================================================================================
EIS FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2002
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CONTENTS
Letter to Shareholders .................................................... 1
Portfolio Summary ......................................................... 4
Schedule of Investments ................................................... 5
Statement of Assets and Liabilities ....................................... 9
Statement of Operations ................................................... 10
Statement of Changes in Net Assets ........................................ 11
Financial Highlights ...................................................... 12
Notes to Financial Statements ............................................. 13
Results of Annual Meeting of Stockholders ................................. 17
Description of Dividend Reinvestment & Cash Purchase Plan ................. 18
Summary of General Information ............................................ 20
Shareholder Information ................................................... 20
Privacy Policy Notice ..................................................... 21
================================================================================
LETTER TO SHAREHOLDERS
July 26, 2002
Dear Fellow Shareholder:
Our semi-annual report for EIS Fund, Inc. (the "Fund") covering the six months
ended June 30, 2002 follows. At the end of the period, the Fund's net assets
were $33.3 million and the Net Asset Value ("NAV") per share was $15.32. The
discount from NAV at which the Fund's shares traded improved to (6.98)% at the
end of the period from (10.98)% at the beginning of the year. As the investment
focus changed to total return, the Fund's portfolio holdings changed from all
fixed-income positions to include a much broader diversification across U.S.
equities as well.
ECONOMIC AND MARKET SUMMARY
U.S. stock markets in the first half of 2002 continued sliding away from the
highs of 2000. Stocks finished flat for the first quarter, only to resume the
decline through the second quarter and retest the lows set in the near panic
selling immediately following the September 11th tragedy. Compounding concerns
from terrorism, markets were rattled by earnings disappointments, mistrust of
stock analysts, and growing revelations of corporate impropriety, along with a
stream of credit downgrades and bankruptcy filings.
In this environment, the dollar also retreated against the euro and the yen. In
dollar terms, these moves strengthened the generally flat performance of
equities in Japan and dampened the broad market retreats in Europe. However,
they may prove detrimental to the export components of these same economies.
PORTFOLIO PERFORMANCE
We believe that our goal of optimizing total return provides on-going value to
our shareholders. Through June 30, 2002, the Fund posted a (10.76)% total return
on NAV for the six months as compared with the S&P 500 Index return of (13.15)%,
for the same period.
Through the first quarter, stocks were able to maintain some balance as the
positives in Energy, Consumer Staples and Materials offset declines in
Technology and Telecommunications. Investors saw signs of nascent recovery and
pessimists forecast a bear market for bonds.
By the second quarter, most equity sectors succumbed to relentless market
pressures. Energy and Materials both finished the half holding slight gains for
the year. However, Technology and Telecommunications both suffered additional
declines of more than 20% for the quarter, leaving them with substantial
negatives for the year. Fixed-income, on the other hand, gave a boost to returns
as equity investors sought shelter from the storm.
================================================================================
1
LETTER TO SHAREHOLDERS (CONTINUED)
OUTLOOK
We remain optimistic that equity fundamentals are improving. Even as terrorism
concerns continued, signs of recovery gave reasons for encouragement toward the
end of the half. Earnings comparisons began to look better. New data for
manufacturers showed that the sharp declines in the rate of capital spending for
2001 were turning favorably for 2002. U.S. exporters began looking forward to
improved opportunities, as a falling dollar makes their products increasingly
competitive. There remains the short-term risk that heightened sensitivity to
concerns such as corporate ethical surprises and threats of terrorism will
prevent the market from reflecting the brightening picture for both the economy
and corporate earnings. However, over time, it has not proven profitable to
fight the Fed, which has repeatedly shown its willingness to encourage the
economy.
It seems apparent that recent strength in bonds owes less to favorable prospects
for rate reductions than to current volatility in equities, as investors seek
safer investments. The recognition that improving economic fundamentals may lead
to rising rates will continue to influence adjustments in the fixed-income
components of our portfolio.
We strongly believe in diversification as an essential part of our total return
investment strategy. This commitment manifests itself in several forms. First,
the portfolio is allocated across cash, equity and fixed-income positions.
Additionally, diversification is maintained across industry groups and sectors.
Finally, there is a further diversification among broad holdings that avoid
concentrated positions. These layers help reduce volatility in the value of the
portfolio and we believe they will lead to better long-term returns.
SEEKING TO PRODUCE SHAREHOLDER VALUE
In keeping with our value-driven goals, the Fund's Board of Directors started
several initiatives to better serve our shareholders.
Distribution Policy - The Fund continued its high payout monthly
distribution policy that was announced last year. These distributions
allow shareholders to receive substantial portions of their
investment in cash or to continue their holdings in the Fund's stock
by reinvesting their distributions in new shares. This policy gives
flexibility to our owners and we believe that it will have a
continuing positive influence on the level of the Fund's discount to
NAV.
Expense Reduction Plan - As you may be aware, attention to Fund
expenses has reduced them substantially in several areas. In
addition, Cornerstone Advisors, Inc., the Fund's investment manager,
has voluntarily expanded its agreement to waive a significant portion
of its management fees, which will result in a lower expense ratio
than would otherwise be the case. To further reduce expenses, the
Board also announced that it would consider mergers among other funds
affiliated with the adviser. We believe that these steps will lead to
our Fund having one of the lowest expense ratios among comparable
closed-end funds.
================================================================================
2
LETTER TO SHAREHOLDERS (CONCLUDED)
The Board of Directors, the officers, and the investment adviser are mindful of
the trust that the Fund's shareholders have placed in us. We know you have a
choice, we appreciate your support, and we look forward to continuing our
service to you in the future.
Sincerely,
/s/ RALPH W. BRADSHAW
---------------------
Ralph W. Bradshaw
Chairman
================================================================================
3
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EIS FUND, INC.
PORTFOLIO SUMMARY - AS OF JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
TOP TEN SECTORS
Percent of
Sector Net Assets
--------------------------------------------------------------------------------
1. Financials 15.0
--------------------------------------------------------------------------------
2. U.S. Government & Agency Obligations 11.9
--------------------------------------------------------------------------------
3. Consumer Discretionary 10.9
--------------------------------------------------------------------------------
4. Healthcare 10.7
--------------------------------------------------------------------------------
5. Information Technology 10.5
--------------------------------------------------------------------------------
6. Industrials 9.1
--------------------------------------------------------------------------------
7. Consumer Staples 7.8
--------------------------------------------------------------------------------
8. Corporate Obligations 6.6
--------------------------------------------------------------------------------
9. Energy 6.4
--------------------------------------------------------------------------------
10. Telecommunication Services 4.1
--------------------------------------------------------------------------------
TOP TEN HOLDINGS, BY ISSUER
Percent of
Holding Sector Net Assets
--------------------------------------------------------------------------------
1. Government National Mortgage U.S. Government & Agency
Association Obligations 6.7
--------------------------------------------------------------------------------
2. U.S. Treasury Notes U.S. Government & Agency Obligations 5.2
--------------------------------------------------------------------------------
3. KFW International Finance Inc. Corporate Obligations 3.4
--------------------------------------------------------------------------------
4. Wisconsin Electric Power Co. Corporate Obligations 3.2
--------------------------------------------------------------------------------
5. Microsoft Corp. Information Technology 3.0
--------------------------------------------------------------------------------
6. Exxon Mobil Corp. Energy 2.9
--------------------------------------------------------------------------------
7. General Electric Co. Industrials 2.6
--------------------------------------------------------------------------------
8. Wal-Mart Stores, Inc. Consumer Discretionary 2.5
--------------------------------------------------------------------------------
9. Pfizer Inc. Healthcare 2.3
--------------------------------------------------------------------------------
10. American International Group, Inc. Financials 2.2
--------------------------------------------------------------------------------
================================================================================
4
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EIS FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
EQUITY SECURITIES - 80.27%
Closed-End Domestic Funds - 1.34%
Gabelli Global Multimedia .................... 21,700 $ 151,900
John Hancock Bank & Thrift Opportunity Fund .. 30,000 255,300
Petroleum & Resources Corp. .................. 1,700 38,709
----------
445,909
----------
CONSUMER DISCRETIONARY - 10.86%
Carnival Corp. ............................... 2,500 69,225
Clear Channel Communications, Inc.+ .......... 2,500 80,050
Comcast Corp., Special Class A+ .............. 3,200 74,976
CVS Corp. .................................... 2,500 76,500
Delphi Corp. ................................. 2,500 33,000
Eastman Kodak Co. ............................ 2,500 72,925
Ford Motor Co. ............................... 6,100 97,600
Fortune Brands Inc. .......................... 2,500 139,850
Gannett Co., Inc. ............................ 2,500 189,750
Gap, Inc. (The) .............................. 2,900 41,180
General Motors Corp. ......................... 2,500 133,625
Harley-Davidson, Inc. ........................ 2,500 128,175
Hilton Hotels Corp. .......................... 2,500 34,750
Home Depot, Inc. (The) ....................... 7,800 286,494
Limited Brands ............................... 2,500 53,250
Lowe's Companies, Inc. ....................... 2,600 118,040
McDonald's Corp. ............................. 4,500 128,025
Office Depot Inc. ............................ 2,500 42,000
Omnicom Group Inc. ........................... 1,500 68,700
Reebok International Ltd.+ ................... 2,500 73,750
Sears, Roebuck & Co. ......................... 2,500 135,750
Staples, Inc.+ ............................... 2,500 49,250
Starbucks Corp. .............................. 2,500 62,125
Target Corp. ................................. 3,000 111,420
TJX Companies Inc.(The) ...................... 5,000 98,050
Viacom Inc. non-voting Class B+ .............. 6,000 266,220
Wal-Mart Stores, Inc. ........................ 15,000 825,150
Walt Disney Co. (The) ........................ 6,900 130,410
----------
3,620,240
----------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
CONSUMER STAPLES - 7.81%
Albertson's Inc. ............................. 2,500 $ 76,150
Anheuser-Busch Companies, Inc. ............... 3,000 150,000
Archer-Daniels-Midland Co. ................... 2,500 31,975
Coca-Cola Co. (The) .......................... 7,000 392,000
Coca-Cola Enterprises ........................ 2,500 55,200
Colgate-Palmolive Co. ........................ 2,500 125,125
ConAgra Foods, Inc. .......................... 2,500 69,125
General Mills Inc. ........................... 2,500 110,200
Gillette Co. (The) ........................... 3,600 121,932
J.M. Smucker Co.(The) ........................ 68 2,321
Kimberly-Clark Corp. ......................... 2,500 155,000
Kroger Co. (The)+ ............................ 2,700 53,730
PepsiCo, Inc. ................................ 5,900 284,380
Philip Morris Companies Inc. ................. 5,900 257,712
Procter & Gamble Co. (The) ................... 3,400 303,620
Sara Lee Corp. ............................... 2,600 53,664
Sysco Corp. .................................. 2,500 68,050
Unilever NV, NY Shares ....................... 2,500 162,000
Walgreen Co. ................................. 3,400 131,342
----------
2,603,526
----------
ENERGY - 6.38%
ChevronTexaco Corp. .......................... 3,600 318,600
Conoco Inc. .................................. 2,500 69,500
Exxon Mobil Corp. ............................ 23,500 961,620
Halliburton Co. .............................. 2,500 39,850
Occidental Petroleum Corp. ................... 2,500 74,975
Phillips Petroleum Co. ....................... 2,500 147,200
Royal Dutch Petroleum Co., NY Shares ......... 7,200 397,944
Schlumberger Ltd. ............................ 2,500 116,250
----------
2,125,939
----------
================================================================================
See accompanying notes to financial statements.
5
--------------------------------------------------------------------------------
EIS FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 2002 (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
FINANCIALS - 15.04%
AFLAC Inc. ................................... 2,500 $ 80,000
Allstate Corp. (The) ......................... 2,500 92,450
American Express Co. ......................... 5,000 181,600
American International Group, Inc. ........... 10,900 743,707
Bank of America Corp. ........................ 7,700 541,772
Bank of New York Co., Inc. (The) ............. 2,500 84,375
Bank One Corp. ............................... 3,900 150,072
Capital One Financial Corp. .................. 2,500 152,625
Charles Schwab Corp. (The) ................... 4,600 51,520
Citigroup Inc. ............................... 12,400 480,500
Fannie Mae ................................... 3,400 250,750
Fifth Third Bancorp .......................... 2,500 166,625
FleetBoston Financial Corp. .................. 3,500 113,225
Freddie Mac .................................. 2,500 153,000
Hartford Financial Services Group, Inc. (The) . 3,500 208,145
Household International, Inc. ................ 2,500 124,250
John Hancock Financial Services Group, Inc. .. 1,000 35,200
J.P. Morgan Chase & Co. ...................... 6,600 223,872
Marsh & McLennan Companies, Inc. ............. 1,000 96,600
MBNA Corp. ................................... 2,800 92,596
MetLife, Inc. ................................ 2,500 72,000
Morgan Stanley ............................... 3,700 159,396
National City Corp. .......................... 2,500 83,125
U.S. Bancorp ................................. 6,600 154,110
Wachovia Corp. ............................... 5,000 190,900
Washington Mutual, Inc. ...................... 3,200 118,752
Wells Fargo & Co. ............................ 4,200 210,252
----------
5,011,419
----------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
HEALTHCARE - 10.65%
Amgen Inc. ................................... 3,500 $ 146,580
Baxter International Inc. .................... 2,500 111,100
Boston Scientific Corp. ...................... 2,500 73,300
Cardinal Health, Inc. ........................ 2,500 153,525
Eli Lilly & Co. .............................. 3,800 214,320
Genzyme Corp.+ ............................... 2,500 48,100
Guidant Corp. ................................ 2,500 75,575
HCA Inc. ..................................... 2,500 118,750
Johnson & Johnson ............................ 10,000 522,600
Medtronic, Inc. .............................. 4,100 175,685
Merck & Co., Inc. ............................ 10,300 521,592
Pfizer Inc. .................................. 22,000 770,000
Pharmacia Corp. .............................. 4,400 164,780
Schering-Plough Corp. ........................ 2,000 49,200
Tenet Healthcare Corp. ....................... 2,500 178,875
Wyeth ........................................ 4,400 225,280
----------
3,549,262
----------
INDUSTRIALS - 9.08%
3M Co. ....................................... 2,500 307,500
American Power Conversion .................... 2,500 31,575
Boeing Co. (The) ............................. 2,800 126,000
Burlington Northern Santa Fe Corp. ........... 2,500 75,000
Caterpillar Inc. ............................. 2,500 122,375
Cendant Corp.+ ............................... 3,500 55,580
Concord EFS, Inc.+ ........................... 2,500 75,350
Fed Ex Corp. ................................. 2,500 133,500
First Data Corp. ............................. 5,000 188,300
General Electric Co. ......................... 29,300 851,165
Honeywell International Inc. ................. 2,800 98,644
Illinois Tool Works Inc. ..................... 2,500 172,300
Lockheed Martin Corp. ........................ 2,500 173,750
Masco Corp. .................................. 2,500 67,775
Paychex, Inc. ................................ 2,500 78,225
Raytheon Co. ................................. 2,500 101,875
Southwest Airlines Co. ....................... 2,600 42,016
Tyco International Ltd. ...................... 6,600 89,166
United Technologies Corp. .................... 2,500 169,750
Waste Management, Inc. ....................... 2,500 65,125
----------
3,024,971
----------
================================================================================
See accompanying notes to financial statements.
6
--------------------------------------------------------------------------------
EIS FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 2002 (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 10.52%
Agilent Technologies, Inc.+ .................. 2,500 $ 59,700
Analog Devices, Inc.+ ........................ 2,500 74,250
Apple Computer Inc. .......................... 2,500 44,300
Applied Materials, Inc.+ ..................... 5,400 102,708
Cisco Systems, Inc.+ ......................... 17,000 237,150
Computer Associates International, Inc. ...... 2,500 39,725
Corning Inc. ................................. 3,200 11,360
Dell Computer Corp.+ ......................... 8,600 224,804
Electronic Data Systems Corp. ................ 2,500 92,875
Hewlett-Packard Co. .......................... 7,042 107,602
Intel Corp. .................................. 15,200 277,704
International Business Machines Corp. ........ 8,500 612,000
JDS Uniphase Corp.+ .......................... 5,000 13,450
Linear Technology Corp. ...................... 2,500 78,575
Maxim Integrated Products .................... 2,500 95,825
Microsoft Corp.+ ............................. 18,500 1,001,220
Oracle Corp.+ ................................ 13,100 124,057
Sanmina-SCI Corp.+ ........................... 2,500 15,775
Solectron Corp.+ ............................. 2,800 17,220
Texas Instruments Inc. ....................... 6,000 142,200
Transocean Sedco Forex ....................... 2,500 77,875
XEROX Corp. .................................. 2,500 17,425
Yahoo! Inc. + ................................ 2,500 36,900
----------
3,504,700
----------
MATERIALS - 2.08%
Alcoa Inc. ................................... 2,800 92,820
Barrick Gold Corp. ........................... 2,500 47,475
Dow Chemical Co. (The) ....................... 3,000 103,140
E.I. Du Pont de Nemours & Co. ................ 3,500 155,400
International Paper Co. ...................... 2,500 108,950
Placer Dome Inc. ............................. 2,500 28,025
Praxair, Inc. ................................ 1,000 56,970
Rohm & Haas Co. .............................. 2,500 101,225
----------
694,005
----------
No. of Value
Description Shares (Note A)
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 4.11%
Alltel Corp. ................................. 2,500 $ 117,500
AT&T Corp. ................................... 6,000 64,200
BellSouth Corp. .............................. 6,300 198,450
SBC Communications Inc. ...................... 16,400 500,200
Verizon Communications Inc. .................. 12,200 489,830
----------
1,370,180
----------
UTILITIES - 2.40%
American Electric Power Co., Inc. ............ 2,500 100,050
Dominion Resources, Inc. ..................... 2,500 164,950
Duke Energy Corp. ............................ 3,000 93,300
Edison International+ ........................ 2,500 42,500
FirstEnergy Corp. ............................ 2,500 83,450
Mirant Corp.+ ................................ 2,500 18,250
Reliant Energy, Inc. ......................... 2,500 42,250
Southern Co. (The) ........................... 2,500 68,500
TXU Corp. .................................... 2,500 128,500
Williams Companies, Inc. (The) ............... 2,500 14,975
Xcel Energy, Inc. ............................ 2,500 41,925
----------
798,650
----------
Total Equity Securities
(cost - $29,777,992) ......................... 26,748,801
----------
Principal
Amount
(000's)
-------
FIXED INCOME SECURITIES - 18.49%
U.S. GOVERNMENT & Agency Obligations - 11.89%
Government National Mortgage Association - 6.71%
7.00%, 04/15/23 ...................... $ 595 623,002
7.00%, 05/15/22 ...................... 141 147,938
7.50%, 12/15/25 ...................... 274 291,489
8.00%, 08/15/24 ...................... 332 355,455
8.00%, 01/15/25 ...................... 208 222,482
8.50%, 07/15/17 ...................... 238 259,000
8.50%, 05/15/21 ...................... 63 68,312
10.00%, 01/15/18 ..................... 239 268,223
----------
2,235,901
----------
================================================================================
See accompanying notes to financial statements.
7
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EIS FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 2002 (UNAUDITED) (CONCLUDED)
--------------------------------------------------------------------------------
Principal
Amount Value
Description (000's) (Note A)
--------------------------------------------------------------------------------
U.S. TREASURY NOTES - 5.18%
3.00%, 01/31/04 .............................. $ 600 $ 603,913
3.00%, 02/29/04 .............................. 500 502,910
3.625%, 03/31/04 ............................. 400 406,184
6.00%, 08/15/04 .............................. 200 212,473
----------
1,725,480
----------
TOTAL U.S. GOVERNMENT &
Agency Obligations - ......................... 3,961,381
----------
CORPORATE OBLIGATIONS - 6.60%
KFW International Finance Inc., Notes 7.20%
03/15/14 ................................ 1,000 1,138,180
Wisconsin Electric Power Co., 7.25%,
08/01/04 ................................ 1,000 1,063,050
----------
TOTAL CORPORATE OBLIGATIONS .................. 2,201,230
----------
TOTAL FIXED INCOME SECURITIES
(cost - $5,820,007) ..................... 6,162,611
----------
SHORT-TERM INVESTMENT - 0.92%
REPURCHASE AGREEMENT - 0.92%
Bear, Stearns & Co. Inc.
(Agreement dated 06/28/02 to
be repurchased at $307,752)
1.92%, 07/01/02
(cost - $307,703) ....................... 308 307,703
----------
TOTAL INVESTMENTS - 99.68%
(cost - $35,905,702) (Notes A, C) ............ 33,219,115
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES - 0.32% .......................... 105,504
----------
Net Assets - 100.00% ......................... $33,324,619
===========
+ Non-income producing security
================================================================================
See accompanying notes to financial statements.
8
--------------------------------------------------------------------------------
EIS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost $35,905,702) (Note A) .................... $ 33,219,115
Cash collateral received for securities loaned (Note E) ............... 680,405
Receivables:
Interest ...................................................... 87,043
Dividends ..................................................... 33,723
Reclaims ...................................................... 47
Prepaid expenses and other assets ..................................... 32,277
------------
Total Assets .......................................................... 34,052,610
------------
LIABILITIES
Payables:
Upon return of securities loaned (Note E) ..................... 680,405
Investment management fees (Note B) ........................... 19,815
Directors fees ................................................ 10,251
Other accrued expenses ........................................ 17,520
------------
Total Liabilities ..................................................... 727,991
------------
NET ASSETS (applicable to 2,174,766 shares of common stock outstanding) $ 33,324,619
============
NET ASSET VALUE PER SHARE ($33,324,619 ./. 2,174,766) ................. $ 15.32
============
NET ASSETS CONSISTS OF
Capital stock, $0.01 par value; 2,174,766 shares issued and outstanding
(15,000,000 shares authorized) ................................ $ 21,748
Paid-in capital ....................................................... 38,949,860
Distributions in excess of net investment income ...................... (1,884,677)
Accumulated net realized loss on investments .......................... (1,075,725)
Net unrealized depreciation in value of investments ................... (2,686,587)
------------
Net assets applicable to shares outstanding ........................... $ 33,324,619
============
================================================================================
See accompanying notes to financial statements.
9
--------------------------------------------------------------------------------
EIS FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME Income (Note A):
Dividends .............................................. $ 193,011
Interest ............................................... 339,604
Less: Foreign taxes withheld ........................... (928)
-----------
Total Investment Income ................................ 531,687
-----------
Expenses:
Investment management fees (Note B) .................... 185,243
Audit and legal fees (Note B) .......................... 56,258
Printing ............................................... 29,143
Administration fees .................................... 24,795
Directors' fees ........................................ 18,680
Accounting fees ........................................ 13,940
NYSE listing fees ...................................... 12,607
Transfer agent fees .................................... 11,511
Custodian fees ......................................... 7,638
Insurance .............................................. 5,266
Other .................................................. 2,544
-----------
Total Expenses ......................................... 367,625
Less: Fees paid indirectly (Note B) ................... (32,432)
Less: Management fee waivers .......................... (60,569)
-----------
Net Expenses ................................... 274,624
-----------
Net Investment Income .................................. 257,063
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss from investments ............................. (984,593)
Net change in unrealized appreciation in value of investments .. (3,558,861)
-----------
Net realized and unrealized loss on investments ................ (4,543,454)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $(4,286,391)
===========
================================================================================
See accompanying notes to financial statements.
10
--------------------------------------------------------------------------------
EIS FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Six For the
Months ended Year Ended
June 30, 2002 December 31,
(unaudited) 2001
DECREASE IN NET ASSETS
Operations:
Net investment income ................................................... $ 57,063 $ 1,138,302
Net realized gain/(loss) on investments ................................. (984,593) 311,603
Net change in unrealized appreciation in value of investments ........... (3,558,861) 221,216
------------ -----------
Net increase/decrease in net assets resulting from operations ... (4,286,391) 1,671,121
------------ -----------
Dividends and distributions to shareholders (Note A):
Net investment income ................................................... (246,991) (1,444,190)
In excess of net investment income ...................................... (1,894,749) (182,628)
------------ -----------
Total dividends and distributions to shareholders ....................... (2,141,740) (1,626,818)
------------ -----------
Capital stock transactions (Note D):
Proceeds from 13,675 shares newly issued in reinvestment of distributions 205,270 --
Cost of shares repurchased .............................................. -- (136,980)
------------ -----------
Net increase/(decrease) in net assets resulting from capital
stock transactions ...................................................... 205,270 (136,980)
------------ -----------
Total decrease in net assets ............................................ (6,222,861) (92,677)
------------ -----------
NET ASSETS
Beginning of period ............................................................. 39,547,480 39,640,157
------------ -----------
End of period ................................................................... $ 33,324,619 $ 39,547,480
============ ============
================================================================================
See accompanying notes to financial statements.
11
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EIS FUND, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
--------------------------------------------------------------------------------
For the Six
Months Ended
June 30, 2002 For the Years Ended December 31,
(unaudited) 2001 2000 1999 1998 1997
----------- ---- ---- ---- ---- ----
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of period ................ $ 18.30 $ 18.28 $ 17.62 $ 18.78 $ 18.52 $ 18.23
--------- --------- ---------- --------- --------- ---------
Net investment income ............................... 0.12 0.52 1.07 1.03 1.06 1.08
Net realized and unrealized gain/(loss)
on investments ...................................... (2.10) 0.24 0.63 (1.20) 0.23 0.38
--------- --------- ---------- --------- --------- ---------
Net increase/(decrease) in net assets
resulting from operations ........................... (1.98) 0.76 1.70 (0.17) 1.29 1.46
--------- --------- ---------- --------- --------- ---------
Dividends and distributions to shareholders:
Net investment income ....................... (0.12) (0.66) (1.05) (1.01) (1.03) (1.17)
Net realized gain on investments ............ -- (0.09) -- -- -- --
In excess of net investment income .......... (0.87) -- -- -- -- --
--------- --------- ---------- --------- --------- ---------
Total dividends and distributions to
shareholders ........................................ (0.99) (0.75) (1.05) (1.01) (1.03) (1.17)
--------- --------- ---------- --------- --------- ---------
Capital stock transactions:
Anti-dilutive effect due to capital
shares repurchased .......................... -- 0.01 0.01 0.02 -- --
Dilutive effect due to shares newly issued in
reinvestment of distributions ............... (0.01) -- -- -- -- --
--------- --------- ---------- --------- --------- ---------
Total capital stock transactions .................... (0.01) 0.01 0.01 0.02 -- --
--------- --------- ---------- --------- --------- ---------
Net asset value, end of year ........................ $ 15.32 $ 18.30 $ 18.28 $ 17.62 $ 18.78 $ 18.52
========= ========= ========== ========= ========= =========
Market value, end of year ........................... $ 14.25 $ 16.290 $ 15.875 $ 14.250 $ 16.560 $ 16.750
========= ========= ========== ========= ========= =========
Total investment return (a) ......................... (6.75)% 8.91% 19.02% (8.39)% 5.55% 14.51%
========= ========= ========== ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) .... $ 33,325 $ 39,547 $ 39,640 $ 38,283 $ 41,069 $ 40,490
Ratio of expenses to average net assets,
excluding fee waivers and fees paid
indirectly, if any .......................... 1.98%(b)(c) 3.01% 1.06% 1.05% 0.97% 1.08%
Ratio of net investment income to
average net assets .................. 1.39%(c) 2.77% 5.97% 5.60% 5.62% 5.89%
Portfolio turnover .......................... 69.27% 0.00% 15.87% 16.09% 15.88% 2.91%
---------------
(a) Total investment return at market value is based on the changes
in market price of a share during the period and assumes reinvestment
of dividends and distributions, if any, at actual prices pursuant to
the Fund's dividend reinvestment plan. Total investment return does
not reflect brokerage commissions or initial underwriting discounts
and has not been annualized.
(b) Ratio of expenses to average net assets, net of fee waivers and
of fees paid indirectly is 1.48%.
(c) Annualized.
================================================================================
See accompanying notes to financial statements.
12
--------------------------------------------------------------------------------
EIS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
EIS Fund, Inc. (the "Fund") was incorporated on March 16, 1973 and commenced
investment operations on May 15, 1973. As a result of a Special Meeting of
Stockholders held on December 27, 2001, the Fund, formerly known as the
Excelsior Income Shares, Inc., (d/b/a EIS Fund) changed its name. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
closed-end, diversified management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires management to make certain estimates and assumptions that may affect
the reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All equity securities shall be valued at the closing price
on the exchange or market on which the security is primarily traded ("Primary
Market"). If the security did not trade on the Primary Market, it shall be
valued at the closing price on another exchange where it trades. If there are no
such sale prices, the value shall be the most recent bid, and if there is no
bid, the security shall be valued at the most recent asked. If no pricing
service is available and there are more than two dealers, the value shall be the
mean of the highest bid and lowest ask. If there is only one dealer, then the
value shall be the mean if bid and ask are available, otherwise the value shall
be the bid. All other securities and assets are valued as determined in good
faith by the Board of Directors. Short-term investments having a maturity of 60
days or less are valued on the basis of amortized cost. The Board of Directors
has established general guidelines for calculating fair value of not readily
marketable securities. At June 30, 2002, the Fund held no securities valued in
good faith by the Board of Directors. The net asset value per share of the Fund
is calculated weekly and on the last business day of the month with the
exception of those days on which the New York Stock Exchange is closed.
REPURCHASE AGREEMENTS: The Fund has agreed to purchase securities from financial
Institutions subject to the sellers agreement to repurchase them at an
agreed-upon time and price ("repurchase agreements"). The financial institutions
with whom the Fund enters into repurchase agreements are banks and
broker/dealers, which Cornerstone Advisors, Inc. (the Fund's "Manager" or
"Cornerstone") considers creditworthy. The seller under a repurchase agreement
will be required to maintain the value of the securities as collateral, subject
to the agreement at not less than the repurchase price plus accrued interest.
Cornerstone monitors daily the mark-to-market of the value of the collateral,
and, if necessary, requires the seller to maintain additional securities, so
that the value of the collateral is not less than the repurchase price. Default
by or bankruptcy of the seller would, however, expose the Fund to possible loss
because of adverse market action or delays in connection with the disposition of
the underlying securities.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
Beginning January 1, 2001, the revised AICPA Audit and Accounting Guide, Audits
of Investment Companies (the "Guide"), requires funds to begin to amortize all
premiums and accrete all discounts on fixed income securities. Upon initial
adoption on January 1, 2001, the cumulative net amount of accretion that would
have been recognized had amortization/accretion been in effect from the purchase
date of each holding through December 31, 2000 was immaterial. The impact of the
change was also immaterial to the Fund's net investment income, net unrealized
appreciation of investments and net realized gain on investments for the year
ended December 31, 2001.
================================================================================
13
--------------------------------------------------------------------------------
EIS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
--------------------------------------------------------------------------------
The revised Guide also requires funds to classify gains and losses realized on
the paydown of mortgage-backed securities as an adjustment to interest income on
its statement of operations. Such net paydown gains, which had been previously
included as a part of realized gain/loss from security transactions, amounted to
$7,348 in 2001.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
The Fund had a capital loss carryforward on December 31, 2001 of $91,132 which
expires in 2008. Differences between capital loss carryforwards on a book and
tax basis primarily relate to timing of the recognition of losses for U.S.
federal income tax purposes. There is no undistributed ordinary income on a tax
basis.
DISTRIBUTIONS OF INCOME AND GAINS: Effective January 2002, the Fund initiated a
fixed, monthly distribution to shareholders. To the extent that these
distributions exceed the current earnings of the Fund, the balance will be
generated from sales of portfolio securities held by the Fund, which will either
be short-term or long-term capital gains or a tax-free return of capital. Prior
thereto, the Fund distributed at least annually to shareholders, substantially
all of its net investment income and net realized short-term capital gains, if
any. The Fund determines annually whether to distribute any net realized
long-term capital gains in excess of net realized short-term capital losses,
including capital loss carryovers, if any. An additional distribution may be
made to the extent necessary to avoid the payment of a 4% U.S. federal excise
tax. Dividends and distributions to shareholders are recorded by the Fund on the
ex-dividend date. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for U.S. federal income tax purposes due to U.S. generally
accepted accounting principles/tax differences in the character of income and
expense recognition.
NOTE B. AGREEMENTS
Cornerstone Advisors, Inc. ("Cornerstone") serves as the Fund's investment
manager with respect to all investments. As compensation for its management
services, Cornerstone receives from the Fund an annual fee, calculated weekly
and paid monthly, equal to 1.00% of the Fund's average weekly net assets.
Through December 31, 2002, Cornerstone has voluntarily agreed to limit the
Fund's annual operating expenses (excluding interest, taxes, brokerage
commissions, legal fees, expenditures which are capitalized in accordance with
generally accepted accounting principles, and other extraordinary expenses not
incurred in the ordinary course of such Fund's business) to 1.50% of the first
$30,000,000 of annual average net assets, and 1% of average annual net assets in
excess of $30,000,000. For the six, months ended Cornerstone earned $185,243 for
investment management services, of which Cornerstone waived $60,569.
Included in the Statement of Operations, under the caption Fees paid indirectly,
are expense offsets of $32,432 arising from credits earned on portfolio
transactions executed with a broker, pursuant to a directed brokerage
arrangement.
The Fund paid or accrued approximately $32,400 for the six months ended June 30,
2002 for legal services to Spitzer & Feldman P.C., counsel to the Fund. Mr.
Westle, a partner of the firm, serves as secretary of the Fund.
At June 30, 2002, pursuant to regulatory filings, a single shareholder and his
affiliates owned approximately 34% of the outstanding shares of the Fund based
on a Schedule 13G/A filing with the Securities and Exchange Commission on
February 15, 2002.
================================================================================
14
--------------------------------------------------------------------------------
EIS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
--------------------------------------------------------------------------------
NOTE C. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at June 30,
2002 was $36,001,682. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currency) of
$2,782,567 was composed of gross appreciation of $972,183 for those investments
having an excess of value over cost and gross depreciation of $3,754,750 for
those investments having an excess of cost over value.
For the six months ended June 30, 2002, purchases and sales of securities, other
than short-term investments, were $38,107,775 and $22,610,673 respectively.
NOTE D. SHARE REPURCHASE PROGRAM
Pursuant to Section 23 of the Investment Fund Act of 1940, the Fund may in the
future purchase shares of its own common stock on the open market from time to
time, at such times, and in such amounts as may be deemed advantageous to the
Fund. Nothing herein shall be considered a commitment to purchase such shares.
For the year ended December 31, 2001, the Fund purchased 8,000 shares in the
open market at a cost of $136,980. These purchases were made at a weighted
average discount to net asset value of 19.59%. No limit has been placed on the
number of shares to be purchased by the Fund other than those imposed by federal
securities laws. All purchases will be made in accordance with federal
securities laws, with shares repurchased held in treasury. There were no share
repurchases for the six months ended June 30, 2002.
NOTE E. SECURITIES LENDING
To generate additional income, the Fund may lend up to 331/3% of its total
assets. The Fund receives payments from borrowers equivalent to the dividends
and interest that would have been earned on securities lent while simultaneously
seeking to earn interest on the investment of cash collateral. Loans are subject
to termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments. Loans of securities are required at all
times to be secured by collateral equal to at least 100% of the market value of
securities on loan. However, in the event of default or bankruptcy of the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings. In the event that the borrower fails to return
securities, and collateral maintained by lender is insufficient to cover the
value of loaned securities, the borrower is obligated to pay the amount of the
shortfall (and interest thereon) to the Fund. However, there can be no assurance
the Fund can recover this amount. The value of securities on loan to brokers and
the related collateral received at June 30, 2002, were $630,027 and $680,405,
respectively. Any cash collateral received is reinvested into repurchase
agreements, which in turn are collateralized by various U.S. Government and
Agency securities.
During the six months ended June 30, 2002, the Fund earned $225 in securities
lending income which is included under the caption Interest in the Statement of
Operations.
NOTE F. COLLATERAL FOR REPURCHASE AGREEMENT
Listed below is the collateral associated with the repurchase agreement with
Bear, Stearns & Co. Inc. outstanding at June 30, 2002.
PRINCIPAL
AMOUNT MARKET
ISSUER (000'S) MATURITY VALUE
------ ------- -------- -----
Federal Home Loan Mortgage
Corp. (interest only) $6,110 5/15/31 $683,717
NOTE G. SUBSEQUENT EVENTS
Effective July 1, 2002, Cornerstone has voluntarily agreed to waive its
management fees to the Fund to the extent that monthly operating expenses exceed
0.1% of net assets, calculated monthly.
On August 2, 2002 the Fund's Board of Directors approved the merger (the
"Merger") of The Cornerstone Strategic Return Fund, Inc. ("CRF") with and into
the Fund. If the Merger receives shareholder approval, CRF will cease to exist
and the Fund will be the surviving legal corporation and substantially all of
the shares of common stock of CRF will be converted into an equivalent dollar
================================================================================
15
--------------------------------------------------------------------------------
EIS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
--------------------------------------------------------------------------------
amount of full shares of common stock of the Fund based on the relative net
asset value of the Fund and CRF. The Fund will not issue any fractional shares
to CRF shareholders that do not participate, in its dividend reinvestment plan.
The Fund's transfer agent will aggregate the fractional shares, sell the
resulting full shares on the New York Stock Exchange at the current market price
for the shares and remit the cash proceeds to CRF's shareholders in proportion
to their fractional shares. Consummation of the Merger is subject to a number of
conditions, including shareholder approval and certain regulatory approvals.
Upon consummation of the Merger, the Fund expects to change its name to
"Cornerstone Total Return Fund, Inc."
Effective August 12, 2002, the Fund has entered into a Securities Services
Agreement with Fifth Third Bank (which was approved by the Board of Directors on
August 2, 2002) to act in the capacity of the Fund's stock transfer agent and
registrar.
================================================================================
16
RESULTS OF ANNUAL MEETING OF STOCKHOLDERS (UNAUDITED)
On April 18, 2002, the Annual Meeting of Stockholders of EIS Fund, Inc. (the
"Fund") was held and the following matters were voted upon:
(1) To elect the following Directors of the Fund:
Directors For Against
Ralph W. Bradshaw 1,780,735 95,422
Gary A. Bentz 1,780,935 95,222
Andrew A. Strauss 1,837,918 38,239
Glenn W. Wilcox 1,839,926 36,231
Scott B. Rogers 1,837,478 38,679
(1) To ratify the selection of Tait, Weller & Baker as independent accountants
for the year ending December 31, 2002.
For Against Abstain
1,834,833 27,119 14,205
================================================================================
17
DESCRIPTION OF DIVIDEND REINVESTMENT & CASH PURCHASE PLAN (UNAUDITED)
Shareholders who have Shares registered directly in their own names
automatically participate in the Fund's Dividend Reinvestment & Cash Purchase
Plan (the "Plan"), unless and until an election is made to withdraw from the
Plan on behalf of such participating shareholders. Shareholders who do not wish
to have distributions automatically reinvested should so notify Fifth Third
Bank, (the "Agent"), Corporate Trust Operations, at 38 Fountain Square Plaza,
Mail Drop - 10AT66-3212, Cincinnati, OH 45202. Under the Plan, all of the Fund's
dividends and other distributions to shareholders are reinvested in full and
fractional Shares as described below.
When the Fund declares an income dividend or a capital gain or other
distribution (each, a "Dividend" and collectively, "Dividends"), the Agent, on
the shareholders' behalf, will: (i) receive additional authorized shares from
the Fund either newly issued or repurchased from shareholders by the Fund and
held as treasury stock ("Newly Issued Shares") or, (ii) at the sole discretion
of the Board of Directors, be authorized to purchase outstanding shares on the
open market, on the NYSE or elsewhere, with cash allocated to it by the Fund
("Open Market Purchases").
Shares acquired by the Agent in Open Market Purchases will be allocated to the
reinvesting shareholders based on the average cost of such Open Market
Purchases. Alternatively, the Agent will allocate Newly Issued Shares to the
reinvesting shareholders at a price equal to the average closing price of the
Fund over the five trading days preceding the payment date of such dividend.
Registered shareholders who acquire their shares through Open Market Purchases
and who do not wish to have their Dividends automatically reinvested should so
notify the Fund in writing. If a Shareholder has not elected to receive cash
Dividends and the Agent does not receive notice of an election to receive cash
Dividends prior to the record date of any Dividend, the shareholder will
automatically receive such Dividends in additional Shares.
Participants in the Plan may withdraw from the Plan by providing written notice
to the Agent at least 30 days prior to the applicable Dividend payment date.
When a participant withdraws from the Plan, or upon termination of the Plan as
provided below, certificates for whole shares credited to his/her account under
the Plan will, upon request, be issued. Whether or not a participant requests
that certificates for whole shares be issued, a cash payment will be made for
any fraction of a Share credited to such account.
The Agent will maintain all shareholder accounts in the Plan and furnish written
confirmations of all transactions in the accounts, including information needed
by shareholders for personal and tax records. The Agent will hold shares in the
account of each Plan participant in non-certificated form in the name of the
participant, and each shareholder's proxy will include those shares purchased
pursuant to the Plan. Each participant, nevertheless, has the right to receive
certificates for whole shares owned. The Agent will distribute all proxy
solicitation materials to participating shareholders.
In the case of shareholders, such as banks, brokers or nominees, that hold
shares for others who are beneficial owners participating in the Plan, the Agent
will administer the Plan on the basis of the number of shares certified from
time to time by the record shareholder as representing the total amount of
shares registered in the Shareholder's name and held for the account of
beneficial owners participating in the Plan.
There will be no charge to participants for reinvesting Dividends other than
their share of brokerage commissions as discussed below. The Agent's fees for
administering the Plan and handling the reinvestment of Dividends will be paid
by the Fund. Each participant's account will be charged a pro-rata share of
brokerage commissions incurred with respect to the Agent's Open Market Purchases
in connection with the reinvestment of Dividends. Brokerage charges for
purchasing small amounts of shares for individual accounts through the Plan are
expected to be less than the usual brokerage charges for such transactions
because the Agent will be purchasing shares for all the participants in blocks
and pro-rating the lower commission that may be attainable.
================================================================================
18
The automatic reinvestment of Dividends will not relieve participants of any
income tax that may be payable on such Dividends. Participants who receive
shares pursuant to the Plan as described above will recognize taxable income in
the amount of the fair market value of those shares. In the case of non-U.S.
participants whose Dividends are subject to U.S. income tax withholding and in
the case of participants subject to 30% federal backup withholding, the Agent
will reinvest Dividends after deduction of the amount required to be withheld.
The Fund reserves the right to amend or terminate the Plan by written notice to
participants. All correspondence concerning the Plan should be directed to the
Agent at the address referred to in the first paragraph of this section.
================================================================================
19
SUMMARY OF GENERAL INFORMATION
The Fund - EIS Fund, Inc. is a closed-end, diversified investment company whose
shares trade on the New York Stock Exchange. Its investment objective is to seek
total return, consisting of capital appreciation and current income by investing
primarily all of its assets in equity securities of U.S. and non-U.S. issuers
whose securities trade on a U.S. securities exchange or over the counter or as
American Depositary Receipts or other forms of depositary receipts which trade
in the United States. The Fund is managed by Cornerstone Advisors, Inc.
SHAREHOLDER INFORMATION
The Fund is listed on the New York Stock Exchange (symbol "EIS"). The share
price is published in: The New York Times (daily) under the designation "EIS Fd"
and The Wall Street Journal (daily) and Barron's (each Monday) under the
designation "EIS Fund." The net asset value per share is published under
"Closed-End Funds" each Sunday in The New York Times and each Monday in The Wall
Street Journal and Barron's under the designation "EIS Fund."
--------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, THAT EIS FUND, INC. MAY FROM TIME TO TIME
PURCHASE SHARES OF ITS CAPITAL STOCK IN THE OPEN MARKET.
--------------------------------------------------------------------------------
================================================================================
20
PRIVACY POLICY NOTICE
The following is a description of EIS Fund, Inc.'s (the "Fund") policies
regarding disclosure of nonpublic personal information that you provide to the
Fund or that the Fund collects from other sources. In the event that you hold
shares of the Fund through a broker-dealer or other financial intermediary, the
privacy policy of the financial intermediary would govern how your nonpublic
personal information would be shared with unaffiliated third parties.
CATEGORIES OF INFORMATION THE FUND COLLECTS. The Fund collects the following
nonpublic personal information about you:
1. Information from the Consumer: this category includes information the
Fund receives from you on or in applications or other forms,
correspondence, or conversations (such as your name, address, phone
number, social security number, assets, income and date of birth); and
2. Information about the Consumer's transactions: this category includes
information about your transactions with the Fund, its affiliates, or
others (such as your account number and balance, payment history,
parties to transactions, cost basis information, and other financial
information).
CATEGORIES OF INFORMATION THE FUND DISCLOSES. The Fund does not disclose any
nonpublic personal information about their current or former shareholders to
unaffiliated third parties, except as required or permitted by law. The Fund is
permitted by law to disclose all of the information it collects, as described
above, to its service providers (such as the Fund's custodian, administrator and
transfer agent) to process your transactions and otherwise provide services to
you.
CONFIDENTIALITY AND SECURITY. The Fund restricts access to your nonpublic
personal information to those persons who require such information to provide
products or services to you. The Fund maintains physical, electronic and
procedural safeguards that comply with federal standards to guard your nonpublic
personal information.
================================================================================
21
DIRECTORS AND CORPORATE OFFICERS
Ralph W. Bradshaw Chairman of the Board of
Directors and President
Gary A. Bentz Director, Vice President
and Treasurer
Scott B. Rogers Director
Andrew A. Strauss Director
Glenn W. Wilcox, Sr. Director
Thomas R. Westle Secretary
INVESTMENT MANAGER STOCK TRANSFER AGENT AND
Cornerstone Advisors, Inc. REGISTRAR
One West Pack Square Fifth Third Bank
Suite 1650 Corporate Trust Operations
Asheville, NC 28801 38 Fountain Square Plaza
Mail Drop #10AT66-3212
ADMINISTRATOR Cincinnati, OH 45202
Bear Stearns Funds
Management Inc. INDEPENDENT ACCOUNTANTS
383 Madison Avenue Tait, Weller & Baker
New York, NY 10179 8 Penn Center
Philadelphia, PA 19103
CUSTODIAN
Custodial Trust Company LEGAL COUNSEL
101 Carnegie Center Spitzer & Feldman P.C.
Princeton, NJ 08540 405 Park Avenue
New York, NY 10022
EXECUTIVE OFFICES
383 Madison Avenue
New York, NY 10179
For shareholder inquiries, registered shareholders should call (800) 837-2755.
For general inquiries, please call (212) 272-2093.
EIS
LISTED
NYSE(R)
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund without examination by
independent accountants who do not express an opinion thereon. It is not a
prospectus, circular or representation intended for use in the purchase or sale
of shares of the Fund or of any securities mentioned in this report.
EIS FUND, INC.