service
fee of 0.25%.
Because the Fund has a 12b-1 Plan, 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.
DISTRIBUTIONS AND DIVIDENDS
The Acquiring Fund pays dividends from net investment income, and distributes
net capital gains, if any, at least annually. Dividends and distributions are
automatically reinvested in additional shares of the respective class of the
Acquiring Fund, unless the shareholder requests cash. There are no fees or
sales charges on reinvestments.
30
FINANCIAL HIGHLIGHTS FOR ACQUIRING FUND
For a Share of Beneficial Interest Outstanding Throughout Each Period
The Acquiring Fund. The financial highlights table is intended to help you
understand the Acquiring Fund's financial performance for its shares for each
period shown. Certain information reflects financial results for a single Fund
share. The total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund assuming reinvestment of all
dividends and distributions. This information through October 31, 2003 has been
derived from financial statements audited by PricewaterhouseCoopers LLP, whose
report, along with the IDEX financial statements, are included in the IDEX
Annual Report, which is available upon request.
INVESTMENT OPERATIONS DISTRIBUTIONS
NET ASSET -------------------------------------------------------------------------------------
FOR THE VALUE, NET NET REALIZED FROM NET FROM NET
PERIOD BEGINNING INVESTMENT AND UNREALIZED TOTAL INVESTMENT REALIZED TOTAL
ENDED (d)(g) OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS INCOME GAINS DISTRIBUTIONS
------------ ----------- ------------- -------------- ---------- ---------- ---------- ---------------
Class A 10/31/2003 $ 9.69 $0.18 $ 1.83 $ 2.01 $(0.21) $ -- $(0.21)
10/31/2002 11.67 0.18 (1.65) (1.47) (0.16) (0.35) (0.51)
10/31/2001 12.75 0.26 (0.51) (0.25) (0.26) (0.57) (0.83)
10/31/2000 11.79 0.30 1.01 1.31 (0.35) -- (0.35)
10/31/1999 13.14 0.27 (0.73) (0.46) (0.24) (0.65) (0.89)
Class B 10/31/2003 9.69 0.11 1.80 1.91 (0.14) -- (0.14)
10/31/2002 11.66 0.11 (1.65) (1.54) (0.08) (0.35) (0.43)
10/31/2001 12.74 0.18 (0.50) (0.32) (0.19) (0.57) (0.76)
10/31/2000 11.78 0.23 1.01 1.24 (0.28) -- (0.28)
10/31/1999 13.13 0.19 (0.73) (0.54) (0.16) (0.65) (0.81)
Class C 10/31/2003 9.69 0.11 1.80 1.91 (0.14) -- (0.14)
10/31/2002 11.66 0.12 (1.66) (1.54) (0.08) (0.35) (0.43)
10/31/2001 12.74 0.17 (0.49) (0.32) (0.19) (0.57) (0.76)
10/31/2000 11.78 0.23 1.01 1.24 (0.28) -- (0.28)
Class L 10/31/2003 9.71 0.12 1.77 1.89 (0.14) -- (0.14)
Class M 10/31/2003 9.69 0.12 1.81 1.93 (0.15) -- (0.15)
10/31/2002 11.66 0.11 (1.63) (1.52) (0.10) (0.35) (0.45)
10/31/2001 12.74 0.19 (0.50) (0.31) (0.20) (0.57) (0.77)
10/31/2000 11.78 0.24 1.01 1.25 (0.29) -- (0.29)
10/31/1999 13.13 0.20 (0.73) (0.53) (0.17) (0.65) (0.82)
31
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------
RATIO OF EXPENSES TO NET INVESTMENT
NET ASSET NET ASSETS, AVERAGE NET ASSETS(a) INCOME (LOSS) TO
FOR THE PERIOD VALUE, END OF TOTAL END OF --------------------- AVERAGE PORTFOLIO
ENDED(g) PERIOD RETURN(c) PERIOD (000'S) NET(e) TOTAL(f) NET ASSETS(a) TURNOVER RATE(b)
-------------- ------------- --------- -------------- ---------- --------- ---------------- ----------------
Class A 10/31/2003 $11.49 21.04% $11,832 1.55% 2.20% 1.75% 50%
10/31/2002 9.69 (13.20) 11,020 1.55 1.89 1.56 82%
10/31/2001 11.67 (2.13) 13,880 1.55 1.95 2.04 50%
10/31/2000 12.75 11.43 9,850 1.55 2.02 2.50 28%
10/31/1999 11.79 (3.74) 12,377 1.66 1.85 2.12 82%
Class B 10/31/2003 11.46 19.98 13,744 2.20 2.85 1.10 50%
10/31/2002 9.69 (13.72) 12,038 2.20 2.54 0.91 82%
10/31/2001 11.66 (2.74) 16,180 2.20 2.60 1.39 50%
10/31/2000 12.74 10.76 9,193 2.20 2.67 1.85 28%
10/31/1999 11.78 (4.36) 12,171 2.31 2.50 1.47 82%
Class C 10/31/2003 11.46 19.98 3,645 2.20 2.85 1.10 50%
10/31/2002 9.69 (13.72) 3,999 2.20 2.54 0.91 82%
10/31/2001 11.66 (2.74) 3,619 2.20 2.60 1.39 50%
10/31/2000 12.74 10.76 565 2.20 2.67 1.85 28%
Class L 10/31/2003 11.46 19.73 530 2.20 2.86 1.10 50%
Class M 10/31/2003 11.47 20.20 3,267 2.10 2.75 1.20 50%
10/31/2002 9.69 (13.64) 3,050 2.10 2.44 1.01 82%
10/31/2001 11.66 (2.65) 4,866 2.10 2.50 1.49 50%
10/31/2000 12.74 10.86 2,868 2.10 2.57 1.95 28%
10/31/1999 11.78 (4.26) 4,689 2.21 2.40 1.57 82%
Notes to Financial Highlights
(a) Annualized.
(b) Not annualized for periods of less than one year.
(c) Total Return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase. Periods of
less than one year are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ending 10/31/2001, 10/31/2002, and
10/31/2003.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any.
(f) Ratio of Total Expenses to Average Net Assets includes all expenses
before fee waivers and reimbursements by the investment adviser.
(g) The Acquiring Fund commenced operations on October 1, 1995. The inception
date for the Fund's offering of Class C shares was November 1, 1999, and
Class L shares was November 11, 2002.
32
APPENDIX A
AGREEMENT & PLAN OF REORGANIZATION
THIS AGREEMENT & PLAN OF REORGANIZATION (the "Plan") is made as of the 9th day
of September 2003 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 Value Balanced (the "Acquiring Fund") and IDEX LKCM Strategic
Total Return (the "Acquired Fund"), separate series of the Company.
This Plan is intended to be, and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of Acquired
Fund to Acquiring Fund in exchange solely for Class A, Class B, Class C, Class L
and Class M voting shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares"), the assumption by Acquiring Fund of all liabilities of
Acquired Fund, and the distribution of Acquiring Fund Shares to the shareholders
of Acquired Fund in complete liquidation of Acquired Fund as provided herein,
all upon the terms and conditions hereinafter set forth in this Plan.
WHEREAS, the Company is an open-end, registered investment management company
and Acquired Fund owns securities which generally are assets of the character in
which Acquiring Fund is permitted to invest.
WHEREAS, the Trustees of the Company have determined that the exchange of all of
the assets of Acquired Fund for Acquiring Fund Shares, and the assumption of all
liabilities of Acquired Fund by Acquiring Fund, is in the best interests of
Acquiring Fund and its shareholders, and that the interests of the existing
shareholders of Acquiring Fund would not be diluted as a result of this
transaction.
WHEREAS, the Trustees of the Company have determined, with respect to Acquired
Fund, that the exchange of all of the assets of Acquired Fund for Acquiring Fund
Shares, and the assumption of all liabilities of Acquired Fund by Acquiring
Fund, is in the best interests of Acquired Fund and its shareholders, and that
the interests of the existing shareholders of Acquiring Fund would not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the Company, on behalf of Acquiring Fund and
Acquired Fund separately, hereby covenants and agrees to the following terms and
conditions:
1. TRANSFER OF ASSETS OF ACQUIRED FUND TO ACQUIRING FUND IN EXCHANGE FOR
ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
AND THE LIQUIDATION OF ACQUIRED FUND
1.1 Subject to the requisite approval of the shareholders of Acquired
Fund and the other terms and conditions herein set forth and on
the basis of the representations and warranties contained herein,
the Company will transfer all of Acquired Fund's assets, as set
forth in paragraph 1.2, to Acquiring Fund, and Acquiring Fund
agrees in exchange therefore: (i) to deliver to Acquired Fund the
number of full and fractional Class A, Class 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").
33
1.3 Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. Acquiring
Fund shall also assume all of the liabilities of Acquired Fund,
whether accrued or contingent, known or unknown, existing at the
Valuation Date. On or as soon as practicable prior to the Closing
Date, Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions that,
together with all previous distributions, shall have the effect of
distributing to its shareholders (i) all of its investment company
taxable income and all of its net realized capital gains, if any,
for the period from the close of its last taxable year to the end
of the business day on the Closing; and (ii) any undistributed
investment company taxable income and net capital gain from any
period to the extent not otherwise distributed.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, Acquired Fund will distribute to Acquired Fund's shareholders
of record with respect to each class of its shares, determined as
of immediately after the close of business on the Closing Date
(the "Acquired Fund Shareholders"), on a pro rata basis within
that class, Acquiring Fund Shares of the same class received by
Acquired Fund pursuant to paragraph 1.1, and will completely
liquidate. Such distribution and liquidation will be accomplished,
with respect to Acquired Fund's shares, by the transfer of
Acquiring Fund Shares then credited to the account of Acquired
Fund on the books of Acquiring Fund to open accounts on the share
records of Acquiring Fund in the names of Acquired Fund
Shareholders. The aggregate net asset value of Class A, Class B,
Class C, Class L and Class M Acquiring Fund Shares to be so
credited to Class A, Class B, Class C, Class L and Class M
Acquired Fund Shareholders shall, with respect to each class, be
equal to the aggregate net asset value of Acquired Fund shares of
the corresponding class owned by such shareholders on the Closing
Date. All issued and outstanding shares of Acquired Fund will
simultaneously be canceled on the books of Acquired Fund, although
share certificates representing interests in shares of each class
of Acquired Fund will represent a number of the same class of
Acquiring Fund Shares after the Closing Date, as determined in
accordance with Section 2.3. Acquiring Fund shall not issue
certificates representing Acquiring Fund Shares in connection with
such exchange.
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.
34
2.4 All computations of value shall be made by Acquired Fund's
designated record keeping agent, and shall be subject to review by
the independent certified public accountants for IDEX.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be April 30, 2004, 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
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;
35
(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 Bylaws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Company,
on behalf of Acquired Fund is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the
imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the
Company, on behalf of Acquired Fund, is a party or by which
it is bound;
(g) Material contracts or other commitments (other than this
Plan) that will be terminated with liability to it prior to
the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
the Company, on behalf of Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or, to its
knowledge, threatened against Acquired Fund or any of its
properties or assets that, if adversely determined, would
materially and adversely affect its financial condition or
the conduct of its business. The Company, on behalf of
Acquired Fund, knows of no facts which might form the basis
for the institution of such proceedings and is not a party
to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially
and adversely affects its business or its ability to
consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, including the
Schedule of Investments, at October 31, 2003 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;
(j) Since October 31, 2003 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,
36
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:
(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
37
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 Bylaws 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, 2003 of the
Acquiring Fund, and the Statement 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;
(i) Since October 31, 2003, there has not been any material
adverse change in Acquiring Fund's financial condition,
assets, liabilities or business, other than changes
occurring in the ordinary course of business, or any
incurrence by Acquiring Fund of indebtedness maturing more
than one year from the date such indebtedness was incurred,
except as otherwise disclosed to and accepted by Acquired
Fund. For purposes of this subparagraph (i), a decline in
net asset value per share of Acquiring Fund due to declines
in market values of securities in Acquiring Fund's
portfolio, the discharge of Acquiring Fund liabilities, or
the redemption of Acquiring Fund Shares by shareholders of
Acquiring Fund, shall not constitute a material adverse
change;
(j) On the Closing Date, all federal and other tax returns and
reports of Acquiring Fund required by law to have been filed
by such date (including any extensions) shall have been
filed and are or will be correct in all material respects,
and all federal and other taxes shown as due or required to
be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment
thereof, and to the best of Acquiring Fund's knowledge no
such return is currently under audit and no assessment has
been asserted with respect to such returns;
(k) For each taxable year of its operation, Acquiring Fund has
met the requirements of Subchapter M of the Code for
qualification as a regulated investment company and has
elected to be treated as such, has been eligible to and has
computed its federal income tax under Section 852 of the
Code, has distributed all of its investment company taxable
income and net capital gain (as defined in the Code) 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
38
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.
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.
39
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;
40
7.4 Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all
previous distributions, shall have the effect of distributing to
its shareholders (i) all of its investment company taxable income
and all of its net realized capital gains, if any, for the period
from the close of its last taxable year to 4:00 p.m. Eastern Time
on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to
the extent not otherwise already distributed.
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 LLP 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 LLP determines that the
transaction contemplated by this Plan does not qualify as such.
The delivery of such opinion is conditioned upon receipt by
Dechert LLP 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.
41
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
The representations, warranties and covenants contained in this Plan or
in any document delivered pursuant hereto or in connection herewith shall
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each
of Acquired Fund and Acquiring Fund in sections 9.1 and 9.2 shall survive
the Closing.
11. TERMINATION
This Plan and the transactions contemplated hereby may be terminated and
abandoned by resolution of the Board of Trustees, at any time prior to
the Closing Date, if circumstances should develop that, in the opinion of
the Board, make proceeding with the Plan inadvisable.
12. AMENDMENTS
This Plan may be amended, modified or supplemented in such manner as may
be set forth in writing by the authorized officers of the Company;
provided, however, that following any meeting of the shareholders called
by the Company, on behalf of Acquired Fund, pursuant to paragraph 5.2 of
this Plan, no such amendment may have the effect of changing the
provisions for determining the number of Class A, Class B, Class C, Class
L and Class M Acquiring Fund Shares to be issued to Acquired Fund
Shareholders under this Plan to the detriment of such shareholders
without their further approval.
13. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
13.1 The Article and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Plan.
13.2 This Plan may be executed in any number of counterparts, each of
which shall be deemed to be an original.
13.3 This Plan shall be governed by and construed in accordance with
the laws of the State of Massachusetts without regard to its
principles of conflicts of laws.
13.4 This Plan shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent
of the other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or
by reason of this Plan.
13.5 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the
Company personally, but shall bind only property of Acquired Fund,
as provided in the Declaration of Trust of the Company. The
execution and 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: /s/ Brian C. Scott
Name: Brian C. Scott
Title: President & Chief Executive Officer
42
APPENDIX B
SET FORTH BELOW IS AN EXCERPT FROM THE IDEX ANNUAL REPORT, DATED OCTOBER 31,
2003, REGARDING THE ACQUIRING FUND'S PERFORMANCE:
TRANSAMERICA VALUE BALANCED
MARKET ENVIRONMENT
The twelve months ended October 31, 2003, were a positive, if uneven period for
U.S. securities markets. On the equity side, stocks staged short-lived rallies
and retreats before turning decidedly negative in January, when it became
increasingly obvious that the U.S. would go to war with Iraq. That, combined
with conflicting economic data, put a damper on investor expectations. Once
military operations began in March, investors anticipated a more robust economy,
and the stock market began a long advance that brought the Russell 1000 Value
Index to a 12-month total return of 22.87%. The market favored economically
sensitive sectors; various equipment manufacturing and technology or
Internet-related sectors posted the largest gains. Fixed-income markets
performed exceptionally well in the first half of the period and lagged in the
second half, in response to economic data suggesting that interest rates may
rise.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Value Balanced
outperformed its primary benchmark, the Lehman Brothers Intermediate U.S.
Government/Credit Index, which returned 5.43% and underperformed its secondary
benchmark, the Russell 1000 Value Index, which returned 22.87%.
STRATEGY REVIEW
Throughout the period, we maintained a neutral asset allocation of approximately
60% equities and 40% bonds. Within the equity portfolio, we weighted our
investments toward noncyclical industries. Given this, we should have
underperformed the equity market. Instead, our patience with temporarily
undervalued companies that have strong franchises, decent balance sheets, and
above-average dividend yields paid off handsomely. Fleet- Boston Financial
Corporation, a core financial holding, rebounded once investors realized that
its foreign loan portfolio would not be decimated by Latin America's economic
malaise. Shares of another bank holding, Washington Mutual, Inc., increased
sharply, reflecting the company's well-executed retail oriented business plan.
Likewise, our perseverance with telecommunications company Sprint Corporation
(FON Group) ("Sprint") was rewarded. Sprint was punished by the misdeed of
others and has at times been our worst-performing stock. We are committed to it
nonetheless. At the heart of an increasingly important industry, Sprint is
making good choices to "right the ship" and paying an attractive dividend in the
process. Unfortunately, our patience with pharmaceuticals Schering- Plough
Corporation and Merck & Co., Inc. has not as yet proven productive. In
hindsight, we may have purchased these too early, but we remain convinced that
they are capable of successfully bringing new products to market. We will give
them more time. The portfolio's fixed-income component maintained a slightly
above-average duration in the first half of the period, when interest rates were
declining and bond prices rising. During the latter six months, we moved to a
below-average duration, positioning the portfolio for economic growth and the
higher interest rates that may follow. Throughout the period, we overweighted
corporate bonds and, within that sector, emphasized industries with improving
credit profiles and superior potential for capital appreciation (e.g., media,
utilities and telecommunications). This approach worked well; corporate bonds
outperformed Treasuries, and our chosen industries outpaced the corporate sector
in general. Of late, we have taken profits in telecommunications and made new
investments in paper, forest products, metals and mining companies.
B-1
OUTLOOK
We struggle to justify equity valuations in the current environment. Even after
taking into account the recent economic data, we see little evidence of top-line
revenue growth or bold economic growth that would substantiate current stock
prices. In most industries, companies are still unable to raise prices, and
overcapacity and global competition continue to be very real issues. Therefore,
we will maintain a cautious position in the equity portfolio. In the bond
portfolio, we continue to stress industries where even a modest economic rebound
may have a positive impact on profitability and corporate credit quality.
John C. Riazzi
Gary U. Rolle
Co-Fund Managers
Transamerica Investment Management, LLC
IDEX Transamerica Value Balanced
....SEEKS PRESERVATION OF CAPITAL AND COMPETITIVE INVESTMENT RETURNS.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 1
AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED 10/31/03
1 Year 5 Years From Inception Inception Date
------ ------- -------------- --------------
Class A (NAV) 21.04% 1.98% 5.96% 10/1/95
Class A (POP) 14.38% 0.83% 5.22% 10/1/95
Russell 1000 Value(1) 22.87% 3.68% 10.52% 10/1/95
LBIGC1 5.43% 6.52% 6.94% 10/1/95
Class B (NAV) 19.98% 1.30% 5.27% 10/1/95
Class B (POP) 14.98% 1.11% 5.27% 10/1/95
Class C (NAV) 19.98% - 2.76% 11/1/99
Class L (NAV) - 19.73% 11/11/02
Class L (POP) 17.73% 11/11/02
Class M (NAV) 20.20% 41% 38% 10/1/95
Class M (POP) 17.99% 1.21% 5.25% 10/1/95
NOTES
(1) The Russell 1000 Value (Russell 1000) Index and Lehman Brothers Intermediate
U.S. Government/Credit (LBIGC) Index are unmanaged indices 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
Micropaltr Micropal, Inc. 2003 - 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. Current performance may be
lower or higher than performance quoted.
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, (2% in the 1st
year and 1% in the 2nd year) for Class L 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. Class C and M shares are not
available to new investors.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
B-2
PART B
IDEX Mutual Funds
Statement of Additional Information
March 10, 2004
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
IDEX LKCM Strategic Total Return (the "Acquired IDEX Transamerica Value Balanced (the "Acquiring
Fund") Fund")
570 Carillon Parkway, St. Petersburg, Florida 33716 570 Carillon Parkway, St. Petersburg, Florida 33716
This Statement of Additional Information is available to the shareholders of the
Acquired Fund in connection with a proposed transaction whereby all of the
assets and liabilities of the Acquired Fund will be transferred to the Acquiring
Fund in exchange for shares of the Acquiring Fund.
This Statement of Additional Information of the 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 March
1, 2003.
2. The Financial Statements of the Acquired Fund and the Acquiring Fund as
included in the IDEX Annual Report for the year ended October 31, 2003,
Registration No. 033-02659 (Annual Report filed on Form N-CSR on January 8,
2004).
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated March 10, 2004 relating to the reorganization of the
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 Proxy Statement/Prospectus.
43
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- -------- --------- ------- --------- ------
U.S. GOVERNMENT OBLIGATIONS
U.S. Treasury Bond (d)
3.63%, due 03/31/2004 .................. $ -- $ -- $ 1,250 $ 1,263 $ 1,250 $ 1,263
5.38%, due 02/15/2031 (b) .............. -- -- 595 615 595 615
U.S. Treasury Note (b) (d)
3.63%, due 05/15/2013 .................. -- -- 255 244 255 244
-------- ------- -------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost: $2,137 ) $ -- $ 2,122 $ 2,122
-------- ------- -------
U.S. GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae - Conventional Pool
5.00%, due 05/01/2018 .................. -- -- 221 225 221 225
5.00%, due 06/01/2018 .................. -- -- 219 222 219 222
6.00%, due 11/01/2032 .................. -- -- 361 370 361 370
6.00%, due 01/01/2033 .................. -- -- 94 96 94 96
6.00%, due 02/01/2033 .................. -- -- 190 195 190 195
6.00%, due 05/01/2033 .................. -- -- 361 371 361 371
Fannie Mae - Gold Pool
5.00%, due 04/01/2018 .................. -- -- 391 397 391 397
Freddie Mac - Gold Pool
7.00%, due 10/01/2028 .................. -- -- 230 242 230 242
6.50%, due 04/01/2029 .................. -- -- 232 242 232 242
6.00%, due 09/01/2033 .................. -- -- 247 253 247 253
Ginnie Mae - FHA/VA Pool
6.50%, due 10/15/2027 .................. -- -- 260 273 260 273
-------- ------- -------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(cost: $2,887 ) $ -- $ 2,886 $ 2,886
-------- ------- -------
CORPORATE DEBT SECURITIES
AMUSEMENT & RECREATION SERVICES
Disney (Walt) Company (The)
4.88%, due 07/02/2004 .................. -- -- 250 255 250 255
BEVERAGES
Cia Brasileira de Bebidas - 144A
8.75%, due 09/15/2013 .................. -- -- 25 26 25 26
BUSINESS CREDIT INSTITUTIONS
Deere (John) Capital Corporation
3.90%, due 01/15/2008 .................. -- -- 250 253 250 253
eircom Funding - 144A (b)
8.25%, due 08/15/2013 .................. -- -- 50 54 50 54
Ford Motor Credit Company
6.70%, due 07/16/2004 .................. -- -- 250 257 250 257
BUSINESS SERVICES
First Data Corporation
4.70%, due 11/01/2006 .................. 500 528 -- -- 500 528
The notes to the pro forma financial statements are an integral part of this
report.
44
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- -------- --------- ------- --------- ------
CHEMICALS & ALLIED PRODUCTS
Dow Chemical Company (The)
5.25%, due 05/14/2004 ...................... $ -- $ -- $ 250 $ 254 $ 250 $ 254
Nalco Company - 144A
7.75%, due 11/15/2011 ...................... -- -- 50 52 50 52
COMMERCIAL BANKS
Abbey National PLC (h)
7.35%, due 10/29/2049 ...................... -- -- 250 277 250 277
CS First Boston - 144A (g)
7.90%, due 05/01/2007 ...................... -- -- 125 140 125 140
Korea Development Bank (The)
5.50%, due 11/13/2012 ...................... -- -- 250 257 250 257
COMMUNICATION
Echostar DBS Corporation - 144A
5.75%, due 10/01/2008 ...................... -- -- 75 75 75 75
Liberty Media Corporation
5.70%, due 05/15/2013 ...................... -- -- 200 196 200 196
COMPUTER & OFFICE EQUIPMENT
Hewlett-Packard Company
5.50%, due 07/01/2007 ...................... -- -- 250 269 250 269
ELECTRIC SERVICES
Kentucky Utilities Company
8.55%, due 05/15/2027 ...................... 250 262 -- -- 250 262
TXU Energy Company LLC - 144A
7.00%, due 03/15/2013 ...................... -- -- 125 137 125 137
ELECTRIC, GAS & SANITARY SERVICES
PG&E Corporation - 144A
6.88%, due 07/15/2008 ...................... -- -- 50 53 50 53
HEALTH SERVICES
HCA Inc. ......................................
7.13%, due 06/01/2006 ...................... -- -- 100 107 100 107
HOLDING & OTHER INVESTMENT OFFICES
EOP Operating Limited Partnership
8.38%, due 03/15/2006 ...................... -- -- 250 281 250 281
HOTELS & OTHER LODGING PLACES
Park Place Entertainment Corporation
7.00%, due 04/15/2013 ...................... -- -- 75 78 75 78
INSURANCE
St. Paul Companies, Inc. (The)
5.75%, due 03/15/2007 ...................... -- -- 250 267 250 267
The notes to the pro forma financial statements are an integral part of this
report.
45
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- -------- --------- ------- --------- ------
INSURANCE AGENTS, BROKERS & SERVICE
Hartford Financial Services Group,
Inc. (The) - 144A
4.63%, due 07/15/2013 .................... $ -- $ -- $ 125 $ 119 $ 125 $ 119
LIFE INSURANCE
Hartford Life, Inc. ...........................
6.90%, due 06/15/2004 .................... 400 413 -- -- 400 413
METAL MINING
Placer Dome, Inc. - 144A
6.45%, due 10/15/2035 .................... -- -- 140 141 140 141
MOTION PICTURES
News Corporation Limited (The)
7.75%, due 12/01/2045 .................... -- -- 175 201 175 201
Time Warner Inc. ..............................
9.13%, due 01/15/2013 .................... -- -- 125 156 125 156
PAPERBOARD CONTAINERS & BOXES
Norampac Inc. - 144A
6.75%, due 06/01/2013 .................... -- -- 50 52 50 52
PERSONAL CREDIT INSTITUTIONS
Capital One Bank
6.88%, due 02/01/2006 .................... -- -- 125 136 125 136
General Electric Capital Corporation
8.85%, due 04/01/2005 .................... 500 548 -- -- 500 548
General Motors Acceptance Corporation
6.75%, due 01/15/2006 .................... -- -- 125 133 125 133
PRIMARY METAL INDUSTRIES
Phelps Dodge Corporation
8.75%, due 06/01/2011 .................... -- -- 225 268 225 268
PRINTING & PUBLISHING
Gannett Co., Inc. .............................
5.50%, due 04/01/2007 .................... 500 542 -- -- 500 542
RADIO & TELEVISION BROADCASTING
USA Interactive
7.00%, due 01/15/2013 .................... -- -- 50 55 50 55
SECURITY & COMMODITY BROKERS
Goldman Sachs Group, Inc. (The)
5.25%, due 10/15/2013 ................... -- -- 125 125 125 125
TELECOMMUNICATIONS
ALLTEL Corporation
7.25%, due 04/01/2004 .................... 800 819 -- -- 800 819
Cincinnati Bell Inc. - 144A
8.38%, due 01/15/2014 .................... -- -- 50 51 50 51
The notes to the pro forma financial statements are an integral part of this
report.
46
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- -------- --------- ------- --------- ------
Sprint Capital Corporation - 144A
8.75%, due 03/15/2032 ...................... $ -- $ -- $ 125 $ 142 $ 125 $ 142
VARIETY STORES
Wal-Mart Stores, Inc.
6.55%, due 08/10/2004 ...................... 600 623 -- -- 600 623
------- ------- -------
TOTAL CORPORATE DEBT SECURITIES
(cost: $8,409) ................................ $ 3,735 $ 4,867 $ 8,602
------- ------- -------
CONVERTIBLE BONDS
PRINTING & PUBLISHING
Tribune Company - PHONES
2.00%, due 05/15/2029 ...................... 8 648 -- -- 8 648
------- ------- -------
TOTAL CONVERTIBLE BONDS
(cost: $977) $ 648 $ -- $ 648
------- ------- -------
SHARES VALUE SHARES VALUE SHARES VALUE
--------- -------- --------- ------- --------- ------
CONVERTIBLE PREFERRED STOCKS
INSTRUMENTS & RELATED PRODUCTS
Raytheon Company 17,000 $ 859 -- $ -- 17,000 $ 859
LIFE INSURANCE
Prudential Financial, Inc. - Units 17,600 1,085 -- -- 17,600 1,085
------- ------- -------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost: $1,787) $ 1,944 $ -- $ 1,944
------- ------- -------
COMMON STOCKS
AIR TRANSPORTATION
FedEx Corporation (d) -- -- 4,500 341 4,500 341
AMUSEMENT & RECREATION SERVICES
Disney (Walt) Company (The) (d) -- -- 52,200 1,182 52,200 1,182
AUTOMOTIVE
Honeywell International Inc. 24,500 750 -- -- 24,500 750
BEVERAGES
Coca-Cola Company (The) 19,000 882 -- -- 19,000 882
PepsiCo, Inc. 17,000 813 -- -- 17,000 813
The notes to the pro forma financial statements are an integral part of this
report.
47
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
SHARES VALUE SHARES VALUE SHARES VALUE
--------- -------- --------- ------- --------- ------
BUSINESS SERVICES
Clear Channel Communications, Inc. 24,000 $ 980 -- $ -- 24,000 $ 980
First Data Corporation (b) 19,600 700 -- -- 19,600 700
CHEMICALS & ALLIED PRODUCTS
Colgate-Palmolive Company 17,500 931 -- -- 17,500 931
du Pont (E.I.) de Nemours and Company 20,400 824 15,000 606 35,400 1,430
COMMERCIAL BANKS
Bank of America Corporation (d) 7,500 568 5,400 409 12,900 977
Bank of New York Company, Inc. (The) 26,500 827 -- -- 26,500 827
Citigroup Inc. 22,800 1,081 -- -- 22,800 1,081
Cullen/Frost Bankers, Inc. 26,000 1,008 -- -- 26,000 1,008
FleetBoston Financial Corporation (d) -- -- 61,010 2,464 61,010 2,464
Mellon Financial Corporation 29,800 890 -- -- 29,800 890
Wachovia Corporation (d) -- -- 11,000 505 11,000 505
Wells Fargo & Company 17,600 990 -- -- 17,600 990
COMMUNICATION
Cox Communications, Inc. - Class A (a) -- -- 22,300 760 22,300 760
Viacom, Inc. - Class B 20,344 811 -- -- 20,344 811
COMMUNICATIONS EQUIPMENT
Harris Corporation 22,700 845 -- -- 22,700 845
Motorola, Inc. 29,700 402 -- -- 29,700 402
COMPUTER & DATA PROCESSING SERVICES
Automatic Data Processing, Inc. 20,000 755 -- -- 20,000 755
Microsoft Corporation 41,800 1,093 4,000 105 45,800 1,198
Oracle Corporation (a) 59,000 706 -- -- 59,000 706
SunGard Data Systems Inc. (a) 24,000 673 -- -- 24,000 673
COMPUTER & OFFICE EQUIPMENT
Cisco Systems, Inc. (a) 32,700 686 -- -- 32,700 686
Dell Computer Corporation (a) 27,200 982 -- -- 27,200 982
International Business Machines Corporation 8,500 761 -- -- 8,500 761
DRUG STORES & PROPRIETARY STORES
Medco Health Solutions, Inc. (a) -- -- 2,170 72 2,170 72
ELECTRONIC & OTHER ELECTRIC EQUIPMENT
Cooper Industries, Inc. - Class A -- -- 6,000 317 6,000 317
General Electric Company 38,000 1,102 -- -- 38,000 1,102
ELECTRONIC COMPONENTS & ACCESSORIES
Intel Corporation 28,300 935 28,000 925 56,300 1,860
Texas Instruments Incorporated 33,500 969 -- -- 33,500 969
Tyco International Ltd. 33,000 689 -- -- 33,000 689
The notes to the pro forma financial statements are an integral part of this
report.
48
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
SHARES VALUE SHARES VALUE SHARES VALUE
--------- -------- --------- ------- --------- ------
ENVIRONMENTAL SERVICES
Allied Waste Industries, Inc. (a) (b) 67,000 $ 756 -- $ -- 67,000 $ 756
Waste Management, Inc. 36,000 933 -- -- 36,000 933
FOOD & KINDRED PRODUCTS
Altria Group, Inc. (b) 14,300 665 12,000 558 26,300 1,223
Kraft Foods, Inc. - Class A (b) 21,400 623 -- -- 21,400 623
Sara Lee Corporation -- -- 8,300 165 8,300 165
HEALTH SERVICES
Triad Hospitals, Inc. (a) 28,700 882 -- -- 28,700 882
INSURANCE
American International Group, Inc. 13,275 808 -- -- 13,275 808
St. Paul Companies, Inc. (The) (b) (d) -- -- 10,000 381 10,000 381
LIFE INSURANCE
John Hancock Financial Services, Inc. (b) (d) -- -- 11,000 389 11,000 389
LUMBER & OTHER BUILDING MATERIALS
Home Depot, Inc. (The) 27,800 1,031 -- -- 27,800 1,031
LUMBER & WOOD PRODUCTS
Louisiana-Pacific Corporation (a) -- -- 27,000 514 27,000 514
Masco Corporation 32,000 880 -- -- 32,000 880
MEDICAL INSTRUMENTS & SUPPLIES
Medtronic, Inc. 20,900 952 -- -- 20,900 952
MOTION PICTURES
Time Warner Inc. (a) -- -- 6,000 92 6,000 92
OIL & GAS EXTRACTION
Anadarko Petroleum Corporation 20,500 894 -- -- 20,500 894
EOG Resources, Inc. 14,800 624 -- -- 14,800 624
Schlumberger Limited 16,400 770 3,000 141 19,400 911
Unocal Corporation 20,000 634 -- -- 20,000 634
PAPER & ALLIED PRODUCTS
Kimberly-Clark Corporation 15,000 792 -- -- 15,000 792
Temple-Inland Inc. (b) 11,500 621 -- -- 11,500 621
PAPER & PAPER PRODUCTS
Boise Cascade Corporation 35,200 $ 986 -- $ -- 35,200 $ 986
PERSONAL SERVICES
Block (H&R), Inc. 10,200 480 -- -- 10,200 480
The notes to the pro forma financial statements are an integral part of this
report.
49
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX LKCM IDEX TRANSAMERICA
STRATEGIC TOTAL RETURN VALUE BALANCED PRO FORMA FUND
---------------------- ---------------------- ---------------------
SHARES VALUE SHARES VALUE SHARES VALUE
--------- -------- --------- ------- --------- ------
PETROLEUM REFINING
BP PLC - ADR (b) 24,500 $ 1,038 -- $ -- 24,500 $ 1,038
ChevronTexaco Corporation -- -- 2,000 149 2,000 149
Exxon Mobil Corporation 26,900 984 4,200 154 31,100 1,138
PHARMACEUTICALS
Abbott Laboratories 11,000 469 -- -- 11,000 469
Alcon, Inc. 15,000 827 -- -- 15,000 827
Bristol-Myers Squibb Co. -- -- 34,450 874 34,450 874
Merck & Co., Inc. (d) -- -- 18,500 819 18,500 819
Pfizer Inc. 29,700 939 -- -- 29,700 939
Schering-Plough Corporation 29,000 443 33,580 513 62,580 956
Teva Pharmaceutical Industries Ltd. - ADR (b) 17,700 1,006 -- -- 17,700 1,006
Wyeth 14,900 658 -- -- 14,900 658
SAVINGS INSTITUTIONS
Charter One Financial, Inc. 26,000 831 -- -- 26,000 831
Washington Mutual, Inc. (d) -- -- 46,400 2,030 46,400 2,030
SECURITY & COMMODITY BROKERS
Alliance Capital Management Holding L.P. (d) -- -- 2,800 94 2,800 94
Jefferies Group, Inc. (d) -- -- 10,000 310 10,000 310
Raymond James Financial, Inc. (d) -- -- 11,000 449 11,000 449
T. Rowe Price Group, Inc. (b) (d) -- -- 12,000 494 12,000 494
TELECOMMUNICATIONS
ALLTEL Corporation 21,600 1,021 8,000 378 29,600 1,399
Sprint Corporation (FON Group) -- -- 91,100 1,458 91,100 1,458
Verizon Communications, Inc. 25,400 853 4,000 134 29,400 987
TRANSPORTATION EQUIPMENT
General Dynamics Corporation 6,000 502 -- -- 6,000 502
U.S. GOVERNMENT AGENCIES
Fannie Mae -- -- 16,500 1,183 16,500 1,183
VARIETY STORES
Wal-Mart Stores, Inc. 17,600 1,038 -- -- 17,600 1,038
------- ------- -------
TOTAL COMMON STOCKS
(cost: $ 61,575) $46,593 $18,965 $65,558
------- ------- -------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
--------- -------- --------- ------- --------- ------
SECURITY LENDING COLLATERAL
DEBT
BANK NOTES
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 ..................... $ 227 $ 227 $ 120 $ 120 $ 347 $ 347
Fleet National Bank
1.06%, due 01/21/2004 ..................... 318 318 169 169 487 487
The notes to the pro forma financial statements are an integral part of this
report.
50
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX LKCM STRATEGIC IDEX TRANSAMERICA
TOTAL RETURN VALUE BALANCED PRO FORMA FUND
----------------------- ----------------------- -----------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
---------- ---------- ---------- ---------- ---------- ----------
EURO DOLLAR TERMS
Bank of Montreal
1.03%, due 11/13/2003 $ 182 $ 182 $ 96 $ 96 $ 278 $ 278
1.04%, due 11/14/2003 160 160 85 85 245 245
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 91 91 48 48 139 139
Bank of Scotland
1.04%, due 11/14/2003 182 182 96 96 278 278
Citigroup, Inc.
1.08%, due 01/05/2004 272 272 145 145 417 417
Credit Agricole Indosuez
1.08%, due 01/06/2004 200 200 106 106 306 306
Den Danske Bank
1.04%, due 11/10/2003 91 91 48 48 139 139
1.08%, due 01/20/2004 272 272 145 145 417 417
Royal Bank of Canada
1.04%, due 11/24/2003 227 227 120 120 347 347
1.06%, due 12/08/2003 91 91 48 48 139 139
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 272 272 145 145 417 417
SouthTrust Bank
1.08%, due 01/16/2004 272 272 145 145 417 417
Wells Fargo & Company
1.04%, due 11/20/2003 272 272 145 145 417 417
PROMISSORY NOTES
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 318 318 169 169 487 487
REPURCHASE AGREEMENTS (C)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $139
on 11/03/2003 91 91 48 48 139 139
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $1,598
on 11/03/2003 1,045 1,045 553 553 1,598 1,598
SHARES VALUE SHARES VALUE SHARES VALUE
---------- ---------- ---------- ---------- ---------- ----------
INVESTMENT COMPANIES
MONEY MARKET FUNDS
Merrimac Cash Series Fund - Premium Class
1-day yield of 0.97% 635,786 636 337,229 337 973,015 973
TOTAL SECURITY LENDING COLLATERAL
---------- ---------- ----------
(cost: $ 7,987) $ 5,219 $ 2,768 $ 7,987
---------- ---------- ----------
Total Investment Securities
(cost: $ 85,759) $ 58,139 $ 31,608 $ 89,747
========== ========== ==========
The notes to the pro forma financial statements are an integral part of this
report.
51
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX LKCM STRATEGIC IDEX TRANSAMERICA
TOTAL RETURN VALUE BALANCED PRO FORMA FUND
-------------------------- -------------------------- ---------------------------
CONTRACTS (F) VALUE CONTRACTS (F) VALUE CONTRACTS (F) VALUE
------------- ---------- ------------- ---------- ------------- ----------
WRITTEN OPTIONS
COVERED CALL OPTIONS
Alliance Capital Management Holding L.P.
Call Strike $40.00,
Expires 04/17/2004 -- $ -- 28 $ (1) 28 $ (1)
Bank of America Corporation
Call Strike $75.00,
Expires 11/22/2003 -- -- 15 (2) 15 (2)
Disney (Walt) Company (The)
Call Strike $25.00,
Expires 01/17/2004 -- -- 72 (2) 72 (2)
FedEx Corporation
Call Strike $60.00,
Expires 01/17/2004 -- -- 35 (55) 35 (55)
FleetBoston Financial Corporation
Call Strike $45.00,
Expires 01/22/2005 -- -- 610 (107) 610 (107)
Intel Corporation
Call Strike $30.00,
Expires 01/17/2004 -- -- 50 (19) 50 (19)
Jefferies Group, Inc.
Call Strike $35.00,
Expires 04/17/2004 -- -- 50 (6) 50 (6)
John Hancock Financial Services, Inc.
Call Strike $40.00,
Expires 01/17/2004 -- -- 50 (1) 50 (1)
Merck & Co., Inc.
Call Strike $75.00,
Expires 01/17/2004 -- -- 50 (e) 50 (e)
Raymond James Financial, Inc.
Call Strike $40.00,
Expires 02/21/2004 -- -- 10 (3) 10 (3)
Raymond James Financial, Inc.
Call Strike $40.00,
Expires 05/22/2004 -- -- 10 (4) 10 (4)
St. Paul Companies, Inc. (The)
Call Strike $40.00,
Expires 04/17/2004 -- -- 20 (3) 20 (3)
T. Rowe Price Group, Inc.
Call Strike $40.00,
Expires 01/17/2004 -- -- 40 (11) 40 (11)
Wachovia Corporation
Call Strike $45.00,
Expires 01/17/2004 -- -- 30 (6) 30 (6)
The notes to the pro forma financial statements are an integral part of this
report.
52
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX LKCM STRATEGIC IDEX TRANSAMERICA
TOTAL RETURN VALUE BALANCED PRO FORMA FUND
-------------------------- -------------------------- ---------------------------
CONTRACTS (F) VALUE CONTRACTS (F) VALUE CONTRACTS (F) VALUE
------------- ---------- ------------- ---------- ------------- ----------
Washington Mutual, Inc.
Call Strike $45.00,
Expires 01/17/2004 -- $ -- 100 $ (12) 100 $ (12)
PUT OPTIONS
ALLTEL Corporation
Put Strike $40.00,
Expires 01/17/2004 -- -- 100 (3) 100 (3)
Altria Group, Inc.
Put Strike $30.00,
Expires 01/22/2005 -- -- 100 (15) 100 (15)
Altria Group, Inc.
Put Strike $40.00,
Expires 03/20/2004 -- -- 25 (3) 25 (3)
Bank of America Corporation
Put Strike $65.00,
Expires 05/22/2004 -- -- 130 (16) 130 (16)
Bank of America Corporation
Put Strike $65.00,
Expires 01/22/2005 -- -- 20 (7) 20 (7)
ChevronTexaco Corporation
Put Strike $60.00,
Expires 01/22/2005 -- -- 20 (4) 20 (4)
Disney (Walt) Company (The)
Put Strike $15.00,
Expires 01/17/2004 -- -- 150 (1) 150 (1)
Dominion Resources, Inc.
Put Strike $50.00,
Expires 01/22/2005 -- -- 80 (14) 80 (14)
du Pont (E.I.) de Nemours and Company
Put Strike $35.00,
Expires 01/22/2005 -- -- 20 (5) 20 (5)
Duke Energy Corporation
Put Strike $12.50,
Expires 01/17/2004 -- -- 250 (3) 250 (3)
Duke Energy Corporation
Put Strike $15.00,
Expires 01/21/2006 -- -- 20 (4) 20 (4)
Exxon Mobil Corporation
Put Strike $35.00,
Expires 04/17/2004 -- -- 40 (5) 40 (5)
Fannie Mae
Put Strike $70.00,
Expires 01/17/2004 -- -- 50 (15) 50 (15)
Fannie Mae
Put Strike $60.00,
Expires 01/22/2005 -- -- 35 (15) 35 (15)
FleetBoston Financial Corporation
Put Strike $20.00,
Expires 01/17/2004 -- -- 120 (1) 120 (1)
Heinz (H.J.) Company
Put Strike $40.00,
Expires 01/17/2004 -- -- 120 (17) 120 (17)
Kimberly-Clark Corporation
Put Strike $45.00,
Expires 01/22/2005 -- -- 90 (15) 90 (15)
Merck & Co., Inc.
Put Strike $40.00,
Expires 04/17/2004 -- -- 30 (4) 30 (4)
The notes to the pro forma financial statements are an integral part of this
report.
53
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX LKCM STRATEGIC IDEX TRANSAMERICA
TOTAL RETURN VALUE BALANCED PRO FORMA FUND
-------------------------- -------------------------- ---------------------------
CONTRACTS (F) VALUE CONTRACTS (F) VALUE CONTRACTS (F) VALUE
------------- ---------- ------------- ---------- ------------- ----------
Merck & Co., Inc.
Put Strike $45.00,
Expires 04/17/2004 -- $ -- 70 $ (24) 70 $ (24)
Microsoft Corporation
Put Strike $15.00,
Expires 01/22/2005 -- -- 100 (2) 100 (2)
Microsoft Corporation
Put Strike $22.50,
Expires 01/17/2004 -- -- 200 (5) 200 (5)
Microsoft Corporation
Put Strike $25.00,
Expires 04/17/2004 -- -- 110 (14) 110 (14)
Plum Creek Timber Company, Inc.
Put Strike $22.50,
Expires 05/22/2004 -- -- 200 (11) 200 (11)
Sara Lee Corporation
Put Strike $15.00,
Expires 01/22/2005 -- -- 140 (8) 140 (8)
Schering -Plough Corporation
Put Strike $20.00,
Expires 01/17/2004 -- -- 100 (48) 100 (48)
Schlumberger Limited
Put Strike $40.00,
Expires 01/17/2004 -- -- 89 (4) 89 (4)
Schlumberger Limited
Put Strike $45.00,
Expires 02/21/2004 -- -- 100 (20) 100 (20)
Sprint Corporation (FON Group)
Put Strike $15.00,
Expires 01/17/2004 -- -- 170 (10) 170 (10)
Time Warner Inc.
Put Strike $10.00,
Expires 01/17/2004 -- -- 200 (1) 200 (1)
Time Warner Inc.
Put Strike $12.50,
Expires 01/22/2005 -- -- 100 (9) 100 (9)
Time Warner Inc.
Put Strike $14.00,
Expires 04/17/2004 -- -- 100 (7) 100 (7)
Time Warner Inc.
Put Strike $7.50,
Expires 01/17/2004 -- -- 280 (1) 280 (1)
Union Pacific Corporation
Put Strike $60.00,
Expires 02/21/2004 -- -- 87 (13) 87 (13)
Verizon Communications, Inc.
Put Strike $40.00,
Expires 01/17/2004 -- -- 100 (68) 100 (68)
Wilmington Trust Corporation
Put Strike $30.00,
Expires 05/22/2004 -- -- 180 (10) 180 (10)
TOTAL WRITTEN OPTIONS
---------- ---------- ----------
(premium: $ 886) $ -- $ (634) $ (634)
---------- ---------- ----------
The notes to the pro forma financial statements are an integral part of this
report.
54
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX LKCM STRATEGIC IDEX TRANSAMERICA
TOTAL RETURN VALUE BALANCED PRO FORMA FUND
-------------------------- -------------------------- ---------------------------
SUMMARY:
Investments, at value 108.6% $ 58,139 95.7% $ 31,608 103.7% $ 89,747
written options 0.0% -- -1.9% (634) -0.7% (634)
Other assets / (liabilities) -8.6% (4,615) 6.2% 2,044 -3.0% (2,571)
------------- ---------- ------------- ---------- ------------- ----------
NET ASSETS 100.0% $ 53,524 100.0% $ 33,018 100.0% $ 86,542
============= ========== ============= ========== ============= ==========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) At October 31, 2003, all or a portion of this security is on loan. The
market value at October 31, 2003 of all securities on loan is $ 7,768.
(c) Cash collateral for the Repurchase Agreements, valued at $1,772, that
serve as collateral for securities lending are invested in corporate
bonds with interest rates and maturity dates ranging from 0.00%-10.18%
and 06/01/2004-12/31/2049, respectively.
(d) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open option contracts. The
value of all securities segregated at October 31, 2003, is $ 11,711. In
addition, cash in the amount of $2,849 was segregated at October 31,
2003.
(e) Value is less than $ 1.
(f) Contract amounts are not in thousands.
(g) Securities are stepbonds. CS First Boston has a coupon rate 7.90% until
05/01/2007, thereafter the coupon rate will reset every 5 years at the
5-year current month treasury rate + 200BP if not called.
(h) Securities are stepbonds. Abbey National PLC has a coupon rate 7.35%
until 10/01/2006, thereafter the coupon rate will reset every 5 years at
the 5-year current month treasury rate + 178BP.
DEFINITIONS:
ADR American Depositary Receipt
PHONES Participation Hybrid Option Note Exchangeable Securities
144A Securities are registered pursuant to Rule 144A of the Securities
Act of 1933. These securities may be resold as transactions exempt
from registration, normally to qualified institutional buyers.
Amounts shown as " -- " represent amounts that are zero or those that round to
less than $1,000.
The notes to the pro forma financial statements are an integral part of this
report.
55
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
AT OCTOBER 31, 2003
(ALL AMOUNTS EXCEPT PER SHARE AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX
LKCM IDEX
Strategic Transamerica Consolidated
Total Value Pro Forma
Return Balanced Adjustments Fund
---------- ------------ ----------- ------------
ASSETS:
Investments securities, at value (cost: $85,759) $ 58,139 $ 31,608 $ -- $ 89,747
(including $7,768 of securities loaned)
Cash 838 4,898 -- 5,736
Receivables:
Investment securities sold 290 -- -- 290
Shares of beneficial interest sold 48 132 -- 180
Interest 52 110 -- 162
Dividends 60 41 -- 101
Dividend reclaims receivable 2 -- -- 2
Due from investment adviser -- 11 -- 11
Other 15 8 -- 23
---------- ------------ ----------- ------------
59,444 36,808 -- 96,252
---------- ------------ ----------- ------------
LIABILITIES:
Investment securities purchased 563 244 -- 807
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 28 62 -- 90
Management and advisory fees 5 -- -- 5
Distribution fees 28 20 -- 48
Transfer agent fees 36 23 -- 59
Payable for securities on loan 5,219 2,768 -- 7,987
Written options (premium: $886) -- 634 -- 634
Other 41 39 -- 80
---------- ------------ ----------- ------------
5,920 3,790 -- 9,710
---------- ------------ ----------- ------------
NET ASSETS $ 53,524 $ 33,018 $ -- $ 86,542
========== ============ =========== ============
NET ASSETS CONSIST OF:
Shares of beneficial interest, unlimited shares authorized $ 51,090 $ 36,515 $ -- $ 87,605
Undistributed net investment income (loss) 22 16 -- 38
Accumulated net realized gain (loss) from
investment securities and option contracts (469) (4,869) -- (5,338)
Net unrealized appreciation (depreciation) on:
Investment securities 2,881 1,104 -- 3,985
Written option contracts -- 252 -- 252
---------- ------------ ----------- ------------
NET ASSETS $ 53,524 $ 33,018 $ -- $ 86,542
========== ============ =========== ============
SHARES OUTSTANDING:
Class A 1,939 1,030 778 (a) 3,747
Class B 999 1,199 397 (a) 2,595
Class C 165 318 66 (a) 549
Class L 13 46 5 (a) 64
Class M 215 285 85 (a) 585
NET ASSET VALUE PER SHARE:
Class A $ 16.10 $ 11.49 -- $ 11.49
Class B 16.02 11.46 -- 11.46
Class C 16.02 11.46 -- 11.46
Class L 16.02 11.46 -- 11.46
Class M 16.03 11.47 -- 11.47
MAXIMUM OFFERING PRICE PER SHARE (1):
Class A $ 17.04 $ 12.16 -- $ 12.16
Class M 16.19 11.59 -- 11.59
(1) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus. Net asset value per share for Classes B, C, and L shares represents
offering price. The redemption price for Classes B, L, and M shares equals net
asset value less any applicable contingent deferred sales charge.
Amounts shown as " -- " represent amounts that are zero or those that round to
less than $1,000.
The notes to the pro forma financial statements are an integral part of this
report.
56
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 2003
(ALL AMOUNTS IN THOUSANDS)
(UNAUDITED)
IDEX
LKCM IDEX
Strategic Transamerica Consolidated
Total Value Pro Forma
Return Balanced Adjustments Fund
---------- ------------ ----------- ------------
INVESTMENT INCOME:
Interest $ 571 $ 471 $ -- $ 1,042
Dividends 831 508 -- 1,339
Income from loaned securities--net 5 5 -- 10
Less withholding taxes on foreign dividends (5) -- -- (5)
---------- ------------ ----------- ------------
1,402 984 -- 2,386
---------- ------------ ----------- ------------
EXPENSES:
Management and advisory fees 418 223 (27) (b) 614
Transfer agent fees 243 152 -- 395
Printing and shareholder reports 36 22 -- 58
Custody fees 14 19 (10) (c) 23
Administration fees 39 39 (38) (d) 40
Legal fees 3 2 -- 5
Auditing and accounting fees 20 20 (10) (e) 30
Trustees fees 4 2 -- 6
Registration fees 74 71 -- 145
Other 5 3 -- 8
Distribution and service fees:
Class A 107 38 -- 145
Class B 153 120 -- 273
Class C 26 36 -- 62
Class L 1 2 -- 3
Class M 32 28 -- 60
---------- ------------ ----------- ------------
Total expenses 1,175 777 (85) 1,867
Less:
Advisory fee waiver (231) (195) 85 (f) (341)
---------- ------------ ----------- ------------
Net expenses 944 582 -- 1,526
---------- ------------ ----------- ------------
Net investment income (loss) 458 402 -- 860
---------- ------------ ----------- ------------
Net realized gain (loss) from:
Investment securities 795 (146) -- 649
Written option contracts -- 326 -- 326
---------- ------------ ----------- ------------
795 180 -- 975
---------- ------------ ----------- ------------
Net increase (decrease) unrealized appreciation
(depreciation) on:
Investment securities 5,051 4,286 -- 9,337
Written options -- 682 -- 682
---------- ------------ ----------- ------------
5,051 4,968 -- 10,019
---------- ------------ ----------- ------------
Net gain (loss) on investment securities and written
option contracts 5,846 5,148 -- 10,994
---------- ------------ ----------- ------------
Net increase (decrease) in net assets resulting
from operations $ 6,304 $ 5,550 $ -- $ 11,854
========== ============ =========== ============
Amounts shown as " -- " represent amounts that are zero or those that round to
less than $1,000.
The notes to the pro forma financial statements are an integral part of this
report.
57
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA NOTES TO THE FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
(unaudited)
NOTE 1 - GENERAL
The accompanying unaudited pro forma financial statements are presented to show
the effect of the proposed transfer of substantially all of the assets of IDEX
LKCM Strategic Total Return (the "Fund") to IDEX Transamerica Value Balanced
(the "Acquiring Fund") in exchange for Class A, B, C, L and M shares of the
Acquiring Fund and the assumption by the Acquiring Fund of substantially all of
the liabilities of the Fund as described elsewhere in this 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 because this fund's investment
objective/style, expense structure, and sub-advisor/fund 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 the Class A, B, C, L and M shares of the Acquiring Fund
will be treated and accounted for as a tax-free reorganization. The acquisition
would be accomplished by an acquisition of the net assets of the Fund in
exchange for the Class A, B, C, L and M shares of the Acquiring Fund at net
asset value. The unaudited pro forma Schedule of Investments and the unaudited
Pro Forma Statement of Assets and Liabilities have been prepared as though the
acquisition had been effective on October 31, 2003. The unaudited pro forma
Statement of Operations has been prepared as though the acquisition had been
effective November 1, 2002 to report operations for the twelve months ended
October 31, 2003.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements of the Fund and the Acquiring Fund, which are
included in their respective annual reports dated October 31, 2003.
NOTE 2 - PRO FORMA ADJUSTMENTS
The Pro Forma adjustments below reflect the impact of the merger.
(a) To adjust shares outstanding of the Pro Forma Fund based on combining
the Fund at the Acquiring Fund's net asset value.
(b) To restate management and advisory fees using the proposed advisory fee
rates for the Pro Forma Fund at the combined average daily net assets
of the Fund and Acquiring Fund.
(c) To remove duplicate Custody fees.
(d) To remove duplicate Administration fees.
(e) To remove duplicate Auditing and accounting fees.
(f) To adjust the Reimbursements by the investment advisor as a result of
the proposed stated annual expense limit of the Pro Forma Fund at the
combined average daily net assets of the Fund and the Acquiring Fund.
No adjustments have been made to investments owned on the Schedules of
Investments as the investments of the Pro Forma Fund are not unsuitable nor
violate the investment objectives of the Acquiring Fund.
58
REORGANIZATION BETWEEN IDEX LKCM STRATEGIC TOTAL RETURN AND IDEX
TRANSAMERICA VALUE BALANCED
PRO FORMA NOTES TO THE FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
(unaudited)
NOTE 3 - INVESTMENT ADVISORY AND OTHER TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the investment adviser for
the Acquiring Fund. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the
Acquiring Fund's administrator. AFSG Securities Corporation ("AFSG") is the
Acquiring Fund's distributor/principal underwriter. AEGON/Transamerica Investor
Services, Inc. ("ATIS") is the Acquiring Fund's transfer agent. ATIS and AFSG
are 100% owned by AUSA Holding Company ("AUSA"). ATFA is a directly owned
subsidiary of Western Reserve Life Assurance Co. of Ohio (78%) ("WRL") and AUSA
(22%). ATFS is a wholly owned subsidiary of WRL. WRL and AUSA are wholly owned
indirect subsidiaries of AEGON NV, a Netherlands corporation. Transamerica
Investment Management, LLC is both a sub-adviser at the acquiring fund and an
affiliate of the fund.
INVESTMENT ADVISORY FEES
The Acquiring Fund pays management fees to ATFA based on average daily net
assets ("ANA") at the following breakpoints:
0.75% of the first $500 million of ANA
0.65% of the next $500 million of ANA
0.60% of ANA over $1 billion.
If the reorganization is approved, the Acquiring Fund will pay management fees
to ATFA based on ANA at the following breakpoints:
0.75% of the first $500 million of ANA
0.65% of ANA over $500 million.
ATFA currently voluntarily waives its advisory fee and will reimburse the
Acquiring Fund to the extent that operating expenses, excluding 12b-1 fees,
exceed the following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitation agreed to by the
adviser within the succeeding three years, the Acquiring Fund may be required to
pay the advisor a portion or all of the waived advisory fees.
59
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 Exhibit A to the Proxy
Statement/Prospectus.
(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. 24, as filed with the SEC on
November 15, 1996. (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. 24, as filed with the SEC on
November 15, 1996.
(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. 51, as filed with the SEC on December 13,
2002.
(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 September 12,
2002.
(10) (a) Plans of Distribution under Rule 12b-1 are incorporated by
reference to Registrant's Registration Statement on Form N-1A (File No.
33-2659), Post-Effective Amendment No. 51, as filed with the SEC on
December 13, 2002. (b) Amended and Restated Plan for Multiple Classes
of Shares is incorporated herein by reference to the Registrant's
Registration Statement on Form N-1A (File No. 33-2659), Post-Effective
Amendment No. 43, as filed with the SEC on December 14, 2001.
(11) Opinion and Consent of Counsel is filed herewith.
60
(12) Opinion and Consent of Dechert LLP to be filed by post-effective
amendment.
(13) Administrative Services Agreement and Transfer Agent Agreement are
incorporated herein by reference to Post-Effective Amendment Nos. 49
and 24, respectively, to the Registrant's Registration Statement on
Form N-1A (File No 33-2659), as filed with the SEC on September 12,
2002 and November 15, 1996, respectively.
(14) Consent of Independent Certified Public Accountants is filed herewith.
(15) Not Applicable
(16) Powers of Attorney for the Registrant are incorporated herein by
reference to registrant's Registration Statement filed on Form N-14
(File No. 333-101251) as filed with the SEC on November 15, 2002.
(17) (a) Form of proxy card is filed herewith.
(b) The Registrant's Annual Report, dated October 31, 2003 is
incorporated herein by reference.
(c) Prospectus for IDEX Mutual Funds, dated March 1, 2003 is
incorporated herein by reference.
Item 17. Undertakings
1. The undersigned registrant agrees that prior to any public re-offering 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 re-offering prospectus will contain the information
called for by the applicable registration form for re-offerings 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.
61
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 6th day of February, 2004.
IDEX MUTUAL FUNDS
By: /s/ John K. Carter
------------------------------------
John K. Carter
Senior Vice President, Secretary and
General Counsel
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
- -------------------------------
Brian C. Scott* President and Chief Executive Officer February 5, 2004
/s/ Kim D. Day
- -------------------------------
Kim D. Day* Vice President, Treasurer and Principal Financial Officer February 5, 2004
/s/ John R. Kenney
- -------------------------------
John R. Kenney* Chairman February 5, 2004
/s/ Peter R. Brown
- -------------------------------
Peter R. Brown* Vice Chairman February 5, 2004
/s/ Larry N. Norman
- -------------------------------
Larry N. Norman* Trustee February 5, 2004
/s/ Daniel Calabria
- -------------------------------
Daniel Calabria* Trustee February 5, 2004
/s/ Charles C. Harris
- -------------------------------
Charles C. Harris* Trustee February 5, 2004
/s/ William W. Short, Jr.
- -------------------------------
William W. Short, Jr.* Trustee February 5, 2004
/s/ Jack E. Zimmerman
- -------------------------------
Jack E. Zimmerman* Trustee February 5, 2004
/s/ Leo J. Hill
- -------------------------------
Leo J. Hill* Trustee February 5, 2004
/s/ Janice B. Case
- -------------------------------
Janice B. Case* Trustee February 5, 2004
/s/ Russell A. Kimball, Jr.
- -------------------------------
Russell A. Kimball, Jr.* Trustee February 5, 2004
/s/ John K. Carter
- -------------------------------
* Signed by John K. Carter, as Attorney in-Fact
62
Exhibit Index
16. (11) Opinion and Consent of Counsel
16. (14) Consent of Independent Certified Public Accountants
16. (17) Form of Proxy Card
63