File Numbers:
811-21576
333-115091
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 14 X
and
THE INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 14 X
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Stock Dividend Fund, Inc. (Exact Name of Registrant as Specified in Charter)
8150 N. Central Expressway #M1120, Dallas, Texas 75206 (Address of
Principal Executive Offices)
214-360-7418(Registrant Telephone Number)
Laura S. Adams 8150 N. Central Expressway #M1120 Dallas, Texas 75206
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on November 15, 2012 pursuant to paragraph (a) of rule 485
STOCK DIVIDEND FUND, INC.
Ticker Symbol: SDIVX
PROSPECTUS
February 15, 2014
INVESTMENT OBJECTIVE:
Growth and Income
8150 N. Central Expressway
Suite #M1120
Dallas, Texas 75206
For Information, Shareholder Services and Requests:
Toll Free 1-800-704-6072
For online Prospectus, Statement of Additional Information and
Reports to Shareholders: www.funddocuments.com
The Securities and Exchange Commission has not approved or disapproved of
these securities, nor has the Commission determined that this Prospectus is
complete or accurate. Any representation to the contrary is a criminal
offense.
TABLE OF CONTENTS
FUND SUMMARY 3
Investment Objective 3
Fees and Expenses 3
Principal Investment Strategies 4
Portfolio Turnover 5
Principal Investment Risks 5
Performance 6
Investment Advisor and Portfolio Manager 7
Purchase and Sale of Fund Shares 7
Tax information 7
MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE 7
Contract Terms 8
PORTFOLIO MANAGER 8
Custody of Investments 8
Legal Proceedings 9
CAPITAL STOCK 9
Description of Common Stock 9
Voting Rights 9
PRICING OF FUND SHARES 9
Market Value of Securities 9
PURCHASE OF FUND SHARES 10
Initial Investments 10
Subsequent Purchases 10
Fractional Shares 10
Purchasing Shares from Broker-dealers and Others 10
OFFICERS AND DIRECTORS OF THE FUND 11
Management Ownership 11
IRA ACCOUNTS 11
PENSION, PROFIT SHARING AND 401K PLANS 11
REDEMPTION OF FUND SHARES 11
Endorsement Requirements 12
Redemption Price 12
FREQUENT PURCHASE AND REDEMPTION OF FUND SHARES 12
DIVIDENDS AND DISTRIBUTIONS 13
Reinvestments 13
TAX CONSEQUENCES 13
Tax Distribution 13
Federal Withholding 13
PRIVACY POLICY 15
FOR MORE INFORMATION Cover
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FUND SUMMARY
Investment Objective: The investment objective of the Fund is growth and
income. This is a fundamental objective and cannot be changed.
Fees and Expenses: The following 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(Load) Imposed on Purchases None
Redemption Fee on purchases held less than one year 2.00%
Annual Fund Operating Expenses (Expenses that are deducted from Fund assets):
Management Fees* 0.85%
Distribution (12b-1) Fees None
Other Expenses** 0.00%
Total Annual Fund Operating Expenses 0.85%
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* The Investment Advisor has contractually agreed to pay all operating
expenses of the Fund except brokerage, interest, taxes, extraordinary legal
and other extraordinary expenses. This agreement is renewed annually and may
be terminated at any time upon 60 days prior written notice, without payment
of penalty, by the Fund?s Board of Directors or by a vote of the majority of
outstanding voting shares of the Fund.
** The Fund does not expect to incur any ?Other 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 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 that your investment has a 5% return each year and that the
operating expenses of the Fund remain the same. Based on these assumptions
your costs would be:
One Year Three Years Five Years Ten Years
$87 $271 $471 $1,049
Principal Investment Strategies: The Fund will attempt to achieve its
objective by investing primarily in dividend paying common stocks. The
Investment Advisor of the Fund uses quantitative analysis to identify
dividend paying common stocks that generally have investment grade credit
ratings on outstanding debt (or equivalent quality if not rated by larger
credit rating agencies such as Moody?s or Standard and Poors), a long history
of dividend payments (at least ten years), minimum ratios of expected
earnings to dividend strength, and expectation by the Advisor that the
dividend may be increased in the future. The Fund will invest at least 80% of
its net assets in larger capitalization dividend paying common stocks of U.S.
issuers and intends to be as fully invested as possible at all times. Larger
capitalization stocks are those that have a value of $5 billion and higher as
determined by calculating number of shares outstanding multiplied by current
share price. This is not a fundamental policy and shareholders will be given
at least 60 days prior notice if there is any change in the 80% investment
policy.
The Fund may at times seek to increase income and possibly avoid short term
capital gains on appreciated securities by selling covered call options
rather than selling the security. When the Fund sells a covered call option,
the purchaser of the option has the right to buy that stock at a
predetermined price (the exercise price) during the life of the option. If
the purchaser exercises the option, the Fund must sell the stock to the
purchaser at the exercise price. The option is ?covered? because the Fund
owns the stock at the time it sells the option. As the seller of the option,
the Fund receives a premium from the purchaser of the call option, which may
provide additional income to the Fund. The Fund may sell call options on
securities that it feels have risen faster than fundamentals would suggest,
thus collecting additional income and avoiding short term gains on the
underlying security if it were sold. However, selling the option will limit
the gain on the underlying security if it continues to rise. In this case,
if the underlying security is not called away before the option expires, the
Fund will have an opportunity to buy back the call option for a loss and
continue ownership of the underlying security, which has appreciated in
value. Although selling call options on underlying securities can
potentially increase income and reduce losses in a declining market, it also
has the effect of limiting gains and creating additional turnover in rising
markets. For this reason, selling call options against portfolio securities
is a secondary strategy and the Fund does not anticipate selling call options
on more than 25% of the value of the underlying securities of its portfolio
at any given time.
Additional information regarding call options: The premium that the Fund
receives for writing a call option will reflect the current market price of
the underlying security, the relationship of the exercise price to such
market price, the historical price volatility of the underlying security, the
option period, supply and demand and interest rates. The exercise price of
an option may be below, equal to or above the current market value of the
underlying security at the time the option is written. Options written by
the Fund will normally have expiration dates between one and nine months from
the date written. From time to time, for tax and other reasons, the Fund may
purchase an underlying security for delivery in accordance with an exercise
notice assigned to it, rather than delivering such security from its
portfolio.
Portfolio Turnover Policy: The Fund does not intend to purchase securities
for short term trading and thus would expect the turnover rate to average
less than 50%. However, there may be times when Fund management deems it
prudent to change the portfolio and turnover could be substantially higher.
Higher portfolio turnover causes increased brokerage commissions and
potentially higher tax liability. The Investment Advisor will attempt to
keep turnover to a minimum.
Principal Investment Risks: An investor could lose money in this Fund. The
principal risks of investing in this Fund are:
a) changing stock market and economic conditions may cause total returns to
go down over short and even long periods of time.
b) the investment strategies may not prove to be effective.
c) the selling of covered call options may result in underperformance in up
markets, additional turnover and higher tax liability.
d) periods of declining stock market prices may cause investing in common
stock securities by the public to fall out of favor, thereby causing the
Fund to underperform or lose money.
e) changes in the tax treatment on stock dividends may adversely affect the
value of dividend paying stocks.
f) the Fund has a short history of operations.
g) The Fund invests mainly in U.S. larger capitalization stocks which may
underperform other stock categories such as small and international.
Non-Diversification risk: The Fund is non-diversified which means that it may
invest a relatively high percentage of its assets in a limited number of
securities. As a result, the performance of the Fund may be more subject to
the moves of an individual company. The Fund seeks only enough
diversification in securities selection to maintain Federal non-taxable
status under Sub-Chapter M of the Internal Revenue Code. See section ?Tax
consequences? of this prospectus for information about requirements for Sub-
Chapter M for the Fund.
Who should invest: This Fund is best suited for disciplined long-term
investors who want to invest in a portfolio of dividend paying companies for
growth and income.
Who should not invest: This Fund is not recommended for investors who are
short term oriented and not tolerant of daily price fluctuations.
Performance:
Risk/Return Bar Chart and Performance Table: The bar chart and table below
provide an indication of the risks of investing in Stock Dividend Fund. The
chart shows the changes in the Fund?s performance since inception. The table
compares the Fund?s returns to a relative comparison benchmark. After-tax
returns are calculated using historical highest federal tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend
on an individual investor?s tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold Fund shares through
tax-deferred accounts such as 401(k) plans or IRA?s. Past results are not an
indication of future performance.
Annual Percentage Returns
30%| 28.25%
25%| 21.19% xx
20%| xx 18.51% 18.43% xx
15%| xx xx 13.80%
10%| 6.65% 5.14% 8.09%
5%| xx xx xx
0%| 0.68%
-5%|
-10%|
-15%|
-20%|
-25%|
-30%|
-35%| (35.96)%
-40%| xx
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2004* 2005 2006 2007 2008 2009 2010 2011 2012 2013
*Beginning operations December 27, 2004 through December 31, 2004.
During the entire period shown in the bar chart above, the highest return for
a calendar quarter was 16.95% while the lowest return for a quarter was
(28.31)%. These returns occurred in quarters ending September 30, 2009 and
December 31, 2008, respectively.
Average Annual Total Returns
for the Year ended December 31, 2013
Annualized Since
2013 Inception(12/27/04)
Stock Dividend Fund
Return Before Taxes 28.25% 7.62%
Return After Taxes on Distributions 26.01% 6.82%
Return After Taxes on Distributions 21.76% 6.23%
And Sale of Fund Shares
S&P 500 Index** 32.36% 7.17%
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**Includes dividend reinvestment compounding and no deduction for fees,
expenses or taxes)
Investment Advisor and Portfolio Manager: Adams Asset Advisors, LLC is the
investment advisor to the Fund. Steven Adams owns Adams Asset Advisors, LLC
and has also been the portfolio manager of the Fund since inception. Mr.
Adams is responsible for day-to-day operation of the Fund. See the
?MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE? section of this prospectus
for additional information.
Purchase and Sale of Fund Shares: Initial purchases of Fund shares are
subject to a $100,000 minimum and must be made through a brokerage firm or
other financial institution that has agreed to facilitate purchase of the
shares. Currently, the only firm with such an agreement is Fidelity
Investments. The account must be opened through Adams Asset Advisors, LLC,
the Advisor to the Fund. Fidelity Investments charges a small transaction
fee for each purchase order. See the ?PURCHASE OF FUND SHARES? section of
this prospectus for additional information. Redemption requests must be made
through Fidelity Investments or Adams Asset Advisors, LLC. The Fund imposes
a 2% redemption fee for shares held less than one year. For additional
information see the ?REDEMPTION OF FUND SHARES? section of this prospectus.
Tax Information: Dividends and capital gain distributions that you receive
from the Fund, whether reinvested in Fund shares or paid in cash, are taxable
to you at either ordinary income or capital gains rates unless you are
investing through a tax-free plan. See ?TAX INFORMATION? section of this
prospectus for additional information.
MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Management
Investment Advisor: Adams Asset Advisors, LLC (?the Advisor?) is a Texas
Limited Liability Corporation, an SEC registered investment advisor and is
the Investment Advisor to the Fund. The Advisor was founded in March of 2002
and is an advisor to one other SEC registered investment company. The
address of Adams Asset Advisors, LLC is: 8150 N. Central Expressway #M1120,
Dallas, TX, 75206. Laura S. Adams is a Member of the Investment Advisor and
is also President of the Fund. Steven Adams, Laura?s husband, is portfolio
manager of the Fund. Mr. Adams has a BSME from U.T. Austin and MBA from
Dartmouth?s Tuck School. Prior to joining Adams Asset Advisors, LLC in March
2005, Mr. Adams worked as a Private Wealth Advisor at Goldman Sachs for over
10 years and then at Merrill Lynch as Senior Vice President, Investments for
over 7 years.
The Investment Advisor will provide the following services to the Fund:
1. Continuous review of the portfolio.
2. Recommend to the Fund when and to what extent which securities the Fund
should purchase or sell according to the Fund?s investment methodology.
3. Pay the salaries of Fund employees who may be officers or directors or
employees of the Investment Advisor. There are currently no salaried
employees of the Fund and none are contemplated at this time.
4. Pay all operating expenses of the Fund, except brokerage fees and
commissions, taxes, interest, extraordinary legal and other extraordinary
expenses.
5. Pay the initial organizational costs of the Fund and reimburse the Fund
for any and all losses incurred because of purchase reneges (when a
shareholder or prospective shareholder fails to make payment for purchase
of Fund shares).
6. Be the transfer agent of the Fund by handling all share purchases and
redemptions.
On April 19, 2004 the Directors of the Fund approved an advisory contract
with the Advisor. This Agreement will continue on a year to year basis
provided that approval is voted on at least annually by specific approval of
the Board of Directors of the Fund or by vote of the holders of a majority of
the outstanding voting securities of the Fund. In either event, it must also
be approved by a majority of Directors of the Fund who are neither parties to
the agreement or interested persons as defined in the Investment Company Act
of 1940 at a meeting called for the purpose of voting on such approval.
Contract Terms: Under the Agreement, the Advisor will furnish investment
direction on the basis of an ongoing review using the appropriate methodology
to determine when and what securities will be purchased or disposed by
designated Fund personnel. The Agreement may be terminated at any time,
without payment of penalty, by the Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund on not more than 60
days written notice to the Advisor. In the event of its assignment, the
Agreement will terminate automatically. Ultimate decisions as to the
investment policy and as to individual purchases and sales of securities are
made by the Officers and Directors of the Fund. For these services, the Fund
has agreed to pay a fee of 0.85% per year on the net assets of the Fund.
This fee is computed daily based on the last calculation of net asset value
of the Fund and is payable monthly.
The Advisor is required to follow the investment strategy of the Fund in
managing the portfolio. The Advisor paid the initial organizational costs of
the Fund. The Advisor is a registered transfer agent and will provide
transfer agent services to the Fund as described in the Statement of
Additional Information(SAI). The Advisor is currently registered as an
investment advisor with the SEC.
A discussion regarding the basis for the Board of Director's approval of the
Agreement between the Fund and the Adviser is available in the Fund's Annual
Report to Shareholders.
PORTFOLIO MANAGER
Steven Adams is Managing Member of the Investment Advisor and also Portfolio
Manager of the Fund. Mr. Adams has a BSME from U.T. Austin and an MBA from
Dartmouth?s Tuck School and joined Adams Asset Advisors, LLC full time in
March 2005. Mr. Adams was previously a Senior Vice President, Investments at
Merrill Lynch for over seven years and a Private Wealth Advisor at Goldman
Sachs for over ten years, managing a Goldman Sachs Private Wealth office for
four of those years. The Fund?s SAI (Statement of Additional Information)
provides additional information about the Portfolio Manager, including
compensation, Fund Share ownership, and other portfolios managed.
Custody of Investments: The Fund will operate under Rule 17f(2) and its
amendments under the Investment Company Act of 1940. Securities and similar
investments of the Fund will be maintained with an entity whose functions and
physical facilities are supervised by Federal or State authority. The Fund
will maintain Fidelity Bond coverage in an amount sufficient to insure
custodial activities.
Legal Proceedings: As of the date of this Prospectus, there was no pending or
threatened litigation involving the Fund or the Investment Advisor.
CAPITAL STOCK
Description of Common Stock: The authorized capitalization of the Fund
consists of 100,000,000 shares of Stock Dividend Fund, Inc. common stock of
$0.001 par value per share. Each share has equal dividend, distribution and
liquidation rights. There are no conversion or preemptive rights applicable
to any shares of the Fund. All shares once issued in book format (no
certificates) are fully paid and non-assessable.
Voting Rights: Each holder of Fund shares has voting rights equal to the
number of shares held. Voting rights are non-cumulative. Therefore, the
holders of a majority of shares of common stock can elect all directors of
the Fund if they so choose, although holders of remaining shares are still
able to cast their votes.
PRICING OF FUND SHARES
When and How do We Price: At a minimum, the Fund is priced on any day that
there is a request for redemption or purchase of Fund shares when the New
York Stock Exchange is open, and also on the last day of the month. The net
asset value of the Fund is determined after 4:15 p.m. using the closing
prices (presently 4:00 p.m.) for common stock securities on days that the New
York Stock Exchange is open. For options securities, the last offered price
will be used from major pricing services based on the closing time of the
Chicago Board Options Exchange (presently 4:15 p.m.) The net asset value is
the price of each share and is determined by dividing the value of Fund owned
securities, plus any cash and other assets less all liabilities, by the
number of shares outstanding. All Fund price calculations will be carried to
two decimal places.
Market Value of Securities: Last sale prices will be used to price securities
that are listed on a national exchange or over-the-counter market. Securities
that have not recently traded are valued at the last bid price in such
market. Securities for which current market quotations are not readily
available will be valued at fair value as determined in good faith by the
Fund?s Board of Directors.
Fair Value Pricing. Fair Value pricing will be used only when market prices
are unavailable. As an example, if trading is halted on one of the Fund?s
portfolio securities while market prices are available for other securities,
the Board will determine a fair value for that holding so that the NAV can be
calculated for the Fund.
PURCHASE OF FUND SHARES
The offering price of shares offered by the Fund is at the net asset value
per share next determined after receipt of the purchase order by the Fund and
is computed in the manner described in the above section ?Pricing of Fund
Shares?. Purchase orders must be received prior to the close of the New York
Stock Exchange(presently 4:00 p.m.) in order to receive the net asset value
pricing for that day. Otherwise, the offering price for the order will be at
the next calculation of net asset value. The Fund reserves the right, at its
sole discretion, to terminate the offering of shares made by this Prospectus
at any time and to reject purchase applications when, in the judgement of
management such termination or rejection is in the best interest of the Fund.
Initial Investments: Initial purchase of shares of the Fund must be made
through a brokerage firm or other financial institution that has agreed to
facilitate purchase of the shares. Currently, the only firm with such an
agreement is Fidelity Investments. The account must be opened through Adams
Asset Advisors, LLC, the Advisor to the Fund. Fidelity Investments charges a
small transaction fee for each purchase order. To receive a prospectus and
Fidelity Investments account application please call 1-800-704-6072 or write
to: Stock Dividend Fund, Inc., 8150 N. Central Expressway #M1120, Dallas, TX
75206.
The minimum initial purchase of shares, unless waived by the Fund, is
$100,000, which is due on the next business day after purchase date.
Subsequent Purchases: Subsequent purchases may be made by mail or phone
through the Fidelity Investments account and funds are due the next business
day after purchase date. The minimum is $100 and Fidelity transaction costs
apply.
Fractional Shares: Fractional shares to three decimal places are offered by
the Fund.
Purchasing Shares from Broker-dealers, Financial Institutions
and Others
Some broker-dealers may sell shares of the Fund. Broker-dealers may charge
investors a fee either at the time of purchase or redemption. The fee, if
charged, is retained by the broker-dealer and not remitted to the Fund or the
Advisor.
The Fund may enter into agreements with broker-dealers, financial
institutions or other service providers (?Servicing Agents?) that may include
the Fund as an investment alternative in the programs they offer or
administer. Servicing Agents may:
1. Become shareholders of record of the Fund. This means all requests to
purchase additional shares and all redemption requests must be sent
through the Servicing Agent. This also means that purchases made through
Servicing Agents may not be subject to the minimum purchase requirements
of the Fund.
2. Use procedures and impose restrictions that may be in addition to, or
different from, those applicable to investors purchasing shares as
previously described.
3. Charge fees to their customers for the services they provide them.
If you decide to purchase shares through Service Agents, please carefully
review the program materials provided to you by the Servicing Agent.
Purchases and redemptions will be affected at the net asset value next
calculated after receipt of a tender by the Service Agent.
OFFICERS AND DIRECTORS OF THE FUND
Management Ownership: Directors and Officers of the Fund and their
ownership:
Fund Shares Owned Dollar Range of Percent of
Name as of 12/31/13 Ownership as of 12/31/13 Class
Laura S. Adams 88,454 >$1,000,000 6.04%
President & Director*
Steven Adams 88,454 >$1,000,000 6.04%
Portfolio Manager*
Yolawnde Malone** 252 $ 0- $ 500,000 0.02%
Director
Melissa D. Gordon, M.D 0 $ 0- $ 10,000 0.00%
Director
Vicky L. Hubbard 0 $ 0- $ 10,000 0.00%
Director
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*Laura S. Adams, President and an ?interested? Director of the Fund and her
husband, Steven Adams, Portfolio Manager of the Fund, hold these shares
jointly. The total of 6.04% includes shares owned in custodial accounts.
**Yolawnde Malone ownership includes as a custodian.
IRA ACCOUNTS
Shares may be purchased for an Individual Retirement Account (?IRA?),
including simple IRA?s, Roth IRA?s, and SEP?s. All IRA type investments must
be made as described in ?PURCHASE OF FUND SHARES?, ?Initial Investments?.
PENSION, PROFIT SHARING AND 401K PLANS
Purchase of Fund shares through business retirement plans is available to the
owners, officers and employees who participate in the retirement plans. The
accounts must be opened with Fidelity Investments as previously described
under ?Initial Investments?.
REDEMPTION OF FUND SHARES
The Fund assesses a 2.00% early redemption fee for shares held less than one
year. The ?first-in, first-out? method is used to determine the holding
period by comparing the date of the redemption with the earliest dates of the
share purchased. Any fees assessed due to early redemption are retained by
the Fund. The Fund reserves the right to waive the redemption fee if
management concludes that the original purchase was made in good faith.
Endorsement Requirements: The Fund will only issue book entry shares and will
redeem pursuant to a shareholder request all or any part of the shares of any
shareholder that tenders a request for redemption. The brokerage firm or
advisor that places your order may require a properly guaranteed endorsement,
also known as a signature guarantee, from an eligible guarantor institution.
A signature guarantee is an assurance by the above mentioned financial
institution that a signature and person who signed the signature are the same
individual.
Redemption Price: The redemption price is the net asset value per share next
determined after notice is received by the Fund for redemption of shares.
The Fund must receive notice prior to the closing of the New York Stock
Exchange(presently 4:00 p.m.) in order to receive pricing at the net asset
value on that day. Otherwise, redemption will be done at the next
calculation of Fund net asset value. The proceeds received by the shareholder
may be more or less than his/her cost of such shares, depending upon the net
asset value per share at the time of redemption and the difference should be
treated by the shareholder as a capital gain or loss for federal and state
income tax purposes.
Redemption Payment: Payment by the Fund will be made within four business
days after redemption. However, the Fund may suspend the right of redemption
or postpone the date of payment if: The New York Stock Exchange is closed for
other than customary weekend or holiday closings, or when trading on the New
York Stock Exchange is restricted as determined by the Securities and
Exchange Commission or when the Securities and Exchange Commission has
determined that an emergency exists, making disposal of fund securities or
valuation of net assets not reasonably practicable. The Fund intends to make
payments in cash, however, the Fund reserves the right to make payments in
kind. It should be noted that shareholders will incur brokerage costs when
selling the securities received as part of an in kind distribution and also
may incur potential tax liabilities. Shareholders would also have continuing
market risk by holding these securities. The Fund does not intend to issue
in kind redemptions using illiquid securities.
FREQUENT PURCHASES AND REDEMPTION OF FUND SHARES
The Fund is not intended to provide a means of speculating on short-term
market movements. Frequent short-term trading by investors has the potential
to make the Fund more difficult to manage efficiently, cause increased
brokerage commissions, create unplanned tax burdens for some shareholders,
and may dilute the value of Fund shares for long-term investors. The Fund
does not have, and will not have, any arrangements with any person or entity
to permit frequent purchases or redemptions of shares. The Fund reserves the
right to reject any purchase at any time, and will exercise this right at the
first signs of any ?market timing? activities by any shareholder.
DIVIDENDS AND DISTRIBUTIONS
Reinvestments: The Fund will automatically use the taxable dividend and
capital gains distributions for purchase of additional shares for the
shareholders at net asset value as of the close of business on the
distribution date.
Cash Payouts: A shareholder may, at any time, by letter or forms supplied by
the Fund direct the Fund to pay dividend and/or capital gains distribution,
if any to such shareholder in cash.
TAX CONSEQUENCES
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund, by paying out substantially all of its investment income
and realized capital gains and meeting certain other tests, intends to be
relieved of federal income tax on the amounts distributed to shareholders.
Not qualifying under Subchapter M of the Internal Revenue Code would cause
the Fund to be considered a personal holding company subject to normal
corporate income taxes. This would reduce the value of shareholder holdings
by the amount of taxes paid. Any subsequent dividend distribution of earnings
of the Fund after taxes would still be taxable as received by shareholders.
Tax Distribution: Fund distributions (capital gains & dividend income),
whether received by shareholders in cash or reinvested in additional shares
of the Fund, may be subject to federal income tax payable by shareholders.
Distribution of any long-term capital gains realized by the Fund will be
taxable to the shareholder as long-term capital gains, regardless of the
length of time Fund shares have been held by the investor. All income
realized by the Fund, including short-term capital gains, will be taxable to
the shareholder as ordinary income, except for amounts designated as
?qualified dividends? on form 1099-Div. Dividends from net income will be
made during the year at the discretion of the Board of Directors. Dividends
received shortly after purchase of Fund shares by an investor will have the
effect of reducing the per share net asset value of his/her shares by the
amount of such dividends or distributions. This may be considered a return
of capital, but the dividend is still subject to federal income and state
taxes.
Federal Withholding: The Fund is required by federal law to withhold 30% of
reportable payments (which may include dividends, capital gains,
distributions and redemptions) paid to shareholders who have not complied
with IRS regulation. In order to avoid this withholding requirement, you must
certify on a W-9 tax form that your Social Security or Taxpayer
Identification Number provided is correct and that you are not currently
subject to back-up withholding.
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PRIVACY POLICY
Regulation S-P: The U.S. Securities and Exchange Commission has adopted a
regulation regarding the ?Privacy of Consumer Financial Information? known as
Regulation S-P. This regulation states that financial institutions such as
the Fund must provide the shareholder with this notice of the Fund?s privacy
policies and practices on an annual basis. The following items (A & B)
detail the Fund?s policies and practices:
A. Information We Collect - Information we receive from you
on application or
forms include; your name, address, social security number or tax ID
number, W9 status, phone number and citizenship status. Information about
your transactions with us include; your account number, account balances
and transaction histories.
B. Disclosure Statement - We only disclose personal information about any
current or former shareholder of the Fund as required by law. And, since
we handle regular transactions internally the number of employees that
even see your information is limited. We also require all of the Fund?s
brokers, and our Investment Advisor that acts as the Fund's transfer agent
to adopt the regulations of Regulation S-P, as specified above by the
Fund.
FOR MORE INFORMATION
Several additional sources of
information are available to you:
The Statement of Additional
Information (SAI), incorporated
into this Prospectus by reference,
contains additional and more
detailed information about the
Fund?s policies and operations.
Annual and semi-annual reports list
current Fund holdings, detailed
financial statements, and
discussion of market conditions and
strategies that significantly
affected the Fund?s performance.
Call the Fund at 1-800-704-6072 or
write to the address below to
request free copies of the SAI and
the Fund?s annual and semi-annual
reports, or to request other
information about the Fund.
Documents are also available at
www.funddocuments.com.
You may also obtain information
about the Fund (including the
Statement of Additional Information
and other reports) from the
Securities and Exchange Commission
on their Internet site at
http://www.sec.gov, or at their
Public Reference Room in
Washington, D.C., or by calling the
Securities and Exchange Commission
at 1-202-551-8090, or by sending a
written request and duplicating fee
to the Public Reference Section of
the SEC, Washington, D.C. 20549-
0102. Email at publicinfo@sec.gov
PLEASE READ THIS PROSPECTUS
In this prospectus we present the
objectives, risks and strategy of
the Fund. Please keep it for future
reference.
STOCK DIVIDEND FUND, INC.
SEC file number: 811-21576
Fund Symbol: SDIVX
8150 N. Central Expressway
Suite M1120
Dallas, Texas 75206
1-800-704-6072
STOCK DIVIDEND FUND, INC.
8150 N. Central Expressway #M1120
Dallas, TX 75206
214-360-7418 800-704-6072
Part B
STATEMENT OF ADDITIONAL INFORMATION
February 15, 2014
This Statement of Additional Information (?SAI?) is not a prospectus, but
should be read in conjunction with the Fund?s current prospectus dated
February 15, 2014. This SAI incorporates by reference the Fund's Annual
Report to Shareholders for the fiscal year ended December 31, 2013. To
obtain a free copy of the Prospectus or Annual Report, please write or call
the Fund at the address or phone number listed above.
TABLE OF CONTENTS
THE FUND HISTORY 2
DESCRIPTION OF FUND AND ITS INVESTMENTS AND RISKS 2
Classification 2
Investment Strategies and Risks, Fund Policies 2
Portfolio Turnover 2
MANAGEMENT OF THE FUND 3
Board of Directors, Management Information 3
Compensation and Sales Load 4
CODE OF ETHICS 4
Proxy Voting Policies 4
ANTI-MONEY LAUNDERING PROGRAM 5
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 5
Control Persons, Principal Holders 5
Management Ownership 5
INVESTMENT ADVISORY AND OTHER SERVICES 5
Investment Advisor 5
Services Provided by, and Fees Paid to the Investment Advisor 5
Portfolio Manager 6
Principal Underwriter, Other Service Providers 6
Third Party Payments & Service Agreements 6
Other Investment Advice 6
Dealer Re-allowances, 12b-1 Fees and Other Services 7
BROKERAGE ALLOCATIONS AND OTHER PRACTICES 7
Brokerage Transactions, Commissions 7
Brokerage Selection 7
Directed Brokerage and Regular Broker-Dealers 7
CAPITAL STOCK AND OTHER SECURITIES 7
PURCHASE, REDEMPTION, AND PRICING OF SHARES 8
Purchase of Shares 8
Offering Price and Redemption in Kind 8
TAXATION OF THE FUND 8
UNDERWRITERS OF THE FUND 8
TRANSFER AGENT 8
FINANCIAL STATEMENTS 9
|
FUND HISTORY
Stock Dividend Fund, Inc. (the ?Fund?) was incorporated in Texas on April 6,
2004. The registered office of the Fund is in Dallas, TX. Mail may be
addressed to 8150 N. Central Expressway #M1120, Dallas, TX 75206.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
Classification
The Fund is an open-end, non-diversified management investment company.
Investment Strategies and Risks
All investment strategies and risks are discussed in the prospectus.
Fund Polices
Investment Restrictions: These investment restrictions are the fundamental
investment policies of the Fund and may not be changed without the receipt of
the affirmative vote of the holders of two-thirds (2/3rds) of the shares
entitled to vote on matters to be presented to shareholders. The Fund may
not:
a) change the investment objective, which is growth and income;
b) borrow money or purchase securities on margin; provided, however,
the Fund may obtain such short term credit as may be necessary for
clearance of purchases and sales of securities for temporary or
emergency purposes in an amount not exceeding five percent (5%) of
the value of its total assets;
c) make investments in commodities, commodity contracts or real estate;
provided, however, the Fund may purchase and sell securities of
companies which deal in real estate or interests therein;
d) make loans; provided, however, the purchase of a portion of a
readily marketable issue of publicly distributed bonds, debentures
or other debt securities shall not be considered the making of a
loan by the Fund;
e) invest in another company for the purpose of acquiring control of
such company;
f) purchase or retain securities of any issuer thereof if any officer
of director of the Fund or its investment adviser owns more than
one-half (1/2) of one percent (1%) of any class of security or
collectively owns more than five percent (5%) of any class of
security of such issuer;
g) pledge, mortgage or hypothecate any of the Fund?s assets;
h) purchase any security that may be subject to registration under the
Securities Act of 1933, as amended, prior to the sale thereof to the
public or which are not at the time of purchase readily salable.
i) issue senior securities; and
j) underwrite securities of other companies or entities.
In addition, the Fund will not concentrate in any one industry or industries
or invest in any illiquid securities.
Portfolio Turnover
The expected turnover rates of the Fund are discussed in the section
?Principal Investment Strategies? of the Prospectus.
PORTFOLIO HOLDINGS
The Fund is required to include a schedule of portfolio holdings in its
annual and semi-annual reports to shareholders. These reports are sent to
shareholders within 60 days of the end of the second and fourth fiscal
quarters and are filed with the Securities and Exchange Commission (the
?SEC?) on form N-CSR. The Fund is also required to file a schedule of
portfolio holdings with the SEC on Form N-Q within 60 days of the end of the
first and third fiscal quarters. The Fund will provide a copy of the
complete schedule of portfolio holdings as filed with the SEC, upon request.
This policy is applied uniformly to all requesters, regardless of whether the
requester is an individual or institutional investor. These are the only
times that the portfolio is released and the Board of Directors has
determined that this release policy is in the best interests of shareholders
of the Fund.
MANAGEMENT OF THE FUND
Board of Directors
Shareholders meet annually to elect all members of the Board of Directors,
select an independent auditor, and vote on any other items deemed pertinent
by the incumbent Board. The Directors hold ultimate responsibility for
running the Fund, including the valuation of the Fund?s portfolio securities
and the pricing of Fund shares. The Board appoints officers to run the Fund
and selects an Investment Advisor to provide investment advice (See
?Investment Advisor?, in the Prospectus). No remuneration is paid to members
of the Board.
Management Information
Officers and Directors of the Fund: Their addresses and principal occupations
during the past five years are:
Name and Address Position Principal Occupation
Interested Directors
Laura S. Adams President, Treasurer, Member
8150 N. Central Expwy. Secretary,Director Adams Asset Advisors, LLC
Suite M1120 Dallas, TX
|
Dallas, TX Age 53
Laura Adams is considered an ?interested person?, as defined in the
Investment Company Act of 1940, because she is affiliated with the Investment
Advisor. Mrs. Adams is currently a Member of Adams Asset Advisors, which was
started in March 2002. Mrs. Adams is also a Director of Small Cap Value Fund,
Inc.
Non-Interested Directors
Yolawnde F. Malone Non-Interested Director Sr. Tax Mngr., Montgomery
1624 Thorntree Dr. Coscia Greilich LLP
DeSoto, TX Age 50 Dallas, TX
Vicky L. Hubbard Non-Interested Director Private Investor
5805 Furneaux
Plano, TX Age 56 Dallas, TX
|
Melissa D. Gordon, M.D. Non-Interested Director Pathologist, former Partner
4048 Amherst North Dallas Pathology
Dallas, TX Age 50 Dallas, TX
Yolawnde Malone is a Senior Tax Manager at Montgomery Coscia Greilich LLP.
Prior to that she was a CPA/Tax Specialist at Family Legacy Trust, an
Affiliate of Cain Waters, where she has worked from 2006 to 2012. From 2004
to 2006 she was tax compliance manager at Tolleson Wealth Management. Mrs.
Malone is also a Director of Small Cap Value Fund, Inc.
Vicky Hubbard has worked in the computer business for ACER Computer for 10
years. She retired in 2000 and is currently a private investor. Mrs.
Hubbard is also a Director of Small Cap Value Fund, Inc.
Melissa Gordon was a staff pathologist at Presbyterian hospital of Dallas for
five years prior to retiring in 2013 and was also a Partner at North Dallas
Pathology. Mrs. Gordon is also a Director of Small Cap Value Fund, Inc.
Compensation: No compensation, pension or retirement benefits will be paid to
directors and/or officers of the Fund in the current fiscal year and none are
presently contemplated. This may be changed in the future by the Board of
Directors at their discretion. The Fund does not compensate officers and
directors that are affiliated with the Investment Adviser except as they
benefit through payment of the Advisory fee. There are no sales loads.
CODE OF ETHICS
Both the Fund and the Fund?s Investment Advisor have adopted Codes of Ethics
under rule 17j-1 of the Investment Company Act. These Codes of Ethics
describe rules and regulations for applicable personnel regarding personal
investments in securities held within the Fund?s portfolio. These Codes of
Ethics are on file with, and available from, the Securities and Exchange
Commission.
PROXY VOTING POLICIES
The Fund does not invest in any security for the purpose of exercising
control or management. The Fund has adopted a policy that will insure that
all proxies received by the Fund are reviewed in a timely manner. Generally,
the Fund will support any policies, plans or structures that will maximize
shareholder value and oppose any proposals that have the effect of
restricting the ability of shareholders to realize the full potential of
their investment. In the event that a conflict regarding a proxy vote does
arise between the Fund and the Advisor, the Board will decide how the Fund
will vote. The Fund will notify shareholders sixty days in advance if there
are any changes to this policy. Information regarding how the Fund voted
proxies relating to portfolio securities during the most recent 12-month
period ended June 30 is available (1) without charge, upon request, by
calling toll-free 800-704-6072 and (2) on the Commission?s website at
http://www.sec.gov.
ANTI-MONEY LAUNDERING PROGRAM
The Fund has policies and procedures in place to address money laundering and
terrorism as required by the USA Patriot Act. Our procedures include, but
are not limited to, reporting suspicious and/or fraudulent activity and a
review of all new account applications.
PRINCIPAL HOLDERS OF SECURITIES
Principal Holders
Major Shareholders: As of December 31, 2013, Mrs. Laura S. Adams, President
of the Fund, and her husband, Steven Adams, Portfolio Manager of the Fund,
jointly own 6.04% of the Fund. This amount includes family custodial
accounts. All remaining outstanding shares of the Fund are owned by National
Financial Services Corp.(Fidelity Investments) for the benefit of others.
Management Ownership
As of December 31, 2013, Mrs. Laura S. Adams, President of the Fund, and her
husband, Steven Adams, Portfolio Manager of the Fund, jointly own 6.04% of
the Fund. This amount includes family custodial accounts.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisor
Adams Asset Advisors, LLC was selected by the Board of Directors on April 19,
2004 to be the Investment Advisor to the Fund. Adams Asset Advisors was
formed on March 21, 2002 and is currently controlled by Steven Adams,
Managing Member, and Mrs. Laura S. Adams, Member, both affiliates of the
Fund, to offer investment advice to institutions, individuals, trusts,
retirement plans, and non-profit organizations. Mrs. Adams is also President
of the Fund and will place buy and sell orders for the Fund in that capacity.
A discussion regarding the basis for the Board of Director's approval of the
Agreement between the Fund and the Adviser is available in the Fund's Annual
Report to Shareholders.
Services Provided by, and Fees Paid to, the Investment Advisor
The Investment Advisor is responsible for furnishing investment direction
advice to Directors of the Fund on the basis of a continuous review of the
portfolio and recommend to the Fund when and to what extent securities should
be purchased or disposed. See section ?Investment Advisor? in prospectus. The
Investment Advisor will be the dividend paying agent. Adams Asset Advisors
has an agreement with the Fund to pay the Fund?s start up expenses and to pay
all ongoing operating expenses of the Fund except brokerage fees and
commissions, taxes, interest, extraordinary legal and other extraordinary
expenses. The advisory fee paid by the Fund is 0.85% per year of the average
total net assets of the Fund. This fee is computed daily and is payable
monthly.
Advisory Fees: The advisory fees to the current adviser, for the last three
years, are as follows:
YEAR ADVISORY FEE AMOUNT WAIVED NET ADVISORY FEE
2011 $ 260,337 $ 0 $ 260,337
2012 $ 260,732 $ 0 $ 260,732
2013 $ 293,717 $ 0 $ 293,717
|
Portfolio Manager
Steven Adams, Managing Member of the Investment Advisor to the Fund, is the
sole portfolio manager. Mr. Adams compensation is paid by Adams Asset
Advisors, LLC and is determined by the owners of Adams Asset Advisors, LLC.
Because Mr. Adams and his wife are the owners of the Advisor, his
compensation is determined by the profitability of the Advisor. Mr. Adams
income will likely be affected by the appreciation and depreciation of the
portfolio?s securities, as well as the purchase and redemption of shares by
the Fund?s shareholders. These events affect the net assets of the Fund and
thus the advisory fees paid to the advisor. The table below describes
information regarding other accounts managed by the portfolio manager:
Other accounts managed Total Assets Advisory Fee based
by Portfolio Manager as of 12-31-13 on Performance
---------------------- ------------- ------------------
Registered Investment Companies:
Small Cap Value Fund, Inc. $ 16,946,933 No
Separate Account Management*
172 accounts $ 1,089,301,717 No
|
*Includes all discretionary accounts and all assets under management of Adams
Assets Advisors, LLC.
Principal Underwriter
The Fund has no underwriter as it sells shares directly.
Other Service Providers
Adams Asset Advisors, LLC is the transfer agent and dividend-paying agent of
the Fund. Fidelity Investments, in effect, acts as the sub transfer agent.
Adams Asset Advisors, LLC nor Fidelity Investments will receive compensation
from the Fund for these services. The principal address of Adams Asset
Advisors is: 8150 N. Central Expressway #M1120, Dallas, TX, 75206.
The Fund does it?s own accounting subject to PMB Helin Donovan, LLP for all
audit procedures. The principal address of PMB Helin Donovan, LLP is: 5550
LBJ Freeway, Suite 750, Dallas, Texas 75240.
Third-Party Payments & Service Agreements
There are no third-party payments or service agreements with any organization
or individual other than the Investment Advisor as described in the previous
paragraph and fees paid to the outside auditor.
Other Investment Advice
There is no individual or organization that receives remuneration from the
Investment Advisor or the Fund for providing investment advice.
Dealer Re-allowances
The Fund is a no-load Fund in that investors in the Fund pay no purchase or
sales fees. Purchases made through Broker-dealers or other Service Agents
may charge a fee either at time of purchase or redemption as described in
?Purchase of Fund Shares? in the prospectus. Any fee, if charged, is
retained by the broker-dealer and not remitted to the Fund or the Advisor.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Brokerage Transactions
The Fund requires brokers to execute transactions in portfolio securities
promptly and at the most favorable price.
Commissions
The Fund has no fixed policy, formula, method, or criteria which it uses in
allocating brokerage business based on commission charges. The Board of
Directors will evaluate and review the reasonableness of brokerage
commissions paid annually.
Brokerage Selection
Fund management will place buy and sell orders for securities based on
recommendations from the Investment Advisor. The Fund may select brokers who,
in addition to meeting primary requirements of execution and price, may
furnish statistical or other factual information and services, which in the
opinion of management, are helpful or necessary to the Fund?s normal
operations. Information or services may include economic studies, industry
studies, statistical analysis, corporate reports, or other forms of
assistance to the Fund or it?s Advisor. No effort is made to determine the
value of these services or the amount they might have reduced expenses of the
Advisor. The Fund will not pay higher brokerage commissions for soft dollar
credits.
The following table details all commissions paid for the most recent three
fiscal years:
Year Total Commissions Paid
2011 $ 215
2012 $ 537
2013 $ 501
|
Directed Brokerage and Regular Broker-Dealers
The Fund selects brokers based on competitive commission rates and
transaction services rendered. At this time the Fund will not be making
principal transactions with broker-dealers.
CAPITAL STOCK AND OTHER SECURITIES
Description of Common Stock: The authorized capitalization of the Fund
consists of 100,000,000 shares of Stock Dividend Fund, Inc. common stock of
.001 par value per share. Each share has equal dividend, distribution and
liquidation rights. There are no conversion or preemptive rights applicable
to any shares of the Fund. All shares once issued in book format are fully
paid and non-assessable.
Voting Rights: Each holder of Fund shares has voting rights equal to the
number of shares held. Voting rights are non-cumulative. Therefore the
holders of a majority of shares of common stock can elect all directors of
the Fund if they so choose, although holders of remaining shares are still
able to cast their votes.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Purchase of Shares
See section ?Purchase of Fund Shares? in the prospectus for more information.
Offering Price and Redemption in Kind
The Fund always trades at the net asset value. Details about the offering
price are given in the section ?Pricing of Fund Shares? of the Prospectus.
Redemption in kind is discussed in the section ?Redemption of Fund Shares? of
the Prospectus.
TAXATION OF THE FUND
Taxation of the Fund is discussed in the section ?Tax Consequences? of the
Prospectus.
UNDERWRITERS OF THE FUND
The Fund has no underwriter as it sells shares directly.
TRANSFER AGENT
The Investment Advisor, Adams Asset Advisors, is the transfer agent of the
Fund, which records all Fund share purchases and redemptions on Fund
premises. Fidelity Investments, in effect, is a sub-transfer agent. The
Advisor is registered as a transfer agent with the SEC. All shareholder
holdings are maintained in book form. The Fund has computer hardware and
software, which are provided and managed by Adams Asset Advisors, to run the
daily operations. All data is backed up and stored in secure locations on
Fund premises.
PERFORMANCE DATA
The Fund?s total returns are based on the overall dollar or percentage change
in the value of a hypothetical investment in the Fund, assuming all dividends
and distributions are reinvested. Average annual total return reflects the
hypothetical annually compounded return that would have produced the same
cumulative total return if the Fund?s performance had been constant over the
entire period presented. Because average annual total returns tend to smooth
out the variations in a Fund?s returns, investors should recognize that they
are not the same as actual year to year returns. Average annual return is
based on historical earnings and is not intended to indicate future
performance.
After tax returns are calculated using historical highest federal tax rates
and do not reflect the impact of state and local taxes. Redemptions assume
long term capital gains rates. Actual after tax returns depend on an
individual investor?s tax situation and may differ from those shown. After
tax returns are not relevant to investors who hold Fund shares through tax-
deferred arrangements such as 401(k) plans or IRA?s.
FINANCIAL STATEMENTS
The Financial Statements and Independent Auditor?s Report required to be
included in the Statement of Additional Information are incorporated herein
by reference to the Fund?s Annual Report to Shareholders for the fiscal year
ended December 31, 2013. The Fund will provide the Annual Report without
charge at written or telephone request.
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
1. Financial Statements and Exhibit Index 2
2. Persons Controlled by or Under Common Control with the Fund 2
3. Indemnification 2
4. Business and other Connections of the Investment Advisor 3
5. Principal Underwriters 3
6. Location of Accounts & Records 3
7. Management Services 3
8. Undertakings 3
9. Signatures 4
10. Exhibit Index 4
1. a. Financial Statements - Condensed financial information on a per share
basis will be presented in Part A as required by applicable laws, rules or
regulations. All other financial statements will be presented in Part B at
the appropriate time specified as required by applicable laws, rules or
regulations.
b. Exhibit Index
a - Articles of Incorporation ? Exhibit (a) of Pre-Effective Amendment
No. 3 of our Registration under the Securities Act of 1933.
b - By-Laws - Exhibit (b) of Pre-Effective Amendment No. 3 of our
Registration under the Securities Act of 1933.
c - Instruments Defining Rights of Security Holders ? Not applicable
d - Investment Advisory Contract - Exhibit (d) of Pre-Effective
Amendment No. 3 of our Registration under the Securities Act of
1933.
e - Underwriting Contracts - Not applicable
f - Bonus or Profit Sharing Contracts - Not applicable
g - Custodial Agreements - Not applicable
h - Other Material Contracts ? Not applicable
i - Legal Opinion - Exhibit (i) of Pre-Effective Amendment
No. 3 of our Registration under the Securities Act of 1933.
j - Other Opinions ? Consent of Independent Auditor
k - Omitted Financial Statements - Not applicable
l - Initial Capital Agreements - Exhibit (l) of Pre-Effective Amendment
No. 3 of our Registration under the Securities Act of 1933.
m - Rule 12b-1 Plan ? Not applicable
n - Rule 18f-3 Plan - Not applicable
p - Code of Ethics
2. Persons Controlled by or Under Common Control with the Fund ? Mrs. Laura
S. Adams and Steven Adams, owners of Adams Asset Advisors, LLC.
3. Indemnification - Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, the registrant has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
Section 2.02-1 of the Texas Business Corporation Act provides generally
and in pertinent part that a Texas corporation may indemnify its directors
and officers against expenses (if the person is found liable to the
corporation or on the basis that improper benefit was improperly received
by the person) or against expenses, judgments, fines and settlements (in
all other cases) actually and reasonably incurred by them in connection
with any action, suit or proceeding if, in connection with the matters in
issue they acted in good faith and in a manner they reasonably believed to
be in, or nor opposed to, the best interests of the corporations, in
connection with any criminal suit or proceeding, if in connection with the
matters in issue, they had no reasonable cause to believe their conduct
was unlawful. Section 2.02-1 does not permit indemnification when the
person is found liable for willful or intentional misconduct in the
performance of his duty to the Corporation. Section 2.02-1 further
permits a Texas corporation to grant to its directors and officers
additional rights of indemnification not inconsistent with Texas Business
Corporation Act through bylaw provisions, agreements, votes of
shareholders or interested directors or otherwise, to purchase indemnity
insurance on behalf of such indemnifiable persons and to advance to such
indemnifiable persons expenses incurred in defending a suit or proceeding
upon receipt of certain undertakings.
Article VII of the Company?s Bylaws provides that, subject to certain
exceptions, the Company shall indemnify, to the fullest extent permitted
by law, any person who is or was a director, officer, employee or agent of
the Company or any affiliate against any and all expenses (including
attorney?s fees), judgments, fines and amounts paid in settlement incurred
by such persons in connection with any civil, criminal, administrative, or
investigative actions, suit, proceeding or claim (including any action by
or in the right of the Company or an affiliate) by reason of the fact that
such person is or was serving in such capacity. In addition, Article VII
authorizes the Company to purchase insurance for itself or any person to
whom indemnification is or may be available against any liability asserted
against such person in, or arising out of, such person?s status as
director, officer, employee or agent of the Company of its affiliates.
Article VII authorizes the Company, to the extent that the Board of
Directors deems appropriate, to make advances of expenses to an
indemnifiable person upon the receipt by the Company of a written
undertaking by such person to repay any amounts advanced in the event that
it is ultimately determined that such person is not entitled to such
indemnification.
4. Business and other Connections of the Investment Advisor ? Adams Asset
Advisors, LLC activity at the present time is performance on its
Investment Advisory contracts and offering investment advice to
individuals, trusts, retirement plans, and non-profit organizations.
5. Principal Underwriters ? Not Applicable
6. Location of Accounts & Records - All Fund records are held at corporate
headquarters ? 8150 N. Central Expressway #M1120, Dallas, TX, 75206.
Laura S. Adams of 8150 N. Central Expressway #M1120, Dallas, TX, 75206,
will maintain physical possession of each account, book or other document
required to be maintained by laws, rules or regulations.
7. Management services - Not applicable
8. Undertakings ? None
9. Signatures ?
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Stock Dividend Fund, Inc. certifies
that it meets all of the requirements for effectiveness of this
Registration Statement and has duly caused this amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas and State of Texas on the
15th day of February, 2014.
Stock Dividend Fund, Inc. By: /s/ Laura S. Adams
------------------------
Laura S. Adams, President
|
Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signatures Title Date
By: /s/ Laura S. Adams President, Treasurer, 2/15/14
---------------------- Secretary and Director
Laura S. Adams
By: /s/ Yolawnde F. Malone Director 2/15/14
--------------------------
Yolawnde F. Malone
By: /s/ Vicky L. Hubbard Director 2/15/14
------------------------
Vicky L. Hubbard
By: /s/ Melissa D. Gordon, M.D. Director 2/15/14
------------------------
Melissa D. Gordon, M.D.
|
10. Exhibit Index ?
Consent of Independent Auditor j
Code of Ethics p
11
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