As filed with the Securities and Exchange Commission on November 9, 2001
Registration No. 33-2659/811-4556
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRIATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|_| Pre-Effective Amendment No. |_| Post-Effective Amendment No.
IDEX Mutual Funds
(Exact name of Registrant as specified in Charter)
Area Code and Telephone Number:
(888) 233-4339
570 Carillon Parkway
St. Petersburg, Florida 33716-1202
(address of Principal Executive Offices) (Zip Code)
John K. Carter, Esq.
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
(Name and address of agent for service)
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Copy To:
Kimberly J. Smith, Esq.
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415
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Approximate date of proposed public offering: As soon as practicable after the
effective date of this Registration Statement.
It is proposed that this filing will become effective on December 10, 2001,
pursuant to Rule 488.
Registrant has registered an indefinite number of shares of its common stock
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
Accordingly, no filing fee is being paid at this time.
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IDEX MUTUAL FUNDS
Form N-14
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
ITEM NO. HEADING
Part A
1. Beginning of Registration Statement
And Outside Front Cover Page of Prospectus.......... Cover Page
2. Beginning and Outside Back Cover Page of
Prospectus.......................................... Cover Page
3. Synopsis and Risk Factors........................... Summary
4. Information About the Transaction................... Letter to Shareholders; Summary; Reasons
for the Exchange; Information About the Exchange; Q&A
5. Information About the Registrant.................... Letter to Shareholders; Summary; Reasons
For the Exchange; Information About the Exchange;
Additional Information About the Fund and the Acquiring
Fund
6. Information About the Company Being Acquired Letter to Shareholders; Reasons for the Exchange;
Information About the Exchange;
Additional Information About the Fund and
The Acquiring Fund
7. Voting Information Letter to Shareholders; Cover Page; Voting
Information; Q & A
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
PART B STATEMENT OF ADDITIONAL INFORMATION
CAPTION
10. Cover Page Cover Page
11. Table of Contents Not Applicable
12. Additional Information about the Statement of Additional
Registrant Information of IDEX (1)
13. Additional Information About the Not Applicable
Company being Acquired
i
14. Financial Statements Financial Statements; Pro Forma
Financial Statements; IDEX Annual Report (2)
(1) Incorporated by reference to the Registration Statement of the
Registrant on Form N-1A (File No. ___).
(2) IDEX Annual Report incorporated by reference.
PART C
15. Indemnification
16. Exhibits
17. Undertakings
ii
IMPORTANT INFORMATION FOR SHAREHOLDERS OF IDEX MUNDER NET50, IDEX TRANSAMERICA
SMALL COMPANY, AND IDEX PILGRIM BAXTER TECHNOLOGY TO HELP YOU UNDERSTAND AND
VOTE ON THE PROPOSALS
Please read the enclosed prospectus/proxy statement for a complete
description of the proposals. However, as a quick reference, the following
questions and answers provide a brief overview of the proposals:
Q. ON WHAT PROPOSALS AM I BEING ASKED TO VOTE?
A. Shareholders are being asked to:
- - Consider, on behalf of the funds in which they own shares) an Agreement and
Plan of Reorganization for the transfer of all of the assets, less liabilities,
of IDEX Munder Net50, IDEX Transamerica Small Company and IDEX Pilgrim Baxter
Technology in exchange for shares of Pilgrim Baxter Mid Cap Growth.
- - Re-elect the current Trustees of IDEX and elect two new Trustees to the Board
of Trustees.
- - To permit IDEX Management, Inc. ("IMI"), after obtaining the approval of the
Board of Trustees of the Fund (the "Board"), to enter into and materially amend
Sub-Advisory Agreements with non-affiliated sub-advisers for the Fund, without
obtaining shareholder approval.
Q. WHAT HAPPENS IF SHAREHOLDERS DECIDE IN FAVOR OF THE EXCHANGE?
A. A closing date will be set for the reorganization. Shareholders will
receive full and fractional shares of IDEX Pilgrim Baxter Mid Cap Growth (the
"Acquiring Fund") equal in value to the shares of IDEX Munder Net50, IDEX
Transamerica Small Company and/or IDEX Pilgrim Baxter Technology (each a "Fund,"
collectively, the "Funds") that they owned on the Closing Date. The net asset
value per share of the Acquiring Fund will not be affected by the transaction.
So the reorganization will not result in a dilution of any shareholder's
interest.
Q. WHAT ARE THE ADVANTAGES OF MERGING THE FUNDS?
A. There are three key potential advantages:
Pilgrim Baxter & Associates, Ltd. Is recognized as a stellar money manager
in the mutual fund industry.
By combining the funds, shareholders may enjoy lower expense ratios over
time. Larger funds tend to enjoy economies of scale not available to funds
with smaller assets under management.
These lower costs may lead to stronger performance, since total return to a
fund's shareholders is net of fund expenses.
The potential benefits are explained in more detail in the enclosed
prospectus/proxy statement.
Q. HOW ARE THESE FUNDS ALIKE?
A. All funds growth of capital and are categorized as Aggressive Growth Funds.
Q. IF THE FUNDS MERGE, WILL THERE BE TAX CONSEQUENCES FOR ME?
A. Unlike a transaction where you direct IDEX to sell shares of one fund in
order to buy shares of another, the reorganization will not be considered a
taxable event. The funds themselves will recognize no gains or losses on
assets as a result of a reorganization. So you will not have reportable
capital gains or losses due to the reorganization.
R. WHY ARE INDIVIDUALS RECOMMENDED FOR ELECTION TO THE BOARD OF TRUSTEES?
A. IDEX is devoted to serving the needs of its shareholders, and the Board is
responsible for managing the Fund's business affairs to meet those needs.
The Board represents the shareholders and can exercise all of the Fund's
powers, except those reserved for shareholders.
Trustees are selected for election to the Board on the basis of their
education and professional experience. Candidates are chosen based on their
distinct interest in, and capacity for understanding the complexities of, the
operation of a mutual fund. These individuals bring considerable experience to
the impartial oversight of a Fund's operation.
The Proxy Statement includes a brief description of each nominee's history and
current position with IDEX, if applicable.
Q. WHY AM I BEING ASKED TO APPROVE A PROPOSAL TO PERMIT IMI TO ENTER INTO, OR
AMEND, A SUB-ADVISORY AGREEMENT WITHOUT SHAREHOLDER APPROVAL?
A. The Board felt that it was in the best interest of IDEX and its
shareholders to permit IMI to have maximum flexibility to select, supervise and
evaluate sub-advisers, without incurring the unnecessary delay or expense of
obtaining shareholder approval because it will allow each fund to operate more
efficiently. Currently, a shareholders' meeting must be held to appoint a sub-
adviser or materially amend a sub-advisory agreement. This necessitates
creation and distribution of proxy materials, and solicitation of proxy votes
from shareholders. This process is timely and costly. The Board also feels
that IMI has significant experience and expertise in working with, and
selecting, sub-advisers.
Q. HOW MANY VOTES DO YOU NEED TO APPROVE THESE PROPOSALS?
A. We need a plurality, or a majority of the votes cast, to approve the
proposal to elect the Trustees, we need the affirmative vote of a majority of
each applicable fund's outstanding voting securities, as defined by the
Investment Company Act of 1940, for the fund specific proposals.
Q. WHAT IF WE DO NOT HAVE ENOUGH VOTES TO MAKE THE DECISIONS BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
A. If we do not receive sufficient votes to hold the meeting, we or ALAMO
Direct, a proxy solicitation firm, may contact you by mail or telephone to
encourage you to vote. Shareholders should review the proxy materials carefully
and cast their vote to avoid additional mailings or telephone calls. If we do
not have enough votes to approve the proposals by the time of the shareholder
meeting at 11:00 a.m. on February 12, 2002, the meeting may be adjourned to
permit further solicitation of proxy votes.
Q. HAS THE BOARD APPROVED THE PROPOSALS?
A. Yes. The IDEX Board has approved all of the proposals and recommends that
you vote "FOR" each applicable proposal.
Q. HOW MANY VOTES AM I ENTITLED TO CAST?
A. As a shareholder, you are entitled to one vote for each share of each fund
that you own, and fractional votes to reflect the fractional shares that you own
on the record date, November 26, 2001.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by mail, via the Internet, by telephone or by
facsimile. To vote by mail, complete and sign the enclosed proxy card, and mail
it in the enclosed, postage paid-envelope.
You may also vote via the Internet at https://vote.proxy-direct.com: enter
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your 14-digit control number from your proxy card, and follow the instructions
on the web site.
You may also vote by telephone, too. Call 1-800-597-7836; enter your 14-digit
control number from your proxy card, and follow the simple instructions that
are given.
Finally, you instead may fax your vote to us at 1-888-796-9932.
If you need any assistance, or have any questions regarding the proposals or
how to submit your vote, please call IDEX Customer Service at 1-888-233-4339
between the hours of 8:00 a.m. and 8:00 p.m. Eastern Time (Monday - Friday).
Q. HOW DO I SIGN THE PROXY CARD?
A. INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names appear
on the account registration shown on the card.
JOINT ACCOUNTS: Both the owners must sign and the signatures should conform
exactly to the names shown on the account registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her capacity.
For example, a trustee for a trust should include his or her title when he or
she signs, such as :Jane Doe, Trustee"; or an authorized officer of a company
should indicate his or her position with the company, such as "John Smith,
President."
Q. WHO DO I CALL IF I HAVE QUESTIONS ABOUT THE PROXY STATEMENT?
A. Call your IDEX Customer Service Representative at 1-888-233-4339 between the
hours of 8:00 a.m. and 8:00 p.m. ET (Monday - Friday).
THE ATTACHED PROXY STATEMENT CONTAINS MORE DETAILED INFORMATION ABOUT THE
PROPOSALS RELATING TO THE APPLICABLE FUND. PLEASE READ IT CAREFULLY!
IDEX TRANSAMERICA SMALL COMPANY IDEX
PILGRIM BAXTER TECHNOLOGY
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
Dear Shareholder:
As a shareholder of IDEX Munder Net50, IDEX Transamerica Small Company
and/or IDEX Pilgrim Baxter Technology (each a "Fund," or collectively, the
"Funds"), you are entitled to vote on the following proposals that are described
below and in the enclosed materials:
1. To consider an Agreement and Plan of Reorganization providing for the
transfer of all of the assets, subject to liabilities, of the Funds to IDEX
Pilgrim Baxter Mid Cap Growth (the "Acquiring Fund") in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the Funds'
stated liabilities (the "Exchange" or the "Reorganization"). The shares of
the Acquiring Fund received in the Exchange will be distributed by the Fund
to its shareholders in liquidation of the Funds, after which each Fund will
be dissolved;
2. To re-elect the current Trustees of the Board and to elect two new Trustees
to the Board;
3. To consider approval of a proposal permitting IDEX Management, Inc. ("IMI"),
after obtaining the approval of the Board of Trustees of IDEX (the "Board"),
to enter into and materially amend sub-advisory agreements with
non-affiliated sub-advisers on behalf of each Fund and future funds, without
obtaining shareholder approval ("Sub-Adviser Approval Policy");
as set forth in the Prospectus/Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the meeting and any
adjournments. The Board is not aware of any other business to come before the
meeting.
The IDEX Board of Trustees (the "Board") has determined that it would be
in the best interest of each Fund and its shareholders if each Fund were to
exchange its assets (subject to liabilities) for shares of the Acquiring Fund
resulting in a larger asset base that may result in overall reductions of fees
for shareholders.
The first proposal provides that each Fund exchange all of its assets,
subject to liabilities, for shares of the Acquiring Fund. Promptly thereafter,
each Fund will distribute pro rata the Acquiring Fund shares received in the
Exchange to its shareholders in complete liquidation of each Fund. Thus, each
Fund shareholder will receive for his or her Fund shares a number of Acquiring
Fund shares equal to the aggregate NET ASSET VALUE of the shareholder's Fund
shares as of the date of the Exchange.
Here are some facts about the Exchange that will be useful to you as you
vote:
o There will be no cost to you to become a shareholder of the Acquiring
Fund
o In the opinion of counsel, the Exchange will be free from Federal
income taxes to you, each Fund and Acquiring Fund
o The holding period and aggregate tax basis of the Acquiring Fund
shares you receive in the Exchange will be the same as the holding
period and aggregate tax basis of your Fund shares
o You will be able to redeem your shares of the Acquiring Fund for cash
at net asset value without any redemption fees or required holding
period
o Shares of the Acquiring Fund are priced each day the New York Stock
Exchange is open for business and you may redeem all or a part of
your shares at the then-current net asset value per share
o As a shareholder of the Acquiring Fund, you will have the ability to
exchange your shares of other open-end funds in the IDEX family of
funds
Further information about the transaction is contained in the enclosed
materials, which you should review carefully.
You are also being asked to re-elect the current members of the IDEX
Board Trustees and to elect two new Trustees to the Board.
Finally you are being asked to consider a proposal to permit IMI, after
obtaining Board approval, to enter into and materially amend Sub-Advisory
Agreements on behalf of each Fund with non-affiliated sub-advisers without
obtaining shareholder approval. This Sub-Adviser Approval Policy may result in
cost savings to IDEX and its shareholders.
A Question and Answer section is included regarding this proxy and its
proposals.
For your convenience, you may vote by mail, by telephone, via the
internet or by facsimile.
TO VOTE BY MAIL;
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o Indicate your votes on the enclosed proxy card;
o Date and sign the proxy;
o Mail the proxy card promptly in the enclosed envelope, which requires no
postage if mailed in the United States; and
o Allow sufficient time for the proxy card to be received on or before
11:00 a.m., February 8, 2002.
You may also vote via the Internet, by telephone or by facsimile by following
the enclosed instructions.
If you vote via the Internet, by telephone or via facsimile, please do not mail
your proxy card.
The IDEX Board recommends that each Fund's shareholders vote "FOR" the
proposed transactions.
If you have any questions after considering the enclosed materials,
please call 1-888-233-IDEX (4339) (8:00 a.m. - 8:00 p.m. ET - Monday - Friday).
Sincerely,
John R. Kenney
Chairman and Chief Executive
Officer
December 12, 2001
IDEX MUTUAL FUNDS
IDEX Munder Net50
IDEX Transamerica Small Company
IDEX Pilgrim Baxter Technology
570 Carillon Parkway
St. Petersburg, Florida 33716
(Toll-Free) 1-888-233-4339
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
February 15, 2002
To the shareholders of IDEX Munder Net50, IDEX Transamerica Small Company and/or
IDEX Pilgrim Baxter Technology of IDEX Mutual Funds (each a "Fund," collectively
the "Funds") of IDEX Mutual Funds:
Notice is hereby given that a special meeting of the shareholders of the Funds
will be held at 570 Carillon Parkway, St. Petersburg, Florida 33716, on the 15th
day of February, 2002 at 11:00 a.m., local time, or any adjournment(s) thereof,
for the following purposes:
1. To consider an Agreement and Plan of Reorganization providing for the
transfer of all of the assets, subject to liabilities, of each Fund to IDEX
Pilgrim Baxter Mid Cap Growth (the "Acquiring Fund") in exchange for
Acquiring Fund shares and the assumption by the Acquiring Fund of each
Fund's stated liabilities (the "Exchange" or the "Reorganization"). The
shares of the Acquiring Fund received in the Exchange will be distributed by
each Fund to its shareholders in liquidation of each Fund, after which each
Fund will be dissolved;
2. To re-elect the current Trustees of the Board and to elect two new Trustees
to the Board;
3. To consider approval of a proposal permitting IDEX Management, Inc. ("IMI"),
after obtaining the approval of the Board of Trustees of IDEX (the "Board"),
to enter into and materially amend Sub-Advisory Agreements with
non-affiliated sub-advisers on behalf of each Fund and future funds, without
obtaining shareholder approval ("Sub-Adviser Approval Policy");
as set forth in the Prospectus/Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the meeting and any
adjournments. The Board is not aware of any other business to come before the
meeting.
The Board of Trustees of IDEX (the "Board") has fixed the close of business on
November 26, 2001 as the record date (the "Record Date") for the determination
of shareholders of each Fund that are entitled to notice of, and to vote at, the
meeting. You are entitled to vote at the meeting and any adjournment(s) thereof
if you owned shares of any Fund at the close of business on November 26, 2001.
(If you own shares in more than one Fund, you will vote the proposals on behalf
of each Fund in which you own shares.) If you attend the meeting, you may vote
your shares in person. If you do not expect to attend the meeting, please vote
by mail, by telephone, via the Internet or by facsimile following the
instructions included in this statement. If your shares are held in the name of
your brokerage firm (a street name account), please complete your proxy card and
return it to your broker. Your vote is still important. If you vote prior to
February 8, 2002, and then decide to attend the meeting, you may change your
vote in person at the meeting. The proposal set forth above has been unanimously
approved by the Board with respect to each Fund. The Board recommends that you
vote shares that you are entitled to vote "FOR" each proposal. This Notice and
accompanying Proxy Statement will be mailed on or about December 12, 2001.
We look forward to your participation, and we thank you for your continued
confidence in IDEX.
By Order of the Board of Trustees,
John K. Carter, Secretary
IDEX Mutual Funds
St. Petersburg, Florida
________, 2001
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
You may vote by mail, by telephone, via the Internet or by facsimile. Please
vote only one time, using the method that you prefer, unless you later decide to
change your vote prior to the Meeting.
If you vote by telephone, via the Internet, or by facsimile, please do not mail
your proxy card.
IDEX will furnish, without charge, a copy of its most recent annual report to
shareholders upon request. To obtain a copy, you may download a copy at
www.idexfunds.com, call IDEX Customer Service at 1-(888) 233-4339, or write to
IDEX at P.O. Box 9015, Clearwater, FL 33758-9015.
In order to avoid the additional expense and delay of further solicitation, we
ask that you mail your proxy promptly.
PROSPECTUS/PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD February 8, 2002
This Prospectus/Proxy Statement is furnished in connection with a solicitation
of proxies by the Board of Trustees of IDEX Mutual Funds ("IDEX") on behalf of
IDEX Munder Net50, IDEX Transamerica Small Company and IDEX Pilgrim Baxter
Technology (each a "Fund," collectively, the "Funds") to be used at the Special
Meeting of Shareholders (the "Meeting") of each Fund to be held February 8, 2001
at 11:00 a.m., Eastern Time, at the IDEX offices, 570 Carillon Parkway, St.
Petersburg, Florida 33716, for the purposes set forth in the accompanying Notice
of Special Meeting of Shareholders. Shareholder of record at the close of
business on November 26, 2001 are entitled to receive notice of and to vote at
the Meeting.
It is proposed that each Fund transfer all of its assets, subject to
liabilities, to IDEX Pilgrim Baxter Mid Cap Growth (the "Acquiring Fund"), which
is more fully described in this Prospectus/Proxy Statement (the "Exchange").
Upon consummation of the Exchange, the Acquiring Fund shares received by each
Fund will be distributed to Fund shareholders, with each shareholder receiving a
pro rata distribution of Acquiring Fund shares (or fractions thereof) for Fund
shares held prior to the Exchange. Thus, it is contemplated that each
shareholder will receive for his or her Fund shares a number of Acquiring Fund
shares (or fractions thereof) equal in value to the aggregate net asset value of
the shareholder's Fund shares as of the date of the Exchange.
This Prospectus/Proxy Statement, which should be retained for future reference,
sets forth concisely information about the Acquiring Fund that Fund shareholders
should know before voting on the proposal or investing in the Acquiring Fund.
A Statement of Additional Information ("SAI") dated March 1, 2001, relating to
this Prospectus/Proxy Statement, has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated herein by reference in its entirety. The
SEC maintains a web site (HTTP://WWW.SEC.GOV) that contains the SAI, material
incorporated in this Prospectus/Proxy Statement by reference, and other
information regarding the Acquiring Fund and each Fund. A copy of the SAI is
available without charge by calling 1-888-233-4339, or writing to IDEX at P.O.
Box 9015, Clearwater, Florida 33758-9015.
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MUTUAL FUND SHARES ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. MUTUAL
FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
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AS WITH ALL MUTUAL FUNDS, THE SEC HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The Acquiring Fund is a series of IDEX, an open-end, diversified management
investment company advised by Idex Management, Inc. ("IMI"). The substantive
differences between each Fund and the Acquiring Fund are set forth in this
Prospectus/Proxy Statement.
The Acquiring Fund's Prospectus dated March 1, 2001, and the Acquiring Fund's
Gain and Loss Statement for the period ending ______ each accompany this
Prospectus/Proxy Statement. Such Prospectus and financial statements are
incorporated by reference. For a free copy of the IDEX Annual Report or
Semi-Annual Report, write to IDEX at P.O. Box 9015, Clearwater, Florida
33758-9015, or call 1-888-233-2659.
Shareholders are entitled to one vote for each Fund share held and fractional
votes for each fractional Fund share held. Fund shares represented by executed
and unrevoked proxies will be voted in accordance with the specifications made
thereon. If the enclosed form of proxy is executed and returned, it nevertheless
may be revoked by giving another proxy or by letter or telegram directed to
IDEX, which must indicate the shareholder's name. To be effective, such
revocation must be received before the Meeting. Also, any shareholder who
attends the Meeting
1
in person may vote by ballot at the Meeting, thereby canceling any proxy
previously given. As of November 26, 2001, the following shares of each Fund's
common stock were issued and outstanding:
IDEX Munder Net50
IDEX Transamerica Small Company
IDEX Pilgrim Baxter Mid Cap Growth
Proxy materials will be mailed to shareholders of record on or about December
12, 2001.
2
TABLE OF CONTENTS
Proposal No. 1 - Acquisition of Assets:
Summary..................................................................
Reasons for the Exchange.................................................
Information about the Exchange...........................................
Proposal No.2 - Election of Trustees to the IDEX Board...................
Proposal No. 3 - Approval of a Sub-Adviser Approval Policy...............
Additional Information about each Fund and the Acquiring Fund............
Voting Information.......................................................
Financial Statements and Experts.........................................
Other Matters............................................................
Notice to Broker/Dealers and Voting Trustees and Their Nominees..........
Exhibit A: Agreement and Plan of Reorganization.........................
3
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SUMMARY - Re: REORGANIZATION
PROPOSAL No. 1
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This Summary is qualified by reference to the more complete information
contained elsewhere in this Prospectus/Proxy Statement, the IDEX Prospectus
(which contains information about each Fund and the Acquiring Fund, dated March
1, 2001) the Annual and Semi-Annual Reports, and the form of Agreement and Plan
of Reorganization attached to this Prospectus/Proxy Statement as Exhibit A.
PROPOSED TRANSACTION. The IDEX Board, including Board members who are not
"interested persons" (as defined in the Investment Company Act of 1940, as
amended ("1940 Act")), has approved an Agreement and Plan of Reorganization (the
"Plan"). The Plan provides that, subject to the requisite approval of each
Fund's shareholders, on the date of the Exchange each Fund will assign, transfer
and convey to the Acquiring Fund all of the assets (subject to liabilities) of
such Fund, including all securities and cash, in exchange for shares of the
acquiring Fund having an aggregate net asset value equal to the value of each
Fund's net assets. Each Fund will distribute all Acquiring Fund shares received
by it among its shareholders so that each shareholder will receive a pro rata
net asset value equal to the aggregate net asset value of the shareholder's Fund
shares as of the date of the Exchange. Thereafter, each Fund will be dissolved.
As a result of the Exchange, each Fund's shareholders will cease to be a
shareholder of the Fund and will become a shareholder of the Acquiring Fund as
of the close of business on the date of the Exchange.
Your Fund's investment manager, IMI, proposed to the Board a reorganization of
each Fund with and into the Acquiring Fund so that shareholders of each Fund may
become shareholders of a substantially larger fund advised by the same
investment adviser with generally historically better long-term performance, and
lower fund expenses. The Board also considered the fact that the surviving fund
has the potential for lower overall operating expenses. The Board also
considered that each Fund and the Acquiring Fund offer Class A, Class B, Class C
and Class M shares under identical sales charge arrangements. The Board also
considered that the Reorganization would be a tax-free reorganization, and there
would be no sales charge imposed in effecting the Reorganization.
The IDEX Board has concluded that the Exchange would be in the best interests of
each Fund and its shareholders, and the interests of existing shareholders of
each Fund would not be diluted as a result of the transactions contemplated by
the Exchange. See "Reasons for the Exchange."
TAX CONSEQUENCES. As a condition to the closing of the Exchange, each Fund and
the Acquiring Fund will receive an opinion of counsel to the effect that, for
Federal income tax purposes, (a) no gain or loss will be recognized by the
Fund's shareholders as a result of the Exchange, (b) the holding period and
aggregate tax basis of Acquiring Fund shares received by a Fund shareholder will
be the same as the holding period and aggregate tax basis of the shareholder's
Fund shares, and (c) the holding period and tax basis of each Fund's assets
transferred to the Acquiring Fund as a result of the Exchange will be the same
as the holding period and tax basis of such assets held by each Fund immediately
prior to the Exchange. See "Information about the Exchange - Federal Income Tax
Consequences."
COMPARISON OF EACH FUND AND THE ACQUIRING FUND. The following discussion is
primarily a summary of certain parts of each Fund's Prospectus, as amended, and
the Acquiring Fund's Prospectus. Information contained in this Prospectus/Proxy
Statement is qualified by the more complete information set forth in such IDEX
Prospectus, which are incorporated herein by reference.
Objectives. Each Fund has the following investment objectives:
IDEX Munder Net50: Seeks to provide long-term capital appreciation.
IDEX Transamerica Small Company: Seeks to maximize long-term growth.
IDEX Pilgrim Baxter Technology: Seeks growth of capital.
Acquiring Fund: Seeks capital appreciation.
4
Acquiring Fund and Funds. To pursue its goals, the Funds and the Acquiring Fund
invest principally in:
IDEX Munder Net50: Stocks of domestic and foreign companies that are
engaged in the Internet and Intranet related businesses.
IDEX Transamerica Small Company: Equity securities such as common
stocks, preferred stocks, rights, warrants and securities convertible
into or exchangeable for common stocks of small companies.
IDEX Pilgrim Baxter Technology: Common stocks of companies doing
business in the technology and communications sectors of the market.
Acquiring Fund: Common stocks of medium capitalization companies.
Strategies. IDEX Munder Net50: Under normal market conditions, the fund will
invest at least 65% of its total assets in equity securities and American
Depository Receipts ("ADRs") of both domestic and foreign companies that are
engaged in research, design, development manufacturing or engaged to a
significant extent in the business of distributing products, processes or
services for use with the Internet or Intranet related businesses. The fund
intends to hold approximately 50 different securities, but may hold between 40
and 60 securities at any time. Of the companies selected, 70-90% are expected to
be domestic, while 10-30% are expected to be foreign. There is no limit on the
market capitalization of the companies in which the fund may invest, or in the
length of operating history for the companies. The fund may invest without limit
in small companies and in initial public offerings. The principal risks for this
fund include stock risk, foreign stock risk, sector risk and small- and
medium-sized companies risk.
IDEX Transamerica Small Company: The fund uses a "bottom-up" approach to
investing and builds the fund's portfolio one company at a time by investing
fund assets principally in equity securities such as common stocks, preferred
stocks, rights, warrants and securities convertible into or exchangeable for
common stocks of small companies. The fund manager generally invests at least
65% of the fund's assets in equity securities of companies with a small market
capitalization (no more than $1 billion). The fund manager selects stocks for
small companies that show strong potential for steady growth and high barriers
to competition. The principal risks for this fund include stock risk,
convertible securities risk, small-cap companies risk and warrants and rights
risk.
IDEX Pilgrim Baxter Technology: The fund seeks its objective by investing
principally in common stocks of companies the technology and communications
sectors of the market. The fund manager generally invests at least 65% of the
fund's total assets in common stocks of small, medium or large capitalization
companies doing business in the technology and communications sectors of the
market. This fund is also concentrated which means Pilgrim Baxter invests 25% or
more of the fund's total assets in one or more industries within those sectors.
Pilgrim Baxter uses its own fundamental research and proprietary measures of
growth and business momentum in determining which stocks to buy and sell. The
principal risks for this fund include stock risk, technology stocks risk, and
small or medium sized companies risk.
IDEX Pilgrim Baxter Mid Cap Growth (Acquiring Fund): The fund seeks its
objective by investing principally in common stocks of medium capitalization
companies. In seeking capital appreciation, Pilgrim Baxter invests at least 65%
of the fund's total assets in common stocks, issued by companies with market
capitalizations or average revenues between $500 million and $10 billion. The
fund invests primarily in companies that Pilgrim Baxter believes have strong
business momentum, earnings growth and capital appreciation potential. Pilgrim
Baxter uses its own fundamental research and proprietary measures of growth and
business momentum in determining which stocks to buy and sell.
Description of Main Risks. The principal risks associates with an investment in
the Acquiring Fund are described below:
Stock Risk - 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 investment in a
fund will go up and down.
5
Medium-Sized Companies Risk - These companies present additional risks
because their earnings are less predictable, their share price more volatile,
and their securities less liquid than larger, more established companies.
See "Explanation of Strategies and Risks" in the IDEX Prospectus for a more
complete description of investment risks applicable to an investment in the
Acquiring Fund.
Fees and Expenses. The fees and expenses of each Fund set forth below are
estimated because each Fund has not been in existence for one full calendar
year. The fees and expenses for the Acquiring Fund are for the fiscal year ended
December 31, 2001. The "Pro Forma After Exchange" information is based on net
assets and fund accruals of each Fund and the Acquiring Fund as of ___________.
Annual fund operating expenses are paid out of fund assets, so their effect is
reflected in the fund's net asset value per share.
SHAREHOLDER FEES
(fees paid directly from your investment):
The maximum sales charge (load) imposed on purchases (as a % of offering price)
for Class A shares is 5.50% and for Class M shares is 1.00%. The sales charge is
not applicable to Class B and C shares. The maximum deferred sales charge (load)
for Class B is 5.00% and 1.00% for Class M shares. The charge is not applicable
to A and C shares. 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. Purchases of Class M shares are subject to a 1% contingent deferred
sales charge if redeemed within 18 months of purchase.
ANNUAL FUND OPERATING EXPENSES (Expenses Paid from Fund Assets) (percentage of
average net assets):
ACQUIRING FUND SHARES:
- ---------------------------------------------------------------------
Class A Class B Class C Class M
- ---------------------------------------------------------------------
Management Fees 0.80% 0.80% 0.80% 0.80%
- ---------------------------------------------------------------------
Distribution and 0.35% 1.00% 1.00% 0.90%
service (12b-1
fees)
- ---------------------------------------------------------------------
Other Expenses 0.91% 0.91% 0.91% 0.91%
- ---------------------------------------------------------------------
Total annual fund 2.06% 2.71% 2.71% 2.61%
operating expenses
- ---------------------------------------------------------------------
Expense reduction 0.46% 0.46% 0.46% 0.46%
(a)
- ---------------------------------------------------------------------
Net Operating 1.60% 2.25% 2.25% 2.15%
Expenses
- ---------------------------------------------------------------------
(a) Contractual arrangement with IMI through 11/30/01 for expenses that exceed
1.20% and for the period 12/01/01 through 4/30/02 for expenses that exceed
1.40%; excluding 12b-1 fees.
6
Munder Net50:
- ------------------------------------------------------------------------------------------
Class A Class B Class C Class M
- ------------------------------------------------------------------------------------------
Management Fees 1.00% 1.00% 1.00% 1.00%
- ------------------------------------------------------------------------------------------
Distribution and 0.35% 1.00% 1.00% 0.90%
service (12b-1
fees)
- ------------------------------------------------------------------------------------------
Other Expenses (a) 2.70% 2.70% 2.70% 2.70%
- ------------------------------------------------------------------------------------------
Total annual fund 4.05% 4.70% 4.70% 4.60%
operating expenses
- ------------------------------------------------------------------------------------------
Expense reduction 2.25% 2.25% 2.25% 2.25%
(b)
- ------------------------------------------------------------------------------------------
Net Operating 1.80% 2.45% 2.45% 2.35%
Expenses
- ------------------------------------------------------------------------------------------
(a) Because the fund commenced operations in December 2000, the "Other
Expenses" are estimates.
(b) Contractual arrangement with IMI through 11/30/01, for expenses that
exceed 1.40% and for the period 12/01/01 through 4/30/02. for expenses
that exceed 1.60%, excluding 12b-1 fees.
Transamerica Small Company:
- ------------------------------------------------------------------------------------------
Class A Class B Class C Class M
- ------------------------------------------------------------------------------------------
Management Fees 0.80% 0.80% 0.80% 0.80%
- ------------------------------------------------------------------------------------------
Distribution and 0.35% 1.00% 1.00% 0.90%
service (12b-1
fees)
- ------------------------------------------------------------------------------------------
Other Expenses (a) 3.39% 3.39% 3.39% 3.39%
- ------------------------------------------------------------------------------------------
Total annual fund 4.54% 5.19% 5.19% 5.09%
operating expenses
- ------------------------------------------------------------------------------------------
Expense reduction 2.94% 2.94% 2.94% 2.94%
(b)
- ------------------------------------------------------------------------------------------
Net Operating 1.60% 2.25% 2.25% 2.15%
Expenses
- ------------------------------------------------------------------------------------------
(c) The "Other Expenses" are estimates because the fund commenced operations
in March 2000.
(d) Contractual arrangement with IMI through 11/30/01, for expenses that
exceed 1.20% and for the period 12/01/01 through 4/30/02. for expenses
that exceed 1.40%, excluding 12b-1 fees.
Pilgrim Baxter Technology:
- ------------------------------------------------------------------------------------------
Class A Class B Class C Class M
- ------------------------------------------------------------------------------------------
Management Fees 1.00% 1.00% 1.00% 1.00%
- ------------------------------------------------------------------------------------------
Distribution and 0.35% 1.00% 1.00% 0.90%
service (12b-1
fees)
- ------------------------------------------------------------------------------------------
Other Expenses (a) 0.92% 0.92% 0.92% 0.92%
- ------------------------------------------------------------------------------------------
Total annual fund 2.27% 2.92% 2.92% 2.82%
operating expenses
- ------------------------------------------------------------------------------------------
Expense reduction 0.47% 0.47% 0.47% 0.47%
(b)
- ------------------------------------------------------------------------------------------
Net Operating 1.80% 2.45% 2.45% 2.35%
Expenses
- ------------------------------------------------------------------------------------------
(e) The "Other Expenses" are estimates because the fund commenced operations
in March 2000.
(f) Contractual arrangement with IMI through 11/30/01, for expenses that
exceed 1.40% and for the period 12/01/01 through 4/30/02. for expenses
that exceed 1.60%, excluding 12b-1 fees.
7
PRO FORMA AFTER EXCHANGE ACQUIRING FUND:
- ------------------------------------------------------------------------------------------
Class A Class B Class C Class M
- ------------------------------------------------------------------------------------------
Management Fees % % % %
- ------------------------------------------------------------------------------------------
Distribution and % % % %
service (12b-1
fees)
- ------------------------------------------------------------------------------------------
Other Expenses % % % %
- ------------------------------------------------------------------------------------------
Total annual fund % % % %
operating expenses
- ------------------------------------------------------------------------------------------
Expense reduction % % % %
- ------------------------------------------------------------------------------------------
Net Operating % % % %
Expenses
- ------------------------------------------------------------------------------------------
EXAMPLE:
This example shows what you could pay in expenses over time. It will
help you compare the costs of investing in the Acquiring Fund with the costs of
investing in other mutual funds. It uses the same hypothetical conditions other
funds use in their prospectuses: $10,000 initial investment, 5% total return
each year and no changes in expenses. The return is for illustration purposes
only and is not guaranteed. Actual costs may be higher or lower.
ACQUIRING FUND:*
If the shares are redeemed at the end of each period:
- ------------------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
A $ 704 $ 1,118 $ 1,558 $ 2,774
- ------------------------------------------------------------------------------------------
B** $ 728 $ 1,098 $ 1,494 $ 2,851
- ------------------------------------------------------------------------------------------
C $ 228 $ 798 $ 1,394 $ 3,008
- ------------------------------------------------------------------------------------------
M $ 415 $ 860 $ 1,431 $ 2,981
- ------------------------------------------------------------------------------------------
*The table reflects the expense cap increase on 12/01/01.
**Examples for Class B shares assume they will convert to Class A shares eight
years after you purchase them.
If the shares are not redeemed:
- ------------------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
A $ 704 $ 1,118 $ 1,558 $ 2,774
- ------------------------------------------------------------------------------------------
B** $ 228 $ 798 $ 1,394 $ 2,851
- ------------------------------------------------------------------------------------------
C $ 228 $ 798 $ 1,394 $ 3,008
- ------------------------------------------------------------------------------------------
M $ 316 $ 860 $ 1,431 $ 2,981
- ------------------------------------------------------------------------------------------
* The table reflects the expense cap increase on 12/01/01.
**Examples for Class B shares assume they will convert to Class A shares eight
years after you purchase them.
PRO FORMA AFTER EXCHANGE (Acquiring Fund):
If shares are redeemed:
- ------------------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
A $ $
- ------------------------------------------------------------------------------------------
B* $ $
- ------------------------------------------------------------------------------------------
C $ $
- ------------------------------------------------------------------------------------------
M $ $
- ------------------------------------------------------------------------------------------
*Examples for Class B shares assume they will convert to Class A shares eight
years after you purchase them.
8
If the shares are not redeemed:
- ------------------------------------------------------------------------------------------
Share Class 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------------
A $ $
- ------------------------------------------------------------------------------------------
B* $ $
- ------------------------------------------------------------------------------------------
C $ $
- ------------------------------------------------------------------------------------------
M $ $
- ------------------------------------------------------------------------------------------
*Examples for Class B shares assume they will convert to Class A shares eight
years after you purchase them.
8
PAST PERFORMANCE. The average total returns for the Acquiring Fund for Class A
shares were (21.84%) and 27.77% for one year and since inception respectively;
Class B shares (22.07%) and 29.74%; Class C Shares (17.97%) and 9.59%; and Class
M Shares (19.50%) and 30.39%. The total return for the year ended December 31,
2000 was (17.30%).
MANAGEMENT FEES: The investment advisory fee for IDEX Munder Net50 is an annual
rate of 1.00% of the first $1 billion of the fund's average daily net assets and
0.95% of average daily net assets over $1 billion. The investment advisory fee
for IDEX Transamerica Small Company is an annual rate of 0.80% of the first $500
million of the fund's average daily net assets and 0.70% of assets over $500
million. The investment advisory fee for IDEX Pilgrim Baxter Technology is an
annual rate of 1.00% of the first $500 million of the fund's average daily net
assets and 0.90% of assets over $500 million.
The current investment advisory fee for the Acquiring Fund is an annual rate of
0.80% of the first $500 million of the fund's average daily net assets and 0.70%
of the fund's average daily net assets over $500 million. For the fiscal year
ended October 31, 2000, IMI received $ 440,701, less reimbursements of $229,341,
for a net of $211,360 for investment advisory services on behalf of IDEX Pilgrim
Baxter Technology and did not receive any fees for IDEX Transamerica Small
Company as IMI paid $125,027 on behalf of the fund for reimbursements. IMI did
not receive any fees for services to IDEX Munder Net50 as it did not commence
operations until April 2001. The Acquiring Fund paid IMI $580,661, less
reimbursements of $ 373,224, for a net advisory fee of $207,437.
If the current advisory fee for the Acquiring Fund had been effect for the
fiscal year ended October 31, 2000, IDEX Munder Net50, IDEX Transamerica Small
Company and IDEX Pilgrim Baxter Technology would have paid IMI $________,
$______ and $_______, respectively, in investment advisory fees.
BOARD CONSIDERATION OF FEES. The Board reviewed the performance of each Fund,
the asset base of each Fund and the fees. It considered a variety of
alternatives potentially available to each Fund, including maintaining the
status quo or liquidating each Fund.
The Board then examined the nature, quality and scope of the services provided
to the Acquiring Fund by Pilgrim Baxter. They then reviewed the fee structure of
the Acquiring Fund, and analyzed the fee structure of each Fund. They reviewed
the fees of similar funds in the mutual fund industry. They also reviewed the
reputation and presence of Pilgrim Baxter in the mutual fund industry. They also
noted that both IDEX Pilgrim Baxter Technology and IDEX Munder Net 50
shareholders would realize a reduction in advisory fees under the Acquiring
Fund's fee structure.
The Board felt the combined higher net assets should enable the Acquiring Fund
to spread costs over accounting, legal and printing, and this larger asset base
may thereby potentially reduce the per share expense levels. The Board also
determined that higher net asset levels also may benefit portfolio management by
permitting larger individual portfolio investments that may result in reduced
transaction costs or more favorable pricing by providing the opportunity for
greater portfolio diversity.
The Board further determined that these benefits, in turn, should have a
favorable effect on the future economies of scale and eliminate certain costs
associated with operating separately. These factors, and the reputation of
American Century, resulted in the determination that reorganizing each Fund into
the Acquiring Fund, was in the best interest of each Fund and its shareholders.
9
SHARE DISTRIBUTION AND PURCHASE PROCEDURES. Both each Fund and the Acquiring
Fund's shares may be purchased at their net asset value on any day the New York
Stock Exchange (NYSE) is open. The Acquiring Fund continuously offers new shares
to investors at a price equal to the net asset value of the shares at the time
of purchase. The Acquiring Fund's net asset value per share is determined as of
close of regular trading on the NYSE, on each day that the NYSE is open, by
dividing the value of the Acquiring Fund's net assets by the total number of
shares outstanding. The Acquiring Fund's investments generally are valued based
on market value or, where market quotations are not readily available, based on
fair value as determined in good faith by the Acquiring Fund's Board. See
"Shareholder Information" in the IDEX Prospectus.
SHARE REDEMPTION PROCEDURES. A shareholder of the Acquiring Fund may redeem his
or her shares from the Acquiring Fund at any time during which IDEX is open for
business by tendering such shares to IDEX. The redemption price the Acquiring
Fund will pay for such shares in equal to their net asset value next determined
after receipt of a proper request for redemption. See "Shareholder Information -
How to Sell Shares" in the IDEX Prospectus.
EXCHANGE PRIVILEGES AND OTHER SHAREHOLDER SERVICES. You can exchange $500 or
more of one fund in the IDEX family for shares in the same class of another
fund. You may also exchange into the Cash Equivalent Fund without a sales
charge. Shareholders of the Acquiring Fund may exchange at net asset value all
or a portion of their shares. Please see "Shareholder Information - How to
Exchange Shares" in the IDEX Prospectus.
INVESTMENT ADVISER. The investment adviser for both each Fund and the Acquiring
Fund is IDEX Management, Inc. ("IMI"), located at 570 Carillon Parkway, St.
Petersburg, Florida 33716. IMI has served as an investment adviser since 1985.
IMI hires sub-advisers to furnish investment advice and recommendations and has
entered into sub-advisory agreements with each sub-adviser in the IDEX fund
family. The investment adviser also monitors the sub-advisers' buying and
selling of securities and administration of each Funds. For these services, it
is paid an advisory fee. This fee is based on the average daily net assets of
each fund, and is paid per the terms of the Investment Advisory Agreements.
IMI is a wholly-owned direct subsidiary of AUSA Holding Company ("AUSA"). AUSA
is a holding company that 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.
PORTFOLIO MANAGEMENT. The Acquiring Fund is sub-advised by Pilgrim Baxter &
Associates, Ltd. The fund is managed by a team of investment professions led by
Gary L. Pilgrim. Mr. Pilgrim is the president and chief investment officer of
Pilgrim Baxter, and has been a growth stock manager for over 30 years.
BOARD MEMBERS. Both each Fund and the Acquiring Fund are managed by the same
Board. The Board is composed of seven members. John R. Kenney serves as Chairman
and Chief Executive Officer. Mr. Kenney is an affiliated person of IDEX and
related entities. Patrick S. Baird, also an affiliated person, serves as Trustee
and President of IDEX. The remaining Board members are "disinterested persons"
as defined by the 1940 Act. Peter R. Brown serves as Vice Chairman. The
remaining "disinterested" Board members are Daniel Calabria, Charles Harris,
William Short, Jr. and Jack E. Zimmerman. James L. Churchill and Julian Lerner
serve as Trustees Emeritus. Janice B. Case and Russell A. Kimball, Jr. are the
current nominees to the Board.
The Board is not required to hold annual meetings to elect Trustees. A
description of the Trustees is set forth in the Statement of Additional
Information.
CAPITALIZATION. The following table sets forth as of ________ (1) the
capitalization of each Fund's shares; (2) the capitalization of the Acquiring
Fund's shares; and (3) the pro forma capitalization of the Acquiring Fund's
shares, as adjusted showing the effect of the Exchange had it occurred on such
date.
10
- ------------------------------------------------------------------------------------------
Fund Shares Acquiring Fund Pro Forma After
Shares Exchange Acquiring
Fund
- ------------------------------------------------------------------------------------------
Total net assets
- ------------------------------------------------------------------------------------------
Net asset value per
share
- ------------------------------------------------------------------------------------------
Shares outstanding
- ------------------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. Both the Fund and the Acquiring Fund
distributes to its shareholders net investment income and any net realized
short-term capital gains _______, and net realized long-term capital gains, if
any, annually. Such dividends and distributions are automatically reinvested in
each Fund or Acquiring Fund shares at net asset value, unless the shareholder
requests cash. See "Shareholder Information - Distributions and Taxes" in the
IDEX SAI.
SHAREHOLDER RIGHTS. Both the Acquiring Fund and each Fund are part of a
Massachusetts Trust, and, thus, their shareholders have the same rights due them
under the state law. IDEX is not required to hold annual meetings of
shareholders and has no current intention to hold such meetings, except as
required by the 1940 Act. Under the 1940 Act, IDEX is required to hold a
shareholders' meeting if, among other reasons, the number of Trustees elected by
shareholders is less than a majority of the total number of Trustees, or if it
desires to change any fundamental investment policies. In addition, holders of
at least 10% of a fund's outstanding shares may require a fund to hold a
shareholder meeting for the purpose of voting on the removal of any Trustee.
REASONS FOR THE EXCHANGE
The Board, including a majority of its independent Trustees, has determined that
the exchange is in the best interests of each Fund. In approving the
Reorganization, the Board considered a number of factors, including:
(1) the compatibility of the Funds' investment objectives, policies
and restrictions;
(2) the effect of Exchange on the expense ratio of the Acquiring
Fund relative to each Fund's current expense ratio;
(3) the effect of the Exchange on the Funds' expected investment
performance;
(4) the costs to be incurred by each Fund as a result of the
Exchange;
(5) the tax consequences of the Exchange;
(6) possible alternatives to the Exchange, including whether each
Fund should continue to operate on a stand-alone basis or should
be liquidated;
(7) the potential benefits of the Exchange to IDEX and its
respective shareholders.
The Exchange was recommended to the Board by IDEX at a meeting held on October
30, 2001. In recommending the Exchange, IDEX advised the Board that the
investment advisory fees for the Acquiring Fund would be equal to or less than
each Fund's fee. The Board considered the performance record of the Acquiring
Fund and of each Fund. The Board also considered that with greater net assets,
the Funds should reduce the expenses borne by shareholders as a percentage of
net assets. The Board was also advised that following the Exchange, the expense
ratio for the Acquiring Fund may decrease because the investment advisory fees
paid decrease as its size increases.
In determining whether to recommend approval of the Exchange, the Board
considered the following factors, among others: (1) the compatibility of the
Acquiring Fund and each Fund's investment objective and management policies, as
well as the services offered by IDEX to the Funds; (2) the terms and conditions
of the Exchange and whether the Exchange would result in dilution of shareholder
interests; (3) expense ratios and information regarding the fees and expenses of
the Acquiring Fund and each Fund, as well as the expense rations of similar
funds and the estimated expense ratio of the combined fund; (4) the tax
consequences of the Exchange; and (5) the estimated costs to be incurred by the
Acquiring Fund and each Fund as a result of the Exchange
INFORMATION ABOUT THE EXCHANGE
Plan Of Exchange. The following summary of the Plan is qualified in its entirety
by reference to the form of Plan attached to this Prospectus/Proxy Statement as
Exhibit A. The Plan provides that the Acquiring Fund will acquire
11
all of the assets of each Fund at net asset value, in exchange for Acquiring
Fund shares and the assumption by the Acquiring Fund of each Fund's stated
liabilities on ____________, or such later date as may be agreed upon by the
parties (the "Closing Date"). The number of Acquiring Fund shares to be issued
to each Fund will be determined on the basis of the relative net asset values
per share and aggregate net assets of the shares of the Acquiring Fund and each
Fund, generally computed as of the close of trading on the floor of the NYSE
(currently at 4:00 p.m., New York time) on the Closing Date. Portfolio
securities of each Fund and the Acquiring Fund, which are described for the
Acquiring Fund under "Shareholder Information - Pricing of Shares" in the IDEX
Prospectus.
Prior to the Closing Date, each Fund will declare a dividend or dividends which,
together with all previous such dividends, will have the effect of distributing
to Fund shareholders all of each Fund's previously undistributed investment
company taxable income, if any, for the fiscal period ending on or prior to the
Closing Date (computed without regard to any deduction or dividends paid), its
net exempt interest income for the fiscal period ending on or prior to the
Closing Date, and all of its previously undistributed net capital gain realized
in the fiscal period ending on or prior to the Closing Date (after reduction for
any capital loss carried forward).
As conveniently as practicable after the Closing Date, each Fund will liquidate
and distribute pro rata to its shareholders of record as of the close of
business on the Closing Date, the shares received by it in the Exchange. Such
distribution and liquidation will be accomplished by establishing accounts on
the share records of the Acquiring Fund in the name of each Fund shareholder,
each account representing the respective pro rata number of Acquiring Fund
shares due to the shareholder. After such distribution and the winding up of its
affairs, each Fund will be dissolved. Some of the outstanding shares of each
Fund may be represented by physical certificates; however, in the interest of
economy and convenience, shares of the Acquiring Fund issued to Fund
shareholders pursuant to the Exchange, will be in uncertificated form. After the
Closing Date, any outstanding certificates representing Fund shares will be
void.
The Plan may be amended at any time prior to the Exchange. Each Fund will
provide its shareholders with information describing any material amendment to
the Plan prior to shareholder consideration. The obligations of each Fund and
the Acquiring Fund under the Plan are subject to various conditions, including
approval by Fund shareholders holding the requisite number of Fund shares and
the continuing accuracy of various representations and warranties of each Fund
and the Acquiring Fund being confirmed by the respective parties.
The Plan may be amended at any time prior to the Exchange. Each Fund will
provide its shareholders with information describing any material amendment to
the Plan prior to shareholder consideration. The obligations of each Fund and
the Acquiring Fund under the Plan are subject to various conditions, including
approval by Fund shareholders holding the requisite number of Fund shares and
the continuing accuracy of various representations and warranties of each Fund
and the Acquiring Fund being confirmed by the respective parties.
The total expenses of the Exchange are expected to be approximately $_____,
which will be borne pro rata according to the aggregate net assets of the
Acquiring Fund and each Fund on the date of the Exchange.
Federal Income Tax Consequences. The exchange of each Fund's assets for the
Acquiring Fund shares is intended to qualify for Federal income tax purposes as
a tax-free reorganization under Section 368(a) of the Code. As a condition to
the closing of the Exchange, each Fund and the Acquiring Fund will receive the
opinion of Sutherland Asbill & Brennan, LLP, counsel to each Fund and the
Acquiring Fund, to the effect that on the basis of the existing provisions of
the Code, Treasury regulations thereunder, current administrative regulations
and pronouncements and court decisions, and certain facts, assumptions and
representations, for Federal income tax purposes: (1) the transfer of all of
each Fund's assets in exchange for Acquiring Fund shares and the assumption by
the Acquiring Fund of each Fund's liabilities will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) of the Code with respect to each
Fund; (2) no gain or loss will be recognized by the Acquiring Fund upon receipt
of each Fund's assets solely in exchange for Acquiring Fund shares and the
assumption by the Acquiring Fund of liabilities of each Fund; (3) no gain or
loss will be recognized by each Fund upon transfer of its assets to the
Acquiring Fund in exchange for shares and the assumption by the Acquiring Fund
of each Fund's liabilities or upon the distribution (whether actual or
constructive) of Acquiring Fund shares to Fund shareholders in exchange for
their Fund shares; (4) no gain or loss will be recognized by Fund shareholders
upon the exchange of Fund shares for Acquiring Fund shares; (5) the aggregate
tax basis for Acquiring Fund shares received by each Fund shareholder pursuant
to the Exchange will be the same as the aggregate tax basis for Fund shares held
by such
12
shareholder immediately prior to the Exchange, and the holding period of
Acquiring Fund shares to be received by a Fund shareholder will include the
period during which Fund shares surrendered in exchange therefor were held by
such shareholder (provided Fund shares were held as capital assets on the date
of the Exchange); and (6) the tax basis of Fund assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to each Fund immediately
prior to the Exchange, and the holding period of Fund assets in the hands of the
Acquiring Fund will include the period during which those assets were held by
each Fund.
NEITHER EACH FUND NOR THE ACQUIRING FUND HAS SOUGHT A TAX RULING FROM THE
INTERNAL REVENUE SERVICE ("IRS"). THE OPINION OF COUNSEL IS NOT BINDING ON THE
IRS NOR DOES IT PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Fund
shareholders should consult their tax advisers regarding the effect, if any, of
the proposed Exchange in light of their individual circumstances. Since the
foregoing discussion relates only to the Federal income tax consequences of the
Exchange, Fund shareholders also should consult their tax advisors as to state
and local tax consequences, if any, of the Exchange.
REQUIRED VOTE AND BOARD'S RECOMMENDATION
The IDEX Board has approved the Plan and the Exchange on behalf of each Fund,
and has determined that (i) participation in the Exchange is in the best
interest of each Fund and its shareholders and (ii) the interests of
shareholders of each Fund will not be diluted as a result of the Exchange.
Pursuant to the IDEX charter documents, an affirmative vote of a majority of
each Fund's shares outstanding and entitled to vote is required to approve the
Plan and the Exchange.
- --------------------------------------------------------------------------------
THE IDEX BOARD OF TRUSTEES, INCLUDING THE "NON-INTERESTED"
TRUSTEES, RECOMMENDS THAT EACH FUND'S SHAREHOLDERS VOTE "FOR" PROPOSAL No. 1 -
APPROVAL OF THE PLAN AND THE EXCHANGE.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT EACH FUND AND THE ACQUIRING FUND
Information about each Fund and the Acquiring Fund is incorporated by reference
into the Prospectus/Proxy Statement from the IDEX Prospectus forming a part of
its Registration Statement on Form N-1A (File No. 33-2659), as amended.
Each Fund and the Acquiring Fund are subject to the requirements of the 1940
Act, and file reports, proxy statements and other information with the SEC.
These materials may be inspected and copied at the Public Reference Facilities
of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies
of such materials may also bed obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, SEC, Washington, D.C., at
prescribed rates.
- --------------------------------------------------------------------------------
PROPOSAL No. 2:
To re-elect the current Trustees of the Board and to elect two additional
Trustees to the Board.
- --------------------------------------------------------------------------------
IDEX is not required to hold annual meetings of shareholders for the election of
Trustees. Shareholders are being asked to consider the re-election of the seven
Trustees and the election of two new Trustees to the IDEX Board at the Special
Meeting pursuant to each Fund's Bylaws, which permit the election of Trustees at
any meeting required to be held. Election of the Trustees requires a vote of ALL
IDEX shareholders. Shareholders of other IDEX funds will be asked to vote for
the Trustees at a later date. The results of the Trustee election will be
effective March 1, 2002.
At a meeting held on June 14, 2001 (the "Board Meeting"), the Disinterested
Trustees unanimously nominated for re-election: Peter R. Brown, Charles C.
Harris, Jack E. Zimmerman, William W. Short, Jr., Daniel Calabria, John R.
Kenney, and Patrick S. Baird, the incumbent Trustees; and unanimously nominated
for election to the Board, Janice B. Case and Russell A. Kimball, Jr. The
Trustees are to be elected to serve until reaching their respective designated
13
retirement ages or until their successors are duly elected and qualified.
Following the Special Meeting, IDEX does not contemplate holding regular
meetings of shareholders to elect Trustees or otherwise. Each of the nominees
named has agreed to serve as a Trustee if elected. However, should any nominee
become unable or unwilling to accept nomination or election, the proxies will be
voted for one or more substitute nominees designated by the Board.
The following sets forth the names, ages, principal occupations, and other
information respecting the nominees:
- ------------------------------------------------------------------------------------------
Number of
Funds/
Term of Portfolios
Office overseen
Position(s) and Principal Occupation by
Name held length or Employment Trustee
With Fund of time in the past 5 years or
served Nominee
for
Trustee
- ------------------------------------------------------------------------------------------
Peter R. Brown Vice 1986 - Chairman of the Board, All IDEX
1180 6th Street East Chairman present Peter Brown Construction funds (31)
Treasure Island, Company (construction
Florida 33708 contractors and All
(DOB 5/10/28) engineers), Largo, Florida AEGON/Trans-america
(1963-2000); Vice Series
Chairman, Fund,
AEGON/Transamerica Series Inc.
Fund, Inc., Rear Admiral ("ATSF")
(Ret.) U.S. Navy Reserve, Portfolios
Civil Engineer Corps. (34)
- ------------------------------------------------------------------------------------------
Charles C. Harris Trustee 1994 - Director, All IDEX
35 Winston Drive present AEGON/Transamerica Series funds
Clearwater, Fund, Inc. (1986-present); (31)
Florida 33756 former Trustee of IDEX
(DOB 7/15/30) Fund, IDEX II Series Fund All ATSF
and IDEX Fund 3. Portfolios
(34)
- ------------------------------------------------------------------------------------------
Russell A. Kimball, Jr. Nominee Current Director, Nominee
1160 Gulf Boulevard Nominee AEGON/Transamerica Series for all
Clearwater Beach, Fund, Inc. (1986-present); IDEX
Florida 34630 General Manager, Sheraton funds
(DOB 8/17/44) Sand Key Resort (resort (31)
hotel), Clearwater,
Florida (1975-present) All ATSF
Portfolios
(34)
- ------------------------------------------------------------------------------------------
John R. Kenney(1) Chairman 1996- Chairman of the Board, All IDEX
P. O. Box 5068 present Director and Co-CEO of funds
Clearwater, Great Companies, L.L.C.; (31)
Florida 33758 Chairman of the Board of
(DOB 2/8/38) Directors, Western Reserve All ATSF
Life Assurance Co. of Portfolios
Ohio; Chairman of the (34)
Board of Directors
(September, 1996-present),
President (September,
1997-present);
AEGON/Transamerica Fund
Advisers, Inc. (investment
adviser), St. Petersburg,
Florida; Chairman of the
Board of Directors
(September 1996-present),
AEGON/Transamerica Fund
Services, Inc., St.
Petersburg, Florida;
Director (December,
1990-present); IDEX
Management, Inc.,
(investment adviser), St.
Petersburg, Florida;
Trustee and Chairman
(September 1996-present),
AEGON/Transamerica Series
Fund, Inc. (investment
company), St. Petersburg,
Florida.
- ------------------------------------------------------------------------------------------
Patrick S. Baird (1) President, 1999- Executive Vice President, All IDEX
4333 Edgewood Road NE Trustee present Chief Operating Officer funds (31)
Cedar Rapids, (February, 1996-present),
Iowa 52499 AEGON USA; President and All ATSF
(DOB 1/19/54) Director, Portfolios
AEGON/Transamerica Series (34)
Fund, Inc.
- ------------------------------------------------------------------------------------------
14
- ------------------------------------------------------------------------------------------
Number of
Funds/
Term of Portfolios
Office overseen
Position(s) and Principal Occupation by
Name held length or Employment Trustee
With Fund of time in the past 5 years or
served Nominee
for
Trustee
- ------------------------------------------------------------------------------------------
Jack E. Zimmerman (2) Trustee 1986 - Director (December, All IDEX
507 Saint Michael Circle present 1987-present), Western funds (31)
Kettering, Reserve Life Assurance Co.
Ohio 45429 of Ohio; currently
(DOB 2/3/28) retired; formerly,
Director, Regional Marketing
of Martin Marietta
Corporation, Dayton (aerospace
industry) and Director of
Strategic Planning of Martin
Marietta Baltimore Aerospace.
- ------------------------------------------------------------------------------------------
William W. Short, Jr. Trustee 1986- Director, All IDEX
12420 73rd Court present AEGON/Transamerica Series funds
Largo, Fund, Inc. (2000-present); (31)
Florida 33773 President and majority
(DOB 2/25/36) shareholder of Short's, All ATSF
Inc. (men's retail Portfolios
apparel); Chairman of (34)
Southern Apparel
Corporation, S.A.C.
Apparel Corporation and
S.A.C. Distributors
(nationwide wholesale
apparel distributors),
Largo, Florida.
- ------------------------------------------------------------------------------------------
Daniel Calabria Trustee 1996- Director, All IDEX
7068 S. Shore Drive So., present AEGON/Transamerica Series funds (31)
South Pasadena, Fund, Inc. (2001-present);
Florida 33707 Trustee (1993-present) and All ATSF
(DOB 3/5/36) President (1993-1995) of Portfolios
the Florida Tax Free Funds (34)
(mutual funds); President
and Director (1995) of Sun
Chiropractic Clinics,
Inc., Executive Vice
President (1993-1995),
William R. Hough & Co.
(investment adviser,
municipal bond and
underwriting firm).
- ------------------------------------------------------------------------------------------
Janice B. Case Nominee Current Director, Nominee
Nominee AEGON/Transamerica Series All IDEX
Fund, Inc. (2001-present); funds (31)
Senior Vice President
(1996-2000), Vice All ATSF
President (1990-1996), Portfolios
Director of Customer (34)
Service & Marketing
(1987-1990), Florida Power
Corporation, St.
Petersburg, Florida
- ------------------------------------------------------------------------------------------
(1) Such Trustee is an "Interested Person" of the fund as defined in the 1940
Act and an affiliated person of IDEX, and did not receive compensation
directly from IDEX. Such Director is also an affiliated person of IMI.
(2) Mr. Zimmerman is the brother-in-law of John R. Kenney, Chairman of IDEX.
The Board met 4 times during the twelve months ended October 31, 2000 (the
"Period").
The Board's Audit Committee is composed of Messrs. Brown, Harris, and Short, and
met 2 times in the Period. All Audit Committee members are considered
"independent" under Rule 4200(a)(14) of the National Association of Securities
Dealers' listing standards. The functions performed by the Audit Committee
include the recommendation of the independent public accountants for IDEX to be
selected by the Board, the review of the scope and results of audit services,
the review of the adequacy of internal accounting and financial controls, the
review of material changes in accounting principals and practices and other
matters when requested from time to time by the Board. The Audit Committee has
adopted a charter to set forth its responsibilities (the "Charter"). A copy of
the Charter is attached to this Prospectus/Proxy Statement as Exhibit __
As required by the Charter, the Audit Committee received and reviewed the report
of PricewaterhouseCoopers (PWC), the independent public accountants for IDEX,
regarding the results of their audit, as well as the written disclosures and the
letter from PWC required by Independence Standards Board Standard No. 1. The
Audit Committee reviewed the audited financial statements with the management of
IDEX. A representative of PWC also discussed with the Audit Committee the
independence of PWC from IDEX, as well as the matters required to be
15
discussed by Statement of Auditing Standards 61. Discussions between the Audit
Committee and the representative of PWC included the following:
o PWC's responsibilities in accordance with generally accepted auditing
standards
o The initial selection of, and whether there were any changes in, significant
accounting policies or their application
o Management's judgments and accounting estimates
o Whether there were any significant audit adjustments o Whether there were any
disagreements with management
o Whether there was any consultation with other accountants
o Whether there were any major issues discussed with management prior to PWC's
retention
o Whether PWC encountered any difficulties in performing the audit
o PWC's judgments about the quality of the IDEX accounting principles
o PWC's responsibilities for information prepared by management that is
included in documents containing audited financial statements
Based on its review of the financial statements and its discussions with
management and the representative of PWC, the Audit Committee did not become
aware of any material misstatements or omissions in the financial statements.
Accordingly, the Audit Committee recommended to the Board that the audited
financial statements be included in the Annual Report for the year ended October
31, 2000, and filed with the SEC.
During the year ended October 31, 2000, PWC billed IDEX $ 234,000 in fees for
professional services in connection with the audit of the annual financial
statements and review of SEC filings.
During the fiscal year ended October 31, 2000, no fees were incurred by IDEX
from PWC for professional accounting services to design, implement or manage,
hardware or software that collects or generates information significant to the
IDEX financial statements.
The Board's Nominating Committee is composed of Messrs. Brown, Harris, and
Short, and met 1 time during the Period. The functions performed by the
Nominating Committee includes making nominations for independent trustees, and
for membership on committees. The Nominating Committee will consider nominees
recommended by shareholders. Recommendations should be submitted in writing to
the Committee in care of the Secretary of IDEX at the address shown on page 1 of
this Proxy Statement.
Each Disinterested Trustee currently receives a total annual retainer fee of
$20,000, plus $4,000 and incidental expenses for each regular meeting attended
and $2,500 for each special meeting attended.
During the fiscal year ended October 31, 2000, the Trustees received the
following compensation from IDEX:
--------------------------------------------------------------------
Compensation for Year
Name of Person, Position Ended October 31, 2000
--------------------------------------------------------------------
Peter R. Brown,
Vice Chairman $ 43,500
--------------------------------------------------------------------
Daniel Calabria,
Trustee $ 38,500
--------------------------------------------------------------------
Charles C. Harris,
Trustee $ 43,500
--------------------------------------------------------------------
William W. Short, Jr.,
Trustee $ 43,500
--------------------------------------------------------------------
Jack E. Zimmerman,
Trustee $ 38,500
--------------------------------------------------------------------
Disinterested Trustees may participate in a non-qualified deferred compensation
plan. Under this plan, compensation may be deferred that would otherwise be
payable by IDEX and by certain other entities, including
16
AEGON/Transamerica Series Fund, Inc. Compensation may be deferred on a current
basis for services rendered as a director/trustee. Interested Trustees do not
receive any compensation from IDEX.
Disinterested Trustees may participate in a non-qualified deferred compensation
plan. Under this plan, compensation may be deferred that would otherwise be
payable by IDEX and by certain other entities, including AEGON/Transamerica
Series Fund, Inc. Compensation may be deferred on a current basis for services
rendered as a director/trustee.
Shareholder Approval. The selection of each nominee requires an affirmative vote
of a majority of outstanding voting securities entitled to vote present at the
Special Meeting, in person or by proxy.
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS
A VOTE "FOR" PROPOSAL No. 2
- --------------------------------------------------------------------------------
Proposal No. 3: A Proposal To Permit IMI, After Obtaining Approval Of The Board,
To Enter Into And Materially Amend Sub-Advisory Agreements With Non-Affiliated
Investment Sub-Advisers On Behalf of each Fund Without Obtaining Shareholder
Approval.
At the Board Meeting held on September 11, 2000, the Trustees, including a
majority of the trustees who are not parties to the Sub-Advisory Agreements or
interested persons (within the meaning of Section 2(a)(19) of the 1949 Act) of
any such party (the "Disinterested Trustees"), approved and recommended that
shareholders of each Fund approve a policy to permit the Investment Adviser, on
behalf of each Fund and subject to approval of the Board, to appoint
sub-advisers, to enter into sub-advisory agreements, and to materially amend
existing sub-advisory agreements (the "Sub-Adviser Approval Policy") without
further shareholder approval for the existing Funds of IDEX, and for future
Funds, subject to certain conditions. Special restrictions apply to the
Sub-Advisers that are affiliates of the Investment Adviser ("Affiliated
Sub-Adviser"). Implementation of the Sub-Adviser Approval Policy approved by the
Board is subject to the terms and conditions of an Exemptive Order from the SEC
as described below.
IDEX
IDEX Mutual Funds is a Massachusetts Trust organized as a diversified, open-end
management investment company under the 1940 Act. Shares of IDEX are registered
under the Securities Act of 1933 (the "1933 Act"), and IDEX itself is registered
under the 1940 Act on Form N-1A with the SEC. Idex Investor Services, Inc.
("IIS"), located at 570 Carillon Parkway, St. Petersburg, Florida 33716, an
affiliate of IDEX and IMI, serves as transfer agent and administrator for IDEX.
AFSG Securities Corporation, located at 4333 Edgewood Road, NE, Cedar Rapids,
Iowa 52499, serves as principal underwriter for IDEX. IDEX currently consists of
31 funds.
THE INVESTMENT ADVISER
IMI serves as investment adviser to IDEX. IMI does not currently act as an
investment adviser with respect to any registered investment company other than
IDEX. IMI has served as investment adviser of each Fund since each Fund's
inception.
IMI is registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act"). IMI has served as the investment adviser
to each Fund of IDEX since January 1, 1998. (Prior to that date,
InterSecurities, Inc. served as the investment adviser to various Funds in
existence prior to that date.) Pursuant to the Investment Advisory Agreement
between IDEX and IMI, dated ______, and subject to the supervision of the Board,
IMI is responsible for furnishing continuous advice and recommendations to IDEX
as to the acquisition, holding, or disposition of any or all the securities or
other assets that each Fund may own or contemplate acquiring from time to time.
The Investment Adviser's officers attend meetings of the Board and are
responsible for furnishing oral or written reports to keep the Board and
officers of IDEX fully informed as to the condition of the investments of each
fund, the investment recommendations of IMI, and the investment considerations
that have
17
given rise to those recommendations. IMI supervises the purchase and sale of the
investments of each Fund and maintains all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions on behalf of IDEX.
The Investment Advisory Agreement contemplates that IMI, in connection with the
performance of its responsibilities under the Agreement, will enter into
sub-advisory agreements with sub-advisers to provide each Fund with investment
management services. IMI selects a sub-adviser based on a qualitative and
quantitative evaluation of the proposed sub-adviser. IMI monitors the
performance of each sub-adviser and evaluates how well the sub-adviser has
performed in managing the assets of its respective fund(s) in light of each such
fund's stated investment objective and policies. IMI also monitors each
sub-adviser's long-term performance and the level of risk assumed in achieving
that level of performance. Particular criteria for the selection and retention
of a sub-adviser include the sub-adviser's discipline and thoroughness in
pursuit of a fund's stated investment objective and the sub-adviser's long-term
performance. Short-term performance by itself is not a significant factor in
selecting or terminating a sub-adviser.
IMI also may, from time to time, recommend that the services of a sub-adviser be
terminated. The criteria for termination includes the departure of a
sub-adviser's key investment advisory personnel, a change in control of
management of the sub-adviser, a departure from a fund's stated investment
objective or policies, or other developments relating to the sub-adviser that
are deemed not to be in the best interest of shareholders by IMI.
THE SUB-ADVISERS
With respect to each Fund, IMI has entered into an investment sub-advisory
agreement (each a "Sub-Advisory Agreement" and, together, the "Sub-Advisory
Agreements") with one or more investment sub-advisers for each fund (each, a
"Sub-Adviser"). IDEX currently has 18 different sub-advisers. Each fund
currently has one sub-adviser. Each sub-adviser provides investment advisory
assistance and portfolio management advice to IMI for each Fund(s) with respect
to which the sub-adviser is engaged. Subject to review and supervision by IMI
and the Board, each sub-adviser is responsible for the actual investment
management of its fund(s) and for making decisions to buy, sell, or hold any
particular security. Each sub-adviser also places orders to buy or sell
securities on behalf of that fund. Each sub-adviser bears all of its expenses in
connection with the performance of its services, such as compensating and
furnishing office space for its officers and employees connected with investment
and economic research, trading, and investment management of its fund(s). Each
sub-adviser is a registered investment adviser under the Advisers Act. Each
sub-adviser receives monthly compensation from IMI based on a specified
percentage of the average daily net assets of each fund managed by that
sub-adviser.
Each sub-adviser has been recommended by IMI, and selected and approved by the
Board, including a majority of Trustees who are not parties to the sub-advisory
agreements or interested persons (within the meaning of Section 2(a)(19) of the
1940 Act) of any such party ("Disinterested Trustees"), as well as by the
shareholders of the relevant fund. The Sub-Advisory Agreement for each Fund was
approved on _______.
As required by the 1940 Act, each sub-advisory agreement: describes the
compensation that is to be paid to each sub-adviser by IMI; continues in effect
for up to two years and from year to year thereafter, only so long as such
continuance is specifically approved at least annually by the Board or by a vote
of the majority of the outstanding voting securities of the appropriate fund in
the manner required by the 1940 Act, and Rules thereunder; may be terminated at
any time, without the payment of any penalty, by the IDEX Board or by
shareholders on sixty (60) days' written notice to the Sub-Adviser, on (60)
days' written notice from IMI to the sub-adviser provided certain conditions are
met, or on sixty (60) days' written notice from the sub-adviser to the
investment adviser; will terminate automatically in the event of its assignment;
and requires approval of amendments thereto as specified by the 1940 Act.
The Section 15 Exemptive Order
On August 5, 1998, the SEC granted an exemption from Section 15(a) of the 1940
Act and Rule 18f-2 under the 1940 Act to AEGON/Transamerica Series Fund, Inc.
(formerly, WRL Series Fund, Inc.), AEGON/Transamerica Fund Advisers, Inc.
(formerly, WRL Investment Management, Inc.) (the "ATSF Adviser") and any other
registered investment company advised by the Adviser, or a person controlling,
controlled by, or under common control with
18
the ATSF Adviser (ICI Release No. 23379) (the "Exemptive Order"). IDEX and IMI
are affiliates with those entities and are under common control with the
Adviser. The provisions of the 1940 Act require that shareholders approve
investment advisory agreements, including sub-advisory agreements, and to
approve any material amendment to such an investment advisory agreement. The
Exemptive Order was granted by the SEC on [DATE]. If shareholders approve the
Sub-Adviser Approval Policy as described in the Exemptive Order, IMI will be
authorized, subject to approval by the Board, to evaluate, select and retain new
sub-adviser each Funds, or materially amend an existing sub-advisory agreement
without obtaining further approval of the affected Funds' shareholders, whenever
the Investment Adviser and the Board believe such actions are in the best
interests of a Fund and its shareholders.
Current Sub-Adviser Approval Process. Currently, for each Fund, IMI enters into
a separate sub-advisory agreement with the respective sub-adviser selected by
the investment adviser and approved by the Board. Under the terms of these
sub-advisory agreements, the sub-advisers have authority to provide the
respective fund(s) with advice concerning the investment management of a fund's
assets. Subject to a fund's investment objective policies and restrictions, the
sub-advisers determine what securities shall be purchased or sold, and what
portion of a fund's assets shall remain uninvested. For these sub-advisory
services to each of the Funds, IMI pays each sub-adviser a monthly fee at an
annual rate based on the average daily net assets of each Fund, as specified in
the specific sub-advisory agreement. Each sub-adviser bears its own expenses of
providing sub-advisory services to the respective fund. Each fund's sub-advisory
agreement are subject to annual approval by the Board, including the
Disinterested Trustees. Any material amendments to an existing sub-advisory
agreement currently require approval by the Board and a fund's shareholders.
Each sub-adviser of a fund is an "investment adviser" to that fund, as that term
is defined in Section 2(a)(20) of the 1940 Act. Section 15(a) of the 1940 Act
and Rule 18f-2 thereunder provide, in effect, that it is unlawful for any person
to act as an investment adviser to a fund except pursuant to a written contract
that has been submitted to and approved by the vote of a majority of the voting
securities of that fund. Therefore, when a sub-adviser is initially retained,
shareholders of each affected fund generally are required to approve the
sub-advisory agreement with the proposed sub-adviser. Similarly, if an existing
sub-advisory agreement were amended in any material respect, such amendment
would generally be deemed to result in a new contract for which shareholder
approval would be required. Moreover, under Section 15(a), a sub-advisory
agreement terminates automatically upon its "assignment," which in most
instances would occur upon a change of control of the sub-adviser.
Proposed Sub-Adviser Approval Policy. Approval of the Sub-Adviser Approval
Policy on behalf of each Fund will not affect any of the requirements under the
federal securities laws that govern each Fund, the investment adviser, the
sub-advisers or the sub-advisory agreements other than the requirement to call
meetings of each Fund's shareholders and obtain approval for certain changes
affecting a non-affiliated sub-adviser. The Board, including the Disinterested
Trustees, will continue to evaluate and approve all new sub-advisory agreements
between the investment adviser and a sub-adviser as well as all changes to
existing sub-advisory agreements. IDEX and IMI will be subject to several
conditions imposed by the SEC to ensure that the interests of each Fund's
shareholders are adequately protected whenever IMI acts under the Sub-Adviser
Approval Policy. Furthermore, within 90 days of the hiring of a new sub-adviser,
IDEX will provide each Fund's shareholders with an information statement that
contains substantially the same information about the sub-adviser, the
sub-advisory agreement and the sub-advisory fee that would be required to be
sent to shareholders in a proxy statement.
SHAREHOLDER APPROVAL OF THIS PROPOSAL WILL NOT RESULT IN AN INCREASE OR DECREASE
IN THE TOTAL AMOUNT OF INVESTMENT ADVISORY FEES PAID BY EACH FUND TO IMI.
Shareholders should recognize that in engaging a new sub-adviser and entering
into a sub-advisory agreement, IMI will negotiate fees with that sub-adviser
and, because these fees are paid by IMI and not directly by each Fund, any fee
reduction negotiated by IMI may inure to IMI's benefit and any increase will
inure to its detriment. The fees paid to IMI by each Fund and the fees paid to a
sub-adviser by IMI are considered by the Board in approving the advisory and
sub-advisory arrangements, and any change in fees paid by each Fund to IMI would
require shareholder approval. In any event, if the shareholders approve this
Policy, then IMI, pursuant to each Fund's Investment Advisory Agreement, will
continue to provide the same level of management and administrative services to
each Fund as it has always provided.
19
In addition to shareholder approval, the relief granted by the SEC and set forth
in the Exemptive Order is subject to the following conditions:
(1) IMI will not enter into a sub-advisory agreement with any affiliated
sub-adviser without the sub-advisory agreement, including the
compensation to be paid thereunder, being approved by each Fund's
shareholders of that Fund.
(2) At all times, a majority of the Board will be persons each of whom is a
Disinterested Trustee and the nomination of new or additional
Disinterested Trustees will be within the discretion of the
then-existing Disinterested Trustees.
(3) When a sub-adviser change is proposed for a Fund with an affiliated
sub-adviser, the Board, including a majority of the Disinterested
Trustees, will make a separate finding, reflected in the minutes of the
meetings of the Board, that the change is in the best interests of each
Fund and the shareholders. and does not involve a conflict of interest
from which IMI or the affiliated sub-adviser derives an inappropriate
advantage.
(4) IMI will provide general management and administrative services to IDEX
and each Fund, including overall supervisory responsibility for the
general management and investment of each Fund's securities portfolios,
and subject to review and approval by the Board, will: (a) set each
Fund's overall investment strategies; (b) select sub-advisers; (c)
monitor and evaluate the performance of sub-advisers; (d) allocate and,
when appropriate, reallocate each Fund's assets among its sub-advisers
in those cases where each Fund has more than one sub-adviser; and (e)
implement procedures reasonably designed to ensure that the sub-advisers
comply with each Fund's investment objective, policies, and
restrictions.
(5) Within ninety (90) days of the hiring of any new sub-adviser, IMI will
furnish shareholders with all information about the new sub-adviser that
would be included in a proxy statement. The information will include any
change in the disclosure caused by the addition of a new sub-adviser.
IMI will meet this condition by providing the shareholders with an
information statement that meets certain requirements of the Securities
Exchange Act of 1934, as amended, and the rules thereunder.
(6) IDEX will disclose in its prospectus the existence, substance, and
effect of the Sub-Adviser Approval Policy. The IDEX prospectus will
prominently disclose that the investment adviser has ultimate
responsibility for the investment performance of each Fund due to its
responsibility to oversee sub-advisers and recommend their hiring,
termination, and replacement.
(7) No Trustee or officer of IDEX or IMI will own directly or indirectly
(other than through a pooled investment vehicle that is not controlled
by the Trustee or officer) any interest in a sub-adviser, except for:
(a) ownership of interests in IMI or any entity that controls, is
controlled by, or is under common control with IMI; or (b) ownership of
less than one percent (1%) of the outstanding securities of any class of
equity or debt securities of a publicly traded company that is either a
sub-adviser or an entity that controls, is controlled by, or is under
common control with a sub-adviser.
In addition, in connection with the implementation of the Sub-Adviser Approval
Policy, the Board and IMI may amend, from time to time, certain provisions of
the sub-advisory agreements to reflect the terms and conditions of the Exemptive
Order and the Sub-Adviser Approval Policy.
Reasons for Requesting Approval of the Sub-Adviser Approval Policy
The Board believes that providing IMI with maximum flexibility to perform those
duties that shareholders expect IMI to perform - selecting, supervising and
evaluating sub-advisers - without incurring the unnecessary delay or expense of
obtaining shareholder approval is in the best interests of each Fund's
shareholders because it will allow each Fund to operate more efficiently.
Currently, in order for IMI to appoint a sub-adviser or materially amend a
sub-advisory agreement, IDEX must call and hold a shareholders meeting of each
Fund, create and distribute proxy materials, and solicit proxy votes from each
Fund's shareholders. This process is time consuming and costly, and
20
the costs are usually borne entirely by each Fund. Without the delay inherent in
holding a shareholders meeting, each Fund would be able to act more quickly and
with less expense to appoint a sub-adviser when the Trustees and IMI feel that
the appointment would benefit each Fund.
Also, the IDEX Board believes that it is appropriate to allow the selection,
supervision and evaluation of a sub-adviser to be done by IMI (subject to review
and approval by the IDEX Board) in light of the management structure of IDEX, as
well as IMI's significant experience and expertise in selecting sub-advisers and
the shareholders' expectation that IMI will utilize that expertise to select the
most competent sub-advisers. In the opinion of the Trustees, IMI has
demonstrated that it has the requisite expertise to evaluate, select and
supervise sub-advisers. The Board believes that many investors choose to invest
in a fund because of IMI's experience and expertise in evaluating and choosing
sub-advisers who can add the most value to a shareholder's investment in a fund.
Finally, the Board will provide sufficient oversight of the sub-adviser
selection process to ensure that shareholders' interests are protected whenever
IMI selects a new sub-adviser or materially amends an existing sub-advisory
agreements. The Board, including a majority of the Disinterested Trustees, will
continue to evaluate and approve all new sub-advisory agreements as well as any
amendments to existing sub-advisory agreements. In its review, the Board will
analyze all factors that it considers to be relevant to the determination,
including the nature, quality and scope of services provided by the sub-adviser.
The Trustees will compare the investment performance of the assets managed by
the sub-adviser with other accounts with similar investment objectives managed
by other advisers and will review the sub-adviser's compliance with federal
securities laws and regulations. The Board believes that their comprehensive
review will ensure that IMI continues to act in the best interests of each Fund
and its shareholders. Each sub-advisory agreement will continue to be subject to
all provisions of the 1940 Act, except for the specific provisions of the 1940
Act for which relief was granted by the SEC in the Exemptive Order.
Shareholder Approval
The adoption of the Sub-Adviser Approval Policy requires an affirmative vote of
a majority of outstanding shares present or by proxy. Shareholders of each Fund
will vote as separate classes on the proposals.
- --------------------------------------------------------------------------------
THE IDEX BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR APPROVAL" OF THE SUB-
ADVISER APPROVAL POLICY
- --------------------------------------------------------------------------------
VOTING INSTRUCTIONS
Shareholders of record of each Fund who own shares of beneficial interest at the
close of business on November 26, 2001 (the "Record Date") will be entitled to
vote at the Meeting, including any adjournment(s) thereof, with respect to the
Reorganization and Exchange, election of Trustees and the Sub-Adviser Approval
Policy. Shareholders of each Fund are entitled to one vote for each share held
and fractional votes for fractional shares held with no share having cumulative
voting rights.
With respect to each Fund, the presence in person or by proxy, of a majority of
each Fund shares outstanding and entitled to vote will constitute a quorum for
the transaction of business at the Meeting. If a quorum is not present at the
Meeting, or if a quorum is present at the Meeting but sufficient votes to
approve the proposal is not received, the persons names as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
each Fund's shares represented at the Meeting in person or by proxy (excluding
abstentions and "broker non-votes," as defined below).
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions, if your proxy is received in a timely manner
and is properly executed. If we receive your proxy, and it is executed properly,
but you give no voting instructions with respect to the proposal, your shares
will be voted "FOR" the proposal set forth herein. The duly appointed proxies
may, in their discretion, vote upon such other matters as may properly come
before the Meeting.
21
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated _____ (the "Agreement") between IDEX
American Century International (the "Fund") and IDEX International Equity (the
"Acquiring Fund") of IDEX Mutual Funds ("IDEX"), a Massachusetts Business Trust.
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1)(C) 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 each Fund
in exchange solely for shares of the Acquiring Fund and the assumption by the
Acquiring Fund of certain liabilities of each Fund and the distribution, after
the Closing Date hereinafter referred to, of the Acquiring Fund shares to the
shareholders of each Fund in liquidation of each Fund as provided herein, all
upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, both each Fund and the Acquiring Fund are registered, diversified,
open-end management investment companies, and each Fund owns securities which
are assets of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, both the Acquiring Fund and each Fund are authorized to issue their
shares of common stock;
WHEREAS, the Board of Trustees of IDEX has determined that the exchange of all
of the assets of each Fund and certain liabilities of each Fund for shares of
the Acquiring Fund and the assumption of such liabilities is in the best
interest of the Acquiring Fund's shareholders and that the interests of the
Acquiring Fund's existing shareholders would not be diluted as a result of this
transaction; and
WHEREAS, the Board of Trustees of IDEX has determined that the exchange of all
of the assets and certain of the liabilities of each Fund for shares of the
Acquiring Fund and the assumption of such liabilities is in the best interest of
each Fund's shareholders and that the interests of each Fund's existing
shareholders would not be diluted as a result of the transaction.
NOW THEREFORE, in consideration of the premises and covenants and agreements
hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF EACH FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF FUND LIABILITIES AND LIQUIDATION OF EACH FUND.
1.1 Subject to the terms and conditions contained herein, each Fund
agrees to assign, transfer and convey to the Acquiring Fund all
of the assets of each Fund, including all securities and cash
(subject to liabilities), and the Acquiring Fund agrees in
exchange therefor (i ) to deliver to each Fund the number of
Acquiring Fund shares, including fractional Acquiring Fund
shares, determined as set forth in paragraph 2.3; and (ii) to
assume certain liabilities of each Fund, as set forth in
paragraph 1.2. Such transactions shall take place at the closing
(the "Closing") on the closing date ("Closing Date") provided for
in paragraph 3.1. In lieu of delivering certificates for the
Acquiring Fund shares, the Acquiring Fund shall credit the
Acquiring Fund shares to each Fund's account on the books of the
Acquiring Fund and shall deliver a confirmation thereof to each
Fund.
1.2 Each Fund will endeavor to discharge all of its know liabilities
and obligations prior to the Closing Date. The Acquiring Fund
shall assume all liabilities, expenses, costs, charges and
reserves reflected on an unaudited statement of assets and
liabilities of each Fund prepared by IDEX, as of the Valuation
Date (as defined in paragraph 2.1), in accordance with generally
accepted accounting principles consistently applied from the
prior audited period. The Acquiring Fund shall assume only those
liabilities of each Fund reflected in that unaudited statement of
assets and liabilities and shall not assume any other
liabilities, whether absolute or contingent.
1
1.3 Delivery of the assets of each Fund to be transferred shall be
made on the Closing Date and shall be delivered to State Street
Bank, the IDEX custodian (the "Custodian"), for the account of
the Acquiring Fund, with all securities not in bearer or
book-entry form duly endorsed, or accompanied by duly executed
separate assignments or stock powers, in proper form for
transfer, with signatures guaranteed, and with all necessary
stock transfer stamps, sufficient to transfer good and marketable
title thereto (including all accrued interest and dividends and
rights pertaining thereto) to the Custodian for the account of
the Acquiring Fund free and clear of all liens, emcumbrances,
rights, restrictions and claims. All cash delivered shall be in
the form of immediately available funds payable to the order of
the Custodian for the account of the Acquiring Fund.
1.4 Each Fund will pay or cause to be paid to the Acquiring Fund any
interest received on or after the Closing Date with respect to
assets transferred to the Acquiring Fund hereunder. Each Fund
will transfer to the Acquiring Fund any distributions, rights or
other assets received by each Fund after the Closing Date as
distributions on or with respect to the securities transferred.
Such assets shall be deemed included in assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately
valued.
1.5 As soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), each Fund will liquidate and distribute
pro rata to each Fund's shareholders of record, determined as of
the close of business on the Closing Date, Acquiring Fund shares
received by each Fund pursuant to paragraph 1.1. Such liquidation
and distribution will be accomplished by the transfer of the
applicable Acquiring Fund shares then credited to the account of
each Fund on the books of the Acquiring Fund to open accounts on
the share records of the Acquiring Fund in the names of each
Fund's shareholders and representing the respective pro rata
number of the applicable Acquiring Fund shares due such
shareholders. All issued and outstanding shares of each Fund
simultaneously will be canceled on the books of each Fund.
1.6 Ownership of Acquiring Fund shares will be shown on the books of
the Acquiring Fund's transfer agent. Shares of the Acquiring Fund
will be issued in the manner described in the IDEX current
prospectus and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund
shares in a name other than the registered holder of the
Acquiring Fund shares on the books of each Fund as of that time
shall, as a condition of such issuance and transfer, be paid by
the person to whom such Acquiring Fund shares are to be issued
and transferred.
1.8 Any reporting responsibility of each Fund is and shall remain the
responsibility of each Fund up to and including the Closing Date
and such later date on which each Fund is dissolved.
2. VALUATION.
2.1 The value of each Fund's assets to be acquired by the Acquiring
Fund hereunder shall be the value of such assets computed as of
the close of trading on the floor of the New York Stock Exchange
(currently, 4:00 p.m., New York time), except that options and
futures contracts will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange, on the
Closing Date (such time and date being hereinafter called the
"Valuation Date"),using the valuation procedures set forth in the
IDEX Declaration of Trust, as amended, (the "IDEX Charter"), and
then-current prospectus or statement of additional information.
In no event shall the same security held by both each Fund and
the Acquiring Fund be valued at different prices.
2.2 The net asset value of an Acquiring Fund share shall be the net
asset value per share computed as of the Valuation Date, using
the valuation procedures set forth in the Acquiring Fund's
Charter and then-current prospectus or statement of additional
information.
2
2.3 The number of Acquiring Fund shares to be issued (including
fractional shares, if any) in exchange for each Fund's net assets
shall be determined by dividing the value of the net assets of
each Fund determined using the same valuation procedures referred
to in paragraph 2.1 by the net asset value of one Acquiring Fund
share, determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be February 28, 2001 or such later date as
the parties may mutually agree. All acts taking place at the
Closing shall be deemed to take place simultaneously as of the
close of business on the Closing Date unless otherwise provided.
The Closing shall be held at 5:00 p.m., New York time, at the
offices of IDEX, 570 Carillon Parkway, St. Petersburg, Florida
33716 or such other time and/or place as the parties may mutually
agree.
3.2 The Custodian shall deliver at the Closing a certificate of an
authorized officer stating that: (a) each Fund's portfolio
securities, cash and any other assets have been delivered in
proper form to the Acquiring Fund within two business days prior
to or on the Closing Date; and (b) all necessary taxes including
all applicable stock transfer stamps have been paid, or provision
for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3 If on the Valuation Date (a) the New York Stock Exchange or
another primary trading market for portfolio securities of the
Acquiring Fund or each Fund shall be closed to trading or trading
thereon shall be restricted, or (b) trading or the reporting of
trading on said Exchange or elsewhere shall be disrupted so that
accurate appraisal of the value of the net assets of the
Acquiring Fund or each 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.
3.4 The transfer agent for each Fund shall deliver at the Closing a
certificate of an authorized officer stating that its records
contain the names and addresses of each Fund's shareholders and
the number and percentage ownership of outstanding shares,
respectively, owned by each such shareholder immediately prior to
the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund shares to be credited
on the Closing Date to the Secretary of each Fund, or provide
evidence satisfactory to each Fund that such Acquiring Fund
shares have been credited to each Fund's account on the books of
the Acquiring Fund. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, receipts or
other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Each Fund represents and warrants to the Acquiring Fund as
follows:
(a) Each Fund is a series of IDEX Mutual Funds, in a
Massachusetts Business Trust duly organized and validly existing
under the laws of the State of Massachusetts and has power to own
all of its properties and assets and to carry out its obligations
under this Agreement.
(b) Each Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a open-end, diversified,
management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) Each Fund is not, and the execution, delivery and performance
of this Agreement will not result, in material violation of the
IDEX Declaration of Trust, as amended (the "Funds' Charter"), or
its Bylaws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which each Fund is a party or by
which it is bound.
3
(d) Each Fund has no material contracts or other commitments
outstanding (other than this Agreement) which will be terminated
with liability to it on or prior to the Closing Date.
(e) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending
or to its knowledge threatened against each Fund or any of its
properties or assets which, if adversely determined, would
materially and adversely affect its financial condition or the
conduct of its business. Each 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.
(f) The Statements of Assets and Liabilities of each Fund dated
________, 2001, have not been audited as each Fund commenced
operation in April 2001. The unaudited statement (copies of which
have been furnished to the Acquiring Fund) fairly reflect the
financial condition of each Fund as of such dates, and there are
no known contingent liabilities of each Fund as of such dates not
disclosed therein.
(g) Since _____, 2001, there has not been any material adverse
change in each Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of
business, or any incurrence by each Fund of indebtedness maturing
more than one year from the date such indebtedness was incurred,
except as disclosed on the statement of assets and liabilities
referred to in Section 1.2 hereof.
(h) At the Closing Date, all Federal and other tax returns and
reports of each Fund required by law to have been filed by such
dates shall have been filed, and all Federal and other taxes
shall have been paid so far as due, or provision shall have been
made for the payment thereof, and to the best of each Fund's
knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(i) Each Fund intends to meet, and to continue to meet, the
requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of each Fund are, and at
the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of the issued and
outstanding shares of each 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 as provided in paragraph 3.4. Each Fund
does not have outstanding any options, warrants or other rights
to subscribe for or purchase any of each Fund shares, nor is
there outstanding any security convertible into any of each Fund
shares.
(k) On the Closing Date, each Fund will have full right, power
and authority to sell, assign, transfer and deliver the assets to
be transferred by it hereunder.
(l) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all
necessary action on the part of the IDEX Board of Trustees and,
subject to the approval of shareholders of each Fund, this
Agreement will constitute the valid and legally binding
obligation of each Fund, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless
of whether the enforceability is considered in a proceeding in
equity or at law).
(m) The proxy statement of each Fund (the "Proxy Statement"),
included in the Registration Statement referred to in paragraph
5.5 (other than information therein that has been furnished by
the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material
fact required to
4
be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made,
not materially misleading.
4.2 The Acquiring Fund represents and warrants as follows:
(a) The Acquiring Fund is a series of IDEX Mutual Funds duly
organized and validly existing under the laws of the State of
Massachusetts and has power to carry on its business as it is now
being conducted and to carry out its obligations under this
Agreement.
(b) The Acquiring Fund is registered under the 1940 Act as an
open-end, diversified management investment company, and such
registration has not been revoked or rescinded and is in full
force and effect.
(c) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material
respects to the applicable requirements of the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act and the rules
and regulations of the Securities and Exchange Commission
thereunder and do not 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.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material
violation of the IDEX Charter or its Bylaws or of any agreement,
indenture, instrument, contract, lease or other undertaking to
which the Acquiring Fund is a party or by which it is bound.
(e) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending
or to its knowledge threatened against the Acquiring Fund or any
of its properties or assets which, if adversely determined, would
materially and adversely affect its financial condition or the
conduct of its business. The 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 contemplated herein.
(f) The Statements of Assets and Liabilities of the Acquiring
Fund for the period ending October 31, 2000 were taken from the
audited IDEX Mutual Funds by the firm of PricewaterhouseCoopers,
LLP and are in accordance with generally accepted accounting
principles, consistently applied, and such statements (copies of
which have been furnished to each Fund) fairly reflect the
financial condition of the Acquiring Fund as of such dates.
(g) Since October 31, 2000 there has not been any material
adverse change in the Acquiring Funds' financial condition,
assets, liabilities or business other than changes occurring in
the ordinary course of business, or any incurrence by the
Acquiring Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as disclosed on
the statement of assets and liabilities referred to in Section
4.2(f) hereof.
(h) At the Closing Date, all Federal and other tax returns and
reports of the Acquiring Fund required by law then to be filed
shall have been filed, and all Federal and other taxes shown as
due on said returns and reports shall have been paid or provision
shall have been made for the payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund are,
and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund
does not have outstanding any options, warrants or other rights
to subscribe for or purchase any of the
5
Acquiring Funds' shares, nor is there outstanding any security
convertible into any Acquiring Fund shares.
(k) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Acquiring Fund's Board of
Trustees, and this Agreement will constitute the valid and
legally binding obligation of the Acquiring Fund enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to
general principles of equity and the discretion of the court
(regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(l) The Proxy Statement included in the Registration Statement
(only insofar as it relates to the Acquiring Fund and is based on
information furnished by the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing
Date, 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.
5. COVENANTS OF THE ACQUIRING FUND AND EACH FUND.
5.1 The Acquiring Fund and each 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
payment of customary dividends and distributions.
5.2 Each Fund will call a meeting of Fund shareholders to consider and
act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund and
each 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
Agreement.
5.4 As promptly as practicable, but in any case within sixty days after
the Closing Date, each Fund shall furnish the Acquiring Fund, in such
form as is reasonably satisfactory to the Acquiring Fund, a statement of
the earnings and profits of each Fund for Federal income tax purposes
which will be carried over to the Acquiring Fund as a result of Section
381 of the Code and which will be certified by each Fund's President or
its Vice President and Treasurer.
5.5 Each Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement, referred to in
paragraph 4.1(m), all to be included in a Registration Statement on Form
N-14 of the Acquiring Fund (the "Registration Statement"), in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and
the 1940 Act in connection with the meeting of each Fund shareholders to
consider approval of this Agreement and the transactions contemplated
herein.
5.6 The Acquiring Fund agrees to 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 it may deem
appropriate in order to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions provided for
herein shall be subject, at its election, to the performance by each Fund of all
the obligations to be performed by it hereunder on or before the Closing Date
and, in addition thereto, the following conditions:
6
6.1 All representations and warranties of each Fund contained in this
Agreement 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 Agreement, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
6.2 Each Fund shall have delivered to the Acquiring Fund a statement of
each Fund's assets and liabilities, together with a list of each Fund's
portfolio securities showing the tax basis of such securities by lot and
the holding periods of such securities, as of the Closing Date,
certified by the Treasurer of each Fund.
6.3 Each Fund shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in its name by the IDEX President or Vice
President and its Treasurer, in form and substance satisfactory to the
Acquiring Fund, to the effect that the representations and warranties of
each Fund made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the
Acquiring Fund shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH FUND.
The obligations of each Fund to consummate the transactions provided for herein
shall be subject, at its election, to the performance by the Acquiring Fund of
all 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 Acquiring Fund contained
in this Agreement 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 Agreement, as of the Closing Date with
the same force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to each Fund on the Closing
Date a certificate executed in its name by the IDEX President or Vice
President and its Treasurer, in form and substance reasonably
satisfactory to each Fund, to the effect that the representations and
warranties of the Acquiring Fund made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected by
the transactions contemplated by this Agreement, and as to such other
matters as the Acquiring Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
EACH FUND.
If any of the conditions set forth below do not exist on or before the Closing
Date with respect to each Fund or the Acquiring Fund, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement.
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding
shares of each Fund in accordance with the provisions of the IDEX
Charter.
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending 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 Agreement 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 (including
those of the Securities and Exchange Commission and of state Blue Sky
and securities authorities) deemed necessary by the Acquiring Fund or
each Fund 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 the
Acquiring Fund or each Fund, provided that either party hereto may for
itself waive any of such conditions.
7
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.
8.5 Each Fund shall have declared a dividend or dividends which,
together with all previous such shall have the effect of distributing to
each Fund's shareholders all of each Fund's investment company taxable
income for all taxable years or periods ending on or prior to the
Closing Date (computed without regard to any deduction for dividends
paid); the excess of its interest income excludable from gross income
under Section 103(a) of the Code over its disallowed deductions under
Sections 265 and 171(a)(2) of the Code, for all taxable years or periods
ending on or prior to the Closing Date; and all of its net capital gain
realized in all taxable years or periods ending on or prior to the
Closing Date (after reduction for any capital loss carry forward).
8.6 The parties shall have received an opinion of Sutherland Asbill &
Brennan LLP substantially to the effect that for Federal income tax
purposes:
(a) The transfer of all or substantially all of each Fund's assets in
exchange for the Acquiring Fund shares and the assumption by the
Acquiring Fund of certain identified liabilities of each Fund will
constitute a "reorganization" within the meaning of Section 368(a)(1)(C)
of the Code; (b) No gain or loss will be recognized by the Acquiring
Fund upon the receipt of the assets of each Fund solely in exchange for
the Acquiring Fund shares and the assumption by the Acquiring Fund of
certain identified liabilities of each Fund; (c) No gain or loss will be
recognized by each Fund upon the transfer of each Fund's assets to the
Acquiring Fund in exchange for the Acquiring Fund shares and the
assumption by the Acquiring Fund of certain identified liabilities of
each Fund or upon the distribution (whether actual or constructive) of
the Acquiring Fund shares to Fund shareholders in exchange for their
shares of each Fund; (d) No gain or loss will be recognized by Fund
shareholders upon the exchange of their Fund shares for the Acquiring
Fund shares; (e) The aggregate tax basis for the Acquiring Fund shares
received by each of each Fund's shareholders pursuant to the
Reorganization will be the same as the aggregate tax basis of each Fund
shares held by such shareholder immediately prior to the Reorganization,
and the holding period of the Acquiring Fund shares to be received by
each Fund shareholder will include the period during which each Fund
shares exchanged therefor were held by such shareholder (provided each
Fund shares were held as capital assets on the date of the
Reorganization); and (f) The tax basis of each Fund assets acquired by
the Acquiring Fund will be the same as the tax basis of such assets to
each Fund immediately prior to the Reorganization, and the holding
period of the assets of each Fund in the hands of the Acquiring Fund
will include the period during which those assets were held by each
Fund.
No opinion will be expressed as to the effect of the Reorganization on
(i) each Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for Federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting, and (ii) any shareholder
of each Fund that is required to recognize unrealized gains and losses for
Federal income tax purposes under a mark-to-market system of accounting.
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transaction contemplated hereby may be
terminated and abandoned by resolution of the Board of each Fund or of
the Acquiring Fund, as the case may be, at any time prior to the Closing
Date (and notwithstanding any shareholder vote) if circumstances should
develop that, in the opinion of either Board, make proceeding with the
Agreement inadvisable.
9.2 If this Agreement is terminated and the transaction contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the directors, officers or shareholders
of the Acquiring Fund or of each Fund, as the case may be, in respect of
this Agreement, except that the parties shall bear the aggregate
expenses of
8
the transaction contemplated hereby in proportion to their respective
net assets as of the date this Agreement is terminated or the exchange
contemplated hereby is abandoned.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions may be
waived by the IDEX Board on behalf of each Fund or of the Acquiring Fund if, in
its judgment of either, such waiver will not have a material adverse effect on
the benefits intended under this Agreement to the shareholders of each Fund or
of the Acquiring Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided for
herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be, on or subsequent to the date
hereof, set forth in a writing signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance with
the internal laws of the State of Florida, without giving effect to
principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement by each Fund and
the Acquiring Fund shall be governed and construed in accordance with
the internal laws of the State of Massachusetts without giving effect to
principles of conflict of laws.
11.4 This Agreement may be executed in counterparts, each of which, when
executed and delivered, shall be deemed to be an original.
11.5 This Agreement 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 Agreement.
9
IN WITNESS WHEREOF, the Acquiring Fund and each Fund have caused this Agreement
and Plan of Reorganization to be executed and attested on its behalf by its duly
authorized representatives as of the date first above written.
IDEX Mutual Funds on behalf of:
IDEX Munder Net50
IDEX Pilgrim Baxter Technology
IDEX Transamerica Small Company
By: ___________________________________
John R. Kenney
Chairman and Chief Executive Officer
ATTEST: __________________
John K. Carter, Esq.
Secretary
IDEX Mutual Funds on behalf of:
IDEX Pilgrim Baxter Mid Cap Growth
By: ___________________________________
John R. Kenney
Chairman and Chief Executive Officer
ATTEST: __________________
John K. Carter, Esq.
Secretary
10
PART B
STATEMENT OF ADDITIONAL INFORMATION
Relating to the Acquisition by
IDEX Pilgrim Baxter Baxter Mid Cap Growth (the "Acquiring Fund")
A Series of IDEX Mutual Funds ("IDEX")
570 Carillon Parkway
St. Petersburg, Florida 33716
1-888-
Of The Assets of
IDEX Munder Net50
IDEX Transamerica Small Company
IDEX Pilgrim Baxter Mid Cap Growth
Series of IDEX
Dated: ______
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in connection with the Prospectus/Proxy Statement dated
__________, relating specifically to the proposed transfer of all of the assets
and liabilities of IDEX Munder Net50, IDEX Transamerica Small Company and IDEX
Pilgrim Baxter Technology (each a "Fund," collectively, the "Funds") in exchange
for shares of IDEX Pilgrim Baxter Mid Cap Growth (the "Acquiring Fund"). The
transfer is to occur pursuant to an Agreement and Plan of Reorganization. Each
of the following documents accompanies this Statement of Additional Information
and is incorporated herein by reference.
1. The IDEX Prospectus and Statement of Additional Information
dated March 1, 2001.
2. The IDEX Annual Report dated _______________.
3. The IDEX Semi-Annual Report dated __________.
GENERAL INFORMATION
This Statement of Additional Information relates to the proposed transfer of
substantially all of the assets and liabilities of the Funds to the Acquiring
Fund, in exchange for like shares of Acquiring Fund (the "Reorganization" or the
"Exchange"). The aggregate net asset value of each share issued will have an
aggregate net asset value equal to the aggregate net asset value of the shares
of each Fund that were outstanding immediately before the effective time of the
Reorganization.
After the transfer of substantially all of its assets and liabilities in
exchange for the Acquiring Fund, each Fund will distribute such shares to its
shareholders in liquidation of each Fund. Each shareholder owning shares of each
Fund at the effective time of the Reorganization will receive shares of the same
Class from the Acquiring Fund of equal value, and will receive any unpaid
dividends or distributions that were declared before the effective time of the
Reorganization on shares of each Fund. The Acquiring Fund will establish an
account for each former shareholder of each Fund reflecting the appropriate
number of shares distributed to such shareholder. These accounts will be
substantially identical to the accounts maintained by each Fund for each
shareholder. Upon completion of the Reorganization with respect to each Fund,
all outstanding shares of each Fund will have been redeemed and cancelled in
exchange for shares distributed by the Acquiring Fund, and each Fund will wind
up its affairs and be terminated as a series of IDEX under Massachusetts law.
For further information about the transaction, see the Proxy Statement/
Prospectus.
1
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
The unaudited pro forma information attached to this Statement of
Additional Information as Exhibit A gives effect to the proposed transfer of
substantially all of the assets and liabilities of each Fund to the Acquiring
Fund as if such transfer had occurred as of December 31, 2000. In addition, the
pro forma combined statements have been prepared based upon the fee and expense
structure of the Acquiring Fund. The pro forma financial information should be
read in conjunction with the historical financial statements and notes thereto
of each Fund (which commenced operations in April 2001) and the Acquiring Fund,
incorporated herein by reference in this Statement of Additional Information.
The proposed transfer of the assets and liabilities of each Fund to the
Acquiring Fund will be accounted for as a tax-free reorganization.
2
EXHIBIT A
Pro Forma Information
(unaudited)
To be composed of:
PORTFOLIO OF INVESTMENTS
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
PRO FORMA STATEMENT OF OPERATIONS
Footnotes
PART C: OTHER INFORMATION
Item 15. Indemnification
Reference is made to ________ of the Registrant's Declaration of Trust, _____ of
the Registrant's By-Laws and Section ___ of the Distribution Agreements between
IDEX and AFSG Securities Corporation.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant understands that in the opinion of the Securities
and Exchange Commission ("SEC") such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a Trustee,
officer or controlling person of the 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, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits
1. Declaration of Trust and all amendments are incorporated herein
by reference to the Registrant's Registration Statement on Form
N-1A (File No. ), as filed with the SEC.
2. (a) Amended and Restated By-Laws are incorporated herein by
reference to the Registrant's Registration Statement on Form
N-1A (File No. ), as filed with the SEC.
3. Not applicable.
4. Form of Agreement and Plan of Reorganization is filed herewith
as Exhibit A.
5. Not Applicable.
6. (a) Form of Investment Advisory Agreements are incorporated
herein by reference to the Registrant's Registration Statement
on Form N-1A (File No. ), Amendment No. ___as filed with the SEC
on ______.
(b) Form of Sub-Advisory Agreements are incorporated herein by
reference to the Registrant's Registration Statement on Form
N-1A (File No. ), Amendment No. ___as filed with the SEC on
______.
7. Distribution Agreement is incorporated herein by reference to
the Registrant's Registration Statement on Form N-1A (File No.),
Amendment No. ___as filed with the SEC on ______.
8. Not. Applicable.
9. Custodian Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. ),
Amendment No. ___as filed with the SEC on ______.
10. [Check this one]
11. Opinion and Consent of Sutherland Asbill & Brennan LLP is filed
herewith.
12. Form of opinion of ______ with respect to tax matters is filed
herewith.
13. Not Applicable.
14. Consents of Independent Public Accountant are filed herewith.
15. Not Applicable.
16. Power of Attorney for the Registrant is incorporated herein by
reference to the Registrant's Registration Statement on Form
N-1A (File No.) as filed with the SEC.
17. (a) Form of proxy card is filed herewith.
(a) The Registrant's Annual Report, dated _____, is incorporated
herein by reference.
(c) Prospectus and Statement of Additional Information of IDEX,
dated March 1, 2001, are incorporated herein by reference to
Amendment No. ____ to the Registrant's Registration Statement on
Form N-1A (File No. _____) as filed with the SEC.
(d) IDEX Annual Report dated ________ is incorporated by
reference.
(e) N/A
(f) N/A
1
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
a part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act, the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by
persons 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 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 the time shall be deemed to be the initial bona fide
offering of them.
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of St. Petersburg and the State
of Florida on the _____ day of ______, 2001.
IDEX Mutual Funds
/s/ John R. Kenney_____
------------------
John R. Kenney
/s/ John R. Kenney Chairman, Trustee & CEO (Date)
- ------------------------------------
John R. Kenney
/s/ Patrick S. Baird President and Trustee (Date)
- --------------------------------------
Patrick S. Baird* (Principal Executive Officer)
/s/ Thomas R. Moriarty Senior Vice President (Date)
- --------------------------------
Thomas R. Moriarty Treasurer and Principal
Financial Officer
/s/ Christopher G. Roetzer Vice President, Assistant (Date)
- --------------------------------
Christopher G. Roetzer Treasurer and Principal
Accounting Officer
/s/ Peter R. Brown Trustee (Date)
- ------------------------------------
Peter R. Brown *
/s/ Daniel Calabria Trustee Date
- ------------------------------------
Daniel Calabria *
/s/ Charles C. Harris Trustee (Date)
- -------------------------------------
Charles C. Harris*
/s/ William W. Short, Jr. Trustee (Date)
- ----------------------------------
William W. Short, Jr. *
/s/ Jack E. Zimmerman Trustee (Date)
- --------------------------------
Jack E. Zimmerman *
/s/ John K. Carter
- ----------------------------------
*Signed by John K. Carter
Attorney in Fact
EXHIBIT INDEX
Exhibit No. Description
11 Opinion and Consent of Sutherland Asbill & Brennan, LLP
12 Form of opinion of _____ as to tax matters
13 Consents of Independent Public Accountants
17(a) Form of Proxy Card
EXHIBIT INDEX
Exhibit No. Description
11 Opinion and Consent of Sutherland Asbill & Brennan, LLP
12 Form of opinion of _____ as to tax matters
13 Consents of Independent Public Accountants
17(a) Form of Proxy Card