SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A File #2-74436
File 811-3287
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( )
Pre-Effective Amendment No. ( )
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Post-Effective Amendment No. 21st (X)
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )
Post-Effective Amendment No. 21st (X)
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(Check appropriate box or boxes)
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NEW ALTERNATIVES FUND, INC.
150 Broadhollow Road, Suite 306 Melville, New York 11747
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(Address of Principal Executive Offices) (Zip Code)
(631) 423-7373
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*(Registrant`s Telephone Number, including Area Code)
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
(Check Appropriate Box)
Prospectus
Dated April 30, 2002
NEW ALTERNATIVES FUND, INC.
150 Broadhollow Road, Melville, New York 11747 Telephone 1-800-423-8383 or 1-631-423-7373
New Alternatives is a mutual fund seeking growth investment in various industries that are oriented to a clean environment with a special interest in Alternative Energy
As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved of this Fund's shares or determined whether this prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime.
PRINTED ON Printed on Recycled Paper
TABLE OF CONTENTS SUBJECT PAGE Fund Investments, Goals, Policy and Strategy 3 Special Interest - Alternative Energy 3 Main Risks of Investing in the Fund 3 Is This Fund for you? 4 Average Annual Returns Bar Chart and Tables 4,5 Fees and Expenses of the Fund 5 Maximum Sales Charge 5 Annual Fund Operating Expenses 5 Effect of Operating Expenses 5 Investment Objectives and Strategy 6 Investment Formula 6 Fund Definition of Alternative Energy 6 Alternative Energy : The Area of Special Interest 7 Related Products and Technologies in Which We Invest 7 Illustrations of Problems and Advantages in Areas of Investment 7,8 The Investment Manager and Advisor, Portfolio Managers 8 Pricing Shares 9 Minimum Investment, Minimum Subsequent Investment 9 General Restrictions 9 Transfer of Shares 9 Redeeming Shares 9 Signature Requirements 9 Dividends and Distributions 9 Taxes 9 How to Purchase Shares 10 Sales Loads Break Points 10 Reduction or Modifications of Charges 10 Privacy 10 Sales Charge Exemptions 10 Transfer Agent 10 Financial Highlights 11 Fund Application Form 15 |
Fund's Investment Objectives Strategies and Goals
Similar to many funds, the Fund seeks long term capital gains by investing in common stocks. Investments are in a wide range of industries and in companies of all sizes.
New Alternatives Fund investment policies are materially different from other funds.
A: Most of this Fund's investments will be in companies that provide a contribution to a clean and sustainable environment.
B: There is a special interest in alternative energy.
Alternative energy means production and conservation of energy by means which
reduce pollution and harm to the environment; particularly when compared to
conventional coal, oil or atomic energy. See page 6 for more information.
C: Companies with non-discriminatory practices at all levels of their work force are sought.
Special Interest ------------>> Alternative Energy
The Fund's goal is to invest 25% or more of assets in companies involved in alternative energy. That percentage may not always be achieved. There are presently a limited number of companies from which to choose.
Main Risks of Investing in The Fund
All mutual funds have a level of risk that comes from changes in the market and changes in the economy. Fund shares will fluctuate in value. Losses are possible.
New technologies may be feasible, but not cost effective. The Fund may not choose among them wisely. Interest in achieving a clean environment may diminish.
Investments in alternative energy and companies with environmental products are subject to political priorities and changing government regulation.
Reduced prices for recycled products can result when there are less expensive competing virgin materials available, causing companies collecting or using recycled materials to have reduced income.
There are risks from a failure to enforce environmental law. For example, should the government reduce environmental regulation or its enforcement, then companies that produce products designed to provide a clean environment, in which we invest, are less likely to prosper. Potential advantages of alternative energy may be slow in development and recognition.
See "Illustrations of Problems and Advantages in Different Areas of Investment", starting on page 7.
Part of the Fund portfolio may include small developing companies where risks are normally higher.
The Fund may invest up to 15% of its assets in foreign companies which publish information in English at levels comparable to US companies. Foreign investment has risks arising from currency fluctuation, tax and political changes. This disclosure of risks is not complete.
There are risks which cannot yet be envisioned.
Is This Fund for You?
This Fund's shares are not for investors seeking a high level of current income or safety. Investing in this Fund is not a complete investment program.
This Fund may appeal to investors with an interest in alternative energy, environmental improvement and social responsibility. Please understand that social responsibility is a subjective concept that is interpreted by the managers. No company in which we have previously invested, to our knowledge, has tested its products on animals.
This policy reduces the number of companies from which choices can be made.
Bar Chart and Performance Table
The bar chart and table shown below provide an indication of the risks of investing in the New Alternatives Fund, Inc. by showing changes in the Fund's performance from year to year over a 10-year period and by showing how the Fund 's average annual returns for one, five and ten years compare to those of a broad-based securities market index. How the Fund has performed in the past is not necessarily an indication of how the Fund will perform in the future.
The computations assume the reinvestment of all dividends and capital gain distributions. The information provides some indication of the risks of investing in the Fund. The bar chart does not reflect sales charges. If those items were included, the returns would be less than those shown in the chart.
During the 10 year period shown in the bar chart, the highest return for a quarter was 33.86% (quarter ending March 31, 2000) and the lowest return for a quarter was -20.86% (quarter ending Sept. 30, 2001).
Average Annual 2001 Five Ten Total Returns Years Years Return Before Taxes (16.581)% 6.537% 6.805% After Taxes on Distributions (17.392)% 5.347% 5.605% After Taxes on Distributions And Sale of Fund Shares (13.244)% 5.095% 5.395% Russell 2000 Index* 2.49% 7.52% 11.51% |
*See Notes
Note 1: After-tax returns are calculated using the historical
highest individual federal marginal income tax rates and do not reflect
the impact of state and local taxes.
Note 2: Actual after-tax returns depend on an investor's tax situation and
may differ from those shown, and after-tax returns shown are not relevant to
investors who hold their Fund shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
Note 3: The Russell 2000 Index consists of the small US stocks. It is a
widely recognized index.
Note 4: Fund results were calculated according to a standard formula. The
formula requires that the maximum sales charge of 4.75% be deducted. Results
would be higher if they were calculated at net asset value. The indices
represent stocks. The indices are not managed and do not reflect sales charges,
commissions or expenses.
Note 5: The return before tax results are modified from the original
disclosure due to error in calculations.
Fees and expenses of the fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge as a percentage of the offering price 4.75% Annual Fund Operating Expenses (expenses that are deducted from Fund assets) Management Fee .69% Distribution (12b-1) None Other Expenses* .45% Total Annual Operating Expense 1.14% |
*Other expenses include fund operating expenses such as Custodian and transfer agent expenses.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000.00 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes the maximum sales load and that your investment has a 5% return each year and the Fund's operating expenses remain the same. Your costs might be higher or lower, based on these assumptions your costs would be as indicated.
1 year 3 years 5 years 10 years $587.80 $826.60 $1084.10 $1820.20
Investment Objectives and Strategy
Investment Formula: There is no commitment to any formula in selecting investments such as favoring growth or value or any technical system. The Fund's Advisor selects securities for purchase or sale by subjectively balancing factors including the investment's relationship to the areas of interest and concentration. The Advisor assesses the perceived risk of the investment at a particular price. Attention is given to the perceived prospects for the company selected and its industry, with concern for economic, political and social conditions at the time. We consider expectations based on technology and skills of management.
The managers subscribe to a number of related trade publications relating to the Fund's area of interest, including "The Hydrogen and Fuell Cell Investor" and "Renewable Energy World". The managers review annual reports (Form 10K) and quarterly reports (Form 10 Q) of companies as filed with the SEC. The managers review daily news about every company in which the Fund invests and examine various analyst reports and studies of sales and purchases of shares by company officers.
The managers examine financial reports and discuss questions with company officers. We collect news from general and financial publications. We solicit and use information and opinions of our shareholders, many of whom are knowledgeable about the technologies in which we invest.
Money awaiting investment in stocks is generally kept in US Treasury Bills. The Fund maintains modest amounts in socially concerned (federally insured) banks that are committed to serving community needs.
Fund Definition of Alternative Energy
Alternative energy and renewable energy are overlapping and related concepts. Such energy saves natural resources. It is energy that is environmentally superior to coal and oil.
The Fund does not include oil, and coal as presently used resources within its definition of solar and alternative energy. Alternative energy is cleaner. The Fund may invest in such companies when they are actively developing or producing such items as photovoltaics, fuel cells or developing other products and technologies related to the Fund areas of interest. There may be future technologies for the transformation of coal to a clean source of energy.
Wind, flowing water, energy conservation and geothermal heating are ancient but now employ new advanced technology.
Electricity produced by solar cells and fuel cells are relatively new. All of the technologies operate. The cost effectiveness of some of the newest technologies varies.
Atomic energy is not included as an area for alternative energy investment. There is a significant potential for accident, unresolved radioactive waste disposal problems, excessive cost and frequent community opposition. There is increasing distress with the cost of dismantling atomic energy facilities as they mature or depreciate.
Alternative Energy: The Area of Special Interest
Alternative energy and related products, are illustrated below:
*a. solar cells produce electricity from sunlight,
*b. fuel cells produce electricity from hydrogen, which has been separated from hydrocarbons,
*c. Hydroelectric power is clean, but is limited by geography,
*d. geothermal energy is produced by heat produced from sources below the earth's surface,
*e. conservation includes insulation, energy efficient electrical equipment, and transportation such as electric vehicles, bicycles and railroads,
*f. recycling is a form of energy and resource conservation,
*g. cogeneration uses a single fuel to produce, simultaneously, general use electricity and heat or cooling .
Related Products and Technologies in Which We Invest
Batteries for Solar Energy: Solar cells depend on daylight to produce energy. Batteries are needed to store the energy. In some cases inverters are needed to convert direct current to alternating current.
Natural gas is the cleanest of hydrocarbon conventional fuels. It is also the most promising current source of hydrogen for fuel cells.
Resource Conservation: Renewable biomass fuel saves resources. Lumber made from laminating cheap or waste wood or fast-growing trees is stronger than regular timber. It will help preserve hard wood forests. Paper made from fast-growing plants saves forests.
Illustration of Problems and Advantages in Different Areas of Investment:
Recycling: When steel from the Far East pours into the U.S., the price of recycled metals and the companies that collect and process metal falls. When raw material price for plastic production becomes inexpensive, the demand for recycled plastic declines. As a decline in resource availability becomes visible, prices for the recycled plastic material rises.
Conventional Energy prices can fluctuate widely. Oil supplies are finite. Alternative energy technologies are expected to advance when oil prices rise. When there is an abundant and inexpensive supply of oil, investors may neglect alternative energy.
There are variable levels of public anxiety about national energy independence and the desire for alternatives that foster energy independence. There are polluting effects from oil and coal as currently used. All these considerations impact the demand for alternative energy.
Clean air and clean water investment grow when there are water-based epidemics, acid rain, polluted streams, reports of asthma and allergies. It falters when federal, state and local commitment fades. There is a continuing contest between opposition to government regulation and clean air and water.
Solar (photovoltaic) cells are presently used and attractive in remote areas where there is no utility grid. The costs are getting lower and the cells more powerful each year. They are not presently competitive with utility electric production.
Fuel cells appear to be more efficient than conventional utility produced electricity and cleaner. The main by-product is drinkable water. Commercial use is barely beginning. They are not yet proven to be cost efficient. Choosing the best cells and the companies that produce them may prove difficult.
Environmentally Grown and Processed Foods are enjoying a period of growth. Producers, distributors and retailers are prospering. Many of the products cost more. The growth may not survive a poor economy.
More Alternatives: The list of energy alternatives and environmental solutions cannot be exhaustive or the comments complete.
Technologies such as Ocean Energy, including ocean thermal variation, tidal movement and wave action to produce electricity are under development. There will be other new opportunities in new areas of alternative energy and new environmental products and technologies. The Fund will include them as they appear practical.
The Investment Manager and Advisor of the Fund is Accrued Equities, Inc. of 150 Broadhollow Rd. Melville, NY 11747. The company was founded in 1954 to advise the personal investment clients of then practicing lawyer Maurice Schoenwald.
The officers of the advisor are Maurice and David Schoenwald (father and son), who founded the Fund in 1982. The manager makes all investment decisions, provides office space, staff, telephone, administrative services, secretarial services, government regulatory compliance, information, preparation of documents and like services.
The management fee is 1% of the first $10 million of assets; .75 of 1% for the next $20 million; .50 of 1% for assets more than $30million and .45 of 1% for assets more than $100 million. This amounted to .69% of net assets in 2001.
Portfolio Managers: The managers are Maurice and David Schoenwald. They were local, private practicing attorneys, personally interested in social and environmental matters. They have managed the Fund since its inception.
David has been a journalist and an attorney with Law Services (a poverty law agency).
Maurice has had experience teaching law, practicing commercial law, arranging various investments and writing about investment.
They received financial and consultive assistance in founding the Fund from friends and neighbors. Since founding the Fund, they have sought and received advice from shareholders. Such help and commentary are solicited during each quarter.
The portfolio managers are attentive to and influenced by shareholder commentary.
Pricing Shares: Shares are priced once at the end of each business day on which the New York Stock Exchange is open for trading. Pricing is based on the market value of the shares in the Fund portfolio. That is currently at 4:00PM EST. Your purchase order will be priced at the market value, called NAV, next calculated after your order is received by the transfer agent, PFPC Inc. If markets change the time of closing for emergencies or new policies, the closing time for the Fund shall follow the revised standards.
Minimum Investment: The minimum Initial investment in the Fund is $2,500.00 or $2,000.00 for retirement plans such as IRA's or similar plans.
Minimum Subsequent Investment: After the minimum initial investment you can add as little as $50.00 at any time through an automatic investment arrangement with your bank. If you do not use the automatic system, the minimum additional investment is $250.00.
General Restrictions: If your account falls below $1,000.00 the fund reserves the right to return to you the current value of your account. The Fund will usually request that you increase your balance before closing your account.
The Fund reserves the right to refuse certain requests to purchase.
Transfer of Shares: You may, without charge, transfer shares to co-owners, children, parents, siblings, spouse, family trusts, grandchildren, grandparents and estates. Other transfers are not authorized. You can always redeem shares (sell shares back to the Fund) for their then current value.
Redeeming Shares: You may redeem shares at any time. The pricing will be at the next net asset value per share calculated after the transfer agent receives your written request.
If the Fund has not collected payment for your purchase of the shares, they will delay payment for your redemption until payment for the shares is collected. Shares for which no payment is collected will be canceled without notice.
Signature Requirements: The following helps protect the Fund and its shareholders against fraud. Requests for redemption must be in writing signed by the person or persons named in the account and addressed to New Alternatives Fund, Inc. C/O PFPC Inc., 211S. Gulph Road, King of Prussia, Pennsylvania, 19406.
Signature (Medallion) guarantees are required. They can be provided by any of the following: a bank, registered stock broker on the New York Stock Exchange or savings and loan association.
If the amount redeemed is less than $2,500.00, the need for a guarantee may be waived if the proceeds go to the fund owners at their last filed address.
Dividends and Distributions: Once a year the Fund pays its shareholders dividends from net investment income received and distributes any net capital gains that it has realized. Your distributions will be reinvested in the Fund unless you instruct otherwise.
Taxes: The Fund expects to make distributions that will be taxed as ordinary income or capital gains. Fund dividends and distributions are taxable to most investors unless your investment is in an IRA or other tax- advantaged account. The dividends and distributions are taxed whether paid or re-invested. IRA accounts and like account holders pay taxes when you receive benefits. The tax status of your dividends and gains distributions will be detailed in your annual tax statement from the Fund.
How to Purchase Shares: On the last page, before the cover, is an order form. Should you wish to open an IRA account or some other special account, please call the Fund and you will receive the forms. The order should be sent to our transfer agent addressed to New Alternatives Fund, Inc. C/O PFPC Inc., PO Box 61503, 211 S. Gulph Road, King of Prussia, Pennsylvania 19406.
More Information: You can reach the Fund by phone at 1-800-423-8383. We can supply general information, details about Fund policy suitability, annual reports, statements of additional information and prospectuses.
The transfer agent can tell you about the status of your account. The transfer agent can be reached at 610-239-4600
Sales Loads Break Points (Sales Loads)
Purchase Sales Commission as a Sales Commission as a Amount percentage of offering price percentage of Net Asset Value $2,500 to $25,000 4.75% 4.987% $25,001 to $99,999.99 3.85% 4% $100,000 or more 2.91% 3% |
Reductions or Modifications in Charges are Available:
1. Subsequent Additional Purchases: If you add to your holdings and pass the threshold into larger category, the sales charge for the additional purchases will be at the reduced rate of the newly obtained category.
2. Purchases Made by Families: Investors may combine family purchases
into a single transaction to qualify for a reduced sales charge, however each
family member must meet the minimum investment. This includes purchases by:
spouses, children, parents, siblings, grandparents and family trusts.
It is each investor's responsibility to notify the transfer agent at the time of purchase of eligibility for such reduced sales charge. Attach a note to your order or call before making the order to assure your reduced arrangement.
Sales Charges Exemptions: People or institutions who may invest in the Fund without paying sales charges are:
A. Non Profit or Charitable Organizations (as defined in Section
501 (c) (3) of the Internal Revenue Code) investing $25,000 or more.
B. Clients of an Investment Advisor in the U.S. If the client is charged an ongoing fee by the investment advisor for advisory services.
C. Brokers who are purchasing for their own account who will not transfer their shares.
D. Officers and employees of the Fund and manager and their families.
Persons using the above privileges are obliged to note the facts on their order form. Calling the fund office in advance can help prevent errors.
Transfer Agent: All Fund books and records are maintained by PFPC Inc., our transfer agent. They serve many mutual funds including large funds.
Personal Privacy: The Fund and its transfer agent have a policy of not releasing information about its shareholders without the shareholders permission except under legal requirements.
Financial Highlights: This table describes the fund's performance for the periods indicated. "Total Return" shows how much your investment in the fund would have increased or (decreased) during each period. It assumes you reinvested all dividends and distributions. These figures have been independently audited by Joseph Don Angelo, CPA whose report along with the fund's financial statement is included in the annual report. These are available upon request.
Per Share Data
Financial Highlights
STATEMENT OF PER SHARE INCOME AND CAPITAL CHANGES
For each share of capital stock outstanding*
Year End Year End Year End Year End Year End Year End Year End
12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
Net asset value at
beginning of period $41.29 $28.85 $28.54 $32.07 $30.87 $30.51 $28.14
Investment Income $.75 $.79 $.66 $.52 $.64 $.73 $.75
Expenses .43 .42 .38 .37 .38 .39 .40
Net Investment Income .32 .37 .28 .15 .26 .34 .35
Net realized and unrealized
(Loss) on investment (5.13) 14.93 2.14 (3.22) 3.16 3.72 5.14
Total from Investment Operations (4.81) 15.30 2.42 (3.07) 3.42 4.06 5.49
Distributions from net
Investment Income (.32) (.37) (.28) (.15) (.26) (.34) (.35)
Distributions from net
realized gain(1.13) (2.12) (1.83) (.16) (1.96) (3.36) (2.77) (.43)
Total Distributions (1.45) (2.49) (2.11) (.31) (2.22) (3.70) (3.12)
Net change in net asset value (6.58) 12.44 .31 (3.53) 1.20 .36 2.37
Net asset value
as of end of the period $34.71 $41.29 $28.85 $28.54 $32.07 $30.87 $30.51
Total Return
(sales load not reflected) (12.4)% 51.7 8.5% (10%) 11.1% 13.3% 19.5%
Net assets, end of period $49.245 $52,773 $32,555 $33,021 $37,941 $35,549 $32,236
Ratio of operating expense
to net assets** 1.14% 1.11% 1.13% 1.18% 1.15% 1.21% 1.28%
Ratio of net investment income
to average net assets** 0.87% 1.01% .89% .49% .79% 1.04% 1.12%
Portfolio turnover 29.3% 59.7% 87.3% 32.4 53.9% 51.2% 48.72%
Number of shares outstanding
at end of period*** 1,368,171,321 1,211,783 1,058,230 1,156,952 1,111,377 1,038,561 965,769
First Seven
Year End Year End Year End Year End Year End Year End 4/30/83
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 Months
Net asset value at
beginning of period $30.00 $29.95 $29.19 $24.62 $27.57 $22.55 $12.50
Investment Income $.72 $.62 $.62 $.72 $.70 $.73 $.38
Expenses .40 .33 .28 .29 .27 .26 .20
Net Investment Income .32 .29 .34 .43 .43 .47 .18
Net realized and unrealized
(Loss) on investment (1.43) .58 1.10 5.86 (2.53) 5.41 3.08
Total from Investment Operations (1.11) .87 1.44 6.29 (2.10) 5.88 3.26
Distributions from net
Investment Income (.32) (.29) (.34) (.43) (.43) (.47) (.18)
Distributions from net
realized gain (1.13) (.53) (.34) (1.29) (.42) (.39) (.19)
Total Distributions (.75) (.82) (.68) (1.72) (.85) (.86) (.37)
Net change in net asset value (1.86) .05 .76 4.57 (2.95) 5.03 2.89
Net asset value
as of end of the period $28.14 $30.00 $29.95 $29.19 $24.62 $27.57 $15.39
Total Return
(sales load not reflected) (3.7%) 2.9% 4.9% 25.6% (7.6%) 26.0% 10.4%
Net assets, end of period $28,368 $31,567 $28,896 $23,931 $16,433 $11,893 $163
Ratio of operating expense
to net assets** 1.30% 1.11% 1.04% 1.18% 1.27% 1.25% 1.08%
Ratio of net investment income
to average net assets** 1.04% .96% 1.25% 1.74% 2.08% 2.20% 1.69%
Portfolio turnover 33.00% 18.36% 13.10% 21.50% 24.70% 14.60% 74.50%
Number of shares outstanding
at end of period*** 984,847 1,026,460 945,006 776,974 646,664 419,212 10,592
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* All Adjusted for two for one share split on July 26, 1985 and January 2, 1990 ** Annualized and includes state taxes *** Shares immediately prior to dividend - Fund commenced operation on September 3, 1982 **** At this time the Fund was on fiscal year. A table for 1983-1988 is available on request. Deleted to make space.
The accompanying notes are an integral part of these financial statements.
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APPLICATION FOR PURCHASE OF SHARES
New Alternatives Fund, Inc.
Phone (800) 423-8383 for General Inquiries
c/o PFPC Inc.
Phone (610) 239-4600 for Account Status
P.O. Box 61503
211 S. Gulph Road
King of Prussia, PA 19406
I hereby remit $ ($2,500.00 minimum) to be applied toward the purchase of shares and fractions thereof of New Alternatives Fund, Inc. For IRA's see seperate application.
Please register the shares as follows:
(Please Print or Type Clearly)
Your Phone #
area code telephone
Alternative Phone #
area code telephone
1. Account Registration (check one)
Individual
date of birth: / /
first name middle initial last name MM DD YY
Joint Tenant
date of birth: / /
first name middle initial last name MM DD YY
Gifts to Minors under the Uniform Gifts
name of custodian name
of state
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to Minors Act as custodian for
Other
Indicate name of corporation, other organization of fiduciary capacity; if trustee, include date of trust instrument.
2. Mailing Address
street city state zip code
3. Employer (if any)
(Name/Address requested by regulatory authorities)
4. Social Security (or Identification) Number
(Use Social Security Number of minor or custodian for minor account.)
I have received a copy and read the Fund's Prospectus dated April 30, 2002. I understand that dividends and distributions will be reinvested in additional shares unless payment in cash is requested in writing. I certify and affirm, under penalty of perjury, the above tax number is correct. I am over the age of eighteen. The following is required by Federal Tax Law to avoid backup withholding: "By signing below, I certify under penalties of perjury that I am a U.S. person (including U.S. resident alien).
X X Signature of Applicant/Date Signature of Joint Owner, if any/Date
Mail this form, when completed, to New Alternatives Fund, Inc., c/o PFPC Inc., P.O. Box 61503, 211 S. Gulph Road, King of Prussia, PA 19406, together with a check payable to the order of New Alternatives Fund, Inc., drawn in US currency on a bank in the United States.
To be completed by Broker or Investment Advisor - If any.
More Information is available:
A. There is a Statement of Additional Information, referred to as SAI. This provides details of Fund organization, rules, officers, directors, history, limitations on types of investment and policies. The SAI is considered incorporated by reference to the prospectus and is considered a part of the prospectus.
B. Annual and Semi-Annual Reports to Shareholders contain a discussion of the market conditions and strategy that significantly affected the Fund's performance during its last fiscal year. It also lists portfolio holdings at the end of the year.
To obtain all or any of this information or other information about the Fund without charge contact:
By telephone: Call 1-800-423-8383
By mail: New Alternatives Fund, 150 Broadhollow Road, Melville NY 11747
On the Internet: Text-only versions of Fund documents can be viewed online or downloaded from: SEC -- http://www.sec.gov
At the SEC You can also obtain copies by visiting the SEC's Public Reference Room in Washington, DC. (Phone 1-800-SEC-0330) or by sending your request and a duplicating fee to the SEC's Public Reference Section, Washington, DC 20549-6009.
The Fund SEC file number is : 811 - 3278
Printed on Recycled Paper
New Alternatives Fund, Inc.
Prospectus
April 30, 2002
ITEM 10
File 811 3287
Part B
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2002
New Alternatives Fund, Inc. File 2 74436
150 Broadhollow Road, Suite 306
Melville, New York 11747
631 423-7373
800 423-8383
This Statement of Additional Information is not a prospectus and should be read in conjunction with the prospectus of New Alternatives Fund, Inc., dated April 30, 2002. The Fund's most recent Annual and Semi-Annual Financial Reports are separate documents and are incorporated by reference to this Statement of Additional Information.
Requests for copies of the prospectus and Financial reports should be made by either calling the above listed number, or by writing to the Fund.
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
Page Cross Reference
to
prospectus
History of the Fund B-2
Description of the Fund and its Investments and Risks B-2
Management of the Fund B-4
Control Persons and Principal Holders of Securities B-7
Investment Advisor and Other Services B-7
Brokerage, Allocation and Other Practices B-10
Description of Shares B-10
Purchase, Redemption and Pricing of Shares B-11
Taxation of the Fund B-13
Underwriters B-14
Investment Results and Related Statistics B-14
Financial Statement B-15
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ITEM 11
HISTORY OF THE FUND
The Certificate of Incorporation of the Fund was filed in New York, on January 17, 1978. The Fund was an inactive corporation until it commenced its activities as a mutual fund on September 3, 1982. The original name of the corporation, The Solar Fund, Inc. was changed to its present name on August 6, 1982.
ITEM 12
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
Classification
1) New Alternatives Fund, Inc. is an open-end management investment company known as a mutual fund. The Fund is diversified, which means that, with respect to 75% of its total assets, the Fund will not invest more than 5% of its assets in the securities of any single issuer.
2) The Fund seeks long-term growth by investing in common stocks, and has a particular interest in stocks of companies in various industries oriented to a clean energy and the environment.
The Fund will invest in equity securities. Equity securities represent an ownership position in a company. The prices of equity securities fluctuate based on changes in the financial condition of their issuers and on market and economic conditions.
The Fund may invest in stocks of smaller companies. Investing in smaller capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. Securities of smaller companies may be thinly traded (and therefore have to be sold at a discount from current prices or sold in small lots over an extended period of time), may be followed by fewer investment research analysts, and may be subject to wider price swings thus creating a greater chance of loss than securities or larger capitalization companies.
Foreign Securities: The Fund may invest up to 15% of its assets in foreign securities. Investments in foreign securities may present risks not typically involved in domestic investments. The Fund may purchase foreign securities directly, on foreign markets, or those represented by American Depositary Receipts (AADRs@). ADRs are U.S. dollar denominated and traded in the U.S. on exchanges or over the counter. By investing in ADRs rather than directly in foreign issuers= stock, the Fund may possibly avoid some currency and some liquidity risks. The information available for ADRs is subject to the more uniform and more exacting accounting, auditing and financial reporting standards of the domestic market or exchange on which they are traded.
Fund Policies and Restrictions
3) Concentration: The Fund has a special interest in Alternate Energy. The Fund concentrates at least twenty-five percent (25%), except during defensive periods, of its investments in common shares of companies, which have an interest in alternate energy. Alternative energy may be defined differently by various authorities. The Fund definition is shown in the prospectus.
Investment Restrictions
The following investment restrictions are deemed to be fundamental policies of the Fund. As such, the Fund may not, without the affirmative vote of a majority of its shareholders*:
1- Borrow money, except from banks for temporary or emergency purposes in an amount not in excess of five percent (5%) of the market value of its total assets (not including the amount borrowed). The Fund will not invest in portfolio securities while outstanding borrowing exceeds five percent (5%) of the market value of its assets. The Fund does not seek to borrow at all.
2- Purchase on margin or sell short or write or purchase put call or call options.
3- Pledge any of its assets except that up to ten percent (10%) of the market value of its total assets may be pledged in connection with borrowing permitted by (1) above. The Fund does not seek to pledge any of its assets.
4- Lend any of its assets other than through the purchase of a portion of publicly distributed notes, bonds, negotiable certificates of deposit or other debt securities.
5- Underwrite or participate in any underwriting of securities, except to the extent that, in connection with the disposition of portfolio investments, the Fund may be deemed to be an underwriter under the federal securities law.
6- Buy more than ten percent (10%) of the outstanding voting securities of any one issuer.
7- Buy securities of any company (including its predecessors or
controlling persons) that has not been in business for at least three
(3) continuous years, if such investment at the time of purchase would
cause more than ten percent (10%) of the total assets of the Fund (at
market value) to be invested in securities of such companies.
8- With respect to seventy-five percent (75%) of its assets (at market value), invest more than five percent (5%) of such assets in securities of any one issuer, other than the U.S. Government, its agencies or instrumentality.
9- Buy or hold securities of any issuer if, to the knowledge of the Fund, any Officer, Director or ten (10%) shareowner of the Manager owns individually one-half (1/2) of one percent (1%) of a class of securities of such issuer and such persons owning one-half (1/2) of one percent (1%) of such class together own beneficially more than five percent (5%) of such securities.
10- Purchase securities of any other investment company, except as part of a merger, consolidation or other recognition.
11- Participate, on a joint or joint and several basis, in any trading account in securities.
12- Buy or sell any real estate, real estate mortgages, commodities or commodity contract.
13- Issue senior securities.
14- Invest more than ten percent (10%) of its total assets (at market value) in
securities the disposition of which would be subject to legal restriction or securities for which there are no readily available market quotations. The Fund does not seek to invest in any restricted securities or securities for which there are not readily available market quotations.
15- Will not engage in arbitrage or trade for the control or management of another company.
16- Invest more than fifteen percent (15%) of its assets in securities of companies outside the United States.
17- Invest more than twenty-five percent (25%) of the Fund's assets in any single industry; excluding the solar and alternative energy industries as described in the AInvestment Objectives@ and AChoice of Companies for Investments@ sections of the prospectus in which the Fund will always invest more than twenty-five percent (25%) of its assets excepting during defensive periods.
d- Temporary Defensive Position
For temporary defensive purposes - which may include a lack of adequate purchase candidates or an unfavorable market environment - the Fund may invest in cash or cash equivalents. Cash equivalents include instruments such as U.S. Government and agency obligations, certificates of deposit and time deposits.
ITEM 13
MANAGEMENT OF THE FUND
a- Board of Directors
Under the laws of the state of New York, the Board of Directors of the Fund is responsible for managing the business and affairs of the Fund. As is true of most mutual funds, daily management is delegated to the Fund Manager, Accrued Equities, Inc.
None of the Directors have any role in managing other mutual funds or any management interest or financial interest in stock brokerage firms.
The outside Directors act as a committee of the whole. They supervise the Fund. They authorize policy changes, nominate new board members, review agreements with the advisor and underwriter, review financial information and reports, review shareholder correspondence, review emergency plans, review education programs, review agreements, review performance and ethical compliance.
b- Directors And Officers
Number
Name, Address & Age Position with Fund of Shares
*Maurice L. Schoenwald Director (since 1982), Member of New York
Age 82 Chairmen, (1947) & Florida (1978) Bar;
Longboat Key, FL Vice President Fund Chairman & Co-founder;
Bayshore, NY author of articles on legal and
-4-
|
investment questions; former
faculty, Hofstra University.
Chairman of Accrued Equities. 5516.653
*David J. Schoenwald Director (since 1982), Member of New York Bar
Age 52 President, Secretary, (1979); Fund Co-founder. Formerly
Huntington Bay, NY Treasurer reporting staff of Newark Star
Ledger; Now member, Schoenwald
& Schoenwald P.C., Attorneys;
Son of Maurice L. Schoenwald.
President of Accrued Equities. 4394.501
Arthur G. Kaplan Director Admitted to practice law,
Age 79, Retired (since 1982) New York (1951), Oregon (1956)
Lake Oswego, OR District of Columbia (1959);
Formerly Assistant Attorney General
State of Oregon; Assistant Counsel,
two U.S. Senate Subcommittees;
Special Counsel, Curtis Publishing
Co.; retired as Director of
Enforcement, Office of Anti-boycott
Compliance, U.S. Department of
Commerce. 297.352
Sharon Reier Director Financial Journalist
Age 54 (since 1982) contributing to Business Week &
Coconut Creek, FL International Herald Tribune.
& Paris, France Former Regional Editor Financial
World Magazine; Former Editor
with Board Room; Former
Contributing Editor; Institutional
Investor; Formerly staff of Forbes
& American Bankers. 862.516
*Dorothy Wayner Director President Dwayner/
Age 64 (Since 1982) Communications/Advertising and
New York Vice Chairperson Publishing, NY. MBA-New York
(Since 2000) University: member and former
Officer Board Director of Advertising
Women of New York, a private
organization; President Kaleidoscope
Kids, Inc. a non-profit organization
promoting creativity in middle
school kids. 1603.481
Lee Clayton Director R.N., MS; First Fund Investor.
Age 75, Retired (since 1982) Member Sierra Club & New York Nature
Hauppauge, New York Conservancy. 564.420
Dudley Clayton Director Graduate Education in Horticulture.
Age 79, Retired (since 1982) A Director and retired Superintendent
Hauppauge, New York of Pinelawn Memorial Park. Outdoors
man and environmentalist. 564.420
-5-
|
Daniel Wolfson, MD Director Former Resource Manager, Farm &
Age 40 (since 1995) Wilderness Foundation, Plymouth, VT.
East Hampton, MA Developed forest & wildlife habitat for
conservation area. B.S. Environmental
Studies, Hampshire College. M.S. Resource
Management, Antioch University.
Presently Resident Physician.
Resident, Springfield, MA. 314.375
John C. Breitenbach Director Former History Teacher, Trustee: Silver
Age 47 (since 2000) Bay Association, Town Planning
Silver Bay, New York Administrator, Village Volunteer
Fireman, Clerk Warren County
Family Court, drafted storm water and
water quality preservation regulations
for county and city and Lake George
Basin. Admitted to NY Bar, 1999,
Attorney, Partner Carney & Breitenbach 68.734
|
c) (1) *Interested person, as defined in the Investment Company Act of 1940. Maurice L. Schoenwald is Secretary and minority shareholder of Accrued Equities Inc., the Advisor. David Schoenwald is majority shareholder and President of Accrued Equities, Inc. David Schoenwald is Maurice=s Son. Accrued Equities Inc., is the Fund's investment advisor and principal underwriter.
d- Compensation Table for Fund Directors and Fund Paid Staff
Fund Staff Earning More Than $60,000 from Fund: None Annual Total Compensation of Each Director: $500.00 Income of Directors from other mutual funds: None Compensation from Fund of Directors part of manager: None Retirement Benefits from Fund for Staff or Director: None |
Compensation of Directors and Officers. A five hundred dollar fee was paid to each "uninterested" Director by the Fund for the preceding year. The outside Directors will henceforth receive an additional five hundred dollars for attendance at the Fund's summer meeting . No compensation was paid to each "interested" Director and Officer. No other compensation is or was paid. Interested officers and directors are paid by the manager. Coach travel expense to director meeting which exceed 500 miles will be paid to the extent that the expense is incurred. Such reimbursement was paid in 2001 to Sharon Reier.
e- Sales Load
Certain categories of people or institutions may invest in the Fund without paying a sales charge. These include current and retired directors, officers and employees of the Fund or the Fund's advisor and their families, registered representatives of brokers distributing the Fund's shares who are purchasing for their own personal account, Non Profit or Charitable Organizations (as defined in Section 501 C(3) of the Internal Revenue Code) investing $25,000 or more and clients of investments advisors purchasing for their own
accounts who are charged ongoing management fees for their advisors services. Persons in the above categories must make their status as such known to the Fund's transfer agent. (See Prospectus).
ITEM 14
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The following persons own of record, or beneficiary five percent (5%) or more of the Fund's shares:
Name Ownership #Shares % of Total on 12/31/2001
None
As of December 31, 2001 the number of shares and percentage of the total number of shares owned by record or beneficially by the Directors and Officers of the Fund are respectively 14,186.45 and 0.99 % of the outstanding shares of the Fund.
ITEM 15
INVESTMENT ADVISOR AND OTHER SERVICES
a- Investment Manager
The Investment Advisor/Manager is Accrued Equities, Inc. of 150 Broadhollow Road, Suite 306, Melville NY 11747. The telephone number is 631 423-7373. This is a New York Corporation, organized in 1954. Subsequently it had a sister corporation called Resale Accrued Equities with which it merged, and the surviving corporation, Resale Accrued Equities, Inc. then changed its name to Accrued Equities, Inc.
The original investment clients of Accrued Equities, Inc. were limited to legal clients of Maurice Schoenwald. Since 1966 the company has offered investments to the public.
The controlling stockholder and President of the Investment Manager is David J. Schoenwald. He is also President of the Fund. David J. Schoenwald is presently serving as legal counsel to Accrued Equities, Inc. David J. Schoenwald is a member of the law firm of Schoenwald & Schoenwald P.C.
Maurice L. Schoenwald is Secretary and Vice President of the Investment Manager and Chairman of the Board of Directors of the Fund. He is a minority stockholder of Accrued Equities, Inc.
Under the Management Agreement, the Manager receives a monthly fee from the Fund at the following annual rates based on the average net assets of the Fund at the end of each month:
Annual Rate Assets 1% First $10 million .75% Amounts over $10 million .50% Amounts over $30 million .45% Amounts over $100 million |
For the year ended December 31, 2001 the Manager/Advisor received $354,980 for its advisory fee. For the year ended December 31, 2000 the Manager /Advisor received $326,634 for its advisory fee. For the year ended December 31, 1999 the Manager/Advisor received $262,917 for its advisory fee.
In addition to the management fee, the Fund pays other expenses incurred in its operation including, among others, taxes, brokerage commission, fees of directors who are not affiliated with the manager, securities registration fees, charges of custodians, shareholders services and transfer agent services, dividend disbursing and reinvestment expenses, auditing and legal expenses, the typesetting costs involved in the printing of the Prospectus sent to existing shareowner, costs of shareowner=s reports, and the cost of printing prospectuses for distribution to non-shareholders are paid for by the manager.
Under the Management Agreement, if total expenses of the Fund for any fiscal year, including the management fee, but excluding interest, taxes, brokerage commissions and extraordinary expenses excludable by state laws, exceed the applicable expense limitations set by states securities regulations in those states in which the company may make regular sales, the Manager will reduce its compensation by the amount by which such expenses exceed state limitations.
The Manager may, as required, lease at the expense of the Fund office space. Other Fund expenses include the cost of telephone equipment and usage, and supplies and customary clerical and professional services including preparation of reports, forms, tax returns, distributions, shareholder inquiries, net asset valuations, bookkeeping and like services.
The Management Agreement was approved by the Fund's Board of Directors (including a majority of Independent Directors) on September 7, 2001.
The Management/Advisory Agreement must be approved each year by (a) a vote of the Board of Directors of the Fund, or (b) a vote of the share owners, and in either case, by a majority of the independent directors. Any changes in the terms of the Management Agreement must be approved by the share owners. The Management Agreement automatically terminates upon its assignment. In addition, the Management Agreement is terminable at any time without penalty by the Board of Directors of the Fund or by a vote of the holders of a majority of the Funds outstanding shares (as defined above) on sixty (60) days notice to the manager and by the manager on sixty (60) days notice to the Fund.
Personal Investment Policy. The Fund and Accrued Equities, Inc. have adopted a personal investing policy consistent with Investment Company Institute guidelines.
b- Principal Underwriter
The principal distributor of the Fund is Accrued Equities, Inc. of 150 Broadhollow Road, Melville New York 11747. Fund shares are offered on a best efforts continuous basis. David and Maurice Schoenwald arenuous basis. David and Maurice Schoenwald are Officers of Accrued Equities, Inc. and New Alternatives Fund, Inc.
c) Services Provided by Investment Adviser & Fund Expenses Paid by Third Parties
As described in the prospectus, Accrued Equities, Inc. is manager and investment advisor providing services under the Advisory Agreement. Accrued Equities, Inc. manages the Fund's assets.
d-Service Agreements
Custodian: The Custodian of the Fund is PFPC Trust Company, 400 Dellevue Parkway, Wilmington, DE 19809. The Fund's cash and securities are kept with the Custodian. PFPC=s Sub-custodian for foreign custody excepting foreign securities are held by Citibank NA. The Fund pays the Custodian pursuant to a regular schedule of charges based on a schedule agreed on from time to time by the Fund and the Custodian.
The Custodian attends to the collection of proceeds of securities sold by the Fund, collection and deposit of dividends and disbursements for the cost of securities.
Transfer Agent and Dividend Paying: PFPC Inc., 211 South Gulph Road, PO Box 61503, King of Prussia PA 19406-0903 serves as the Transfer Agent and Dividend Paying Agent for the Fund, pursuant to an agreement effective October 1, 1993. Telephone: 610 239-4600.
Fund accounting and pricing services are also provided by PFPC, Inc. Payments to PFPC and its predecessors over the past three years were as follows:
Custodian * Transfer Agent Pricing
2001 $23,725 $43,800 $35,131
2000 $22,540 $43,920 $33,977
1999 $20,075 $43,800 $31,481
|
* Includes payment for Sub-custodian
Independent Auditor: Joseph A. Don Angelo, CPA , 22 Jericho Turnpike, Mineola, New York 11501. The independent accountant provides audit services, review of tax returns, preparation and review of certain documents to be filed with the Securities and Exchange Commission. He has served the Fund since year 2000.
e- Dealer Re-allowance
Purchase Amount Sales Commission Dealer Re-allowance Sales Commission
As a Percentage of as a Percentage of as a Percentage of
Offering Price Offering Price Net Asset Value
-------------- -------------- ---------------
$2,500 to $25,000 4.75% 4% 4.987%
$25,001 to $100,000 3.85% 3% 4%
$100,001 or more 2.91% 2% 3%
|
ITEM 16
BROKERAGE, ALLOCATION AND OTHER PRACTICES
Accrued Equities Inc. is a registered broker/dealer, but it will not engage in brokerage or equity securities of the type which would be included in the Fund's portfolio. No officer or Director of the Fund or its distributor is associated with any firm having an economic interest in general stock brokerage activities.
The choice of a broker will be made by the Manager without benefit to any director or controlling person. Allocation of brokerage transactions, including their frequency, will be made in the best judgement of the Manager and in a manner deemed fair and reasonable to the shareholders, rather than by any formula.
The primary consideration in all portfolio securities transactions is prompt and reliable execution of orders at the most favorable net price. However, as long as the primary consideration is satisfied, the Manager may give consideration in the selection of broker/dealers to the research provided (including analysis and reports concerning issuers, industries, securities, economic factors and trends) by such firms, and payment may be made of a fee higher than that charged by another broker/dealer if the manager deems such allocation of brokerage to be fair and reasonable to the shareholders.
ITEM 17
DESCRIPTION OF SHARES
The Fund's authorized capital is eight million (8,000,000) common shares of one dollar par value. There is only one class of shares.
Each share entitles the holder to one vote. Fractional shares have no rights. Share owners may vote for the election of Directors and all other appropriate and customary matters and participate proportionately in dividends of capital and net assets of the Fund on liquidation.
The common shares are fully paid and non assessable when issued, are redeemable in accordance with the provisions set forth under the heading ARedemption of Shares@, and have no preference, pre-emptive or conversion rights. Fractional shares entitle the holder to the same redemption, dividend, distribution and other rights, excepting voting, as whole shares on a pro rata basis. No certificates are issued for fractional shares.
The Fund will not ordinarily issue certificates for common shares purchased. Certificates are generally unnecessary because (1) ownership of shares is evidenced by a confirmation advice after each purchase or redemption, indicating the amount invested and the purchase price per share or the amount redeemed and the redemption price per share, and the number of shares owned immediately after such transactions; and (2) redemptions and transfers may be transacted without the issuance of certificates.
Shares certificates are issued only upon the specific request of the shareowner made in writing. No charge is made for the issuance of shares certificates.
Shares may not be transferred without written permission of the manager, which is in the discretion of the manager and is generally limited to estates and gifts within a family.
At the discretion of the manager, accounts with a total value, at the time of notice, of $1,000 or less may be redeemed by the company after 10 days notice by mail to the shareholder at the last address, which the shareholder provided to the Fund.
The common shares have non-cumulative voting rights so that the holders of more than fifty percent (50%) of the shares voting for the election of Directors can elect all the directors and in such event the holders of the remaining shares voting for the election of the Directors will not be to elect any person or persons to the Board of Directors. A simple majority of those shares voted in person or by proxy participating in any duly called meeting on proper notice shall be sufficient to pass any resolutions, excepting as otherwise required by the Investment Company Act of 1940.
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. Any dividends paid by the Fund from net investment income on its portfolio and any distributions of net realized capital gains will automatically be reinvested in whole or fractional shares of the Fund at net asset value on the record date unless a shareowner makes a written request for payments in cash.
If a shareholder makes a specific written request for dividends or capital gains distribution, such income or distribution payments, if any, will be paid in cash at least annually.
ITEM 18
PURCHASE, REDEMPTION AND PRICING OF SHARES
HOW TO BUY SHARES: Shares of the Fund may be purchased by sending a Share Purchase Application and a check to New Alternatives Fund, Inc. C/O PFPC Inc., 211 South Gulph Road, PO Box 61503, King of Prussia PA 19406-0903. The application is on the last page of the prospectus.
The Fund's shares are sold directly by the Fund with the assistance of and at the expense of Accrued Equities, Inc., which is compensated for such assistance. All checks are to be made payable to New Alternatives Fund, Inc.. Independent brokers also sell the shares of the Fund. Sales charges are the same irrespective of where or through whom you purchase. Social security numbers or tax numbers are required on the application.
The Fund and Accrued Equities Inc., the Fund's Principal Underwriter reserve the right to reject any purchase order for any reason.
Retirement Plans and IRA Accounts and all related forms of Accounts: Shares of the Fund may be purchased directly by existing retirement plans, which allow such investments.
In addition, qualified individuals may establish (with any provider of such accounts) an Individual Retirement Account (AIRA@) or Roth IRA to be funded with shares of the Fund. The Fund has made arrangements with PFPC Trust Company, to act as Custodian for any IRAs thus created.
Automatic Investment Plan: Shareholders meeting the investment minimum may establish an automatic investment plan wherein periodic drafts from a checking or savings account
are invested in the Fund, subject to the same sales charge recited in this prospectus. Such plan may be canceled by the Fund or the investor upon written notice to the transfer agent no later than 5 business days prior to a schedule debit date.
REDEMPTION OF SHARES: There is no redemption charge. Fund shares are redeemed upon tender of the written request of any shareholder, accompanied by surrender of share certificates, if issued.. All certificates and/or requests for redemption tendered must be signed or endorsed by the shareholder or shareholders in whose name or names the shares are registered Signatures must be guaranteed by a commercial bank or trust company or federally chartered savings bank, Savings and Loan Association or credit union located in the United States or having a correspondent relation with a commercial bank or trust company in the United States, or by a member firm of the New York Stock Exchange (except that guarantee of the signature or signatures on a request for redemption of $2,500 or less may be waived, if approved by the Fund). The Funds Transfer Agent requires a Amedallion@ signature guarantee. Tender shall be made at the office of the Transfer Agent PFPC, Inc., 211 South Gulph Road, PO Box 61503, King of Prussia, PA 19406-0903 (610 239-4600).
The redemption price will be the net asset value of the Fund's shares next computed after the tender is received by the Fund. Payment of the redemption price will be made by a check drawn and issued in the U.S. within seven (7) days after receipt of the written request and certificates as described above, or if payment for the purchase of the shares to be redeemed has not been cleared by that time, the mailing of the redemption check may be postponed until proceeds of any check for the purchase price of the shares has been collected. If payment for shares are dishonored the Fund may cancel the purchase.
For further information, an interested person should call the Fund at 631 423-7373 or 800 423-8383.
Offering Price
SALES CHARGE: The sales charge you pay when purchasing shares are set forth below.
NET ASSET VALUE: The net asset value of a Fund share is determined once daily as of the close of each day of trading on the New York Stock Exchange. Net asset value is determined by subtracting all liabilities of the Fund from the value of its total assets and dividing the resulting figure by the number of Fund shares and fractional shares outstanding.
Shares are purchased at the offering price next determined after the purchase order is received by the Fund. The price you pay for shares, the offering price, is based on the net asset value per share plus a sales load which is calculated once daily at the close of regular trading (currently 4:00 p.m., Eastern Time) each day the New York Stock Exchange is open. In unusual circumstances the Exchange has closed at a different time than the usual 4 p.m.
U.S.: When U.S. major markets change the time of closing or change the same for emergencies, holiday or new policies, the closing time for our Fund shall follow the conventional standards as determined by our Transfer Agent.
Foreign: The pricing of shares traded in foreign markets shall be at the closing of the market, in Greenwich time in such countries, closest to the closing time of U.S, exchanges, following the conventional standards as determined by our Transfer Agent.
In determining the Fund's net asset value, securities for which current market quotations are readily available are valued in the following manner: securities traded on national exchanges are valued at the closing sales price, or, if no sale occurred, at the last price traded. Over-the-counter securities for which no sales were reported on a particular day are valued at the last closing price. Securities for which current market quotations are not readily available are valued at their fair value as determined in good faith by the Board of Directors or the persons to whom the task is delegated by the Board of Directors. The Board will continue to review its overall methods of valuation to assure that all assets are properly valued.
The daily calculation of net asset value is performed by PFPC, Inc., which also serves as transfer agent.
ITEM 19
TAXATION OF THE FUND
Tax Status: the Fund will endeavor to qualify annually for tax treatment applicable to a regulated investment company under the Internal Revenue Code of 1954, as amended (ACode@). Pursuant to the requirements of the Code, the Fund intends to pay, at least annually, dividends representing substantially all of its net investment income. It also intends, at least annually, to distribute any realized capital gains. As a regulated investment company, the Fund will not be subject to the United States income tax on net ordinary income and net capital gains, which are distributed by the Fund, pursuant to the requirements of the ACode@. The status of the Fund as a regulated investment company does not involve government supervision of management or of investment practices or policies.
For Federal income tax purposes distributions paid from the Fund's net investment income and net realized short-term capital gain are taxable to shareholders as ordinary income, whether received in cash or in additional shares. Distributions paid from long-term capital gain are taxable as long-term capital gains, whether received in cash or shares. However, shareholders not subject to tax on their income will not be required to pay Federal income taxes on amounts distributed to them. Shareholders will be notified annually as to the Federal tax status of dividends and distributions.
Subject to regulations of the Internal Revenue Service, the Act may require individuals who are shareholders of the Fund to include their pro rata share of the Fund's investment expenses (such as investment advisory fees), in addition to distributions received, in computing their taxable income. Should related tax law be amended, this provision shall be amended or deemed amended to be consistent with such modified law.
ITEM 20
UNDERWRITERS
The aggregate underwriters commissions on sales of Fund shares during the fiscal year ended December 31, 2001 was $294,840 and the amount retained by Accrued Equities was $188,138. The aggregate underwriters commissions by the Principal Underwriter on sales of Fund shares during the fiscal year ended December 31, 2000 was $231,221.46 and the amount retained by Accrued Equities was $148,604. The aggregate commission on sales of Fund shares during the fiscal ended December 31, 1999 was $47,268 and the amount retained by Accrued Equities was $38,726.
PERIOD ENDING 12/31/2001 COMPENSATION OF ACCRUED EQUITIES INC. NAME OF UNDERWRITING COMPENSATION OTHER PRINCIPAL DISCOUNTS & ON REDEMPTION BROKERAGE COMPEN- UNDER- COMMISSIONS & REPURCHASE COMMISSION SATION WRITER |
Accrued
Equities, Inc. $188,138 -0- -0- $354,980
ITEM 21
INVESTMENT RESULTS AND RELATED STATISTICS
The total return after deducting maximum possible one time (4.75) sales charge for the one year period ending December 31, 2001 was 15.01%. The average annual total returns for the five and ten year periods ended on December 31, 2001 were 5.82% and 6.83% respectively, and 10.15% since inception of the Fund.
These fund results were calculated according to a standard formula, which requires that the Fund reduce its performance by the maximum sales charge of 4.75%. Results of the Fund would be higher if they were calculated at net asset value.
The Russell 2000 Index represents a stock index. This index is not managed and does not reflect sales charges, commissions or expenses.
The managers believe and assert that because of the focus of the Fund on alternative energy, the environment and socially responsible concerns, there is presently no comparable fund and no properly applicable stock index.
The average annual total return (T) is computed using the value at the end of the period (ERV) of a hypothetical initial investment of $1,000 (P) over a period of years (n) according to the following formula as required by the Securities and Exchange Commission:
P(1+T)/n/+ERV
The following assumptions will be reflected in computations made in accordance with formula stated above: (1) deduction of the maximum sales load of 4.75% from the $1,000 initial investment; (2) reinvestment of dividends and distributions at net asset value on the reinvestment date determined by the Board; and (3) a complete redemption at the end of any period illustrated.
To calculate total return, an initial investment is dividend by the offering price (which includes the sales charge) as of the first day of the period in order to determine the initial number of shares purchased. Subsequent dividends and capital gain distributions are then reinvested at net asset value on the reinvestment date determined by the Board of Directors. The sum of the initial shares purchased and shares acquired through reinvestment is multiplied by the ending value. The difference between the ending value and the initial investment divided by the initial investment converted to a percentage equals total return. The resulting percentage indicates the positive or negative investment results that an investor would have experienced from reinvested period. Total return may be calculated for one year, five years, ten years and for other periods of years. The average annual total return over periods greater than one year may also be computed utilizing ending values as determined above.
ITEM 22
FINANCIAL STATEMENT
Part C: Other Information
File 2 74436
File 811 3287
New Alternatives Fund, Inc.
Item 23
Financial Statements and Exhibits
a- (1) Charter is now in effect. Exhibit #1 (previously filed through
Edgar system. See Post-Effective Amendment No. 16 filed April 1997).
b- (2) By-Laws, Exhibit #2 (previously filed through Edgar system. See
Post-Effective Amendment No. 16 filed April 1997).
c- (3) Voting trust. Not applicable.
d- (5) Copy of Investment Management Agreement. Exhibit #4 (previously filed
through Edgar system. See Post-Effective Amendment No.16 filed April
1997).
e- (6) Copy of Underwriting Agreement. Exhibit #5 (previously filed with
Amendment(s) through Edgar system. See Post-Effective Amendment No. 16
filed April 1997).
f- (7) Profit Sharing and related plans. None.
g- (8) Copy of Custodian Services Agreement - (PFPC Trust Company; May 1,
2000), filed herewith.
h- (9) Copies of Materials Agreement - (previously filed herein for through
Edgar. See Post-Effective Amendment No. 17 filed March 1998). The
agreements below have been assigned by First Data Investor Services
Group, Inc. to PFPC, Inc. A. Transfer Agent: First Data Investor
Services Group, Inc. B. Accounting Services: First Data Investor
Services Group, Inc. C. Custody Administration: First Data Investor
Services Group, Inc.
i- (10) Opinion of Counsel. Exhibit #6 (filed with 24F-2 statement).
j- (11) Other Opinions and Consents. Consent of Independent Auditor Joseph Don
Angelo CPA filed herewith.
k- (12) Financial Statements.
l- (13) Copies of agreements in connection with original capital. Exhibit #9
(previously filed).
m-(14) Copies of 12b-1 plan. None.
n-(15) Financial Data Schedule. None.
o-(16) Rule18f-3 plan. None.
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Item 24
Persons Controlled by or Under Common Control with the Fund.
This section is not applicable, excepting that David J. Schoenwald is the controlling (73.83%) stockholder of Accrued Equities, Inc.. Maurice L. Schoenwald is a minority (26.17 stockholder of Accrued Equities, Inc. Maurice L. Schoenwald is Vice President and Chairman of the Board of Directors of the Fund and owns 5516.653 shares or .038% of the Fund of record and beneficially. David J. Schoenwald, President of the Fund and the son of Maurice L. Schoenwald owns 4394.501 shares or .030% of the Fund.
New Alternatives Fund, Inc (the Fund) and Accrued Equities, Inc. (the Manager/Advisor and Principal Underwriter) are New York Corporations.
There is only one class of securities, common stock, at one dollar par value. There were 3042 holders of record of such shares on December 31, 2001.
Item 25
Indemnification
In the event of a claim in connection with the securities registered, the registrant will, unless in the opinion of Counsel the matter may be settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not indemnification is consistent with public policy as expressed in the securities laws that may be applicable and will be governed by the final adjudication of such issue.
On September 1, 2001 customary Directors and Officers Insurance was renewed with Twin City Fire Insurance Company (Hartford Specialty Company). Such insurance policy requires and provides that the company (Fund) have in effect by-laws and resolutions or provisions providing for indemnification to the Insured permitted and or required under applicable law. The Board of Directors approved all change in documents necessary to obtain such insurance. The Board of Directors, ratified the Fund's insurance selection at the directors meeting on September 7, 2001. There are now in effect provisions for indemnification of officers and directors to the extent permitted or required under all applicable laws, including requirements of the Securities Act of 1933 and all of the rules and regulations thereunder.
Item 26
Business and other Connections of the investment Advisor.
David J. Schoenwald is President of Accrued Equities, Inc. and an attorney licensed in the state of new York. The business address of Accrued Equities, Inc. and David J. Schoenwald is 150 Broadhollow Road, Suite 306, Melville, NY 11747. Maurice L. Schoenwald, is Secretary of Accrued Equities, Inc. and a largely retired attorney in private practice in Florida.. Accrued Equities, Inc. has managed in the past real property, loans, mortgages and has been a broker-dealer in investment contracts and a broker of investment contracts for receiverships initiated by the Securities and Exchange Commission. The residence and business address of Maurice L. Schoenwald is 5270 Gulf Of Mexico Drive, Unit 503, Longboat Key, FL 34228.
Item 27
Principal Underwriters
The only underwriter is Accrued Equities, Inc.. Its relationship and history are described in the Prospectus. There are no other underwriting relationships. The President and majority shareholder of the underwriter is David J. Schoenwald of 150 Broadhollow Road, Suite 306, Melville, NY 11747. He is also the President of the Fund. The Vice President and minority shareholder of the underwriter is Maurice L. Schoenwald of 5270 Gulf Of Mexico Drive Unit 503 Longboat Key, FL 34228. He is Secretary of the Fund and Chairman of the Board of Directors of the Fund. The underwriting is on a Abest efforts@ basis only. Checks for the purchase of securities by the investors shall be made payable directly to the Fund. The role of the Underwriter is to organize, finance, manage, advertise, promote, provide clerical and administrative services, to act as investment manager and to develop and control relationships with broker/dealer when and if they arise.
The Fund will pay the Underwriter as described in the Prospectus. As sales agreements are executed with other licensed and qualified broker/dealers, payments to them will be deducted from the payments due to Accrued Equities, Inc.
There are no fees, commissions earnings past or future not fully described in the Prospectus.
Item 28
Location of Accounts and Records
All books and records required will be in the care of David J. Schoenwald, President of the Fund, or Maurice Schoenwald, Secretary of the Fund at 150 Broadhollow Road, Suite 306 Melville, NY 11747, except those within possession of the Custodian and Transfer Agent described in the Prospectus.
Certain accounting records are maintained at the offices of PFPC, Inc.. Records concerning shareholders' accounts are maintained by the Fund's Transfer Agent, PFPC, Inc. 211 South Gulph Road, PO Box 61503, King of Prussia, PA 19406. Records covering portfolio transactions are maintained by the Fund's Custodian, PFPC Trust Company, 8800 Tinicum Boulevard, Philadelphia, PA 19153, and by the Fund.
Item 29
Management Services
There is no management service contract excepting those services described in the Prospectus and Statement of Additional Information.
Item 30
Undertakings
As reflected in the Prospectus, the Fund undertakes to provide each person to whom a prospectus is delivered with a copy of the Fund's latest annual report to shareholders, upon request and without charge.
Pursuant to the requirements of the Securities Act of 1933 and the Investment Act of 1940, the Registrant has caused this post-effective amendment to the Registration Statement to be signed on its behalf by the undersigned, hereunto duly authorized in the Village of Melville, of the State of New York, on the 4th day of April 2002.
NEW ALTERNATIVES FUND, INC.
BY: /S/
David J. Schoenwald
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Pursuant to the requirements of the Securities Act of 1933 and the Investment Act of 1940, the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ President, 4/04/02 David J. Schoenwald
--------------------------- Director
David J. Schoenwald
/S/ Vice President, 4/04/02 Maurice L. Schoenwald
--------------------------- Director
Maurice L. Schoenwald (Chairman)
|
Pursuant to the requirements of the Securities Act of 1933 and the Investment Act of 1940,
the Registration Statement has been signed below by the following persons in the capacities
and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ President and 4/04/02
--------------------------- Director
David J. Schoenwald
/S/ Vice President, Secretary, 4/04/02
--------------------------- Treasurer and Director
Maurice L. Schoenwald
*/S/ Director 4/04/02
---------------------------
Arthur Kaplan
*/S/ Director 4/04/02
---------------------------
Sharon Reier
Director 4/04/02
*/S/
---------------------------
Dorothy Wayner
*/S/ Director 4/04/02
---------------------------
Dudley Clayton
*/S/ Director 4/04/02
---------------------------
Lena Clayton
*/S/ Director 4/04/02
---------------------------
Daniel Wolfson
*/S/ Director 4/04/02
---------------------------
John C. Breitenbach
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* By Maurice L. Schoenwald as Attorney in Fact.
Exhibit 99.g(8)
THIS AGREEMENT is made as of May 1, 2001 by and between PFPC TRUST COMPANY, a limited purpose trust company incorporated under the laws of Delaware ("PFPC Trust"), and NEW ALTERNATIVES FUND, INC., a New York corporation (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian services, and PFPC Trust wishes to furnish custodian services, either directly or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree that the Custody Administration and Agency Agreement, dated October 28, 1994, between the parties, as amended, is hereby terminated effective the date hereof, and further agree as follows:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person authorized by the Fund to give Oral or Written Instructions on behalf of the Fund. An Authorized Person's scope of authority may be limited by setting forth such limitation in a written document signed by both parties hereto.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry system
for
United States and federal agency securities, its successor or successors, and its nominee or nominees and any book-entry system maintained by an exchange registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities-- Exchange Act, as amended.
(f) "Change of Control" means a change in ownership or control (not including transactions between wholly-owned direct or indirect subsidiaries of a common parent) of 25% or more of the beneficial ownership of the shares of common stock or shares of beneficial interest of an entity or its parent(s).
(g) "Oral Instructions" mean oral instructions received by PFPC Trust from an Authorized Person or from a person reasonably believed by PFPC Trust to be an Authorized Person. PFPC Trust may, in its sole discretion in each separate instance, consider and rely upon instructions it receives from an Authorized Person via electronic mail as Oral Instructions.
(h) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate of PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and the CEA.
(k) "Shares" mean the shares of beneficial interest of any series or class of the Fund.
(l) "Property" means:
(i) any and all securities and other investment items which the Fund may from time to time deposit, or cause to be deposited, with PFPC Trust or which PFPC Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or other investment items;
(iii) all proceeds of the sale of any of such securities or investment items; and
(iv) all proceeds of the sale of securities issued by the Fund, which are received by PFPC Trust from time to time, from or on behalf of the Fund.
(m) "Written Instructions" mean (i) written instructions signed by one Authorized Persons and received by PFPC Trust or (ii) trade instructions transmitted by means of an electronic transaction reporting system which requires the use of a password or other authorized identifier in order to gain access. The instructions may be delivered electronically or by hand, mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian services to the Fund, on behalf of each of its investment portfolios (each, a "Portfolio"), and PFPC Trust accepts such appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will provide PFPC
Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the resolutions of the Fund's Board of Directors, approving the appointment of PFPC Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to each class of Shares;
(e) a copy of each Portfolio's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans and agreements made in respect of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements of the Securities Laws and material laws, rules and regulations of governmental authorities having jurisdiction with respect to the duties to be performed by PFPC Trust hereunder. Except as specifically set forth herein, PFPC Trust assumes no responsibility for such compliance by the Fund or any other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or Written Instruction it receives from an Authorized Person (or from a person reasonably believed by PFPC Trust to be an Authorized Person) pursuant to this Agreement. PFPC Trust may assume that any Oral Instructions or Written Instructions received hereunder are not in any way inconsistent with the provisions of organizational documents of the Fund or of any vote, resolution or proceeding of the Fund's Board of Directors or of the Fund's shareholders, unless and until PFPC Trust receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions confirming Oral Instructions (except where such Oral Instructions are given by PFPC Trust or its affiliates) so that PFPC Trust receives the Written Instructions by the close of business on the same day that such Oral Instructions are received. The fact that such confirming Written Instructions are not received by PFPC Trust or differ from the Oral Instructions shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions or PFPC Trust's ability to rely upon such Oral Instructions. Where Oral Instructions or Written Instructions reasonably appear to have been received from an Authorized Person, PFPC Trust shall incur no liability to the Fund in acting upon such Oral Instructions or Written Instructions provided that PFPC Trust's actions comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it should or should not take, PFPC Trust may request directions or advice, including Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any question of law pertaining to any action it should or should not take, PFPC Trust may request advice from counsel of its own choosing (who may be counsel for the Fund, the Fund's investment adviser or PFPC Trust, at the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions or advice or Oral Instructions or Written Instructions PFPC Trust receives from the Fund, and the advice it receives from counsel, PFPC Trust shall be entitled to rely upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any action it takes or does not take in reliance upon directions or advice or Oral Instructions or Written Instructions it receives from the Fund or from counsel and which PFPC Trust believes, in good faith, to be consistent with those directions or advice or Oral Instructions or Written Instructions. Nothing in this section shall be construed so
as to impose an obligation upon PFPC Trust (i) to seek such directions or advice or Oral Instructions or Written Instructions, or (ii) to act in accordance with such directions or advice or Oral Instructions or Written Instructions unless, under the terms of other provisions of this Agreement, the same is a condition of PFPC Trust's properly taking or not taking such action.
7. RECORDS; VISITS. The books and records pertaining to the Fund and any Portfolio, which are in the possession or under the control of PFPC Trust, shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable securities laws, rules and regulations. The Fund and Authorized Persons shall have access to such books and records at all times during PFPC Trust's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by PFPC Trust to the Fund or to an authorized representative of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. Each party shall keep confidential any information relating to the other party's business ("Confidential Information"). Confidential Information shall include (a) any data or information that is competitively sensitive material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of the Fund or PFPC Trust, their respective subsidiaries and affiliated companies and the customers, clients and suppliers of any of them; (b) any scientific or technical information, design, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality
affords the Fund or PFPC Trust a competitive advantage over its competitors; (c) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and (d) anything designated as confidential. Notwithstanding the foregoing, information shall not be subject to such confidentiality obligations if it: (a) is already known to the receiving party at the time it is obtained; (b) is or becomes publicly known or available through no wrongful act of the receiving party; (c) is rightfully received from a third party who, to the best of the receiving party's knowledge, is not under a duty of confidentiality; (d) is released by the protected party to a third party without restriction; (e) is required to be disclosed by the receiving party pursuant to a requirement of a court order, subpoena, governmental or regulatory agency or law (provided the receiving party will provide the other party written notice of such requirement, to the extent such notice is permitted); (f) is relevant to the defense of any claim or cause of action asserted against the receiving party; or (g) has been or is independently developed or obtained by the receiving party.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's independent public accountants and shall take all reasonable action to make any requested information available to such accountants as reasonably requested by the Fund.
10. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and all data bases, computer programs, screen formats, report formats, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents, copyrights, trade secrets, and other related legal rights utilized by PFPC Trust in connection with the services provided by PFPC Trust to the Fund.
11. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provisions for emergency use of electronic data processing equipment to the extent appropriate equipment is available. In the event of equipment failures, PFPC Trust shall, at no additional expense to the Fund, take reasonable steps to minimize service interruptions. PFPC Trust shall have no liability with respect to the loss of data or service interruptions caused by equipment failure provided such loss or interruption is not caused by PFPC Trust's own willful misfeasance, bad faith, gross negligence or reckless disregard of its duties or obligations under this Agreement.
12. COMPENSATION. As compensation for custody services rendered by PFPC Trust during the term of this Agreement, the Fund, on behalf of each of the Portfolios, will pay to PFPC Trust a fee or fees as may be agreed to in writing from time to time by the Fund and PFPC Trust. The Fund acknowledges that PFPC Trust may receive float benefits in connection with maintaining certain accounts required to provide services under this Agreement.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to indemnify and hold harmless PFPC Trust and its affiliates from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, attorneys' fees and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) arising directly or indirectly from any action or omission to act which PFPC Trust takes in connection with the provision of services to the Fund. Neither PFPC Trust, nor any of its affiliates, shall be indemnified against any liability (or any expenses incident
to such liability) caused by PFPC Trust's or its affiliates' own willful misfeasance, bad faith, negligence or reckless disregard of its duties and obligations under this Agreement.
14. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on behalf of the Fund or any Portfolio except as specifically set forth herein or as may be specifically agreed to by PFPC Trust and the Fund in a written amendment hereto. PFPC Trust shall be obligated to exercise care and diligence in the performance of its duties hereunder and to act in good faith in performing services provided for under this Agreement. PFPC Trust shall be liable only for any damages arising out of PFPC Trust's failure to perform its duties under this Agreement to the extent such damages arise out of PFPC Trust's willful misfeasance, bad faith, negligence or reckless disregard of its duties under this Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC Trust shall not be liable for
losses beyond its control, including without limitation (subject to
Section 11), delays or errors or loss of data occurring by reason of
circumstances beyond PFPC Trust's control, provided that PFPC Trust
has acted in accordance with the standard set forth in Section 14(a)
above; and (ii) PFPC Trust shall not be under any duty or obligation
to inquire into and shall not be liable for the validity or invalidity
or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which PFPC Trust reasonably
believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither PFPC Trust nor its affiliates shall be liable for any consequential, special or indirect losses or
damages, whether or not the likelihood of such losses or damages was known by PFPC Trust or its affiliates.
(d) No party may assert a cause of action against PFPC Trust or any of its affiliates more than 365 days after the date on which such party became aware of such alleged cause of action.
(e) Each party shall have a duty to mitigate damages for which the other party may become responsible.
15. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for delivery to PFPC Trust, all the Property owned by the Portfolios, including cash received as a result of the distribution of Shares, during the term of this Agreement. PFPC Trust will not be responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written Instructions, shall open and maintain separate accounts in the Fund's name using all cash received from or for the account of the Fund, subject to the terms of this Agreement. In addition, upon Written Instructions, PFPC Trust shall open separate custodial accounts for each separate Portfolio of the Fund (collectively, the "Accounts") and shall hold in the Accounts all cash received from or for the Accounts of the Fund specifically designated to each separate Portfolio. PFPC Trust shall make cash payments from or for the Accounts of a Portfolio only for:
(i) purchases of securities in the name of a Portfolio, PFPC Trust, PFPC Trust's nominee or a sub-custodian or nominee thereof as provided in sub-section (j) and for which PFPC Trust has received a copy of the broker's or dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions, interest, taxes, administration, accounting, distribution, advisory and management fees which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the Fund's transfer agent, as agent for the shareholders, of an amount equal to the amount of dividends and distributions stated in the Written Instructions to be distributed in cash by the transfer agent to shareholders, or, in lieu of paying the Fund's transfer agent, PFPC Trust may arrange for the direct payment of cash dividends and distributions to shareholders in accordance with procedures mutually agreed upon from time to time by and among the Fund, PFPC Trust and the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Fund and held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with respect to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received as custodian for the Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it for the Accounts in a separate account that physically segregates such securities from those of any other persons, firms or corporations, except for securities held in a Book-Entry System. All such securities shall be held or disposed of only upon Written Instructions of the Fund pursuant to the terms of this Agreement. PFPC Trust shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any such securities or investment, except upon the express terms of this Agreement or upon Written Instructions authorizing the transaction. In no case may any
member of the Fund's Board of Directors, or any officer, employee or agent of the Fund withdraw any securities.
At PFPC Trust's own expense and for its own convenience, PFPC Trust may enter into sub-custodian agreements with other banks or trust companies to perform duties described in this sub-section (c) with respect to domestic assets. Such bank or trust company shall have an aggregate capital, surplus and undivided profits, according to its last published report, of at least one million dollars ($1,000,000), if it is a subsidiary or affiliate of PFPC Trust, or at least twenty million dollars ($20,000,000) if such bank or trust company is not a subsidiary or affiliate of PFPC Trust. In addition, such bank or trust company must be qualified to act as custodian and agree to comply with the relevant provisions of applicable rules and regulations. Any such arrangement will not be entered into without prior written notice to the Fund (or as otherwise provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with sub-custodians with respect to services regarding foreign assets. Any such arrangement will be entered into with prior written notice to the Fund (or as otherwise provided in the 1940 Act).
PFPC Trust shall remain responsible for the performance of all of its duties as described in this Agreement and shall hold the Fund and each Portfolio harmless from its own acts or omissions, under the standards of care provided for herein, or the acts and omissions of any sub-custodian chosen by PFPC Trust under the terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral Instructions or Written Instructions and not otherwise, PFPC Trust, directly or through the use of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio against the receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated in such Oral Instructions or Written Instructions, proxies, consents, authorizations, and any other instruments whereby the authority of a Portfolio as owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its agent, when such securities are called, redeemed, retired or otherwise become payable at the option of the holder; provided that, in any such case, the cash or other
consideration is to be delivered to PFPC Trust;
(iv) deliver any securities held for a Portfolio against receipt of other securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, tender offer, merger, consolidation or recapitalization of any corporation, or the exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio to any protective committee, reorganization committee or other person in connection with the reorganization, refinancing, merger, consolidation, recapitalization or sale of assets of any corporation, and receive and hold under the terms of this Agreement such certificates of deposit, interim receipts or other instruments or documents as may be issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the Portfolios and take such other steps as shall be stated in said Oral Instructions or Written Instructions to be for the purpose of effectuating a duly authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Fund;
(vii) release securities belonging to a Portfolio to any bank or trust company for the purpose of a pledge or hypothecation to secure any loan incurred by the Fund on behalf of that Portfolio; provided, however, that securities shall be released only upon payment to PFPC Trust of the monies borrowed, except that in cases where additional collateral is required to secure a borrowing already made subject to proper prior authorization, further securities may be released for that purpose; and repay such loan upon redelivery to it of the securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing the loan;
(viii)release and deliver securities owned by a Portfolio in connection with any repurchase agreement entered into on behalf of the Fund, but only on receipt of payment therefor; and pay out moneys of the Fund in connection with such repurchase agreements, but only upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by the Fund in connection with any conversion of such securities, pursuant to their terms, into other securities;
(x) release and deliver securities to a broker in connection with the broker's custody of margin collateral relating to futures and options transactions;
(xi) release and deliver securities owned by the Fund for the purpose of redeeming in kind shares of the Fund upon delivery thereof to PFPC Trust;
and
(xii) release and deliver or exchange securities owned by the Fund for other purposes.
PFPC Trust must also receive a certified resolution describing the nature of the corporate purpose and the name and address of the person(s) to whom delivery shall be made when such action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System. PFPC Trust is authorized and instructed, on a continuous basis, to deposit in the Book-Entry System all securities belonging to the Portfolios eligible for deposit therein and to utilize the Book-Entry System to the extent possible in connection with settlements of purchases and sales of securities by the Portfolios, and deliveries and returns of securities loaned, subject to repurchase agreements or used as collateral in connection with borrowings. PFPC Trust shall continue to perform such duties until it receives Written Instructions or Oral Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which are maintained in the Book-Entry System, the records of PFPC Trust shall identify by Book-Entry or otherwise those securities belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry System will at all times be segregated from any assets and cash controlled by PFPC Trust in other than a fiduciary or custodian capacity but may be commingled with other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own system of internal control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All Securities held for a Portfolio which are issued or issuable only in bearer form, except such securities held in the Book-Entry System,
shall be held by PFPC Trust in bearer form; all other securities held for a Portfolio may be registered in the name of the Fund on behalf of that Portfolio, PFPC Trust, the Book-Entry System, a sub-custodian, or any duly appointed nominee of the Fund, PFPC Trust, Book-Entry System or sub-custodian. The Fund reserves the right to instruct PFPC Trust as to the method of registration and safekeeping of the securities of the Fund. The Fund agrees to furnish to PFPC Trust appropriate instruments to enable PFPC Trust to hold or deliver in proper form for transfer, or to register in the name of its nominee or in the name of the Book-Entry System or in the name of another appropriate entity, any securities which it may hold for the Accounts and which may from time to time be registered in the name of the Fund on behalf of a Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee shall vote any of the securities held pursuant to this Agreement by or for the account of a Portfolio, except in accordance with Written Instructions. PFPC Trust, directly or through the use of the Book-Entry System, shall execute in blank and promptly deliver all notices, proxies and proxy soliciting materials received by PFPC Trust as custodian of the Property to the registered holder of such securities. If the registered holder is not the Fund on behalf of a Portfolio, then Written Instructions or Oral Instructions must designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary Written Instructions, PFPC Trust is authorized to take the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each Portfolio, all income, dividends, distributions, coupons, option premiums, other payments and similar items, included or to be included in the Property, and, in addition, promptly advise each Portfolio of such receipt and credit such income, as collected, to each Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of the Fund, checks, drafts, or other orders for the payment of money;
(C) receive and hold for the account of each Portfolio all securities received as a distribution on the Portfolio's securities as a result of a stock dividend, share split-up or reorganization, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any securities belonging to a Portfolio and held by PFPC Trust hereunder;
(D) present for payment and collect the amount payable upon all securities which may mature or be, on a mandatory basis, called, redeemed, or retired, or otherwise become payable on the date such securities become payable; and
(E) take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and the endorsement for collection of checks, drafts, and other negotiable instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be delivered Property against payment or other consideration or written receipt therefor in the following cases:
(1) for examination by a broker or dealer selling for the account of a Portfolio in accordance with street delivery custom;
(2) for the exchange of interim receipts or temporary securities for definitive securities; and
(3) for transfer of securities into the name of the Fund on behalf of a Portfolio or PFPC Trust or a sub-custodian or a nominee of one of the foregoing, or for exchange of securities for a different number of bonds, certificates, or other evidence, representing the same aggregate face
amount or number of units bearing the same interest rate, maturity date and call provisions, if any; provided that, in any such case, the new securities are to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral Instructions or Written Instructions to the contrary, PFPC Trust shall:
(1) pay all income items held by it which call for payment upon presentation and hold the cash received by it upon such payment for the account of each Portfolio;
(2) collect interest and cash dividends received, with notice to the Fund, to the account of each Portfolio;
(3) hold for the account of each Portfolio all stock dividends, rights and similar securities issued with respect to any securities held by PFPC Trust; and
(4) execute as agent on behalf of the Fund all necessary ownership certificates required by the Internal Revenue Code or the Income Tax Regulations of the United States Treasury Department or under the laws of any state now or hereafter in effect, inserting the Fund's name, on behalf of a Portfolio, on such certificate as the owner of the securities covered thereby, to the extent it may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions or Oral Instructions establish and maintain segregated accounts on its records for and on behalf of each Portfolio. Such accounts may be used to transfer cash and securities, including securities in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the procedures required by a securities or option exchange, providing such procedures comply with the 1940 Act and any releases of the SEC relating to the maintenance of segregated accounts by registered investment companies; and
(B) upon receipt of Written Instructions, for other purposes.
(ii) PFPC Trust shall arrange for the establishment of IRA custodian accounts for such shareholders holding Shares through IRA accounts, in accordance
with the Fund's prospectuses, the Internal Revenue Code of 1986, as amended (including regulations promulgated thereunder), and with such other procedures as are mutually agreed upon from time to time by and among the Fund, PFPC Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased securities upon receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker through whom the purchase was made. PFPC Trust shall upon receipt of securities purchased by or for a Portfolio pay out of the moneys held for the account of the Portfolio the total amount payable to the person from whom or the broker through whom the purchase was made, provided that the same conforms to the total amount payable as set forth in such Oral Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security, including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the sale was made;
(vii) the location to which the security must be delivered and delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total amount payable to the Portfolio upon such sale, provided that the total amount payable is the same as was set forth in the Oral Instructions or Written Instructions. Notwithstanding the other provisions thereof, PFPC Trust may accept payment in such form as shall be satisfactory to it, and may deliver securities and arrange for payment in accordance with the customs prevailing among dealers in securities.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may reasonably request;
(B) a monthly statement summarizing all transactions and entries for the account of each portfolio, listing each portfolio security belonging to each Portfolio with the adjusted average cost of each issue and the market value at the end of such month and stating the cash account of each Portfolio including disbursements;
(C) the reports required to be furnished to the Fund pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy statement, proxy material, notice of a call or conversion or similar communication received by it as custodian of the Property. PFPC Trust shall be under no
other obligation to inform the Fund as to such actions or events. For clarification, upon termination of this Agreement PFPC Trust shall have no responsibility to transmit such material or to inform the Fund or any other person of such actions or events.
(m) Crediting of Accounts. If PFPC Trust in its sole discretion credits an Account with respect to (a) income, dividends, distributions, coupons, option premiums, other payments or similar items on a contractual payment date or otherwise in advance of PFPC Trust's actual receipt of the amount due, (b) the proceeds of any sale or other disposition of assets on the contractual settlement date or otherwise in advance of PFPC Trust's actual receipt of the amount due or (c) provisional crediting of any amounts due, and (i) PFPC Trust is subsequently unable to collect full and final payment for the amounts so credited within a reasonable time period using reasonable efforts or (ii) pursuant to standard industry practice, law or regulation PFPC Trust is required to repay to a third party such amounts so credited, or if any Property has been incorrectly credited, PFPC Trust shall have the absolute right in its sole discretion without demand to reverse any such credit or payment, to debit or deduct the amount of such credit or payment from the Account, and to otherwise pursue recovery of any such amounts so credited from the Fund. Nothing herein or otherwise shall require PFPC Trust to make any advances or to credit any amounts until PFPC Trust's actual receipt thereof. The Fund hereby grants a first priority contractual possessory security interest in and a right of setoff against the assets maintained in an Account hereunder in the amount necessary to secure the return and payment to PFPC Trust of any advance or
credit made by PFPC Trust (including charges related thereto) to such Account.
(n) Collections. All collections of monies or other property in respect, or which are to become part, of the Property (but not the safekeeping thereof upon receipt by PFPC Trust) shall be at the sole risk of the Fund. If payment is not received by PFPC Trust within a reasonable time after proper demands have been made, PFPC Trust shall notify the Fund in writing, including copies of all demand letters, any written responses and memoranda of all oral responses and shall await instructions from the Fund. PFPC Trust shall not be obliged to take legal action for collection unless and until reasonably indemnified to its satisfaction. PFPC Trust shall also notify the Fund as soon as reasonably practicable whenever income due on securities is not collected in due course and shall provide the Fund with periodic status reports of such income collected after a reasonable time.
16. DURATION AND TERMINATION. This Agreement shall continue until terminated by the Fund or PFPC Trust on sixty (60) days' prior written notice to the other party. In the event this Agreement is terminated (pending appointment of a successor to PFPC Trust or vote of the shareholders of the Fund to dissolve or to function without a custodian of its cash, securities or other property), PFPC Trust shall not deliver cash, securities or other property of the Portfolios to the Fund. It may deliver them to a bank or trust company of PFPC Trust's choice, having an aggregate capital, surplus and undivided profits, as shown by its last published report, of not less than twenty million dollars ($20,000,000), as a custodian for the Fund to be held under terms similar to those of this Agreement. PFPC Trust shall not be required to make any delivery or payment of assets upon termination until full payment shall have been made to PFPC Trust of all of its fees, compensation,
costs and expenses (such expenses include, without limitation, expenses associated with movement (or duplication) of records and materials and conversion thereof to a successor service provider, or to a bank or trust company pending appointment of such successor, and all trailing expenses incurred by PFPC Trust). PFPC Trust shall have a security interest in and shall have a right of setoff against the Property as security for the payment of such fees, compensation, costs and expenses.
17. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement, in the event of an agreement to enter into a transaction that would result in a Change of Control of the Fund's adviser or sponsor, the Fund's ability to terminate the Agreement pursuant to Section 16 will be suspended from the time of such agreement until two years after the Change of Control.
18. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 8800 Tinicum Boulevard, 3rd Floor, Suite 200, Philadelphia, Pennsylvania 19153, Attention: Sam Sparhawk; (b) if to the Fund, at 150 Broadhollow Road, Melville, New York 11747, Attention: David Schoenwald; or (c) if to neither of the foregoing, at such other address as shall have been given by like notice to the sender of any such notice or other communication by the other party. If notice is sent by confirming telegram, cable, telex or facsimile sending device, it shall be deemed to have been given immediately. If notice is sent by first-class mail, it shall be deemed to have been given five days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.
19. AMENDMENTS. This Agreement, or any term hereof, may be changed or waived only by a written amendment, signed by the party against whom enforcement of such change or
waiver is sought.
20. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate its duties hereunder to any affiliate of PFPC Trust or of The PNC Financial Services Group, Inc., provided that PFPC Trust gives the Fund 30 days' prior written notice of such assignment or delegation.
21. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.
23. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof, provided that the parties may embody in one or more separate documents their agreement, if any, with respect to delegated duties.
(b) No Representations or Warranties. Except as expressly provided in this Agreement, PFPC Trust hereby disclaims all representations and warranties, express or implied, made to the Fund or any other person, including, without limitation, any warranties regarding quality, suitability, merchantability, fitness for a particular purpose or otherwise (irrespective of any course of dealing, custom or usage of trade), of any services or any goods provided incidental to services provided under this Agreement. PFPC Trust disclaims any warranty of title or
non-infringement except as otherwise set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding anything in this Agreement to the contrary, the Fund agrees not to make any modifications to its registration statement or adopt any policies which would affect materially the obligations or responsibilities of PFPC Trust hereunder without the prior written approval of PFPC Trust, which approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.
(e) Governing Law. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law, without regard to principles of conflicts of law. PFPC Trust and the Fund hereby agree to resolve any dispute arising out of this Agreement in accordance with the rules of the American Arbitration Association.
(f) Partial Invalidity. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
(g) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
(h) Facsimile Signatures. The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
PFPC TRUST COMPANY
NEW ALTERNATIVES FUND, INC.
Exhibit 99.j(11)
JOSEPH DON ANGELO
Certified Public Accountant
22 Jericho Turnpike, Suite 100
Mineola, New York 11501
REPORT AND CONSENT OF INDEPENDENT ACCOUNTANT
To the Shareowners and Directors of
New Alternatives Fund, Inc.
With reference to the Registration Statement (Form N-lA) of New Alternatives Fund, Inc., I hereby consent to the use of my report dated February 19, 2002 for the period ending December 31, 2001 appearing in the Prospectus, constituting a part of such registration statement, when such report is accompanied by the financial statements referred to therein. I also consent to the reference to myself in the Prospectus.
The examination referred to in the above- mentioned report included an examination of the supporting statements of this Registration Statement and, in my opinion, such supporting statements presents fairly the information required to be set forth therein in conformity with generally accepted accounting principles.
/S/
-------------------------------------
JOSEPH DON ANGELO, C.P.A.
Mineola, New York
February 19, 2002
|
Exhibit 99.k(12)
ANNUAL
FINANCIAL REPORT
DECEMBER 31, 2001
Year Year Year Year Year Year Year Year
End End End End End End End End
12/31 12/31 12/31 12/31 12/31 12/31 12/31 12/31
2001 2000 1999 1998 1997 1996 1995 1994
NET ASSET VALUE AT
BEGINNING OF PERIOD $41.29 $28.85 $28.54 $32.07 $30.87 $30.51 $28.14 $30.00
------ ------ ------ ------ ------ ------ ------ ------
Investment Income $.75 $.79 $.66 $.52 $.64 $.73 $.75 $.72
Expenses .43 .42 .38 .37 .38 .39 .40 .40
--- --- --- --- --- --- --- ---
Net Investment Income .32 .37 .28 .15 .26 .34 .35 .32
Net realized and unrealized
(loss) on investment (5.13) 14.93 2.14 (3.22) 3.16 3.72 5.14 (1.43)
----- ----- ---- ----- ---- ---- ---- -----
Total from Investment operations (4.81) 15.30 2.42 (3.07) 3.42 4.06 5.49 (1.11)
Distributions from net
investment income (.32) (.37) (.28) (.15) (.26) (.34) (.35) (.32)
Distributions from net
realized gain (1.13) (2.12) (1.83) (.16) (1.96) (3.36) (2.77) (.43)
----- ----- ----- ---- ----- ----- ----- ----
Total Distributions (1.45) (2.49) (2.11) (.31) (2.22) (3.70) (3.12) (.75)
Net change in net asset value (6.58) 12.44 .31 (3.53) 1.20 .36 2.37 (1.86)
Net asset value
as of end of the period $34.71 $41.29 $28.85 $28.54 $32.07 $30.87 $30.51 28.14
====== ====== ====== ====== ====== ====== ====== =====
Total Return
(Sales load not reflected) (12.4)% 51.7 8.5% (10%) 11.1% 13.3% 19.5% (3.7)%
Net assets, end of period $49,245 $52,773 $32,555 $33,021 $37,941 $35,549 $32,236 $28,368
Ratio of operating expense
to net assets** 1.14% 1.11% 1.13% 1.18% 1.15% 1.21% 1.28% 1.30%
Ratio of net investment income
to average net assets** 0.87% 1.01% .89% .49% .79% 1.04% 1.12% 1.04%
Portfolio turnover 29.3% 59.7% 87.3% 32.4 53.9% 51.2% 48.72% 33.00%
Number of shares outstanding
at end of period*** 1,368,171.321 1,211,783 1,058,230 1,156,952 1,111,377 1,038,561 965,769 984,847
Year Year Year Year Year Year Year First Seven
End End End End End End End Months
12/31 12/31 12/31 12/31 12/31 12/31 12/31 4/30/83
1993 1992 1991 1990 1989 1988 1987 ****
NET ASSET VALUE AT BEGINNING
OF PERIOD $29.95 $29.19 $24.62 $27.57 $22.55 $18.85 $22.43 $12.50
------ ------ ------ ------ ------ ------ ------ ------
Investment Income $.62 $.62 $.72 $.70 $.73 $.67 $.40 $.38
Expenses .33 .28 .29 .27 .26 .25 .16 .20
--- --- --- --- --- --- --- ---
Net Investment Income .29 .34 .43 .43 .47 .42 .24 .18
Net realized & unrealized
gain (loss) on investment .58 1.10 5.86 (2.53) 5.41 4.09 (3.21) 3.08
--- ---- ---- ------ ---- ---- ------ ----
Total from Investment operations .87 1.44 6.29 (2.10) 5.88 4.51 (2.97) 3.26
Distributions from net
investment income (.29) (.34) (.43) (.43) (.47) (.42) (.24) (.18)
Distributions from net
realized gain (.53) (.34) (1.29) (.42) (.39) (.39) (.38) (.19)
----- ----- ------ ----- ----- ----- ----- -----
Total Distributions (.82) (.68) (1.72) (.85) (.86) (.81) (.62) (.37)
Net change in net asset value .05 .76 4.57 (2.95) 5.03 3.71 (3.59) 2.89
Net asset value as of end
of the period 30.00 29.95 29.19 24.62 27.57 22.55 18.85 15.39
===== ===== ===== ===== ===== ===== ===== =====
Total return 2.9% 4.9% 25.6% (7.6)% 26.0% 23.9% (2.6)% 10.4%
(Sales load not reflected)
Net assets, end of period $31,567 $28,896 $23,931 $16,433 $11,893 $6,162 $4,133 $163
Ratio of operating expense
to net assets** 1.11% 1.04% 1.18% 1.27% 1.25% 1.24% .80% 1.08%
Ratio of net investment income
to average net assets** .96% 1.25% 1.74% 2.08% 2.20% 2.18% 1.23% 1.69%
Portfolio turnover 18.36% 13.10% 21.50% 24.70% 14.60% 25.88% 8.57% 74.50%
Number of shares 1,026,460 945,006 776,974 646,664 419,212 264,414 212,704 10,592
outstanding at end of period***
|
* All adjusted for two for one share split on July 26, 1985 and January 2, 1990 ** Annualized and includes state taxes *** Shares immediately prior to dividend - Fund commenced operation on September 3, 1982 **** At this time the fund was on a fiscal year. Table for 1983-1987 is available on request. Deleted to make space.
The accompanying notes are an integral part of these financial statements.
FACTORS THAT AFFECTED PERFORMANCE IN YEAR 2001
The Fund was down 12.42% for the year. This was the Fund's worst performance, and followed a year which was the Fund's best performance.
The disappointing performance came during a volatile year for stocks and alternate energy. Prices of natural gas and electricity declined precipitously in a 2001. The year started with an "energy crisis" and an Administration energy plan to deal with the crisis, and ended with an apparent energy glut, the collapse of one of the countries largest energy companies, Enron, and questions about the viability of energy deregulation.
Shares of most fuel cell companies declined as enthusiasm for new energy technologies faded with delays in commercialization in some cases, and a less robust market for electricity during an international recession.
The securities of more conventional natural gas and independent power companies also declined with investors questioning accounting in these industries in light of Enron's bankruptcy and questions about their auditors, Arthur Anderson. The Fund had once owned shares of Enron but disposed of them in 1999. Nevertheless, the accountancy questions raised by the Enron scandal caused investor concern about other energy companies in which the Fund invests.
The Federal Reserve bank lowered interest rates a number of times during the year in a attempt to revive the slowed economy. At year end short-term interest rates on Treasury Bills were at the lowest level since the Fund started in 1982.
Politically, President Bush reversed a campaign pledge to limit carbon emissions and withdrew United States support for the International Kyoto treaty.
The Fund's strategy is to find clean energy and other environmentally oriented investments with a concern for socially responsible corporate behavior.
[GRAPHIC OMITTED]
Value of $10,000 Investment Over Past 10 Years
Fund S&P 500 Russell 2000
1991 $9,525.00 $10,000.10 $10,000.00
1992 $9,993.80 $10,740.80 $11,841.20
1993 $10,282.30 $11,808.70 $14,080.00
1994 $9,900.40 $12,032.70 $13,823.50
1995 $11,830.40 $16,396.70 $17,754.90
1996 $13,405.50 $20,115.90 $20,683.40
1997 $14,890.60 $26,774.90 $25,308.40
1998 $13,397.00 $34,367.10 $24,663.80
1999 $14,578.10 $41,544.30 $29,906.50
2000 $22,124.10 $37,791.90 $29,003.10
2001 $19,375.50 $33,313.40 $29,724.10
|
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2001
COMMON STOCKS: 96.68%
SHARES MARKET VALUE
ALTERNATE ENERGY AS A GROUP: 39.25%
ALTERNATE ENERGY (GENERAL): 12.01%
*Calpine 110,000 $ 1,846,900
*Capstone Turbine Corp. 100,000 541,000
**Energy Developments Ltd. 20,088 68,895
*Global Power Equipment 5,000 75,250
Idacorp 80,000 3,248,000
-----------
5,780,045
-----------
ALTERNATE ENERGY (FUEL CELL): 19.50%
*Ballard Power Systems 2,500 73,925
*FuelCell Energy, Inc. 300,000 5,442,000
*Global Thermoelectric 250,000 1,135,467
* Hydrogenics 30,000 224,100
*Medis Technologies Ltd. 30,000 220,500
*Plug Power 150,000 1,311,000
Siemens AG (ADS) 15,000 982,200
-----------
9,389,192
-----------
ALTERNATE ENERGY (SOLAR CELL): 7.33%
*AstroPower 60,000 2,425,800
*Emcore Corp. 50,000 672,500
Kyocera Corp. (ADR) 5,000 333,650
*Spire Corporation 30,000 95,700
-----------
3,527,650
-----------
ALTERNATE ENERGY (WIND): 0.42%
**Pacific Hydro 30,131 64,008
**Vestas Wind 5,000 136,520
-----------
200,528
-----------
INDUSTRIAL CATALYSTS (FUEL CELLS
& CLEAN AIR): 0.58%
* Engelhard Corp. 5,000 138,400
**Johnson Matthey 10,000 138,846
-----------
277,246
-----------
CLEAN WATER: 13.68%
American Water Works 100,000 4,175,000
Ameron Intl. 10,000 692,000
California Water 20,000 515,000
Pall Corp. 50,000 1,203,000
-----------
6,585,000
-----------
|
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2001
SHARES MARKET VALUE
Energy Conservation: 5.80%
Apogee Enterprises 5,000 $ 79,100
*Cree Inc. 15,000 441,900
*Echelon Corp. 15,000 212,400
*Intermagnetics General Corp. 35,853 928,593
*International Rectifier 10,000 348,800
Linear Technology Corp. 20,000 780,800
------------
2,791,593
------------
NATURAL FOODS: 5.37%
*Stake Technology 40,000 86,800
*United Natural Foods 100,000 2,500,000
------------
2,586,800
------------
ENVIRONMENTAL (GENERAL): 1.56%
*Flow International 35,000 432,950
*Johnson Outdoors, Inc. 40,000 318,000
------------
750,950
------------
RECYCLING: 0.14%
Caraustar Industries 10,000 69,300
------------
NATURAL GAS
TRANSMISSION & DISTRIBUTION: 24.02%
Atmos Energy Corp. 100,000 2,125,000
El Paso Corp. 40,000 1,784,400
KeySpan Corp. 80,000 2,772,000
Nicor Inc. 40,000 1,665,600
NUI Corp. 50,000 1,185,000
Peoples Energy 10,000 379,300
Questar Corp. 15,000 375,750
Williams Companies 50,000 1,276,000
------------
11,563,050
------------
OTHER (FUEL CELL COMPONENTS): 2.84%
Delphi 100,000 1,366,000
------------
OTHER (INDUSTRIAL GASES, HYDROGEN
& COAL GASIFICATION): 3.44%
Praxair 30,000 1,657,500
------------
TOTAL COMMON STOCK (COST $39,062,745) $ 46,544,854
============
|
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2001
CASH, SAVINGS ACCOUNTS,
30 DAY CERTIFICATES OF DEPOSITS AND
U.S. TREASURY BILLS: 3.32%
SOCIALLY CONCERNED BANKS
Alternatives Federal Credit Union $ 100,000
Chittenden Bank 100,000
Community Capital Bank 100,000
Self-Help Credit Union 100,000
South Shore Bank 100,000
U.S. Treasury Bills 1,099,291
------------
TOTAL MARKET DEPOSITS AND TREASURY BILLS $ 1,599,291
============
Total Common Stock (96.68%) $ 46,544,854
Bank Money Market and U.S. Treasury Bills (3.32%) 1,599,291
------------
TOTAL INVESTMENTS (100%) $ 48,144,145
============
|
* Securities for which no cash dividends were paid during the fiscal year. ** Foreign Exchange Securities traded on a foreign exchange.
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2001
ASSETS
------
Investment securities at market value
(Cost: $39,062,745) (Notes 2A and 5) .................................. $ 46,544,854
U.S. Treasury Bills at market value .................................... 1,099,291
Cash, Savings and Certificates of Deposit .............................. 500,000
Cash. .................................................................. 1,105,183
Receivables: Dividends ................................................ 38,500
Interest .......................................... 2,294
Portfolio securities sold ......................... -
Subscriptions ..................................... 91,453
Prepaid Insurance ................................. 5,985
-----
TOTAL ASSETS ........................................................... $ 49,387,560
============
LIABILITIES
-----------
Payables:
Securities purchased ................................................... -
Redemptions payable .................................................... 42,983
Advisory fee. .......................................................... 28,612
Transfer Agent and Fund Pricing-PFPC, Inc. ............................. 28,865
Other .................................................................. 42,127
Dividend distribution payable .......................................... -
-------
TOTAL LIABILITIES ...................................................... 142,587
-------
NET ASSETS ............................................................. $ 49,244,973
============
ANALYSIS OF NET ASSETS
----------------------
Net capital paid in shares of capital stock ............................ 41,761,559
Distributable earnings ................................................. 7,483,414
---------
NET ASSETS (equivalent to $34.71 per share based on 1,418,810.098
shares of capital stock outstanding) .............. $ 49,244,973
============
|
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDING DECEMBER 31, 2001
INVESTMENT INCOME:
Dividends .............................................................. $ 679,920
Interest ............................................................... 334,083
Other net income ....................................................... 12,709
------------
Total Income ........................................................... 1,026,712
------------
EXPENSES:
Management fee (note 4) ................................................ 354,980
Custodian fees: United Missouri Bank & PFPC Trust ..................... 23,725
State taxes ............................................................ 431
Auditor ................................................................ 14,229
Directors .............................................................. 5,389
Filing fees ............................................................ 11,169
Postage and printing ................................................... 14,600
Bond and insurance ..................................................... 2,306
Transfer Agent-PFPC, Inc. .............................................. 43,800
Fund pricing-PFPC, Inc. ................................................ 35,131
Other (primarily Transfer Agent related fees) .......................... 75,013
------------
Total Expenses ......................................................... 580,773
------------
NET INVESTMENT INCOME .................................................. 445,939
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN ON INVESTMENTS (NOTE 2B & 5)
Proceeds from sales .................................................... 12,340,671
Cost of securities sold ................................................ (10,797,396)
Foreign Currency Transactions (Gains/Loss) ............................. (5,235)
------------
Net Realized Gain ...................................................... 1,538,040
------------
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Beginning of period .................................................... 16,277,347
End of period .......................................................... 7,482,109
------------
Total Unrealized Appreciation (Depreciation) For The Period ............ (8,795,239)
------------
Net Realized and Unrealized Gain (Loss) On Investments ................. (7,257,199)
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ $ (6,811,260)
============
|
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
DECEMBER 31, 2001
Year End Year End
12/31/01 12/31/00
FROM INVESTMENT ACTIVITIES:
Net investment income $ 445,939 $ 455,876
Net realized gain from security transactions 1,538,040 2,569,856
Unrealized appreciation (depreciation) of investments (8,795,239) 13,519,895
------------ ------------
Increase (decrease) in net assets derived from
investment activities (6,811,260) 16,545,627
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DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income dividends to shareholders (438,985) (455,393)
Distributions to shareholders (1,544,011) (2,569,912)
FROM CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) from
Capital transactions (note 3) 5,265,736 6,697,209
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INCREASE (DECREASE) IN NET ASSETS: (3,528,520) 20,217,531
NET ASSETS AT:
Beginning of the period 52,773,493 32,555,962
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END OF THE PERIOD $ 49,244,973 $ 52,773,493
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The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
NOTES TO FINANCIAL STATEMENT FOR THE
PERIOD ENDING DECEMBER 31, 2001
1) ORGANIZATION - The Fund is registered as an open-end investment company under the Investment Company Act of 1940, as amended. The Fund commenced operations September 3, 1982. The investment objective of the Fund is to seek long-term capital gains by investing in common stocks that provide a contribution to a clean and sustainable environment.
2) ACCOUNTING POLICIES - The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of these financial statements. The policies are in conformity with generally accepted accounting principles:
A. SECURITY VALUATION - Listed investments are stated at the last reported sale price at the closing of a national securities stock exchange and the NASD National Market System on December 31, 2001 and at the mean between the bid and asked price on the over the counter market if not traded on the day of valuation.
B. FOREIGN CURRENCY - Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions.
The company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are accounted for on the trade date (date order to buy or sell is executed). Realized gains and losses from security transactions are reported on a first in, first out basis if not traded on the day of valuation. Short-term notes are stated at amortized cost which approximates fair value.
D. INVESTMENT INCOME AND EXPENSE RECOGNITION - Dividend income is recorded as of the ex-dividend date. Expenses are accrued on a daily basis.
E. FEDERAL INCOME TAXES - No provision for federal income tax is believed necessary since the Fund intends to distribute all its taxable income to comply with the provisions of the Internal Revenue Code applicable to investment companies. The aggregate cost of the securities owned by the Fund on December 31, 2001 for federal tax purposes is $39,062,745.
F. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
NEW ALTERNATIVES FUND, INC.
NOTES TO FINANCIAL STATEMENT FOR THE
PERIOD ENDING DECEMBER 31, 2001
3) CAPITAL STOCK - There are 8,000,000 shares of $1.00 par value capital stock authorized. On December 31, 2001, there were 1,418,810.098 shares outstanding after the dividend. There were 1,368,171.321 shares before the dividend. Aggregate paid in capital including reinvestment of dividends was $41,761,559.19. Transactions in capital stock were as follows:
Year End 12/31/01 Year End 12/31/00
----------------- -----------------
Shares Dollar Amount Shares Dollar Amount
Capital stock sold 185,623.175 $ 7,199,241 215,002.185 $ 9,141,665
Capital stock issued
Reinvestment of dividends 50,196.791 1,742,329 64,651.702 2,673,343
Redemptions (95,037.971) (3,675,834) (129,982.632 (5,117,800)
----------- ----------- ----------- -----------
Net Increase (Decrease) 140,781.995 $ 5,265,736 149,671.255 $ 6,697,208
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4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES - Pursuant to agreements, Accrued Equities, Inc. serves as investment advisor to the Fund. The Fund pays to Accrued Equities, Inc. an annual management fee of 1.00% of the first $10 million of average net assets; 0.75% of the next $20 million; and 0.50% of net assets over $30 million and 0.45% of assets over $100 million. If the net annual expenses of the Fund (other than interest, taxes, brokerage commissions, extraordinary expenses) exceed the most restrictive limitation imposed by any state in which the Fund has registered its securities for sale, Accrued Equities, Inc. reduces its management fee by the amount of such excess expenses. The annualized expense ratio for the period ended December 31, 2001 was 1.14%. The Fund pays no remuneration to its officers, two of whom are also officers of Accrued Equities, Inc. Accrued Equities, Inc. is the principal underwriter for the Fund. There is a commission of 4.75% on most new sales. The commission will be shared with other brokers who actually sell new shares. Their share of the commission may vary. The Fund paid Accrued Equities, Inc. a total of $52,803 in underwriting fees in 2001. The Fund also paid Accrued Equities, Inc. $135,335 in commissions in 2001.
5) PURCHASES AND SALES OF SECURITIES - For the year ended December 31, 2001 the aggregate cost of securities purchased totaled $24,079,052. Net realized gains were computed on a first in, first out basis. The amount realized on sales of securities for the year ended December 31, 2001 was $12,334,466, plus litigation proceeds of $6,205.
To the Shareholders and
Board of Directors of
New Alternatives Fund, Inc.
We have audited the accompanying statement of assets and liabilities of New Alternatives Fund, Inc., including the schedule of investments, as of December 31, 2001, and the related statements of operations for the year then ended and statements of changes in net assets and the financial highlights for each of the last two years in the period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The 1999 and the prior years financial highlights were audited by other auditors whose report, dated February 8, 2000, expressed an unqualified opinion on them.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2001, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis of our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of New Alternatives Fund, Inc. as of December 31, 2001, the results of its operations for the year then ended, the changes in net assets for each of the last two years in the period then ended, and the financial highlights for the years 2001, and 2000, in conformity with accounting principles generally accepted in the United States of America.
Joseph A. Don Angelo, CPA
Mineola, New York
February 19, 2002