<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
(FILE NO. 33-99080)
PRE-EFFECTIVE AMENDMENT NO. 1 /X/
POST-EFFECTIVE AMENDMENT NO. __ / /
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
(FILE NO. 811-09128)
AMENDMENT NO. 1 /X/
(CHECK APPROPRIATE BOX OR BOXES.)
------------------------
JUNDT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(Address of Principal Executive Offices) (Zip Code)
(612) 541-0677
(Registrant's Telephone Number, including Area Code)
JAMES R. JUNDT
JUNDT ASSOCIATES, INC.
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(Name and Address of Agent for Service)
COPY TO:
JAMES E. NICHOLSON
FAEGRE & BENSON
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
2200 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM AMOUNT MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING BEING OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Shares, par value $.01
per share.................... * * * $500.00**
</TABLE>
* Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940,
Jundt Funds, Inc. hereby elects to register an indefinite number of shares of
its Common Stock.
** Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
<TABLE>
<CAPTION>
ITEM NO. CAPTION IN PROSPECTUS
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
1 Cover page
2 Fees and Expenses
3 Not applicable
4 The Fund; Investment Objective and Policies; Purchase Information
5 Management of the Fund
5A Not applicable
6 The Fund; Purchase Information; How to Buy Fund Shares; Dividends, Distributions and Taxes; General
Information
7 Purchase Information; How to Buy Fund Shares; Determination of Net Asset Value
8 How to Redeem Fund Shares; Determination of Net Asset Value
9 Not applicable
CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------------------------------
10 Cover page
11 Table of Contents
12 Not applicable
13 Investment Objective, Policies and Restrictions
14 Directors and Officers
15 General Information
16 Advisory, Administrative and Distribution Agreements
17 Advisory, Administrative and Distribution Agreements
18 General Information; Financial and Other Information
19 Special Purchase Plans; Monthly Cash Withdrawal Plan; Determination of Net Asset Value
20 Taxes
21 Advisory, Administrative and Distribution Agreements
22 Calculation of Performance Data
23 Financial and Other Information; Financial Statements
</TABLE>
i
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART A
PROSPECTUS OF
JUNDT U.S. EMERGING GROWTH FUND
AND
PROSPECTUS SUPPLEMENT FOR CLASS A SHARES ONLY
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
------------------
Jundt U.S. Emerging Growth Fund (the "Fund") is a professionally managed,
diversified series of Jundt Funds, Inc. (the "Company"), an open-end management
investment company, commonly known as a "mutual fund." The Company currently
offers its shares in one series (Series A, which represent interests in the
Fund) and the Fund, in turn, currently offers its shares in four classes (Class
A, Class B, Class C and Class D), each sold pursuant to different sales
arrangements and bearing different expenses (each, a "Class" and, collectively,
the "Classes.") This Prospectus relates only to the Fund's Class B, Class C and
Class D shares, the only Classes offered for sale to the general public. See
"Purchase Information."
The Fund's investment objective is to provide long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities of
emerging growth companies that are believed by the Fund's investment adviser,
Jundt Associates, Inc. (the "Investment Adviser"), to have significant potential
for growth in revenue and earnings. Income is not a consideration in the
selection of investments and is not an investment objective of the Fund. Like
all mutual funds, attainment of the Fund's investment objective cannot be
assured. See "Investment Objective and Policies."
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Please read this Prospectus
carefully before investing and retain it for future reference. A Statement of
Additional Information, dated December 29, 1995, containing more information
about the Fund (which is incorporated herein by reference), has been filed with
the Securities and Exchange Commission (the "SEC") and is available upon request
and without charge by calling the Fund at the telephone number listed above.
AN INVESTMENT IN THE FUND INVOLVES CERTAIN RISKS, AS DESCRIBED UNDER
"INVESTMENT OBJECTIVE AND POLICIES." FUND SHARES ARE NOT OBLIGATIONS, DEPOSITS
OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANKING INSTITUTION, ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC")
OR ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT RISK INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
AS WITH ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
PROSPECTUS DATED DECEMBER 29, 1995
<PAGE>
THE FUND
The Fund is a professionally managed, diversified series of the Company, an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Fund was
incorporated under the laws of the State of Minnesota on October 26, 1995. The
Fund's principal business address is 1550 Utica Avenue South, Suite 950,
Minneapolis, Minnesota 55416.
PURCHASE INFORMATION
The Fund offers investors the choice among three Classes of shares (Class B,
Class C and Class D), which offer different sales charges and bear different
expenses. See "Fees and Expenses" below. These alternatives permit an investor
to choose the method of purchasing shares that is most beneficial, given the
amount of the purchase, the length of time the investor expects to hold the
shares and other circumstances. AS MORE FULLY DISCUSSED BELOW, CLASS A SHARES
ARE OFFERED FOR SALE EXCLUSIVELY TO CERTAIN SPECIFIED INVESTORS AND ARE NOT
OFFERED FOR SALE TO THE GENERAL PUBLIC.
Investors making investments that, based upon the amount of the investment,
would qualify for reduced Class D sales charges may wish to consider Class D
shares, as opposed to Class B or Class C shares, which bear higher Rule 12b-1
charges. Other investors may wish to consider Class B or Class C shares because
all of the purchase price is invested immediately. Orders for Class B shares for
$250,000 or more will be treated as orders for Class D shares or declined. Sales
personnel may receive different compensation depending on which Class of shares
they sell.
Class A shares are available for investments only by: (a) directors,
officers, employees and consultants of the Fund (including partners and
employees of outside legal counsel to the Fund), the Investment Adviser and the
Fund's principal distributor, U.S. Growth Investments, Inc. (the "Distributor"),
members of their immediate families, and their direct lineal ancestors and
descendants; and (b) accounts for the benefit of any of the foregoing.
2
<PAGE>
FEES AND EXPENSES
The following fee and expense summary format was developed for use by all
mutual funds to assist investors in making investment decisions. Of course,
investors contemplating an investment in Fund shares should also consider other
relevant factors, including the Fund's investment objective and historical
performance.
<TABLE>
<CAPTION>
CLASS B(A) CLASS C CLASS D
---------- -------- --------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases....... NONE(b) NONE(b) 5.25%
Sales Charge Imposed on Dividend
Reinvestments.................................. NONE NONE NONE
Maximum Deferred Sales Load (as a percentage of
original purchase price or redemption proceeds,
whichever is lower) (c)........................ 4.00% 1.00% 1.00%(d)
Annual Fund Operating Expenses (as a percentage of
average net assets):
Investment Advisory Fees (e).................... 1.00% 1.00% 1.00%
12b-1 Fees:
Account Maintenance Fees...................... 0.25% 0.25% 0.25%
Distribution Fees............................. 0.75%(b) 0.75%(b) NONE
Other Expenses:
Administrative Fees........................... 0.20% 0.20% 0.20%
Shareholder Servicing Costs................... 0.28% 0.28% 0.26%
Other (f)..................................... 0.12% 0.12% 0.09%
---------- -------- --------
Total Fund Operating Expenses (f)................. 2.60% 2.60% 1.80%
---------- -------- --------
---------- -------- --------
</TABLE>
- ------------------------
(a) Class B shares will convert automatically into Class D shares on their
designated conversion date (the 15th day of each month or the next business
day if the 15th is not a business day) immediately following the eighth
anniversary of their sale. See "How to Buy Fund Shares."
(b) Class B and Class C shares are sold without a front-end sales charge;
however, their higher 12b-1 fees may cause long-term Class B and Class C
shareholders to pay more than the economic equivalent of the maximum
permitted front-end sales charges.
(c) In addition to any applicable deferred sales loads, service agents may
charge a nominal fee for effecting redemptions of Fund shares.
(d) A contingent deferred sales charge of 1% is imposed on certain redemptions
of Class D shares that were purchased without an initial sales charge as
part of an investment of $1 million or more. See "How to Buy Fund Shares --
Class D Shares."
(e) The fee paid by the Fund to the Investment Adviser is higher than the
advisory fee paid by most other investment companies.
(f) Net of voluntary expense reimbursements by the Investment Adviser.
EXAMPLE:
Investors would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:
<TABLE>
<CAPTION>
CLASS B CLASS C CLASS D (1)
----------- ----------- -------------
<S> <C> <C> <C>
One year...................................................... $ 66 $ 36 $ 70
Three years................................................... 111 81 106
</TABLE>
- ------------------------
(1) Numbers do not reflect the 1% contingent deferred sales charge that may be
imposed on certain redemptions of Class D shares.
3
<PAGE>
Investors in Class B and Class C shares would pay the following expenses on
the same investment, assuming no redemption at the end of each time period:
<TABLE>
<CAPTION>
CLASS B CLASS C
----------- -----------
<S> <C> <C>
One year................................................................... $ 26 $ 26
Three years................................................................ 81 81
</TABLE>
The purpose of the fee and expense information set forth above is to assist
investors in understanding the various costs and expenses that investors will
bear directly or indirectly in each Class of the Fund's shares. More detailed
information regarding these expenses is set forth under "Management of the
Fund." THE FOREGOING INFORMATION REPRESENTS MANAGEMENT'S GOOD FAITH ESTIMATE OF
FUND EXPENSES (NET OF VOLUNTARY EXPENSE REIMBURSEMENTS) DURING THE FIRST YEAR OF
THE FUND'S OPERATIONS AND SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The Investment Adviser has voluntarily agreed to pay certain Fund expenses
as indicated in the above table incurred during the first year of the Fund's
operations. Thereafter, such voluntary expense reimbursements may be
discontinued or modified in the Investment Adviser's sole discretion. Absent
such voluntary expense reimbursements, the Investment Adviser estimates that the
Fund's Class B, Class C and Class D shares would incur Total Fund Operating
Expenses of approximately 3.09%, 3.09% and 2.32%, respectively.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective and certain other specifically designated
investment policies and restrictions are deemed to be "fundamental" and, as
such, may not be changed except by a vote of a "majority" (as defined in the
Investment Company Act) of the Fund's outstanding shares. Except for the Fund's
investment objective and the policies and restrictions that are specifically
designated as "fundamental," each of the Fund's investment policies and
restrictions are "non-fundamental" and, as such, may be changed or eliminated by
the Company's Board of Directors without any vote by Fund shareholders. If a
percentage limitation set forth in any of the following investment policies and
restrictions is adhered to at the time a transaction is effected, later changes
in the percentage resulting from changes in value or in the number of
outstanding securities of the issuer will not be considered a violation.
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities of
emerging growth companies that are believed by the Investment Adviser to have
significant potential for growth in revenue and earnings. Income is not a
consideration in the selection of investments and is not an investment objective
of the Fund. Like all mutual funds, attainment of the Fund's investment
objective cannot be assured.
INVESTMENT POLICIES
The Fund invests primarily in equity securities of emerging growth companies
that are believed by the Investment Adviser to have significant potential for
growth in revenues and earnings. In normal market conditions, the Investment
Adviser endeavors to invest substantially all (and no less than 65%) of the
Fund's assets in equity securities of emerging growth companies. The Investment
Adviser emphasizes emerging growth companies, with at least half of the Fund's
equity securities consisting of companies with annual revenues of less than $750
million, and attempts to maintain equity positions in 30 to 50 of what it
believes are the fastest growing American emerging growth corporations (with
some investments in comparable foreign companies).
The Fund may invest up to 10% of the value of its total assets in securities
of foreign issuers. The Fund may only purchase foreign securities that are
represented by American Depository Receipts listed on a domestic securities
exchange or included in the NASDAQ National Market System, or foreign securities
listed directly on a domestic securities exchange or included in the NASDAQ
National Market System. Interest or dividend payments on such securities may be
subject to foreign withholding taxes. The Fund's investments in foreign
securities involve considerations and risks not typically associated with
investments in securities of domestic companies, including unfavorable changes
in currency rates and exchange control regulations, reduced and less reliable
information about issuers and markets, different accounting standards,
illiquidity of securities and markets, local economic or political instability
and greater market risk in general.
Pending the investment or reinvestment of proceeds from the issuance of Fund
shares or the sale of Fund portfolio investments, the Fund may invest in
short-term money market securities and bank deposits in domestic branches of
U.S. banks having total assets in excess of $1 billion that are members of the
FDIC. In normal market conditions, short-term money market securities and bank
deposits may comprise up to 35% of the Fund's total assets; however, when the
Investment Adviser believes that economic conditions warrant a defensive
investment posture, the Fund may temporarily invest greater than 35% of its
total assets in such investments. The short-term money market
5
<PAGE>
securities in which the Fund may invest include obligations of the United States
Government, its agencies or instrumentalities ("U.S. Government Securities");
commercial paper rated A-1 or higher by Standard & Poor's Corporation and/or
Prime-1 or higher by Moody's Investor Services, Inc.; repurchase agreements; and
certificates of deposit and banker's acceptances issued by domestic branches of
U.S. banks having total assets in excess of $1 billion that are members of the
FDIC. Additionally, to the extent permitted by applicable law, the Fund may
invest to a limited extent in money market mutual funds (which, to the extent of
any such investment, would subject the Fund and its shareholders to duplicate
expenses).
The U.S. Government Securities in which the Fund may invest include
securities issued or guaranteed as to payment of principal and interest by the
U.S. Government or its agencies or instrumentalities. The Fund may invest in
direct obligations of the U.S. Treasury, such as U.S. Treasury bills, and in
obligations of U.S. Government agencies or instrumentalities, including, but not
limited to, the Federal National Mortgage Association and the Student Loan
Mortgage Association. Obligations of U.S. Government agencies or
instrumentalities, such as the Federal National Mortgage Association and the
Student Loan Mortgage Association, may be merely backed by the credit of the
agency or instrumentality issuing the obligations and not by the full faith and
credit of the U.S. Treasury.
The Fund intends to purchase and hold securities for long-term capital
appreciation and does not expect to trade for short-term gain. Accordingly, it
is anticipated that the annual portfolio turnover rate normally will not exceed
100%. The portfolio turnover rate is calculated by dividing the lesser of sales
or purchases of portfolio securities by the average monthly value of the Fund's
portfolio securities. For purposes of this calculation, portfolio securities
exclude all options, futures and securities having a maturity when purchased of
one year or less. The turnover rate has a direct effect on the transaction costs
(including brokerage costs) to be borne by the Fund.
The net asset value of the Fund itself will fluctuate with changes in the
value of its portfolio securities. The Fund is intended for investors seeking
long-term capital appreciation and is not intended to provide a trading vehicle
for those who wish to profit from short-term swings in the stock market.
OTHER INVESTMENT POLICIES
REPURCHASE AGREEMENTS. Except as limited by the Fund's policy regarding
illiquid securities (see "Illiquid Securities" below), the Fund may invest
without limitation in repurchase agreements with securities dealers and member
banks of the Federal Reserve System. Repurchase agreements involve the purchase
by the Fund of an underlying debt instrument, subject to an obligation of the
seller to repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. Certain costs may be incurred
by the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or limited.
The Company's Board of Directors has established procedures, which it
periodically reviews, pursuant to which the Investment Adviser will monitor the
creditworthiness of the dealers and banks with which the Fund enters into
repurchase agreements.
LENDING OF PORTFOLIO SECURITIES. To enhance the return on its portfolio,
the Fund may lend securities in its portfolio representing up to 25% of its
total assets, taken at market value, to securities
6
<PAGE>
firms and financial institutions, provided that each loan is secured
continuously by collateral in the form of cash, high quality money market
instruments or short-term U.S. Government Securities adjusted daily to have a
market value at least equal to the current market value of the securities
loaned. These loans are terminable at any time, and the Fund will receive any
interest or dividends paid on the loaned securities. In addition, it is
anticipated that the Fund may share with the borrower some of the income
received on the collateral for the loan or the Fund will be paid a premium for
the loan. The risk in lending portfolio securities, as with other extensions of
credit, consists of possible delay in recovery of the securities or possible
loss of rights in the collateral should the borrower fail financially. In
determining whether the Fund will lend securities, the Investment Adviser will
consider all relevant factors and circumstances. The Fund will only enter into
loan arrangements with broker-dealers, banks or other institutions which the
Investment Adviser has determined are creditworthy under guidelines established
by the Company's Board of Directors.
FUTURES AND OPTIONS TRANSACTIONS. Through the purchase and sale of stock
index futures contracts, options on stock indices, stock options and options on
stock index futures contracts, the Fund at times may seek to hedge against
either a decline in the value of securities owned by it or an increase in the
price of securities which it plans to purchase. The Fund is not a commodity
pool, and all futures transactions engaged in by the Fund must constitute bona
fide hedging or other permissible transactions in accordance with the rules and
regulations promulgated by the Commodity Futures Trading Commission.
Options purchased and written by the Fund may be exchange traded or may be
options entered into by the Fund in negotiated transactions with investment
dealers and other financial institutions ("OTC Options"), such as commercial
banks or savings and loan associations, deemed creditworthy by the Investment
Adviser. OTC Options are not as liquid as exchange traded options, and it may
not be possible for the Fund to dispose of an OTC Option it has purchased or
terminate its obligations under an OTC Option it has written at a time when the
Investment Adviser believes it would be advantageous to do so.
The use of futures and options involves the risk of imperfect correlation
between movements in futures and options prices and movements in the price of
securities which are the subject of the hedge. Expenses and losses incurred as a
result of the above hedging strategies would reduce the Fund's performance. For
a further discussion of futures and options transactions, including certain
additional risks associated therewith, see APPENDIX A.
ILLIQUID SECURITIES. The Fund may invest up to 10% of the value of its
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, repurchase agreements providing for settlement in more than seven days
after notice, and certain options traded in the over-the-counter market and
securities used to cover such options. As to these securities, the Fund is
subject to the risk of unavailability of a buyer for a favorable price if the
Fund desires to sell these securities. Such lack of liquidity could adversely
affect the value of the Fund's net assets.
INVESTMENT RESTRICTIONS
In addition to the investment policies set forth above, the Fund has adopted
certain fundamental investment restrictions (set forth in their entirety in the
Statement of Additional Information), which may not be amended without the vote
of a "majority" (as defined in the Investment Company Act) of
7
<PAGE>
the Fund's outstanding voting securities. These restrictions prohibit the Fund,
among other matters, from: (a) investing more than 25% of its total assets in
any one industry (disregarding investments in securities of the U.S. Government,
its agencies and instrumentalities); or (b) borrowing money or issuing senior
securities (as defined in the Investment Company Act), except that the Fund may
borrow in amounts not exceeding 15% of its total assets from banks for temporary
or emergency purposes, including the meeting of redemption requests which might
require the untimely disposition of securities. Additionally, the Fund has
adopted certain non-fundamental investment restrictions (also set forth in their
entirety in the Statement of Additional Information), which may be changed by
the Company's Board of Directors without the approval of the Fund's
shareholders. According to these restrictions, the Fund, among other matters,
may not: (a) invest more than 10% of its assets (taken at market value at the
time of purchase) in the outstanding securities of any single issuer; (b) invest
more than 10% of its total assets in securities of issuers which together with
any predecessors have a record of less than three years of continuous
operations; or (c) own more than 10% of the outstanding voting securities of any
one issuer.
BROKERAGE AND PORTFOLIO TRANSACTIONS
Subject to policies established by the Company's Board of Directors, the
Investment Adviser is responsible for investment decisions and for the execution
of the Fund's portfolio transactions. The Fund has no obligation to deal with
any particular broker or dealer in the execution of transactions in portfolio
securities. In executing such transactions, the Investment Adviser seeks to
obtain the best price and execution for its transactions. While the Investment
Adviser generally seeks reasonably competitive commission rates, the Fund does
not necessarily pay the lowest commission.
Where best price and execution may be obtained from more than one broker or
dealer, the Investment Adviser may, in its discretion, purchase and sell
securities through brokers or dealers who provide research, statistical and
other information to the Investment Adviser. Information so received will be in
addition to and not in lieu of the services required to be performed by the
Investment Adviser under its investment advisory agreement with the Fund and the
expenses of the Investment Adviser will not necessarily be reduced as a result
of the receipt of such supplemental information. Such information may be useful
to the Investment Adviser in providing services to clients other than the Fund.
Conversely, such information provided to the Investment Adviser by brokers and
dealers through whom other clients of the Investment Adviser effect securities
transactions may be useful to the Investment Adviser in providing services to
the Fund.
Consistent with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD"), the Investment Adviser may also consider
distribution of Fund shares when allocating Fund portfolio transactions between
or among brokers and dealers that otherwise offer best price and execution.
The Fund will not purchase securities from, or sell securities to, the
Investment Adviser.
Certain other clients of the Investment Adviser have investment objectives
and policies similar to those of the Fund. The Investment Adviser may, from time
to time, make recommendations that result in the purchase or sale of a
particular investment by its other clients simultaneously with the Fund. If
transactions on behalf of more than one client during the same period increase
the demand for the investments being purchased or the supply of investments
being sold, there may be an adverse effect on price or quantity. In addition, it
is possible that the number of options or futures transactions that the Fund may
enter into may be affected by options or futures transactions entered into by
other
8
<PAGE>
investment advisory clients of the Investment Adviser. It is the policy of the
Investment Adviser to allocate advisory recommendations and the placing of
orders in a manner that is deemed equitable by the Investment Adviser to the
accounts involved, including the Fund. When two or more of the clients of the
Investment Adviser (including the Fund) are purchasing or selling the same
security on a given day from, to or through the same broker-dealer, such
transactions may be averaged as to price.
MANAGEMENT OF THE FUND
The Company's Board of Directors is responsible for the overall management
and operation of the Fund. The Fund's officers are responsible for the
day-to-day operations of the Fund under the supervision of the Company's Board
of Directors.
INVESTMENT ADVISER
Pursuant to an Investment Advisory Agreement with the Fund (the "Investment
Advisory Agreement"), the Investment Adviser serves as the Fund's investment
adviser and, as such, is responsible for the overall management of the Fund's
investment portfolio. The Investment Adviser was incorporated in December 1982.
As of November 30, 1995, the Investment Adviser managed approximately $3 billion
of assets for The Jundt Growth Fund, Inc. and 21 institutional clients.
The Investment Adviser is a growth-oriented manager. The Investment Adviser
believes that the U.S. economy, due to its heterogeneous nature and immense
size, provides investors with significant growth opportunities. In selecting
investments, the Investment Adviser emphasizes fundamental prospects of
individual companies rather than macroeconomic trends.
Under the Investment Advisory Agreement, the Fund pays the Investment
Adviser a monthly fee equal on an annual basis to 1.00% of the Fund's average
daily net assets. This fee is higher than the advisory fee paid by most other
investment companies.
James R. Jundt serves as director, Chairman of the Board, Chief Executive
Officer and Secretary of the Investment Adviser and beneficially owns 76% of the
Investment Adviser's capital stock. Mary Joann Jundt, wife of James R. Jundt, is
the trustee of a trust that beneficially owns 4% of the Investment Adviser's
capital stock. The current beneficiaries of the trust are the children of Mr.
and Mrs. Jundt (including Marcus E. Jundt, Vice Chairman of the Board and a
director of the Investment Adviser) and the issue of such children. Mrs. Jundt
votes the shares owned by the trust. The remaining 20% of the Investment
Adviser's capital stock is beneficially owned by Gail M. Knappenberger, formerly
a director and officer of the Investment Adviser.
PORTFOLIO MANAGERS
The Investment Adviser has no formal investment committee. All investment
decisions are made by one or more of the firm's four portfolio managers (James
R. Jundt, Donald M. Longlet, Thomas L. Press and Marcus E. Jundt). The
Investment Adviser places significant emphasis on the team approach in
conducting its portfolio management activities. The portfolio managers confer
frequently throughout the typical business day as to investment opportunities,
and most investment decisions are made after consultation with the other
portfolio managers.
James R. Jundt, CFA, began his investment career in 1964 with Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), New York, New York, as a
security analyst before joining Investors Diversified Services, Inc. in
Minneapolis, Minnesota (now known as American Express Financial Advisers, Inc.)
in 1969, where he served in analytical and portfolio management positions
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<PAGE>
until 1979. From 1979 to 1982, Mr. Jundt was a portfolio manager for St. Paul
Advisers, Inc. ("St. Paul Advisers," subsequently known as AMEV Advisers, Inc.
and now known as Fortis Advisers, Inc.) in Minneapolis. In December 1982, Mr.
Jundt left St. Paul Advisers and founded the Investment Adviser. He has served
as Chairman of the Board, President and Chief Executive Officer and a portfolio
manager of The Jundt Growth Fund, Inc. since 1991. Mr. Jundt has approximately
31 years of investment experience.
Donald M. Longlet, CFA, began his investment career in 1968 with
Northwestern National Bank of Minneapolis (now known as Norwest Bank Minnesota,
National Association) where he served as a security analyst and portfolio
manager until 1982. Mr. Longlet worked as a portfolio manager for AMEV Advisers,
Inc. (now known as Fortis Advisers, Inc.) from 1983 until 1989, when he joined
the Investment Adviser as a portfolio manager. He has served as Vice President
and Treasurer and a portfolio manager of The Jundt Growth Fund, Inc. since 1991.
Mr. Longlet has approximately 27 years of investment experience.
Thomas L. Press was a Senior Vice President of Investment Advisers, Inc. and
Co-Manager of the IAI Emerging Growth Fund from 1992 until July 1993, when he
joined the Investment Adviser as a portfolio manager. From 1987 to 1992, Mr.
Press was a Vice President, Institutional Sales in the Chicago office of Morgan
Stanley & Co., Inc., and prior thereto was an institutional salesman and trader
in the Chicago office of Salomon Brothers Inc. He has served as portfolio
manager of The Jundt Growth Fund, Inc. since July 1993. Mr. Press has
approximately 10 years of investment experience.
Marcus E. Jundt has been a portfolio manager for the Investment Adviser
since June 1992. Mr. Jundt was employed as a research analyst for Victoria
Investors from 1988 to 1992, and from 1987 to 1988 was employed by Cargill
Investor Services, where he worked on the floor of the Chicago Mercantile
Exchange. He has served as a portfolio manager of The Jundt Growth Fund, Inc.
since June 1992. Mr. Jundt has approximately 8 years of investment and related
experience.
ADMINISTRATOR
Under the terms of an Administration Agreement between Princeton
Administrators, L.P. (the "Administrator") and the Fund (the "Administration
Agreement"), the Administrator performs or arranges for the performance of
certain administrative services (I.E., services other than investment advice and
related portfolio activities) necessary for the operation of the Fund,
including, but not limited to, maintaining certain of the books and records of
the Fund, preparing or reviewing certain reports and other documents required by
United States federal, state and other applicable laws and regulations to
maintain the registration of the Fund and its shares and providing the Fund with
administrative office facilities. For the services rendered to the Fund and the
facilities furnished, the Fund pays the Administrator a monthly fee equal to the
greater of: (a) $125,000 per annum; or (b) an annual rate equal to .20% of the
Fund's average daily net assets up to $600 million and .175% of the Fund's
average daily net assets in excess of $600 million. For the period through
December 31, 1996, the Administrator has agreed to waive the $125,000 minimum
per annum fee set forth in clause (a). The principal address of the
Administrator is P.O. Box 9011, Princeton, New Jersey 08543. The Administrator
is an affiliate of Merrill Lynch.
THE DISTRIBUTOR; RULE 12B-1 DISTRIBUTION PLANS
Pursuant to a Distribution Agreement between the Distributor and the Fund,
the Distributor serves as the principal underwriter of each Class of the Fund's
shares. Additionally, the Fund has adopted Distribution Plans pursuant to Rule
12b-1 under the Investment Company Act with respect
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<PAGE>
to its Class B, Class C and Class D shares, pursuant to which each such Class
pays the Distributor certain fees in connection with the distribution of shares
of such Class and/or the maintenance of shareholder accounts.
Under its Distribution Plan, each of Class B, Class C and Class D pays the
Distributor a Rule 12b-1 "account maintenance fee" equal on an annual basis to
.25% of the average daily net assets attributable to each such Class. This
account maintenance fee is designed to compensate the Distributor and certain
broker-dealers and financial institutions with which the Distributor has entered
into selling arrangements for the provision of certain services to the holders
of Fund shares, including, but not limited to, answering shareholder questions,
providing shareholders with reports and other information and providing various
other services relating to the maintenance of shareholder accounts.
The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 "distribution fee" to the Distributor, equal on an
annual basis to .75% of the average daily net assets attributable to each such
Class. This fee is designed to compensate the Distributor for advertising,
marketing and distributing the Class B and Class C shares, including the
provision of initial and ongoing sales compensation to the Distributor's sales
representatives and to other broker-dealers and financial institutions with
which the Distributor has entered into selling arrangements.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN; SUBACCOUNTING AGENTS
Investors Fiduciary Trust Company (the "Transfer Agent"), 1004 Baltimore,
Kansas City Missouri 64105, serves as the Fund's transfer agent and dividend
disbursing agent. Norwest Bank Minnesota, N.A., Norwest Center, 90 South Seventh
Street, Minneapolis, Minnesota 55402, serves as the Fund's custodian. In
addition, the Fund compensates certain broker-dealers that sell Fund shares for
performing various accounting and administrative services with respect to large
street-name accounts maintained by such broker-dealers.
HOW TO BUY FUND SHARES
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers investors the choice among three Classes of shares (Class B,
Class C and Class D) which offer different sales charges and bear different
expenses. (THE FUND'S CLASS A SHARES ARE OFFERED FOR SALE EXCLUSIVELY TO CERTAIN
SPECIFIED INVESTORS AND ARE NOT OFFERED FOR SALE TO THE GENERAL PUBLIC.) These
alternatives permit an investor to choose the method of purchasing shares that
is most beneficial given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances.
As more fully set forth below, a broker-dealer or financial institution may
receive different levels of compensation depending upon which Class of shares is
sold. In addition, the Distributor from time to time may pay certain additional
cash incentives of up to $100 and/or non cash incentives to its investment
executives and other broker-dealers and financial institutions in consideration
of their sales of Fund shares. In some instances, other incentives may be made
available only to selected broker-dealers and financial institutions, based on
objective standards developed by the Distributor, to the exclusion of other
broker-dealers and financial institutions. The Distributor in its discretion may
from time to time, pursuant to objective criteria established by it, pay fees to
qualifying brokers, dealers or financial intermediaries for certain services or
activities which are primarily intended to result in sales of Fund shares.
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<PAGE>
GENERAL PURCHASE INFORMATION
The minimum initial investment is $1,000, and the minimum additional
investment is $50. The Fund may waive or reduce these minimums for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. The Fund's shares may be purchased at their public offering price (see
below) from the Distributor, from the Transfer Agent, from other broker-dealers
who are members of the NASD and who have selling agreements with the
Distributor, and from certain financial institutions that have selling
agreements with the Distributor.
When purchasing Fund shares, investors must specify which Class of shares is
being purchased. If no Class is specified, the order will be deemed an
investment in Class D shares. No share certificates will be issued by the Fund.
Banks, acting as agents for their customers and not for the Fund or the
Distributor, from time to time may purchase Fund shares for the accounts of such
customers. Generally, the Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities. Should the
activities of any bank, acting as agent for its customers in connection with the
purchase of the Fund's shares, be deemed to violate the Glass-Steagall Act,
management will take whatever action, if any, is appropriate in order to provide
efficient services for the Fund. Fund management does not believe that a
termination in the relationship with any bank would result in any material
adverse consequences to the Fund. In addition, state securities laws on this
issue may differ and banks and financial institutions may be required to
register as dealers pursuant to state law. Fund shares are not deposits or
obligations of, or guaranteed or endorsed by, any bank and are not insured or
guaranteed by the U.S. Government, the FDIC, the Federal Reserve Board or any
other federal agency.
When orders are placed for shares of the Fund, the public offering price
used for the purchase will be the net asset value per share next determined,
plus the applicable sales charge, if any. If an order is placed with the
Distributor or other broker-dealer, the broker-dealer is responsible for
promptly transmitting the order to the Fund.
Shares of the Fund may be purchased by opening an account either by mail or
by phone. Shares are deemed to be purchased as of the time of determination of
the Fund's net asset value on the day the purchase order for the purchase of its
shares is received in good form and accepted by the Fund.
An investor who may be interested in having shares redeemed shortly after
purchase should consider making unconditional payment by certified check or
other means approved in advance by the Distributor. Payment of redemption
proceeds will be delayed as long as necessary to verify by expeditious means
that the purchase payment has been or will be collected. Such period of time
typically will not exceed 15 days.
AUTOMATIC INVESTMENT PLAN. Investors may make systematic investments in
fixed amounts automatically on a monthly basis through the Fund's Automatic
Investment Plan. Additional information is available from the Distributor.
PURCHASES BY MAIL. To open an account by mail, complete the general
authorization form attached to this Prospectus, and mail it, along with a check
payable to "Jundt U.S. Emerging Growth Fund" to:
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
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<PAGE>
PURCHASES BY TELEPHONE. To open an account by telephone, call (800)
370-0612 to obtain an account number and instructions. Information concerning
the account will be taken over the phone. The investor must then request a
commercial bank with which he or she has an account and which is a member of the
Federal Reserve System to transmit Federal Funds by wire to the Fund as follows:
State Street Bank & Trust Company, ABA #011000028
For credit of: Jundt U.S. Emerging Growth Fund
Checking Account No.: 9905-154-2
Account Number: (assigned by telephone)
Information on how to transmit Federal Funds by wire is available at any
national bank or any state bank that is a member of the Federal Reserve System.
The bank may charge the shareholder for the wire transfer. The investor will be
required to complete the general authorization form attached to this Prospectus
and mail it to the Fund after making the initial telephone purchase.
CLASS B SHARES -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE
The public offering price of Class B shares of the Fund is the net asset
value of the Fund's shares. Class B shares are sold without an initial sales
charge so that the Fund receives the full amount of the investor's purchase.
However, a contingent deferred sales charge ("CDSC") of up to 4% will be imposed
if shares are redeemed within six years of purchase. For additional information,
see "How to Redeem Fund Shares -- Contingent Deferred Sales Charge." In
addition, Class B shares are subject to higher Rule 12b-1 fees as described
below. The CDSC will depend on the number of years since the purchase was made,
according to the following table, and will be calculated on an amount equal to
the lesser of the net asset value of the shares at the time of purchase or their
net asset value at the time of redemption.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
(AS A PERCENTAGE OF AMOUNT SUBJECT TO
REDEMPTION DURING CHARGE)
- ---------------------------------------------------------------------- -------------------------------------------
<S> <C>
1st Year Since Purchase............................................... 4%
2nd Year Since Purchase............................................... 4%
3rd Year Since Purchase............................................... 3%
4th Year Since Purchase............................................... 3%
5th Year Since Purchase............................................... 2%
6th Year Since Purchase............................................... 1%
Thereafter............................................................ None
</TABLE>
Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class B shares, such as the payment
of compensation to selected broker-dealers, and for selling Class B shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the Class
B shares without deduction of a sales charge at the time of purchase. Although
Class B shares are sold without an initial sales charge, the Distributor pays a
sales commission equal to 4% of the amount invested to broker-dealers who sell
Class B shares and an annual fee of 0.25% of the amount invested that begins to
accrue one year after the shares are sold. Orders for Class B shares of $250,000
or more will be treated as orders for Class D shares or declined.
RULE 12B-1 FEES. Class B shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class B shares and a
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<PAGE>
Rule 12b-1 distribution fee payable at an annual rate of .75% of the average
daily net assets attributable to Class B shares. The higher Rule 12b-1 fee will
cause Class B shares to have a higher expense ratio and to pay lower dividends
than Class D shares. For additional information about this fee, see "Management
of the Fund -- The Distributor; Rule 12b-1 Distribution Plans."
CONVERSION FEATURE. On the "designated conversion date" (the 15th day of
each month, or the next business day if the 15th day is not a business day)
following the eighth anniversary of their sale, Class B shares (including a pro
rata portion of the shares of the Fund received in connection with dividend and
distribution reinvestments) will automatically convert to Class D shares and
will no longer be subject to the higher Rule 12b-1 fees attributable to Class B
shares. Such conversion will be on the basis of the relative net asset values of
the two Classes. Class D shares issued upon such conversion will not be subject
to any FESC or CDSC. Class B shares acquired by exercise of the "reinstatement
privilege" will convert into Class D shares based on the time of the original
purchase of Class B shares. See "How to Redeem Fund Shares -- Reinstatement
Privilege." The conversion of Class B shares into Class D shares is subject to
the continuing availability of a ruling from the Internal Revenue Service that
payment of different dividends by each of the Classes of shares does not result
in the Fund's dividends or distributions constituting "preferential dividends"
under the Internal Revenue Code of 1986, as amended (the "Code"), and that such
conversions do not constitute taxable events for federal tax purposes. There can
be no assurance that such ruling will continue to be available, and the
conversion of Class B shares into Class D shares will not occur if such ruling
is not available at the time of conversion. In such event, Class B shares would
continue to be subject to higher expenses than Class D shares for an indefinite
period.
CLASS C SHARES -- LEVEL LOAD ALTERNATIVE
The public offering price of Class C shares of the Fund is the net asset
value of the Fund's shares. Class C shares are sold without an initial sales
charge so that the Fund receives the full amount of the investor's purchase.
However, a CDSC of 1% will be imposed if shares are redeemed within one year of
purchase. For additional information, see "How to Redeem Fund Shares --
Contingent Deferred Sales Charge." In addition, Class C shares are subject to
higher annual Rule 12b-1 fees as described below.
Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class C shares, such as the payment
of compensation to selected broker-dealers, and for selling Class C shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the Class
C shares without deduction of a sales charge at the time of purchase. Although
Class C shares are sold without an initial sales charge, the Distributor pays a
sales commission equal to 1.00% of the amount invested to broker-dealers who
sell Class C shares at the time the shares are sold and an annual fee of 1.00%
of the amount invested that begins to accrue one year after the shares are sold.
RULE 12B-1 FEES. Class C shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class C shares and a Rule 12b-1 distribution
fee payable at an annual rate of .75% of the average daily net assets
attributable to Class C shares. The higher Rule 12b-1 fee will cause Class C
shares to have a higher expense ratio and to pay lower dividends than Class D
shares. For additional information about this fee, see "Management of the Fund
- -- Distributor; Rule 12b-1 Distribution Plans."
As between Class B and Class C shares, an investor that anticipates an
investment in the Fund of longer than six years (the CDSC period applicable to
Class B shares) would conclude that Class B
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<PAGE>
shares are preferable to Class C shares because the Class B shares will
automatically convert to Class D shares (to which lower Rule 12b-1 fees apply)
after eight years. However, an investor with an anticipated investment time
frame of less than six years (or with an uncertain time frame) may choose Class
C shares because of the larger and longer-term CDSC applicable to Class B
shares.
CLASS D SHARES -- INITIAL SALES CHARGE ALTERNATIVE
The public offering price of Class D shares of the Fund is their next
determined net asset value plus the applicable FESC. The Fund receives the net
asset value. The FESC varies depending on the size of the purchase and is
allocated between the Distributor and other broker-dealers. The current FESC
schedule is as follows:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------
(AS A % OF DEALER REALLOWANCE
OFFERING (AS A % OF (AS A % OF
AMOUNT OF INVESTMENT PRICE) NET INVESTMENT) OFFERING PRICE)
- ------------------------------------------------------------- -------------- --------------- ------------------
<S> <C> <C> <C>
Less than $25,000............................................ 5.25% 5.54% 4.50%
$25,000 but less than $50,000................................ 4.75% 4.99% 4.25%
$50,000 but less than $100,000............................... 4.00% 4.17% 3.50%
$100,000 but less than $250,000.............................. 3.00% 3.09% 2.50%
$250,000 but less than $1,000,000............................ 2.00% 2.04% 1.75%
$1,000,000 and greater....................................... NONE* NONE* *
</TABLE>
- ------------------------
* On any sale of Class D shares to an investor in the amount of $1 million or
more, the Distributor will pay the dealer a commission equal to 1% of the
amount of that sale that is less than $2.5 million, .50% of the amount of
the sale that equals or exceeds $2.5 million but is less than $5 million and
.25% of the sale that equals or exceeds $5 million. Although such purchases
are not subject to a FESC, a CDSC of 1% will be imposed at the time of
redemption if redeemed within one year. See "How to Redeem Fund Shares --
Contingent Deferred Sales Charge."
In connection with the distribution of the Fund's Class D shares, the
Distributor receives all applicable sales charges. The Distributor, in turn,
pays other broker-dealers selling such shares the "dealer reallowance" set forth
above and an annual fee of 0.25% of the amount invested that begins to accrue
one year after the shares are sold. In the event that shares are purchased by a
financial institution acting as agent for its customers, the Distributor or the
broker-dealer with whom such order was placed may pay all or part of its dealer
reallowance to such financial institution in accordance with agreements between
such parties.
SPECIAL PURCHASE PLANS -- REDUCED SALES CHARGES. Certain investors (or
groups of investors) may qualify for reductions in, or waivers of, the sales
charges shown above. Investors should contact their broker-dealer or the Fund
for details about the Combined Purchase Privilege, Cumulative Quantity Discount
and Letter of Intention plans. Descriptions are also included in the
authorization form and in the Statement of Additional Information. These special
purchase plans may be amended or eliminated at any time by the Distributor
without notice to existing Fund shareholders.
RULE 12B-1 FEES. Class D shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class D shares. For additional information
about this fee, see "Management of the Fund -- The Distributor; Rule 12b-1
Distribution Plans."
15
<PAGE>
WAIVER OF SALES CHARGES. Class D shares will be issued at net asset value,
and not subject to a FESC or CDSC, if the purchase of such shares is funded by
the proceeds from the redemption of shares of any unrelated open-end investment
company that charges a sales charge. In order to exercise this privilege, the
purchase order must be received by the Fund within 60 days after the redemption
of shares of the unrelated investment company. Class D shares also will be
issued at their net asset value, and not subject to a FESC or CDSC, to the
following categories of investors:
- Investment executives and other employees of broker-dealers and financial
institutions that have entered into agreements with the Distributor for
the distribution of Fund shares, and parents and immediate family members
of such persons.
- Trust companies and bank trust departments for funds held in a fiduciary,
agency, advisory, custodial or similar capacity.
- States and their political subdivisions, and instrumentalities,
departments, authorities and agencies of states and their political
subdivisions.
- Registered investment advisers and their investment advisory clients.
- Employee benefit plans qualified under Section 401(a) of the Code, (which
does not include Individual Retirement Accounts), and custodial accounts
under Section 403(b)(7) of the Code (also known as tax-sheltered
annuities).
HOW TO REDEEM FUND SHARES
The Fund will redeem its shares in cash at the net asset value per share
next determined after receipt of a shareholder's written request for redemption
in good order. If shares for which payment has been collected are redeemed,
payment will be made within three days. Shareholders that own more than one
Class of the Fund's shares should clearly specify the Class or Classes of shares
being redeemed.
The Fund imposes no charges (other than any applicable CDSC) when shares are
redeemed directly through the Transfer Agent. Service agents may charge a
nominal fee for effecting redemptions of Fund shares. It is the responsibility
of each service agent to transmit redemption orders to the Transfer Agent. The
value of shares redeemed may be more or less than their original cost depending
upon the then-current net asset value of the Class being redeemed.
The Fund may suspend this right of redemption and may postpone payment only
when the New York Stock Exchange is closed for other than customary weekends or
holidays, or if permitted by the rules of the SEC during periods when trading on
the New York Stock Exchange is restricted or during any emergency which makes it
impracticable for the Fund to dispose of its securities or to determine fairly
the value of its net assets or during any other period permitted by order of the
SEC for the protection of investors.
Although the Fund has no current intention of doing so, the Fund reserves
the right to redeem its shares in kind. However, the Fund will pay in cash all
redemption requests by any shareholder that, during any 90-day period, amount to
no more than the lesser of: (a) $250,000; or (b) 1% of the Fund's net asset
value at the beginning of such 90-day period. If a redemption were made in kind,
a shareholder would incur transaction costs in disposing of any securities
received.
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<PAGE>
The Fund expects to redeem all of the shares of any shareholder whose
account has remained below $1,000 as a result of redemptions for at least 60
days after the mailing to the shareholder of a "notice of intention to redeem".
CONTINGENT DEFERRED SALES CHARGE
The CDSC will be calculated on an amount equal to the lesser of the net
asset value of the shares at the time of purchase or their net asset value at
the time of redemption. No CDSC will be imposed on any redeemed shares that have
been held for longer than the applicable CDSC period or to the extent the value
of any redeemed shares represents reinvestment of dividends or capital gains
distributions or capital appreciation of shares redeemed.
In determining whether a CDSC is applicable to any redemption, the
calculation will be determined in the manner that results in the lowest rate
being charged. Therefore, it will be assumed that a redemption of Class B shares
is made first of shares representing reinvestment of dividends and capital gains
distributions and then of remaining shares held by the shareholder for the
longest period of time. If a shareholder owns Class B and Class D shares, then
absent a shareholder choice to the contrary, Class B shares not subject to a
CDSC will be redeemed in full prior to any redemption of Class D shares not
subject to a CDSC.
The CDSC does not apply to: (a) redemption of shares when a Fund exercises
its right to liquidate accounts which are less than the minimum account size;
(b) redemptions in the event of the death or disability of the shareholder
within the meaning of Section 72(m)(7) of the Code; and (c) redemptions
representing a minimum required distribution from an individual retirement
account processed under a systematic withdrawal plan.
REINSTATEMENT PRIVILEGE
The Distributor, upon notification, intends to provide, out of its own
assets, a pro rata refund of any CDSC paid in connection with a redemption of
shares of the Fund (by crediting such refunded CDSC to such shareholder's
account) if, within 90 days of such redemption, all or any portion of the
redemption proceeds are reinvested in shares of the same Class of the Fund. Any
reinvestment within 90 days of a redemption with respect to which the CDSC was
paid will be made without the imposition of an FESC but will be subject to the
same CDSC to which such amount was subject prior to the redemption. The CDSC
period will run from the original investment date of the redeemed shares but
will be extended by the number of days between the redemption date and the
reinvestment date.
EXCHANGE PRIVILEGE
Except as described below, shareholders may exchange some or all of their
Fund shares for shares of The Jundt Growth Fund, Inc., provided that the shares
to be acquired in the exchange are eligible for sale in the shareholder's state
of residence. Class B shareholders may exchange their shares for Class B shares
of The Jundt Growth Fund, Inc., Class C shareholders may exchange their shares
for Class C shares of The Jundt Growth Fund, Inc. and Class D shareholders may
exchange their shares for Class D shares (or Class A shares, if the shareholder
is eligible to purchase Class A shares) of The Jundt Growth Fund, Inc.
The minimum amount which may be exchanged is $1,000. The Fund and The Jundt
Growth Fund, Inc. will execute the exchange on the basis of the relative net
asset values next determined after receipt by the Fund. If a shareholder
exchanges shares of the Fund that are subject to a CDSC for shares of The Jundt
Growth Fund, Inc., the transaction will not be subject to a CDSC. However, when
17
<PAGE>
shares acquired through the exchange are redeemed, the shareholder will be
treated as if no exchange took place for the purpose of determining the CDSC.
There is no specific time limit on exchange frequency; however, the Fund is
intended for long term investment and not as a trading vehicle. The Investment
Adviser reserves the right to prohibit excessive exchanges (more than four per
quarter). The Distributor reserves the right, upon 60 days' prior notice, to
restrict the frequency of, or otherwise modify, condition, terminate or impose
charges upon, exchanges. An exchange is considered a sale of shares on which the
investor may realize a capital gain or loss for income tax purposes. A
shareholder may place exchange requests directly with the Fund, through the
Distributor or through other broker-dealers. An investor considering an exchange
should obtain a prospectus of The Jundt Growth Fund, Inc. and should read such
prospectus carefully. Contact the Fund, the Distributor or any of such other
broker-dealers for further information about the exchange privilege.
EXPEDITED REDEMPTIONS
The Fund offers several expedited redemption procedures, described below,
which allow a shareholder to redeem Fund shares at net asset value determined on
the same day that the shareholder placed the request for redemption of those
shares. Pursuant to these expedited redemption procedures, the Fund's shares
will be redeemed at their net asset value next determined following the Fund's
receipt of the redemption request. The Fund reserves the right at any time to
suspend or terminate the expedited redemption procedures or to impose a fee for
this service. There is currently no additional charge to the shareholder for use
of the Fund's expedited redemption procedures.
EXPEDITED TELEPHONE REDEMPTION. Shareholders redeeming at least $1,000 and
no more than $25,000 of shares may redeem by telephoning the Fund directly at
(800) 370-0612. The applicable section of the authorization form must have been
completed by the shareholder and filed with the Fund before the telephone
request is received. The Fund will employ reasonable procedures to confirm that
telephone instructions are genuine, including requiring that payment be made
only to the shareholder's address of record or to the bank account designated on
the authorization form and requiring certain means of telephonic identification.
If the Fund fails to employ such procedures, it may be liable for any losses
suffered by shareholders as a result of fraudulent instructions. The proceeds of
the redemption will be paid by check mailed to the shareholder's address of
record or, if requested at the time of redemption, by wire to the bank
designated on the authorization form.
EXPEDITED REDEMPTIONS THROUGH CERTAIN BROKER-DEALERS. Certain
broker-dealers who have sales agreements with the Distributor may allow their
customers to effect an expedited redemption of shares of the Fund purchased
through such a broker-dealer by notifying the broker-dealer of the amount of
shares to be redeemed. The broker-dealer is then responsible for promptly
placing the redemption request with the Fund on the customer's behalf. Payment
will be made to the shareholder by check or wire sent to the broker-dealer.
Broker-dealers offering this service may impose a fee or additional requirements
for such redemptions.
MONTHLY CASH WITHDRAWAL PLAN
An investor who owns or buys shares of the Fund valued at $10,000 or more at
the current offering price may open a Withdrawal Plan and have a designated sum
of money paid monthly to the investor or another person. The applicable CDSC may
apply to monthly redemptions of Class B or Class C shares. See "Monthly Cash
Withdrawal Plan" in the Statement of Additional Information.
18
<PAGE>
DETERMINATION OF NET ASSET VALUE
The net asset value of each Class of the Fund's shares is determined once
daily as of 15 minutes after the close of business on the New York Stock
Exchange (generally 4:00 p.m., New York time) on each day during which the New
York Stock Exchange is open for trading. Any assets or liabilities initially
expressed in terms of non-U.S. dollar currencies are translated into U.S.
dollars at the prevailing market rates as quoted by one or more banks or dealers
on the day of valuation. The net asset value is computed by dividing the market
value of the securities held by the Fund plus any cash or other assets
(including interest and dividends accrued but not yet received) minus all
liabilities (including accrued expenses) by the total number of shares
outstanding at such time. Expenses, including but not limited to the fees paid
to the Investment Adviser and the Administrator and any account maintenance
and/or distribution fees payable to the Distributor, are accrued daily.
Portfolio securities which are traded on a national securities exchange or
on the NASDAQ National Market System are valued at the last sale price on such
exchange or market as of the close of business on the date of valuation.
Securities traded on a national securities exchange or on the NASDAQ National
Market System for which there were no sales on the date of valuation and
securities traded on other over-the-counter markets, including listed securities
for which the primary market is believed to be over-the-counter, are valued at
the mean between the most recently quoted bid and asked prices. Options are
valued at market value or fair value if no market exists. Futures contracts are
valued in a like manner, except that open futures contract sales are valued
using the closing settlement price or, in the absence of such a price, the most
recent quoted asked price. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by
the Company's Board of Directors or by the Investment Adviser in accordance with
policies and procedures established by the Company's Board of Directors.
Short-term investments that mature in 60 days or less are valued at amortized
cost, which approximates fair value.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the Fund's net realized gains and net investment
income, if any, will be paid to shareholders annually. Dividends and
distributions may be taken in cash or automatically reinvested in additional
Fund shares (of the same Class of shares as the shares to which the dividends or
distributions relate) at net asset value on the ex-dividend date. Dividends and
distributions will be automatically reinvested in additional Fund shares unless
the shareholder has elected in writing to receive dividends and distributions in
cash.
TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Code. If so qualified, the Fund will not be subject to
federal income taxes to the extent its earnings are timely distributed. The Fund
also intends to make distributions as required by the Code to avoid the
imposition of the 4% federal excise taxes.
The Fund will distribute substantially all of its net investment income and
net capital gains to investors. Distributions to shareholders from the Fund's
income and short-term capital gains are taxed as dividends (as ordinary income),
and long-term capital gain distributions are taxed as long-term capital gains.
Distributions of long-term capital gains will be taxable to the investor as
long-term
19
<PAGE>
capital gains regardless of the length of time the shares have been held. A
portion of the Fund's dividends may qualify for the dividends received deduction
for corporations. The Fund's distributions are taxable when they are paid,
whether a shareholder takes them in cash or reinvests them in additional Fund
shares, except that dividends and distributions declared in December but paid in
January are taxable as if paid on or before December 31. The federal income tax
status of all distributions will be reported to shareholders annually. In
addition to federal income taxes, dividends and distributions may also be
subject to state or local taxes, and if the shareholder lives outside the United
States, the dividends and distributions could also be taxed by the country in
which the shareholder resides.
"BUYING A DIVIDEND"
On the ex-dividend date for a dividend or distribution by the Fund, its
share price is reduced by the amount of the dividend or distribution. If an
investor purchases shares of the Fund on or before the record date ("buying a
dividend"), the investor will pay the full price for the shares (which includes
realized but undistributed earnings and capital gains of the Fund that
accumulate throughout the year), and then receive a portion of the purchase
price back in the form of a taxable distribution.
OTHER TAX INFORMATION
Under federal tax law, some shareholders may be subject to a 31% withholding
on reportable dividends, capital gains distributions and redemption payments
("backup withholding"). Generally, shareholders subject to backup withholding
will be those for whom a taxpayer identification number is not on file with the
Fund or any of its agents or who, to the Fund's or agent's knowledge, have
furnished an incorrect number. In order to avoid this withholding requirement,
investors must certify that the taxpayer identification number provided is
correct and that the investment is not otherwise subject to backup withholding,
or is exempt from backup withholding.
THE FOREGOING TAX DISCUSSION IS GENERAL IN NATURE, AND EACH INVESTOR IS
ADVISED TO CONSULT HIS OR HER TAX ADVISER REGARDING SPECIFIC QUESTIONS AS TO
FEDERAL, STATE, LOCAL OR FOREIGN TAXATION.
PERFORMANCE INFORMATION
Advertisements and communications to shareholders may contain various
measures of the Fund's performance, including various expressions of total
return. Additionally, such advertisements and communications may occasionally
cite statistics to reflect the Fund's volatility or risk. Performance for each
Class of the Fund's shares may be calculated on the basis of average annual
total return and/or total return. These total return figures reflect changes in
the price of the shares and assume that any income dividends and/or capital
gains distributions made by the Fund during the measuring period were reinvested
in shares of the same Class. The Fund presents performance information for each
Class of shares commencing with the Fund's inception. Class D average annual
total return figures reflect the maximum initial I (but do not reflect the
imposition of any CDSC upon redemption), and Class B and Class C average annual
total return figures reflect any applicable CDSC. Performance for each Class is
calculated separately.
Average annual total return is calculated pursuant to a standardized formula
which assumes that an investment was purchased with an initial payment of $1,000
and that the investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and distributions during
the period. The return is expressed as a percentage rate which, if applied on a
20
<PAGE>
compounded annual basis, would result in the redeemable value of the investment
at the end of the period. Advertisements of the Fund's performance will cover,
when available, one, five and ten-year periods, as well as the time period since
the inception of the Fund.
Total return is computed on a per share basis and assumes the reinvestment
of dividends and distributions. Total return generally is expressed as a
percentage rate which is calculated by combining the income and principal
changes for a specified period and dividing by the maximum offering price per
share (in the case of Class D shares) or the net asset value per share (in the
case of Class B or Class C shares) at the beginning of the period.
Advertisements may include the percentage rate of total return or may include
the value of a hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total return also may be
calculated by using the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the period
for Class D shares, or without giving effect to any applicable CDSC at the end
of the period for Class B or Class C shares. Calculations based on the net asset
value per share do not reflect the deduction of the applicable front-end or
contingent deferred sales charge which, if reflected, would reduce the
performance quoted.
In each case performance figures are based upon past performance. The
investment results of the Fund, like all others, will fluctuate over time; thus,
performance figures should not be considered to represent what an investment may
earn in the future or what the Fund's total return or average annual total
return may be in any period.
The Fund's performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those published by Lipper Analytical Service, Inc., Standard & Poor's
Corporation, Dow Jones & Company, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc. and Investment Company Data Incorporated. Performance ratings
reported periodically in national financial publications also may be used.
The Fund's Annual Reports will contain certain performance information
regarding the Fund and will be made available to any recipient of this
Prospectus upon request and without charge.
The Investment Adviser manages a significant amount of assets in emerging
growth "core" portfolios (the "Emerging Growth Portfolios") consisting of all
fully discretionary institutional accounts with investment objectives, policies
and strategies similar to those of the Fund. During the first year of the Fund's
operations, the Investment Adviser intends to quote, in supplemental sales
literature that is accompanied or preceded by this Prospectus, the historical
performance (average annual total return and cumulative total return) of the
Emerging Growth Portfolios. Such performance quotations will be net of advisory
fees paid to the Investment Adviser, but will not reflect the impact of
front-end and deferred sales charges and custodial, Rule 12b-1, administrative,
transfer agency and other expenses that will be borne by the Fund and its
shareholders. Additionally, any such historical performance should not be
interpreted as an indication of future Fund performance.
The following table sets forth the average annual total returns of the
Emerging Growth Portfolios during the one, five and ten years ended October 31,
1995 and for the period from the inception of the Investment Adviser's
management of the Portfolios (January 1, 1983 through October 31, 1995), as well
as the cumulative total return of the Emerging Growth Portfolios from January 1,
1983 through
21
<PAGE>
October 31, 1995. Each such performance calculation is compared with the
performance over the same periods of time of the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500 Index") and the Lipper Growth Fund Index.
<TABLE>
<CAPTION>
EMERGING GROWTH S&P 500 LIPPER GROWTH
AVERAGE ANNUAL TOTAL RETURNS PORTFOLIOS (1) INDEX (2) FUND INDEX(3)
- ------------------------------------------------------------------- ---------------- ----------- -------------
<S> <C> <C> <C>
One year........................................................... 16.22% 26.41% 23.98%
Five years......................................................... 21.97% 17.25% 17.95%
Ten years.......................................................... 19.93% 15.40% 14.12%
Since inception.................................................... 17.61% 15.53% 13.61%
Cumulative Total Return............................................ 703.58% 538.21% 414.26%
</TABLE>
- ------------------------
(1) The investment performance of the Emerging Growth Portfolios reflects
investment management fees and reinvested income dividends and capital gain
distributions and excludes the impact of any income taxes. Such investment
performance does not reflect administrative fees and other operating
expenses that will be incurred by the Fund.
(2) The S&P 500 Index is a widely recognized, unmanaged index of market activity
based on the aggregate performance of a selected portfolio of 500 publicly
traded common stocks, including monthly adjustments to reflect the
reinvestment of dividends. An investor could not purchase securities
represented by the S&P 500 Index without incurring certain transaction
costs. The S&P 500 Index reflects the total return, including changes in
market prices as well as accrued investment income, but excludes brokerage
commissions. Investment income for the S&P 500 Index is assumed to be
reinvested.
(3) The Lipper Growth Fund Index is prepared by Lipper Analytical Services, Inc.
and represents a composite index of the investment performance for the 30
largest growth mutual funds. The composite investment performance of the
Lipper Growth Fund Index reflects investment management and administrative
fees and other operating expenses paid by such mutual funds and reinvested
income dividends and capital gain distributions and excludes the impact of
any income taxes and sales charges.
GENERAL INFORMATION
The Fund is a professionally managed, diversified series of the Company,
which was incorporated under the laws of the State of Minnesota on October 26,
1995. The Company is registered with the SEC under the Investment Company Act as
an open-end management investment company. This registration does not involve
supervision of management or investment policy by an agency of the federal
government.
The Company currently offers its shares in one Series (Series A, which
represent interests in the Fund) and the Fund, in turn, currently offers its
shares in four Classes (Class A, Class B, Class C and Class D), each sold
pursuant to different sales arrangements and bearing different expenses. The
Company's Board of Directors, without shareholder approval, is authorized to
designate additional Classes of shares in the future; however, the Board of
Directors has no present intention to do so. This Prospectus relates only to the
Fund's Class B, Class C and Class D shares, the only Classes offered for sale to
the general public. See "Purchase Information".
22
<PAGE>
Shares of each Class represent interests in the assets of the Fund and have
identical voting, dividend, liquidation and other rights on the same terms and
conditions except that expenses related to the distribution of each Class are
borne solely by such Class and each Class of shares has exclusive voting rights
with respect to the Rule 12b-1 Distribution Plan applicable to such Class and
other matters for which separate Class voting is appropriate under applicable
law. Additionally, because Class B shares (if held for the applicable time
period) automatically convert into Class D shares, any proposed amendment to the
Class D Rule 12b-1 Distribution Plan that would increase the fees payable
thereunder must be approved by Class D AND Class B shareholders (each voting
separately as a Class).
The Fund's shares are freely transferable, are entitled to dividends as
declared by the Company's Board of Directors, and, upon liquidation of the Fund,
are entitled to receive the net assets of the Fund.
The Company's Articles of Incorporation permit the Company's Board of
Directors, without shareholder approval, to create additional Series of shares
and to subdivide any Series into various Classes of shares with such rights and
preferences as the Company's Board of Directors may designate. The Company's
Articles of Incorporation provide that each share of a Series has one vote
irrespective of the relative net asset values of the shares. On some issues,
such as the election of the Company's directors and the ratification of the
Company's independent auditors, all shares of the Company vote together as one
Series. On an issue affecting only a particular Series or Class, the shares of
the effected Series or Class vote as a separate Series or Class. An example of
such an issue would be a fundamental investment restriction pertaining to only
one Series.
The assets received by the Company for the issue or sale of shares of each
Series or Class, and all income, earnings, profits and proceeds thereof, subject
only to the rights of creditors, are allocated to such Series, and in the case
of a Class, allocated to such Class, and constitute the underlying assets of
such Series or Class. The underlying assets of each Series or Class are required
to be segregated on the books of account, and are to be charged with the
expenses with respect to such Series or Class, and with a share of the general
expenses of the Company. Any general expenses of the Company not readily
identifiable as belonging to a particular Series or Class shall be allocated
among the Series or Classes based upon the relative net assets of the Series or
Class at the time such expenses were accrued or such other method as the
Company's Board of Directors, or the Investment Adviser with the supervision of
the Company's Board of Directors, may determine.
The Company is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Company's Board of Directors may convene shareholder
meetings when it deems appropriate and is required under Minnesota law to
schedule regular or special meetings in certain circumstances. Additionally,
under Section 16(c) of the Investment Company Act, the Company's Board of
Directors must promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than ten percent of the Company's outstanding
shares
Under Minnesota law, the Company's Board of Directors has overall
responsibility for managing the Company in good faith, in a manner reasonably
believed to be in the Company's best interests, and with the care an ordinarily
prudent person in a like position would exercise in similar circumstances. The
Company's Articles of Incorporation limit the liability of the Company's
officers and directors to the fullest extent permitted by law.
23
<PAGE>
The Company and the Investment Adviser have adopted a Code of Ethics that
has been filed with the SEC as an exhibit to the Company's Registration
Statement (of which this Prospectus is a part). The Code of Ethics does not
permit any director, officer or employee of the Company, the Investment Adviser
or the Distributor, other than the Company's directors and officers who are not
interested persons of the Company, the Investment Adviser or the Distributor
(collectively, the "Disinterested Directors and Officers"), to purchase any
security in which the Fund is permitted to invest. If such person owns a
security in which, following its purchase by such person, the Fund becomes
permitted to invest, the person would not be permitted to acquire any additional
interest in such security and must observe strict limitations in connection with
any disposition of such security. Disinterested Directors and Officers are
permitted to purchase and sell securities in which the Fund may invest, but may
not effect any purchase or sale at any time during which the Fund has a pending
buy or sell order for the same security. Information about how the Code of
Ethics can be inspected or copied at the SEC's public reference rooms or
obtained at the SEC's headquarters is available through the SEC's toll-free
telephone number, (800) SEC-0330.
For a further discussion of the above matters, see "General Information" in
the Statement of Additional Information.
24
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND GENERAL AUTHORIZATION FORM
I wish to establish or revise my account in the Fund in accordance with these
instructions, the terms and conditions of this form and the current Prospectus
of the Fund, a copy of which I have received.
<TABLE>
<S> <C>
INSTRUCTIONS: 1) Please complete Sections A through J, as applicable. Be sure to sign the
certifications in Section J.
2) Please send this completed form and your check payable to the Fund to:
JUNDT U.S. EMERGING GROWTH FUND, C/O NATIONAL FINANCIAL DATA SERVICES, P.O. BOX
419168, KANSAS CITY, MO 64141-6168
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A. ACCOUNT
REGISTRATION / / Individual ---------------------------------------------------------------------------------
First Name Middle Last Name Social Security #
1. NAME / / Joint Investor* ----------------------------------------------------------------------------
First Name Middle Last Name Social Security #
*The account will be registered "Joint tenants with rights of survivorship" unless otherwise
specified.
/ / Trust Account -----------------------------------------------------------------------------
Name of Trust Tax Identification #
----------------------------------------------------------------------------------------------
Date of Trust Trustee(s)
/ / Corporation, Partnership or Other Entity ----------------------------------------------------
Type of Entity Tax Identification #
----------------------------------------------------------------------------------------------
Name of Entity
</TABLE>
<TABLE>
<S> <C> <C>
/ / Transfer/Gift to Minors
-------------------------------------------------------------------------------------
Custodian's Name (one name only) Minor's State of Residence
-------------------------------------------------------------------------------------
Minor's Name Minor's Social Security #
/ / Transfer on death to: ----------------------------------------------------------------------
Tax Identification #
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
2. ADDRESS ( )
------------------------------------------------- ---------------------------------------------------------
Address/Apt.
No. Area Code Business Telephone
( )
------------------------------------------------- ---------------------------------------------------------
City State Zip Code Area Code Home Telephone
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
B. INITIAL The minimum initial investment is $1,000. Class D shares (except for investments of
INVESTMENT $1 million or more) are subject to a front-end sales charge at the time of purchase.
Class B and Class C shares may be subject to a contingent deferred sales charge at
the time of redemption. If a Class is not selected, the purchase will be made in
Class D shares. Orders for Class B shares of $250,000 or more will be treated as
orders for Class D shares.
</TABLE>
$
----------------------------------------------------
Class B Shares
$
----------------------------------------------------
Class C Shares
$
----------------------------------------------------
Class D Shares
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
C. DEALER
INFORMATION ----------------------------------------------------------------------------------------------------
Name of Broker-Dealer Name of Representative Representative's Phone #
----------------------------------------------------------------------------------------------------
Branch Office Address Branch ID # Representative's ID #
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
D. DIVIDEND NOTE: IF NO ELECTION IS MADE, DIVIDENDS AND CAPITAL GAIN WILL AUTOMATICALLY BE REINVESTED.
DISTRIBUTIONS
/ / Reinvested in additional shares or / / receive dividends in cash*
*For "receive in cash", please choose a delivery option:
/ / Deposit directly into my bank account. ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A
SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT WHERE I WOULD LIKE YOU TO DEPOSIT THE DIVIDEND.
/ / Savings / / Checking
/ / Mail check to my address listed in Section A.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
E. AUTOMATIC / / Please arrange with my bank to invest $ ($100 minimum) per month in the Fund.
INVESTMENT Please charge my bank account on the 20th day (or next business day) of each month. ATTACHED IS A
PLAN VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT ON WHICH
THE INVESTMENT IS GOING TO BE DRAWN.
/ / Savings / / Checking
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
F. LETTER OF / / I elect to take advantage of the Letter of Intention and agree to the escrow provisions herein
INTENTION and certify that I am entitled to reduced rates in accordance with the provisions herein. My initial
(CLASS D investment will be at least 5% of the Letter of Intention amount. I intend to purchase, although
ONLY) I am not obligated to do so, Fund shares within a 13-month period, an aggregate amount of which
will be at least:
/ / $25,000 / / $50,000 / / $100,000 / / $1,000,000
/ / This is a new Letter of Intention.
/ / This is a retroactive 90-day Letter, requiring adjustment of prior purchase(s).
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
G. COMBINED / / I elect to take advantage of the Combined Purchase Privilege. Below is a list of accounts of qualifying
PURCHASE individuals, organizations or other persons (see "Special Purchase Plans -- Combined Purchase Privilege" in the
PRIVILEGE Statement of Additional information) with which I wish to combine my purchase for reduced sales charge purposes.
(CLASS D
ONLY)
1. 2.
-------------------------------------------------- --------------------------------------------------
Account Number Fund Name Account Number Fund Name
-------------------------------------------------- --------------------------------------------------
Owner(s) Name Owner(s) Name
-------------------------------------------------- --------------------------------------------------
Relationship Relationship
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
H. TELEPHONE / / I hereby authorize the Fund's transfer agent (the "Transfer Agent") to honor any telephone
REDEMPTION instructions from any of the registered shareholders or the registered representative of the
PRIVILEGE above account for redemptions of at least $1,000 and no more than $25,000. Redemptions greater
than $25,000 must be in writing and signature guaranteed. The Transfer Agent and the Fund will
employ reasonable procedures to confirm that telephone instructions are genuine, including
requiring that payment be made only to the address registered on the account or to the bank
account designated below and requiring certain means of telephone identification. If the
Transfer Agent and the Fund fail to employ such procedures, they may be liable for any losses
suffered as a result of unauthorized or fraudulent instructions. Provided the Transfer Agent and
the Fund employ such procedures, I will indemnify and hold harmless the Transfer Agent, the
Distributor, and the Fund from and against all losses, claims, expenses and liabilities that may
arise out of, or be in any way connected with a redemption of shares under this expedited
redemption procedure. Proceeds will be mailed as registered on the account or wired to the bank
account designated below.
/ / Savings / / Checking
ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT
TO WHICH PROCEEDS OF $1,000 OR MORE MAY BE WIRED IF REQUESTED.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
I. MONTHLY / / Please send a check for $ on the 25th day (or preceding business day) of each month
WITHDRAWAL (minimum $100). This service is available only for accounts with balances of $10,000. A
contingent deferred sales charge may apply to redemptions of shares. Refer to "How to Redeem
Fund Shares" in the Prospectus.
</TABLE>
2
<PAGE>
________________________________________________________________________________
J. SIGNATURE
AND
CERTIFICATION
Substitute Form W-9 JUNDT U.S. EMERGING GROWTH FUND
<TABLE>
<S> <C> <C>
SIGNATURE CARD AND ----------------------------------------
TAXPAYER IDENTIFICATION NUMBER Account Number (to be completed by the
CERTIFICATION Fund)
</TABLE>
________________________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PART I
------------------------------------
Social Security Number
--------------------------------------------------
Name PLEASE PRINT
---------------------------------------------
REQUIRED --> or
---------------------------------------------
Tax Identification Number
---------------------------------------------
NOTE: If the account is in more than one name, give the
actual owner of the account or the first name
listed on the account and their tax identification
number.
</TABLE>
________________________________________________________________________________
<TABLE>
<S> <C>
PART II Are you an organization that meets the Internal Revenue Service ("IRS") definition of an exempt payee
(I.E., corporations, the United States and its agencies, a state, etc., qualify as exempt but
individuals DO NOT qualify as exempt)?
Yes / / No / /
</TABLE>
________________________________________________________________________________
CERTIFICATION: Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number;
and
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified me that
I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS: You must cross out item (2) above if you have been
notified by IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
I hereby certify that I have received a current prospectus, agree to be bound by
its terms, and that I am empowered and duly authorized to execute and carry out
the terms of this General Authorization Form and to purchase and hold the shares
subscribed for thereby, and further certify that this General Authorization Form
has been duly and validly executed on behalf of the person or entity listed
above and constitutes a legal and binding obligation of such person or entity.
I hereby acknowledge that it is my obligation to notify my investment
representative (at the time of investment) about my eligibility for any of the
special purchase plans detailed in the Prospectus. Absent such notification,
none of such plans will automatically be applied to any investment in Fund
shares, and I have waived my eligibility for all applicable plans.
________________________________________________________________________________
PLEASE
REQUIRED
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
JOINT
Signature--> Date-->
________________________________________
INVESTORS
PLEASE
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
The signature card is provided as a convenience to shareholders allowing
shareholders to submit written requests for redemption without signature
guarantee. (NOTE: For written redemption requests asking for proceeds to be
mailed to other than the shareholder(s) or address of record a signature
guarantee MUST be obtained. Signature guarantees are also required on
redemptions over $50,000.)
Please be sure to have all joint shareholders sign this card.
________________________________________________________________________________
NOTE: THIS SIGNED PAGE MUST ACCOMPANY THE PREVIOUS PAGE OF GENERAL AUTHORIZATION
FORM
3
<PAGE>
LETTER OF INTENTION AND TERMS OF ESCROW
(CLASS D SHARES ONLY)
If you estimate that during the next 13 months you will make a series of
purchases totaling an amount which qualifies for a reduced sales charge, you may
elect to take advantage of a Letter of Intention. The total investment must
equal at least $25,000 in any class of Fund shares. The Letter of Intention does
not obligate you to make purchases totaling a given amount, nor is the Fund
making a binding commitment to sell you the full amount of the shares indicated.
As soon as the Fund is informed that you have chosen to invest with a Letter of
Intention, each purchase can receive the appropriate (lower) sales charge. You
or your dealer must inform us EACH TIME that a purchase is made under a Letter
of Intention. (Automatic Investment Plans are not allowed for Letter of
Intention purchasers.) Your first purchase must be at least 5% of the Letter of
Intention amount.
For example, if you choose a Letter of Intention at the $100,000 level, you are
telling the Fund that you expect your purchases over the next 13 months to total
at least $100,000. Your first purchase must be at least $5,000. Whenever you
make another purchase and tell the Fund you have a Letter of Intention for
$100,000, you will be able to buy shares at the public offering price associated
with a single purchase of $100,000.
Reduced rates on large transactions are limited to the following: an individual
or a "company" as defined in Section 2(a)(8) of the Investment Company Act of
1940; an individual, his or her spouse and their children under the age of 21
purchasing securities for their own account; a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account
(including a pension, profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code);
tax-exempt organizations enumerated in Section 501(c)(3) of the Internal Revenue
Code; and any organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying redeemable
securities of a registered investment company, and provided that the purchase is
made through a central administration, or through a single dealer, or by other
means which result in economy of sales effort or expense. Such rates are not
allowable to a group of individuals whose funds are combined, directly or
indirectly, for the purchase of securities or to the agent, custodian or other
representative of such group.
Out of your initial purchase or purchases, 5% of the dollar amount specified in
the Letter of Intention shall be held in escrow by the Fund in the form of
shares computed at the applicable public offering price. For example, if the
amount of this Letter of Intention is $100,000 and the offering price (at the
time of the initial transaction) is $10 a share, 500 shares ($5,000 worth) would
be held in escrow. All shares purchased, including those escrowed, will be
registered in your name and recorded in the same account, which will be credited
fully with all income dividends and capital gain distributions declared. If the
total purchases equal or exceed the amount specified by you as your expected
aggregate purchases, the escrowed shares will be delivered to you or credited to
your account. If total purchases are less than the amount specified, you will
remit to the Fund an amount equal to the difference between the dollar amount of
sales charges actually paid and the amount of sales charges you would have paid
on your aggregate purchases if the total of such purchases had been made at a
single time. Neither dividends from investment income nor capital gain
distributions taken in shares will apply toward the completion of this Letter of
Intention. The contingent deferred sales charge (and not the front-end sales
charge) will apply to Letters of Intention for $1,000,000 or more. See "How to
Redeem Fund Shares -- Contingent Deferred Sales Charge" in the Prospectus.
However, if total purchases pursuant to such Letter of Intention are less than
$1,000,000 after a period of 13 months from the date of the first credited
investment, you will remit to the Fund an amount equal to the front-end sales
charge that would have applied if the actual aggregate amount invested were
invested at one time, less any contingent deferred sales charge paid on any
investment pursuant to such Letter of Intention redeemed during such period. The
Fund will prepare and mail a statement to you and your dealer or representative,
who shall be responsible for notifying you of the difference due and for
determining from you whether you prefer to pay it in cash or have it liquidated
from the escrowed shares. If the Fund has not received a check within 21 days of
notification, it will be assumed that the preferred method is liquidation. The
Fund will redeem a number of escrowed shares sufficient to realize the
difference and release or deliver the remainder.
The Fund is hereby irrevocably appointed your attorney to surrender for
redemption any or all escrowed shares under the conditions outlined above.
4
<PAGE>
INVESTOR'S CHECKLIST
QUESTIONS: CALL THE FUND AT (800) 370-0612
PURCHASE SHARES
BY MAIL: Send completed application, together with your check payable to the
Fund at:
Jundt U.S. Emerging Growth Fund
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
BY WIRE/TELEPHONE: Call your investment dealer/advisor or the Fund at (800)
370-0612. The Fund will assign a new account number to you.
Then instruct your commercial bank to wire transfer "Federal
Funds" via the Federal Reserve System to:
State Street Bank & Trust Company, ABA #011000028
For Credit of: Jundt U.S. Emerging Growth Fund
Checking Account No.: 9905-154-2
Account Number: (assigned by telephone)
SIGNATURES
All shareholders must sign the General Authorization Form exactly as their
names appear on the account form. Be sure all joint tenants sign. Only the
custodian for a minor must sign. Fiduciaries and officers of the corporations or
other organizations should indicate their capacity or title.
NOTE: See "How to Buy Fund Shares" in the Prospectus for order effectiveness and
further information.
5
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
ELIGIBILITY CERTIFICATION STATEMENT
Name: ___________________________________________________________________
ELIGIBILITY TO PURCHASE CLASS D SHARES AT NET ASSET VALUE
The above-named purchaser is eligible to purchase Class D shares of the Fund
at net asset value because it falls into the following category of investors:
(CHECK ALL BOXES THAT APPLY)
/ / Director, officer, employee or consultant of the Fund
(including partners and employees of outside legal counsel to the Fund), Jundt
Associates, Inc. or U.S. Growth Investments, Inc. or a member of the immediate
family, or a lineal ancestor or descendant, of any such person. Please give
details, including name of person and company or firm: _________________________
_______________________________________________________________________________
/ / Account for the benefit of any of the foregoing. Please
explain: _______________________________________________________________________
_______________________________________________________________________________
/ / Investment executive or other employee of a broker-dealer
or financial institution that has entered into an agreement with U.S. Growth
Investments, Inc. for the distribution of Fund shares or a parent or immediate
family member of any such person.
Please give details, including name of person and
broker-dealer or financial institution:
_______________________________________________________________________________
_______________________________________________________________________________
/ / Trust company or bank trust department for funds held in
a fiduciary, agency, advisory, custodial or similar capacity.
/ / States and their political subdivisions or
instrumentalities, departments, authorities and agencies thereof.
/ / Registered investment advisers or their investment
advisory clients.
/ / Section 401(a) employee benefit plans.
/ / Section 403(b)(7) custodial accounts.
I hereby certify that the enclosed investment represents a purchase of
Fund shares for myself or a beneficial account. I also certify that, as
described in the Fund's current prospectus, I am eligible to purchase Class D
shares at net asset value, and I will notify the Fund in the event I become no
longer eligible for net asset value purchases.
<PAGE>
I understand that any intentional abuse of the net asset value purchase
privilege may result in the application of retroactive sales charges or other
penalties in the discretion of U.S. Growth Investments, Inc.
Signature: ______________________________
Date: _______________________________
- 2 -
<PAGE>
APPENDIX A
GENERAL CHARACTERISTICS AND RISKS OF FUTURES AND OPTIONS
STOCK INDEX FUTURES, OPTIONS ON STOCK INDICES AND OPTIONS ON STOCK INDEX FUTURES
CONTRACTS
The Fund may purchase and sell stock index futures, options on stock indices
and options on stock index futures contracts as a hedge against movements in the
equity markets.
A stock index futures contract is an agreement in which one party agrees to
deliver to the other an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of securities is made.
Options on stock indices are similar to options on specific securities,
described below, except that, rather than the right to take or make delivery of
the specific security at a specific price, an option on a stock index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing level of that stock index is greater than, in the case of a call
option, or less than, in the case of a put option, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is obligated, in return for
the premium received, to make delivery of this amount. Unlike options on
specific securities, all settlements of options on stock indices are in cash and
gain or loss depends on general movements in the stocks included in the index
rather than price movements in particular stocks. Currently, options traded
include the S&P 100 Index, the S&P 500 Index, the NYSE Composite Index, the AMEX
Market Value Index, the National Over-the-Counter Index and other standard
broadly based stock market indices. Options are also traded in certain industry
or market segment indices such as the Computer Technology Index.
If the Investment Adviser expects general stock market prices to rise, it
might purchase a stock index futures contract, or a call option on that index,
as a hedge against an increase in prices of particular equity securities it
wants ultimately to buy. If the stock index does rise, the price of the
particular equity securities intended to be purchased may also increase, but
that increase would be offset in part by the increase in the value of the Fund's
futures contract or index option resulting from the increase in the index. If,
on the other hand, the Investment Adviser expects general stock market prices to
decline, it might sell a futures contract, or purchase a put option, on the
index. If that index does decline, the value of some or all of the equity
securities in the Fund's portfolio may also be expected to decline, but that
decrease would be offset in part by the increase in the value of the Fund's
position in such futures contract or put option.
The Fund may purchase and write call and put options on stock index futures
contracts. The Fund may use such options on futures contracts in connection with
its hedging strategies in lieu of purchasing and selling the underlying futures
or purchasing and writing options directly on the underlying securities or stock
indices. For example, the Fund may purchase put options or write call options on
stock index futures, rather than selling futures contracts, in anticipation of a
decline in general stock market prices or purchase call options or write put
options on stock index futures, rather than purchasing such futures, to hedge
against possible increases in the price of equity securities which the Fund
intends to purchase.
A-1
<PAGE>
In connection with transactions in stock index futures, stock index options
and options on stock index futures, the Fund will be required to deposit as
"initial margin" an amount of cash and short-term U.S. Government securities
equal to from 5% to 8% of the contract amount. Thereafter, subsequent payments
(referred to as "variation margin") are made to and from the broker to reflect
changes in the value of the futures contract.
OPTIONS ON SECURITIES
The Fund may write covered put and call options and purchase put and call
options on the securities in which it may invest that are traded on U.S.
securities exchanges. The Fund may also write call options that are not covered
for cross-hedging purposes.
The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in the case
of a put option; the writer may be assigned an exercise notice at any time prior
to the termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period. If a call
option is exercised, the writer experiences a profit or loss from the sale of
the underlying security. If a put option is exercised, the writer must fulfill
the obligation to purchase the underlying security at the exercise price which
will usually exceed the then market value of the underlying security.
The writer of an option that wished to terminate its obligation may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same series as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
purchased. There is no guarantee that either a closing purchase or a closing
sale transaction can be effected.
Effecting a closing transaction in the case of a written call option will
permit the Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both, or in the case of
a written put option will permit the Fund to write another put option to the
extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other Fund investments. If the Fund desires to sell a
particular security from its portfolio on which it has written a call option, it
will effect a closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is more than the
premium received from writing the option or is less than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the Fund.
A-2
<PAGE>
An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that the Fund would have to exercise the options in order to
realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market include the
following: (a) there may be insufficient trading interest in certain options;
(b) restrictions may be imposed by a national securities exchange ("Exchange")
on opening transactions or closing transactions or both; (c) trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities; (d) unusual or unforeseen
circumstances may interrupt normal operations on an Exchange; (e) the facilities
of an Exchange or the Options Clearing Corporation may not at all times be
adequate to handle current trading volume; or (f) one or more Exchanges could,
for economic or other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of options),
in which event the secondary market on that Exchange (or in that class or series
of options) would cease to exist, although outstanding options on that Exchange
that had been issued by the Options Clearing Corporation as a result of trades
on that Exchange would continue to be exercisable in accordance with their
terms.
The Fund may write options in connection with buy-and-write transactions;
that is, the Fund may purchase a security and then write a call option against
that security. The exercise price of the call the Fund determines to write will
depend upon the expected price movement of the underlying security. The exercise
price of a call option may be below ("in-the-money"), equal to ("at-the-money")
or above ("out-of-the-money") the current value of the underlying security at
the time the option is written. Buy-and-write transactions using in-the-money
call options may be used when it is expected that the price of the underlying
security will remain flat or decline moderately during the option period.
Buy-and-write transactions using out-of-the-money call options may be used when
it is expected that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. If the call options are exercised in such transactions, the
Fund's maximum gain will be the premium received by it for writing the option,
adjusted upwards or downwards by the difference between the Fund's purchase
price of the security and the exercise price. If the options are not exercised
and the price of the underlying security declines, the amount of such decline
will be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the position or take
delivery of the security at the exercise price and the Fund's return will be the
premium received from the put option minus the amount by which the market price
of the security is below the exercise price. Out-of-the-money, at-the-money and
in-the-money put options may be used by the Fund in the same market environments
that call options are used in equivalent buy-and-write transactions.
A-3
<PAGE>
The Fund may purchase put options to hedge against a decline in the value of
its portfolio. By using put options in this way, the Fund will reduce any profit
it might otherwise have realized in the underlying security by the amount of the
premium paid for the put option and by transaction costs.
The Fund may purchase call options to hedge against an increase in the price
of securities that the Fund anticipates purchasing in the future. The premium
paid for the call option plus any transaction costs will reduce the benefit, if
any, realized by the Fund upon exercise of the option, and, unless the price of
the underlying security rises sufficiently, the option may expire worthless to
the Fund.
RISK FACTORS IN FUTURES AND OPTIONS TRANSACTIONS
The effective use of futures and options strategies depends, among other
things, on the Fund's ability to terminate futures and options positions at
times when the Investment Adviser deems it desirable to do so. Although the Fund
will not enter into a futures or option position unless the Investment Adviser
believes that a liquid secondary market exists for such future or option, there
is no assurance that the Fund will be able to effect closing transactions at any
particular time or at an acceptable price.
The use of futures and options involves the risk of imperfect correlation
between movements in futures and options prices and movements in the price of
securities which are the subject of the hedge. Such correlation, particularly
with respect to stock index futures and options on stock indices, is imperfect,
and such risk increases as the composition of the Fund's portfolio diverges from
the composition of the relevant index. The successful use of these strategies
also depends on the ability of the Investment Adviser to correctly forecast
general stock market price movements.
A-4
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JUNDT U.S. EMERGING GROWTH FUND
------------------
PROSPECTUS
DECEMBER 29, 1995
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Fund.............................. 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Investment Objective and Policies..... 5
Management of the Fund................ 9
How to Buy Fund Shares................ 11
How to Redeem Fund Shares............. 16
Determination of Net Asset Value...... 19
Dividends, Distributions and Taxes.... 19
Performance Information............... 20
General Information................... 22
Appendix A -- General Characteristics
and Risks of Futures and Options..... A-1
</TABLE>
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE INVESTMENT ADVISER OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER
TO BUY, SHARES OF THE FUND IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFERING
OR SOLICITATION MAY NOT LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
INVESTMENT ADVISER
Jundt Associates, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416
DISTRIBUTOR
U.S. Growth Investments, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9011
Princeton, New Jersey 08543
TRANSFER AGENT
Investors Fiduciary Trust Company
1004 Baltimore
Kansas City, Missouri 64105
CUSTODIAN
Norwest Bank Minnesota, N.A.
90 South Seventh Street
Minneapolis, Minnesota 55402
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 Norwest Center
Minneapolis, Minnesota 55402
LEGAL COUNSEL
Faegre & Benson
Professional Limited Liability Partnership
2200 Norwest Center
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
PROSPECTUS SUPPLEMENT FOR CLASS A SHARES ONLY
Jundt U.S. Emerging Growth Fund (the "Fund") is a professionally managed,
diversified series of Jundt Funds, Inc. (the "Company"), an open-end management
investment company, commonly known as a "mutual fund." The Company currently
offers its shares in one series (Series A, which represent interests in the
Fund) and the Fund, in turn, currently offers its shares in four classes (Class
A, Class B, Class C and Class D), each sold pursuant to different sales
arrangements and bearing different expenses (each, a "Class" and, collectively,
the "Classes"). The Class B, Class C and Class D Fund shares are offered for
sale to the general public and are described, together with an overall
description of the Fund, in the Fund's Prospectus dated December 29, 1995 (the
"Prospectus").
This Prospectus Supplement relates exclusively to the Fund's Class A Shares.
However, except as provided in this Supplement and the Prospectus, the
information set forth in the Prospectus applies to all Classes, including Class
A, and Class A shares have the same rights and preferences with respect to the
Fund as do the other Classes. Therefore, this Supplement should be read by
prospective Class A shareholders in conjunction with the Prospectus.
PURCHASE INFORMATION
The Fund's Class A shares will not be distributed to the general public, but
will be offered for sale exclusively to directors, officers, employees and
consultants of the Fund (including partners and employees of outside legal
counsel to the Fund), the Fund's investment adviser, Jundt Associates, Inc. (the
"Investment Adviser"), and the Fund's principal distributor, U.S. Growth
Investments, Inc., members of their immediate families, and their direct lineal
ancestors and descendants, as well as accounts for the benefit of any of the
foregoing.
FEES AND EXPENSES
Class A shares are not subject to any front-end sales charges, deferred
sales charges, redemption fees or Rule 12b-1 account maintenance or distribution
fees. The following fee and expense summary
<PAGE>
format was developed for use by all mutual funds to assist investors in making
investment decisions. Of course, investors contemplating an investment in Fund
shares should also consider other relevant factors, including the Fund's
investment objectives and historical performance.
<TABLE>
<CAPTION>
CLASS A SHARES
--------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases....... NONE
Sales Charge Imposed on Dividend
Reinvestments.................................. NONE
Maximum Deferred Sales Load (a)................. NONE
Annual Fund Operating Expenses (as a percentage of
average net assets):
Investment Advisory Fees (b).................... 1.00%
12b-1 Fees...................................... NONE
Other Expenses:
Administrative Fees........................... .20%
Shareholder Servicing Costs................... .26%
Other (c)..................................... .09%
-------
Total Annual Fund Operating Expenses (c).......... 1.55%
-------
-------
</TABLE>
- ------------------------
(a) Service agents may charge a nominal fee for effecting redemptions of Fund
shares.
(b) The fee paid by the Fund to the Investment Adviser is higher than the
advisory fee paid by most other investment companies.
(c) Net of voluntary expense reimbursements by the Investment Adviser.
EXAMPLE:
Investors would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:
<TABLE>
<CAPTION>
CLASS A SHARES
-----------------
<S> <C>
One year...................................................................... $ 16
Three years................................................................... 49
</TABLE>
The purpose of the fee and expense information set forth above is to assist
investors in understanding the various costs and expenses the investors will
bear directly or indirectly in the Fund's Class A shares. More detailed
information regarding these expenses is set forth under "Management of the Fund"
in the Prospectus THE FOREGOING INFORMATION REPRESENTS MANAGEMENT'S GOOD FAITH
ESTIMATE OF FUND EXPENSES (NET OF VOLUNTARY EXPENSE REIMBURSEMENTS) DURING THE
FIRST YEAR OF THE FUND'S OPERATIONS, AND SHOULD NOT BE CONSIDERED
REPRESENTATIONS OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The Investment Adviser has voluntarily agreed to pay certain Fund expenses
as indicated in the above table incurred during the first year of the Fund's
operations. Thereafter, such voluntary expense reimbursements may be
discontinued or modified in the Investment Adviser's sole discretion. Absent
such voluntary expense reimbursements, the Investment Adviser estimates that the
Fund's Class A shares would incur Total Fund Operating Expenses of approximately
2.07%. JUNDT U.S. EMERGING GROWTH FUND
(A SERIES WITHIN JUNDT FUNDS, INC.)
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 22, 1995
<TABLE>
<S> <C>
Assets:
Cash in bank................................................................... $ 100,000
Organizational costs (note 4).................................................. 100,000
---------
Total assets................................................................. 200,000
---------
Liabilities:
Payable to Adviser (note 4).................................................... 100,000
---------
Net assets applicable to outstanding shares.................................. $ 100,000
---------
---------
Represented by:
Capital stock-authorized 10 billion shares (Class A-1 billion shares, Class B-1
billion shares, Class C-1 billion shares, Class D-1 billion shares, and 6
billion shares unallocated) of $.01 par value................................. 100
Additional paid-in capital..................................................... 99,900
---------
$ 100,000
---------
---------
Net asset value of outstanding capital stock:
Class A, net assets of $97,000 divided by 9,700 shares outstanding............. $ 10.00
---------
---------
Class B, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
Class C, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
Class D, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
</TABLE>
See accompanying notes to financial statement.
3
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION OF
JUNDT U.S. EMERGING GROWTH FUND
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 29, 1995
Jundt U.S. Emerging Growth Fund (the "Fund") is a professionally managed,
diversified series of Jundt Funds, Inc. (the "Company"), an open-end management
investment company, commonly known as a "mutual fund". The Company currently
offers its shares in one series (Series A, which represent interests in the
Fund) and the Fund, in turn, currently offers its shares in four classes (Class
A, Class B, Class C and Class D), each sold pursuant to different sales
arrangements and bearing different expenses (each, a "Class" and, collectively,
the "Classes"). Class A shares are offered for sale exclusively to certain
specified investors and are not offered for sale to the general public.
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated December 29, 1995 (the
"Prospectus"), which has been filed with the Securities and Exchange Commission
(the "SEC"). To obtain a copy of the Prospectus, please call the Fund or your
investment executive.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective, Policies and Restrictions....................... B-2
Taxes................................................................. B-3
Advisory, Administrative and Distribution Agreements.................. B-5
Special Purchase Plans................................................ B-8
Monthly Cash Withdrawal Plan.......................................... B-10
Determination of Net Asset Value...................................... B-10
Calculation of Performance Data....................................... B-11
Directors and Officers................................................ B-13
Counsel and Auditors.................................................. B-15
General Information................................................... B-15
Financial and Other Information....................................... B-16
Financial Statement................................................... F-1
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT OF ADDITIONAL
INFORMATION OR IN THE PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE FUND'S INVESTMENT ADVISER OR PRINCIPAL UNDERWRITER. NEITHER THIS
STATEMENT OF ADDITIONAL INFORMATION NOR THE PROSPECTUS CONSTITUTES AN OFFER TO
SELL, OR THE SOLICITATION OF AN OFFER TO BUY, SHARES OF THE FUND IN ANY STATE OR
JURISDICTION IN WHICH SUCH OFFERING OR SOLICITATION MAY NOT LAWFULLY BE MADE.
NEITHER THE DELIVERY OF THIS STATEMENT OF ADDITIONAL INFORMATION NOR ANY SALE
MADE HEREUNDER (OR UNDER THE PROSPECTUS) SHALL CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
B-1
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The Fund's investment objective and policies are set forth in the
Prospectus. Certain additional investment information is set forth below.
INVESTMENT RESTRICTIONS
The Fund has adopted certain FUNDAMENTAL RESTRICTIONS that may not be
changed without approval of shareholders owning a "majority of the outstanding
voting securities" of the Fund, as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"). Under the Investment Company
Act, "majority of the outstanding voting securities" means the affirmative vote
of the lesser of: (a) more than 50% of the outstanding shares of the Fund; or
(b) 67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy. As
fundamental policies, the Fund may not:
1. Invest more than 25% of its total assets in any one industry
(securities issued or guaranteed by the United States Government, its
agencies or instrumentalities are not considered to represent industries);
2. With respect to 75% of the Fund's assets, invest more than 5% of the
Fund's assets (taken at a market value at the time of purchase) in the
outstanding securities of any single issuer or own more than 10% of the
outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the United States Government, its
agencies or instrumentalities;
3. Borrow money or issue senior securities (as defined in the
Investment Company Act) except that the Fund may borrow in amounts not
exceeding 15% of its total assets from banks for temporary or emergency
purposes, including the meeting of redemption requests which might require
the untimely disposition of securities;
4. Make loans of securities to other persons in excess of 25% of its
total assets; provided the Fund may invest without limitation in short-term
obligations (including repurchase agreements) and publicly distributed
obligations;
5. Underwrite securities of other issuers, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933 in selling
portfolio securities;
6. Purchase or sell real estate or any interest therein, including
interests in real estate limited partnerships, except securities issued by
companies (including real estate investment trusts) that invest in real
estate or interests therein; or
7. Purchase or sell commodities or commodity contracts, except that,
for the purpose of hedging, it may enter into contracts for the purchase or
sale of debt and/or equity securities for future delivery, including futures
contracts and options on domestic and foreign securities indices.
In addition to the foregoing fundamental restrictions, the Fund has adopted
certain NON-FUNDAMENTAL RESTRICTIONS, which may be changed by the Fund's Board
of Directors without the approval of the Fund's shareholders. As non-fundamental
policies, the Fund may not:
1. Invest in securities issued by other investment companies in excess
of limitations imposed by federal and applicable state law;
B-2
<PAGE>
2. Make investments for the purpose of exercising control or
management;
3. Invest more than 10% of its assets in illiquid securities;
4. Invest more than 10% of its assets in the outstanding securities of
any single issuer;
5. Purchase or sell interests in oil, gas or other mineral exploration
or development plans or leases;
6. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by Fundamental Restriction 3 above (collateral
arrangements with respect to margin requirements for options and futures
transactions are not deemed to be pledges or hypothecations for this
purpose);
7. Purchase securities on margin, or make short sales of securities
(other than short sales "against the box"), except for the use of short-term
credit necessary for the clearance of purchases and sales of portfolio
securities, but it may make margin deposits in connection with transactions
in options, futures and options on futures;
8. Invest in warrants if at the time of acquisition more than 5% of its
total assets, taken at market value at the time of purchase, would be
invested in warrants, and if at the time of action more than 2% of its total
assets, taken at market value at the time of purchase, would be invested in
warrants not traded on the New York Stock Exchange. For purposes of this
restriction, warrants acquired by the Fund in units or attached to
securities may be deemed to be without value;
9. Invest more than 10% of its total assets in securities of issuers
which together with any predecessors have a record of less than three years
of continuous operation;
10. Own more than 10% of the outstanding voting securities of any one
issuer; or
11. Purchase equity securities in private placements.
With respect to each of the foregoing fundamental and non-fundamental
investment restrictions involving a percentage of the Fund's assets, if a
percentage restriction or limitation is adhered to at the time of an investment
or sale (other than a maturity) of a security, a later increase or decrease in
such percentage resulting from a change of values or net assets will not be
considered a violation thereof.
TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
so qualify, the Fund must, among other things: (a) derive in each taxable year
at least 90% of its gross income from dividends, interest, payments with respect
to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income derived with respect to its
business of investing in such stock, securities or currencies; (b) derive in
each taxable year less than 30% of its gross income from the sale or other
disposition of stock or securities, or options, futures, and certain forward
contracts or foreign currencies held for less than three months; and (c) satisfy
certain diversification requirements at the close of each quarter of the Fund's
taxable year.
B-3
<PAGE>
As a regulated investment company, the Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders, provided it distributes at
least 90% of its "investment company taxable income" (as that term is defined in
the Code) to Fund shareholders in each taxable year. However, if for any taxable
year a Fund does not satisfy the requirements of Subchapter M of the Code, all
of its taxable income will be subject to tax at regular corporate rates without
any deduction for distributions to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's current
or accumulated earnings and profits.
The Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax, during each calendar year the Fund must
distribute: (i) at least 98% of its taxable ordinary income (not taking into
account any capital gains or losses) for the calendar year; (ii) at least 98% of
its capital gain net income for the twelve month period ending on October 31 (or
December 31, if the Fund so elects); and (iii) any portion (not taxed to the
Fund) of the respective balances from the prior year. To the extent possible,
the Fund intends to make sufficient distributions to avoid this 4% excise tax.
The Fund, or the shareholder's broker with respect to the Fund, is required
to withhold federal income tax at a rate of 31% of dividends, capital gains
distributions and proceeds of redemptions if a shareholder fails to furnish the
Fund with a correct taxpayer identification number ("TIN") or to certify that he
is exempt from such withholding, or if the Internal Revenue Service notifies the
Fund or broker that the shareholder has provided the Fund with an incorrect TIN
or failed to properly report dividend or interest income for federal income tax
purposes. Any such withheld amount will be fully creditable on the shareholder's
federal income tax return. An individual's TIN is his social security number.
The Fund may write, purchase or sell options or futures contracts.
Generally, options and futures contracts that are "Section 1256 contracts" will
be "marked to market" for federal income tax purposes at the end of each taxable
year, I.E., each option or futures contract will be treated as sold for its fair
market value on the last day of the taxable year. Gain or loss from transactions
in options and futures contracts that are subject to the "marked to market" rule
will be 60% long-term and 40% short-term capital gain or loss. However, the Fund
may be eligible to make a special election under which certain "Section 1256
contracts" would not be subject to the "marked to market" rule.
Code Section 1092, which applies to certain "straddles," may affect the
taxation of the Fund's transactions in options and futures contracts. Under
Section 1092, the Fund may be required to postpone recognition for tax purposes
of losses incurred in certain closing transactions in options and futures.
One of the requirements for qualification as a registered investment company
is that less than 30% of the Fund's gross income may be derived from gains from
the sale or other disposition of securities, including options, futures and
forward contracts, held for less than three months. Accordingly, the Fund may be
restricted in effecting closing transactions within three months after entering
into an option or futures contract.
B-4
<PAGE>
ADVISORY, ADMINISTRATIVE AND DISTRIBUTION AGREEMENTS
INVESTMENT ADVISORY AGREEMENT
Jundt Associates, Inc. (the "Investment Adviser") has been retained as the
Fund's investment adviser pursuant to an investment advisory agreement entered
into by and between the Company and the Investment Adviser (the "Investment
Advisory Agreement"). Under the terms of the Investment Advisory Agreement, the
Investment Adviser furnishes continuing investment supervision to the Fund and
is responsible for the management of the Fund's portfolio. The responsibility
for making decisions to buy, sell or hold a particular security rests with the
Investment Adviser, subject to review by the Company's Board of Directors.
The Investment Adviser furnishes office space, equipment and personnel to
the Fund in connection with the performance of its investment management
responsibilities. In addition, the Investment Adviser pays the salaries and fees
of all officers and directors of the Fund who are affiliated persons of the
Investment Adviser.
The Fund pays all other expenses incurred in the operation of the Fund
including, but not limited to, brokerage and commission expenses; interest
charges; fees and expenses of legal counsel and independent auditors; the Fund's
organizational and offering expenses, whether or not advanced by the Investment
Adviser; taxes and governmental fees; expenses (including clerical expenses) of
issuance, sale or repurchase of the Fund's shares; membership fees in trade
associations; expenses of registering and qualifying shares of the Fund for sale
under federal and state securities laws; expenses of printing and distributing
reports, notices and proxy materials to existing shareholders; expenses of
regular and special shareholders meetings; expenses of filing reports and other
documents with governmental agencies; charges and expenses of the Fund's
administrator, custodian and registrar, transfer agent and dividend disbursing
agent; expenses of disbursing dividends and distributions; compensation of the
Company's officers, directors and employees who are not affiliated with the
Investment Adviser; travel expenses of directors of the Company for attendance
at meetings of the Board of Directors; insurance expenses; indemnification and
other expenses not expressly provided for in the Investment Advisory Agreement;
and any extraordinary expenses of a non-recurring nature.
For its services, the Investment Adviser receives from the Fund a monthly
fee at an annual rate of 1% of the Fund's average daily net assets. These fees
exceed those paid by most other investment companies.
The Investment Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a majority of the Company's
directors, including a majority of the directors who are not "interested
persons" (as defined in the Investment Company Act) of the Company or the
Investment Adviser ("Independent Directors") at a meeting in person. The
Investment Advisory Agreement may be terminated by either party, by the
Independent Directors or by a vote of the holders of a majority of the
outstanding securities of the Company, at any time, without penalty, upon 60
days' written notice, and automatically terminates in the event of its
"assignment" (as defined in the Investment Company Act).
PORTFOLIO TRANSACTIONS, BROKERAGE COMMISSIONS AND PORTFOLIO TURNOVER RATE
Subject to policies established by the Company's Board of Directors of the
Fund, the Investment Adviser is responsible for investment decisions and for the
execution of the Fund's portfolio transactions. The Fund has no obligation to
deal with any particular broker or dealer in the execution of
B-5
<PAGE>
transactions in portfolio securities. In executing such transactions, the
Investment Adviser seeks to obtain the best price and execution for its
transactions. While the Investment Adviser generally seeks reasonably
competitive commission rates, the Fund does not necessarily pay the lowest
commission.
ADMINISTRATION AGREEMENT
Under the terms of an administration agreement by and between Princeton
Administrators, L.P. (the "Administrator") and the Company (the "Administration
Agreement"), the Administrator performs or arranges for the performance of the
following administrative services: (a) maintenance and keeping of certain books
and records of the Fund; (b) preparation or review and, subject to the Company's
review, filing certain reports and other documents required by federal, state
and other applicable U.S. laws and regulations to maintain the Company's
registration as an open-end investment company; (c) coordination of tax related
matters; (d) response to inquiries from Fund shareholders; (e) calculation and
dissemination for publication of the net asset value of the Fund's shares; (f)
oversight and, as the Company's Board of Directors may request, preparation of
reports and recommendations to the Company's Board of Directors on the
performance of administrative and professional services rendered to the Fund by
others, including the Fund's custodian and any subcustodian, registrar, transfer
agency, and dividend disbursing agent, as well as accounting, auditing and other
services; (g) provision of competent personnel and administrative offices
necessary to perform its services under the Administration Agreement; (h)
arrangement for the payment of Fund expenses; (i) consultations with the
Company's officers and various service providers in establishing the accounting
policies of the Fund; (j) preparation of such financial information and reports
as may be required by any banks from which the Fund borrows funds; and (k)
provision of such assistance to the Investment Adviser, the custodian and any
subcustodian, and the Fund's counsel and auditors as generally may be required
to carry on properly the business and operations of the Fund. Under the
Administration Agreement, the Company agrees to cause the Fund's transfer agent
to timely deliver to the Administrator such information as may be necessary or
appropriate for the Administrator's performance of its duties and
responsibilities to the Fund.
The Administrator is obligated, at its expense, to provide office space,
facilities, equipment and necessary personnel in connection with its provision
of services under the Administration Agreement; however, the Fund (in addition
to the fees payable to the Administrator under the Administration Agreement, as
described below) has agreed to pay reasonable travel expenses of persons who
perform administrative, clerical and bookkeeping functions on behalf of the
Fund. Additionally, the expenses of legal counsel and accounting experts
retained by the Administrator, after consulting with the Fund's counsel and
independent auditors, as may be necessary or appropriate in connection with the
Administrator's provision of services to the Fund, are deemed expenses of, and
shall be paid by, the Fund.
For the services rendered to the Fund and the facilities furnished, the Fund
is obliged to pay the Administrator, subject to an annual minimum fee of
$125,000, a monthly fee at an annual rate of .20% of the first $600 million of
the Fund's average daily net assets and .175% of the Fund's average daily net
assets in excess of $600 million. For the period ending December 31, 1996, the
Administrator has agreed to waive its $125,000 annual minimum fee.
The Administration Agreement will remain in effect unless and until
terminated in accordance with its terms. It may be terminated at any time,
without the payment of any penalty, by the Company
B-6
<PAGE>
on sixty days' written notice to the Administrator and by the Administrator on
ninety days' written notice to the Company. The Administration Agreement
terminates automatically in the event of its assignment.
The principal address of the Administrator is P.O. Box 9011, Princeton, New
Jersey 08543.
THE DISTRIBUTOR
Pursuant to a Distribution Agreement by and between U.S. Growth Investments,
Inc. (the "Distributor") and the Company (the "Distribution Agreement"), the
Distributor serves as the principal underwriter of the Fund's shares. The Fund's
shares are offered continuously by and through the Distributor. As agent of the
Fund, the Distributor accepts orders for the purchase and redemption of Fund
shares. The Distributor may enter into selling agreements with other dealers and
financial institutions, pursuant to which such dealers and/or financial
institutions also may sell Fund shares.
RULE 12B-1 DISTRIBUTION PLANS
Rule 12b-1 under the Investment Company Act provides that any payments made
by the Fund (or any Class thereof) in connection with the distribution of its
shares must be pursuant to a written plan describing all material aspects of the
proposed financing of distribution and that any agreements entered into in
furtherance of the plan must likewise be in writing. In accordance with Rule
12b-1, the Fund adopted a separate Rule 12b-1 Distribution Plan for each of its
Class B, Class C and Class D shares. There is no Rule 12b-1 Distribution Plan
for the Fund's Class A shares.
Rule 12b-1 requires that the Distribution Plans (the "Plans") and the
Distribution Agreement be approved initially, and thereafter at least annually,
by a vote of the Company's Board of Directors including a majority of the
directors who are not interested persons of the Company and who have no direct
or indirect interest in the operation of the Plans or in any agreement relating
to the Plans, cast in person at a meeting called for the purpose of voting on
the plan or agreement. Rule 12b-1 requires that the Distribution Agreement and
each Plan provide, in substance:
(a) that it shall continue in effect for a period of more than one year
from the date of its execution or adoption only so long as such continuance
is specifically approved at least annually in the manner described in the
preceding paragraph;
(b) that any person authorized to direct the disposition of moneys paid
or payable by the Fund pursuant to the Plan or any related agreement shall
provide to the Company's Board of Directors, and the directors shall review,
at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made; and
(c) in the case of a Plan, that it may be terminated at any time by a
vote of a majority of the members of the Company's Board of Directors who
are not interested persons of the Company and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan or by a vote of a majority of the outstanding voting shares of
each affected Class or Classes of the Fund's shares.
Rule 12b-1 further requires that none of the Plans may be amended to
increase materially the amount to be spent for distribution without approval by
the shareholders of the affected Class or Classes and that all material
amendments of the Plan must be approved in the manner described in the paragraph
preceding clause (a) above.
B-7
<PAGE>
Rule 12b-1 provides that the Fund may rely upon Rule 12b-1 only if the
selection and nomination of the Company's disinterested directors are committed
to the discretion of such disinterested directors. Rule 12b-1 provides that the
Fund may implement or continue the Plans only if the directors who vote to
approve such implementation or continuation conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties under state
law, and under Sections 36(a) and (b) of the Investment Company Act, that there
is a reasonable likelihood that each Plan will benefit the Fund and its
shareholders. The Company's Board of Directors has concluded that there is a
reasonable likelihood that the Distribution Plans will benefit the Fund and its
shareholders.
Under its Distribution Plan, each of Class B, Class C and Class D pays the
Distributor a Rule 12b-1 "account maintenance fee" equal on an annual basis to
.25% of the average daily net assets attributable to each such Class. This
account maintenance fee is designed to compensate the Distributor and certain
broker-dealers and financial institutions with which the Distributor has entered
into selling arrangements for the provision of certain services to the holders
of Fund shares, including, but not limited to, answering shareholder questions,
providing shareholders with reports and other information and providing various
other services relating to the maintenance of shareholder accounts.
The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 "distribution fee" to the Distributor, equal on an
annual basis to .75% of the average daily net assets attributable to such Class.
This fee is designed to compensate the Distributor for advertising, marketing,
and distributing the Class B and Class C shares, including the provision of
initial and ongoing sales compensation to the Distributor's sales
representatives and to other broker-dealers and financial institutions with
which the Distributor has entered into selling arrangements.
SPECIAL PURCHASE PLANS
AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares may be
purchased through a preauthorized automatic investment plan. Such preauthorized
investments (at least $50) may be used to purchase shares of the Fund at the
public offering price next determined after the Fund receives the investment
(normally the 5th of each month, or the next business day thereafter). Further
information is available from the Distributor.
COMBINED PURCHASE PRIVILEGE. The following persons (or groups of persons)
may qualify for reductions from the front-end sales charge ("FESC") schedule for
Class D shares set forth in the Prospectus by combining purchases of any Class
of Fund shares, if the combined purchase of all Fund shares totals at least
$25,000:
(i) an individual or a "company" as defined in Section 2(a)(8) of the
Investment Company Act;
(ii) an individual, his or her spouse and their children under
twenty-one, purchasing for his, her or their own account;
(iii) a trustee or other fiduciary purchasing for a single trust estate
or single fiduciary account (including a pension, profit-sharing or other
employee benefit trust) created pursuant to a plan qualified under Section
401 of the Code;
(iv) tax-exempt organizations enumerated in Section 501(c)(3) of the
Code;
(v) employee benefit plans of a single employer or of affiliated
employers;
B-8
<PAGE>
(vi) any organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company, and provided that
the purchase is made through a central administration, or through a single
dealer, or by other means which result in economy of sales effort or
expense. An organized group does not include a group of individuals whose
sole organizational connection is participation as credit cardholders of a
company, policyholders of an insurance company, customers of either a bank
or broker-dealer, or clients of an investment adviser.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of Class D
shares may qualify for a Cumulative Quantity Discount. The applicable FESC will
then be based on the total of:
(i) the investor's current purchase; and
(ii) the net asset value (at the close of business on the previous day)
of Fund shares held by the investor; and
(iii) the net asset value of shares of any Class of Fund shares owned by
another shareholder eligible to participate with the investor in a "Combined
Purchase Privilege" (see above).
For example, if an investor owned shares worth $15,000 at the then current
net asset value and purchased an additional $10,000 of shares, the sales charge
for the $10,000 purchase would be at the rate applicable to a single $25,000
purchase.
To qualify for the Combined Purchase Privilege or to obtain the Cumulative
Quantity Discount on a purchase through an investment dealer, when each purchase
is made the investor or dealer must provide the Fund with sufficient information
to verify that the purchase qualifies for the privilege or discount.
LETTER OF INTENTION. Investors wishing to purchase Class D shares may also
obtain the reduced FESC shown in the Prospectus by means of a written Letter of
Intention, which expresses the investor's intention to invest not less than
$25,000 (including certain "credits," as described below) within a period of 13
months in any Class of Fund share. Each purchase of shares under a Letter of
Intention will be made at the public offering price applicable at the time of
such purchase to a single transaction of the dollar amount indicated in the
Letter. A Letter of Intention may include purchases of shares made not more than
90 days prior to the date that an investor signs a Letter of Intention; however,
the 13-month period during which the Letter is in effect will begin on the date
of the earliest purchase to be included. Investors qualifying for the Combined
Purchase Privilege described above may purchase shares under a single Letter of
Intention.
For example, assume that on the date an investor signs a Letter of Intention
to invest at least $25,000 as set forth above and the investor and the
investor's spouse and children under twenty-one have previously invested $10,000
in shares which are still held by such persons. It will only be necessary to
invest a total of $15,000 during the 13 months following the first date of
purchase of such shares in order to qualify for the sales charges applicable to
investments of $25,000.
The Letter of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intention is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount indicated is not
purchased. When the full amount indicated has been purchased, the escrow will be
released. To the extent that an
B-9
<PAGE>
investor purchases more than the dollar amount indicated on the Letter of
Intention and qualifies for further reduced sales charges, the sales charges
will be adjusted for the entire amount purchased at the end of the 13-month
period. The difference in sales charges will be used to purchase additional
shares at the then current offering price applicable to the actual amount of the
aggregate purchases.
Investors electing to take advantage of the Letter of Intention should
carefully review the appropriate provisions on the general authorization form
attached to the Prospectus.
MONTHLY CASH WITHDRAWAL PLAN
Any investor who owns or buys shares of the Fund valued at $10,000 or more
at the current offering price may open a Withdrawal Plan and have a designated
sum of money paid monthly to the investor or another person. Shares are
deposited in a Withdrawal Plan account and all distributions are reinvested in
additional shares of the Fund at net asset value. Shares in a Withdrawal Plan
account are then redeemed at net asset value to make each withdrawal payment.
Deferred sales charges may apply to monthly redemptions of shares. Redemptions
for the purpose of withdrawal are made on the 20th of the month (or on the
preceding business day if the 20th falls on a weekend or is a holiday) at that
day's closing net asset value, and checks are mailed on the next business day.
Payments will be made to the registered shareholder or to another party if
preauthorized by the registered shareholder. As withdrawal payments may include
a return on principal, they cannot be considered a guaranteed annuity or actual
yield of income to the investor. The redemption of shares in connection with a
Withdrawal Plan may result in a gain or loss for tax purposes. Continued
withdrawals in excess of income will reduce and possibly exhaust invested
principal, especially in the event of a market decline. The maintenance of a
Withdrawal Plan concurrently with purchases of additional shares of a Class
which imposes an FESC would normally be disadvantageous to the investor because
of the FESC payable on such purchases. For this reason, an investor may not
maintain an Automatic Investment Plan for the accumulation of shares of a Class
which imposes an FESC (other than through reinvestment of distributions) and a
Withdrawal Plan at the same time. The cost of administering Withdrawal Plans is
borne by the Fund as an expense of all shareholders. The Fund or the Distributor
may terminate or change the terms of the Withdrawal Plan at any time. The
Withdrawal Plan is fully voluntary and may be terminated by the shareholder at
any time without the imposition of any penalty.
Since the Withdrawal Plan may involve invasion of capital, investors should
consider carefully with their own financial advisers whether the Withdrawal Plan
and the specified amounts to be withdrawn are appropriate in their
circumstances. The Fund makes no recommendations or representations in this
regard.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is calculated separately for each Class of
shares. The assets and liabilities attributable to each Class of shares is
determined in accordance with generally accepted accounting principles and
applicable SEC rules and regulations.
B-10
<PAGE>
The portfolio securities in which the Fund invests fluctuate in value, and
hence the Fund's net asset value per share also fluctuates. On December 21,
1995, the net asset value per share of each Class of the Fund's shares was
calculated as follows:
Class A Shares:
<TABLE>
<C> <S>
Net Assets ($97,000)
-------------------------- = Net Asset Value Per Class A Share ($10.00)
Shares Outstanding (9,700)
</TABLE>
Class B Shares:
<TABLE>
<C> <S>
Net Assets ($1,000)
-------------------------- = Net Asset Value Per Class B Share ($10.00)
Shares Outstanding (100)
</TABLE>
Class C Shares:
<TABLE>
<C> <S>
Net Assets ($1,000)
-------------------------- = Net Asset Value Per Class C Share ($10.00)
Shares Outstanding (100)
</TABLE>
Class D Shares:
<TABLE>
<C> <S>
Net Assets ($1,000)
-------------------------- = Net Asset Value Per Class D Share ($10.00)
Shares Outstanding (100)
</TABLE>
CALCULATION OF PERFORMANCE DATA
For purposes of quoting and comparing the performance of each Class of the
Fund's shares to that of other mutual funds and to other relevant market indices
in advertisements or in reports to shareholders, performance may be stated in
terms of "average annual total return" or "cumulative total return." These total
return quotations are and will be computed separately for each Class of shares.
Under the rules of the SEC, funds advertising performance must include average
annual total return quotations calculated according to the following formula:
P(1+T)(n) = ERV
<TABLE>
<C> <C> <S>
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of such period.
</TABLE>
This calculation assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
B-11
<PAGE>
Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
ERV - P
CTR = (________) x 100
P
<TABLE>
<C> <C> <S>
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of such period; and
P = initial payment of $1,000.
</TABLE>
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
Under each of the above formulas, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication.
The average annual total return and cumulative total return figures
calculated in accordance with the foregoing formulas assume in the case of Class
D shares the maximum FESC has been deducted from the hypothetical initial
investment at the time of purchase, or in the case of Class B or Class C shares
the maximum applicable CDSC has been paid upon the hypothetical redemption of
the shares at the end of the period.
Past performance is not predictive of future performance. All advertisements
containing performance data of any kind will include a legend disclosing that
such performance data represents past performance and that the investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Advertisements and communications may compare the performance of Fund shares
with that of other mutual funds, as reported by Lipper Analytical Services, Inc.
or similar independent services or financial publications, and may also contrast
the Fund's investment policies and portfolio flexibility with other mutual
funds. From time to time, advertisements and other Fund materials and
communications may cite statistics to reflect the performance over time of Fund
shares, utilizing generally accepted indices or analyses, including, but not
limited to, those published by Lipper Analytical Service, Inc., Standard &
Poor's Corporation, Dow Jones & Company, Inc., CDA Investment Technologies,
Inc., Morningstar, Inc. and Investment Company Data Incorporated. Performance
ratings reported periodically in national financial publications also may be
used. In addition, advertising materials may include the Investment Adviser's
analysis of, or outlook for, the economy or financial markets, compare the
Investment Adviser's analysis or outlook with the views of others in the
financial community and refer to the expertise of the Investment Advisers
personnel and their reputation in the financial community.
B-12
<PAGE>
DIRECTORS AND OFFICERS
Directors and officers of the Company, together with information as to their
principal occupations during the past five years, are set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE COMPANY PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
James R. Jundt (1)(2) Chairman of the Board, Chairman of the Board, Chief Executive Officer,
1550 Utica Avenue South President and Chief Secretary and portfolio manager of the
Suite 950 Executive Officer Investment Adviser since its inception in 1982.
Minneapolis, MN 55416 Chairman of the Board, President and Chief
Executive Officer of The Jundt Growth Fund, Inc.
since 1991. Also a trustee of Gonzaga University
and the Minneapolis Institute of Arts and a
director of three private companies.
John E. Clute Director Dean and Professor of Law, Gonzaga University
East 702 Sharp Avenue School of Law (since August 1, 1991); previously
Spokane, WA 99202 Senior Vice President -- Human Resources and
General Counsel, Boise Cascade Corporation
(forest products) for more than five years.
Director of The Jundt Growth Fund, Inc. since
1991. Also a director of Hecla Mining Company
(mining).
Floyd Hall Director Chairman, President and Chief Executive Officer
3100 West Big Beaver Road of K-Mart Corporation (retailing) since June
Troy, MI 48084 1995. Chairman and Chief Executive Officer of
The Museum Company (retailing) and Alva Replicas
Company (manufacturer of statuary and sculpture)
from July 1989 to June 1995; from March 1984 to
July 1989 Chairman and Chief Executive Officer
of The Grand Union Company (grocery store
chain). Director of The Jundt Growth Fund, Inc.
since 1991. Also a director of Jamesway Corp.
(discount retailing) as well as a private
company.
</TABLE>
B-13
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE COMPANY PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
Demetre M. Nicoloff Director Cardiac and thoracic surgeon, Cardiac Surgical
1492 Hunter Drive Associates, P.A., Minneapolis, Minnesota.
Wayzata, MN 55391 Director of The Jundt Growth Fund, Inc. since
1991. Also a director of Optical Sensors for
Medicine, Inc. (patient monitoring equipment);
ATS Medical, Inc. (heart valves), Micromedics,
Inc. (instrument trays, ENT specialty products
and fibrin glue applicators); Possis Medical
Inc. (cardiovascular surgical products); Applied
Biometrics, Inc. (cardiac output measuring
devices) and Sonometrics, Inc. (ultrasound
imaging equipment).
Darrell R. Wells Director Managing Director, Security Management Company
4350 Brownsboro Road (asset management firm). Director of The Jundt
Louisville, KY 40207 Growth Fund, Inc. since 1991. Also a director of
Churchill Downs Inc. (race track operator) and
Citizens Financial Inc. (insurance holding
company), as well as several private companies.
Donald M. Longlet Vice President and Treasurer Portfolio manager since May 1989 with the
1550 Utica Avenue South Investment Adviser; portfolio manager with AMEV
Suite 950 Advisers, Inc., St. Paul, Minnesota, from
Minneapolis, MN 55416 January 1983 to April 1989. Vice President and
Treasurer of The Jundt Growth Fund, Inc. since
1991.
James E. Nicholson Secretary Partner with the law firm of Faegre & Benson
2200 Norwest Center Professional Limited Liability Partnership,
Minneapolis, MN 55402 Minneapolis, Minnesota, which has served as
general counsel to the Investment Adviser since
its inception. Secretary of The Jundt Growth
Fund, Inc. since 1991.
</TABLE>
- ------------------------
(1) Director who is an "interested person" of the Fund, as defined in the
Investment Company Act.
(2) "Controlling person" of the Investment Adviser, as defined in the Investment
Company Act. Mr. Jundt beneficially owns 76% of the capital stock of the
Investment Adviser. Mr. Jundt also owns 100% of the capital stock of the
Distributor and is, therefore, a controlling person of the Distributor as
well.
B-14
<PAGE>
The Company and The Jundt Growth Fund, Inc. (together, the "Fund Complex")
together have agreed to pay each director who is not an "interested person" of
either the Company or The Jundt Growth Fund, Inc. a fee of $12,000 per year plus
$1,200 for each meeting attended and to reimburse each such director for the
expenses of attendance at such meetings. No compensation is paid by the Company
or the Fund Complex to the Company's officers or directors who are "interested
persons" of either the Company or The Jundt Growth Fund, Inc.
The following table sets forth estimated compensation and benefits to be
paid to each director by the Fund Complex during the first full year of the
Fund's operations (the year ending December 31, 1996):
COMPENSATION TABLE
<TABLE>
<CAPTION>
ESTIMATED AGGREGATE COMPENSATION
FROM THE FUND COMPLEX
----------------------------------------
ESTIMATED
PENSIONS OR
RETIREMENT
TWELVE-MONTH BENEFITS ACCRUED
PERIOD ENDED AS PART OF COMPANY
NAME OF DIRECTOR DECEMBER 31, 1996 EXPENSES
- ----------------------------------------------------------------------- ----------------- ---------------------
<S> <C> <C>
James R. Jundt......................................................... None None
Demetre M. Nicoloff.................................................... $ 16,800 None
Darrell R. Wells....................................................... $ 16,800 None
John E. Clute.......................................................... $ 16,800 None
Floyd Hall............................................................. $ 16,800 None
</TABLE>
COUNSEL AND AUDITORS
Faegre & Benson Professional Limited Liability Partnership, 2200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, serves as the
Fund's general counsel. KPMG Peat Marwick LLP, 4200 Norwest Center, 90 South
Seventh Street, Minneapolis, Minnesota 55402, has been selected as the
independent auditors of the Fund for its fiscal years ending December 31, 1995
and 1996, respectively.
GENERAL INFORMATION
Under Minnesota law, each Company director owes certain fiduciary duties to
the Company and to its shareholders. Minnesota law provides that a director
"shall discharge the duties of the position of director in good faith, in a
manner the director reasonably believes to be in the best interest of the
corporation, and with the care an ordinary prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of a
Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate or limit the liability of
directors: (a) for any breach of the directors' duty of "loyalty" to the
corporation or its shareholders; (b) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of Minnesota law or
for violation of certain provisions of Minnesota securities laws; or (c) for any
transaction from which the directors derived an improper personal benefit. The
Company's Articles of Incorporation limit the liability of the Company's
directors to the
B-15
<PAGE>
fullest extent permitted by Minnesota statutes, except to the extent that such
liability cannot be limited as provided in the Investment Company Act (which
prohibits any provisions which purport to limit the liability of directors
arising from such directors' willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of their role as
directors).
Minnesota law does not eliminate the duty of "care" imposed upon a director.
It only authorizes a corporation to eliminate monetary liability for violations
of that duty. Minnesota law, further, does not permit elimination or limitation
of liability of "officers" to the corporation for breach of their duties as
officers (including the liability of directors who serve as officers for breach
of their duties as officer). Minnesota law does not permit elimination of the
availability of equitable relief, such as injunctive or rescissionary relief.
These remedies, however, may be ineffective in situations where shareholders
become aware of such a breach after a transaction has been consummated and
rescission has become impractical. Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933 or the Securities Exchange Act of 1934, and it is uncertain whether and to
what extent the elimination of monetary liability would extend to violations of
duties imposed on directors by the Investment Company Act and the rules and
regulations thereunder.
The Company is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders. Regular and special
shareholder meetings are held only at such times and with such frequency as
required by law. Minnesota corporation law provides for the Board of Directors
to convene shareholder meetings when it deems appropriate. In addition, if a
regular meeting of shareholders has not been held during the immediately
preceding fifteen months, a shareholder or shareholders holding three percent or
more of the voting shares of the Company may demand a regular meeting of
shareholders of the Company by written notice of demand given to the chief
executive officer or the chief financial officer of the Company. Within ninety
days after receipt of the demand, a regular meeting of shareholders must be held
at the expense of the Company. Irrespective of whether a regular meeting of
shareholders has been held during the immediately preceding fifteen months, in
accordance with Section 16(c) under the Investment Company Act, the Company's
Board of Directors shall promptly call a meeting of shareholders for the purpose
of voting upon the question of removal of any director when requested in writing
to do so by the record holders of not less than 10 percent of the outstanding
shares. Additionally, the Investment Company Act requires shareholder votes for
all amendments to fundamental investment policies and restrictions and for all
investment advisory contracts and amendments thereto.
Upon issuance and sale in accordance with the terms of the Fund's Prospectus
and Statement of Additional Information, each Fund share will be fully paid and
non-assessable. Shares have no preemptive, subscription or conversion rights and
are redeemable as set forth under "How To Redeem Fund Shares" in the Prospectus.
FINANCIAL AND OTHER INFORMATION
The Fund's Prospectus and this Statement of Additional Information do not
contain all the information included in the Company's Registration Statement
filed with the SEC under the Securities Act of 1933 and the Investment Company
Act (the "Registration Statement") with respect to the securities offered by the
Prospectus and this Statement of Additional Information. Certain portions of the
Registration Statement have been omitted from the Prospectus and this Statement
of Additional Information pursuant to the rules and regulations of the SEC. The
Registration Statement including the exhibits filed therewith may be examined at
the office of the SEC in Washington, D.C.
B-16
<PAGE>
Statements contained in the Fund's Prospectus or in this Statement of
Additional Information as to any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.
B-17
<PAGE>
JUNDT U. S. EMERGING GROWTH FUND
(A SERIES WITHIN JUNDT FUNDS, INC.)
FINANCIAL STATEMENT
DECEMBER 22, 1995
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Jundt Funds, Inc.:
We have audited the statement of assets and liabilities of Jundt U.S.
Emerging Growth Fund (a series within Jundt Funds, Inc.) as of December 22,
1995. This financial statement is the responsibility of the Fund's management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash in bank by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Jundt U.S.
Emerging Growth Fund at December 22, 1995, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
December 22, 1995
F-1
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES WITHIN JUNDT FUNDS, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 22, 1995
<TABLE>
<S> <C>
Assets:
Cash in bank................................................................... $ 100,000
Organizational costs (note 4).................................................... 100,000
---------
Total assets................................................................. 200,000
---------
Liabilities:
Payable to Adviser (note 4).................................................... 100,000
---------
Net assets applicable to outstanding shares.................................. $ 100,000
---------
---------
Represented by:
Capital stock-authorized 10 billion shares (Class A-1 billion shares, Class B-1
billion shares, Class C-1 billion shares, Class D-1 billion shares, and 6
billion shares unallocated) of $.01 par value................................. 100
Additional paid-in capital..................................................... 99,900
---------
$ 100,000
---------
---------
Net asset value of outstanding capital stock:
Class A, net assets of $97,000 divided by 9,700 shares outstanding............. $ 10.00
---------
---------
Class B, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
Class C, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
Class D, net assets of $1,000 divided by 100 shares outstanding................ $ 10.00
---------
---------
</TABLE>
See accompanying notes to financial statement.
F-2
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES WITHIN JUNDT FUNDS, INC.)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 22, 1995
(1) ORGANIZATION
Jundt Funds, Inc. was incorporated on October 26, 1995 and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. Jundt U.S. Emerging Growth Fund (the Fund) is a
series within Jundt Funds, Inc.
The Fund currently issues Class A, Class B, Class C, and Class D shares.
Class A shares are offered for sale exclusively to certain specified investors
and are not offered for sale to the general public. Class B shares are sold
subject to a contingent deferred sales charge (CDSC) payable upon redemption if
redeemed within six years and automatically convert to Class D shares following
the eighth anniversary of their sale. Class C shares are sold subject to a CDSC
if redeemed within one year and do not have a conversion feature. Class D shares
are sold subject to a front-end sales charge.
All classes of shares have identical voting, dividend, liquidation and other
rights, and the same terms and conditions, except that the level of certain
class specific fees and expenses may differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
The only transaction of the Fund since inception has been the initial sale
on December 21, 1995 of 9,700 shares of Class A, 100 shares of Class B, 100
shares of Class C, and 100 shares of Class D to James R. Jundt, President of
Jundt Funds, Inc.
(2) FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute taxable
income to the shareholders in amounts that will avoid federal income and excise
taxes.
(3) FEES AND EXPENSES
The Fund has entered into an investment advisory agreement with Jundt
Associates, Inc. (the Adviser) under which the Adviser manages the Fund's assets
and provides related office space, equipment and personnel. The fee for
investment management and advisory services is based on the average daily net
assets of the Fund at the annual rate of 1.00%.
The Fund has adopted separate plans of distribution applicable to Class B
shares, Class C shares and Class D shares, respectively, relating to the payment
of certain distribution expenses pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (as amended). The Fund pays distribution fees to U.S. Growth
Investments, Inc., the principal underwriter and distributor, to be used to pay
certain expenses incurred in the distribution, promotion and servicing of the
Fund's shares. The Class B and Class C distribution plans provide for a fee at
an annual rate of 1.00% of average daily net assets of Class B shares and Class
C shares, respectively. The 1.00% fee is comprised of a 0.75% distribution fee
and a 0.25% service fee. The Class D plan provides for a 0.25% service fee.
The Fund has entered into an administrative services agreement with
Princeton Administrators, L.P. for accounting and other administrative services.
The administrative service fee is equal to the
F-3
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES WITHIN JUNDT FUNDS, INC.)
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 22, 1995
(3) FEES AND EXPENSES (CONTINUED)
greater of $125,000 per annum or an annual rate of 0.20% of the Fund's average
daily net assets (the fee is reduced to 0.175% for the Fund's average daily net
assets in excess of $600 million). The annual minimum of $125,000 has been
waived through December 31, 1996.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, organizational costs,
printing and shareholder reporting, legal, auditing, and other miscellaneous
expenses.
(4) ORGANIZATIONAL COSTS
The Fund expects to incur organizational expenses in connection with the
start-up and initial registration of the Fund. These costs will be amortized
over 60 months on a straight-line basis beginning with the commencement of
operations. If any or all of the shares held by James R. Jundt representing
initial capital of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by the pro rata portion of the unamortized
organizational cost balance.
Legal fees of approximately $30,000, included as organizational costs, were
incurred for services provided by a law firm of which the Fund's secretary is a
partner.
F-4
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART C
OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION
ITEM 24 -- FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements for Jundt Funds, Inc. (the "Registrant") are
included in Part B of this Registration Statement (Prospectus).
(b) Exhibits:
<TABLE>
<C> <S>
1 Articles of Incorporation and Certificate of Designation
2 Bylaws
3 Not applicable
4 Not applicable
5 Investment Advisory Agreement
6.1 Distribution Agreement
6.2 Form of Selected Dealer Agreement
7 Not applicable
8 Custodian Contract
9.1 Transfer Agency and Service Agreement
9.2 Administration Agreement
9.3 Financial Services Agreement
10 Opinion and Consent of Faegre & Benson Professional Limited Liability
Partnership
11 Consent of KPMG Peat Marwick LLP
12 Not applicable
13 Not applicable
14 Not applicable
15.1 Class B Distribution Plan
15.2 Class C Distribution Plan
15.3 Class D Distribution Plan
16 Not applicable
17 Not applicable
18 Rule 18f-3 Plan
19 Code of Ethics
20 Powers of Attorney
</TABLE>
ITEM 25 -- PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Registrant is under common control with The Jundt Growth Fund, Inc., an
open-end management investment company, by virtue of the fact that the
Registrant and The Jundt Growth Fund, Inc. share a common investment adviser.
There are no other persons, to the Registrant's knowledge, that are directly or
indirectly controlled by or under common control with the Registrant.
C-1
<PAGE>
ITEM 26 -- NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of the
Registrant as of December 29, 1995:
<TABLE>
<CAPTION>
NUMBER OF RECORD
TITLE OF CLASS HOLDERS
- ------------------------------------------------------------------------------ ---------------------
<S> <C>
Class A Common Shares, par value $.01 per share............................... 1
Class B Common Shares, par value $.01 per share............................... 1
Class C Common Shares, par value $.01 per share............................... 1
Class D Common Shares, par value $.01 per share............................... 1
</TABLE>
ITEM 27 -- INDEMNIFICATION
The Articles of Incorporation (Exhibit 1) and Bylaws (Exhibit 2) of the
Registrant provide that the Registrant shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to the
full extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act of
1940, as now enacted or hereafter amended. Section 302A.521 of the Minnesota
Statutes, as now enacted, provides that a corporation shall indemnify a person
made or threatened to be made a party to a proceeding against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys' fees
and disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person: (a) has not been indemnified by another organization for
the same judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding with respect to the
same acts or omissions; (b) acted in good faith; (c) received no improper
personal benefit; (d) complied with the Minnesota Statute dealing with directors
conflicts of interest, if applicable; (e) in the case of a criminal proceeding,
had no reasonable cause to believe the conduct was unlawful; and (f) reasonably
believed that the conduct was in the best interests of the corporation or, in
certain circumstances, reasonably believed that the conduct was not opposed to
the best interests of the corporation.
The Articles of Incorporation of the Registrant further provide that, to the
fullest extent permitted by the Minnesota Business Corporations Act, as existing
or amended (except as prohibited by the Investment Company Act of 1940, as
amended) a director of the Registrant shall not be liable to the Registrant or
its shareholders for monetary damages for breach of fiduciary duty as director.
The form of Selected Dealer Agreement (Exhibit 6.2) between the Registrant's
principal underwriter, U.S. Growth Investments, Inc. (the "Distributor"), and
any broker-dealer with which the Distributor enters into such Selected Dealer
Agreement provides that each of the parties to the Selected Dealer Agreement
agrees to indemnify and hold the other harmless, including such parties'
officers, directors and any person who is or may be deemed to be a controlling
person of such party, from and against any losses, claims, damages, liabilities
or expenses, whether joint or several, to which any such person or entity may
become subject under the Securities Act of 1933 or otherwise insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon, (a) any untrue statement or alleged untrue
statement of material fact, or any omission or alleged omission to state a
material fact made or omitted by such indemnifying party therein; or (b) any
willful misfeasance or gross misconduct by such indemnifying party in the
performance of its duties and obligations thereunder.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in such 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,
C-2
<PAGE>
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 such Act and will be governed by the final adjudication
of such issue.
ITEM 28 -- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
In addition to serving as investment adviser to the Registrant, the
Investment Adviser (Jundt Associates, Inc.) serves as the investment adviser to
The Jundt Growth Fund, Inc. and as a sub-adviser to Diversified Investors Funds
Group (Growth Series) as well as the investment adviser to numerous private
accounts.
See "Management of the Fund -- Investment Adviser" and "Management of the
Fund -- Portfolio Managers" in the Registrant's Prospectus and "Advisory,
Administrative and Distribution Agreements" and "Directors and Officers" in the
Registrant's Statement of Additional Information.
ITEM 29 -- PRINCIPAL UNDERWRITERS
(a) The Distributor is the only principal underwriter of the Registrant's
shares and also serves as principal underwriter of The Jundt Growth Fund, Inc.'s
shares.
(b) The following describes certain information regarding the officers and
directors of the Distributor:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH THE DISTRIBUTOR WITH THE REGISTRANT
- ----------------------- ------------------------------------------- -------------------------------------------
<S> <C> <C>
James R. Jundt Director and Chairman of the Board Chairman of the Board, President and Chief
Executive Officer
Thomas L. Press Director, President, Secretary and None.
Treasurer
</TABLE>
(c) Not applicable.
ITEM 30 -- LOCATION OF ACCOUNTS AND RECORDS
The Registrant's custodian is Norwest Bank Minnesota, N.A., Norwest Center,
90 South Seventh Street, Minneapolis, Minnesota 55402.
The Registrant's transfer agent and dividend disbursing agent is Investors
Fiduciary Trust Company, 1004 Baltimore, Kansas City, Missouri 64105.
Other records will be maintained by the Registrant at its principal offices,
which are located at 1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota
55416 and by Princeton Administrators, L.P., the Registrant's administrator,
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536.
ITEM 31 -- MANAGEMENT SERVICES
Not applicable.
ITEM 32 -- UNDERTAKINGS
(a) Not applicable.
(b) Registrant hereby undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the effective date of Registrant's Registration Statement filed under the
Securities Act of 1933, as amended.
(c) Registrant hereby undertakes to furnish to each person to whom a
prospectus of the Registrant has been furnished the latest Annual Report of the
Registrant. Such Annual Report will be furnished by the Registrant without
charge upon request by any such person.
(d) Pursuant to Section 16(c) of the Investment Company Act of 1940, as
amended, the Registrant hereby undertakes to call a shareholders' meeting for
the purpose of voting upon the question of removal of one or more directors (and
to assist shareholders in communications with each other) if and when requested
in writing to do so by the record holders of not less than ten percent of the
Registrant's outstanding shares.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minneapolis, and State of Minnesota, on the 21st
day of December, 1995.
JUNDT FUNDS, INC.
By /s/ JAMES R. JUNDT
-----------------------------------
James R. Jundt
CHAIRMAN OF THE BOARD
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-1A has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME/SIGNATURE TITLE DATE
- ------------------------------------------------------------ ------------------------------ ------------------
<C> <S> <C>
Director, Chairman of the
/s/ JAMES R. JUNDT Board, President and Chief
------------------------------------------- Executive Officer (Principal December 21, 1995
James R. Jundt Executive Officer)
/s/ DONALD M. LONGLET Vice President and Treasurer
------------------------------------------- (Principal Financial and December 21, 1995
Donald M. Longlet Accounting Officer)
------------------------------------------- Director
John E. Clute*
------------------------------------------- Director
Floyd Hall*
------------------------------------------- Director
Demetre M. Nicoloff*
------------------------------------------- Director
Darrell R. Wells*
*By /s/ JAMES R. JUNDT
--------------------------------------
James R. Jundt, December 21, 1995
ATTORNEY-IN-FACT
(Pursuant to Powers of Attorney dated as of December 4,
1995, filed with this Registration Statement on Form N-1A.)
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
NUMBER AND NAME OF EXHIBIT PAGE NUMBER
- ----------------------------------------------------------------------- -----------
<S> <C> <C>
1 Articles of Incorporation and Certificate of Designation....
2 Bylaws......................................................
5 Investment Advisory Agreement...............................
6.1 Distribution Agreement......................................
6.2 Form of Selected Dealer Agreement...........................
8 Custodian Contract..........................................
9.1 Transfer Agency and Service Agreement.......................
9.2 Administration Agreement....................................
9.3 Financial Services Agreement................................
10 Opinion and Consent of Faegre & Benson Professional Limited
Liability Partnership......................................
11 Consent of KPMG Peat Marwick LLP............................
15.1 Class B Distribution Plan...................................
15.2 Class C Distribution Plan...................................
15.3 Class D Distribution Plan...................................
18 Rule 18f-3 Plan.............................................
19 Code of Ethics..............................................
20 Powers of Attorney..........................................
</TABLE>
<PAGE>
ARTICLES OF INCORPORATION
OF
JUNDT FUNDS, INC.
For the purpose of forming a corporation pursuant to the provisions of
Minnesota Statutes, Chapter 302A, the following Articles of Incorporation are
hereby adopted:
1. The name of the corporation is Jundt Funds, Inc. (the "Corporation").
2. The Corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, the Corporation
shall have specific power:
(a) to conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations; and
(b) to purchase, subscribe for, invest in or otherwise acquire, and
to own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, choses in action, evidences of indebtedness, certificates
of indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of
the United States, or any state, commonwealth, territory or possession
thereof, or organized under the laws of any foreign country, or any state,
province, territory or possession thereof, or issued or to be issued by the
United States government or any agency or instrumentality thereof, options
on stock indexes, stock index and interest rate futures contracts and
options thereon, and other futures contracts and options thereon.
In the above provisions of this Article 2, purposes shall also be construed
as powers and powers shall also be construed as purposes, and the enumeration of
specific purposes or powers shall not be construed to limit other statements of
purposes or to limit purposes or powers which the Corporation may otherwise have
under applicable law, all of the same being separate and cumulative, and all of
the same may be carried on, promoted and pursued, transacted or exercised in any
place whatsoever.
3. The Corporation shall have perpetual existence.
4. The location and post office address of the registered office in
Minnesota is 1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota 55416.
<PAGE>
5. The total authorized number of shares of the Corporation is 1 trillion
(1,000,000,000,000), all of which shall be common shares of the par value of
$.01 per share (individually, a "Share" and collectively, the "Shares"). The
Corporation may issue and sell any of its Shares in fractional denominations to
the same extent as its whole Shares, and Shares and fractional denominations
shall have, in proportion to the relative fractions represented thereby, all the
rights of whole Shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the Corporation.
(a) Ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series A Common Shares;" and the remaining
nine hundred ninety billion (990,000,000,000) Shares authorized by this Article
5 shall initially be undesignated Shares (the "Undesignated Shares"). Any
series of the Shares shall be referred to herein individually as a "Series" and
collectively herein, together with any further series from time to time created
by the Board of Directors, as "Series." The Undesignated Shares may be issued
in such Series with such designations, preferences and relative, participating,
optional or other special rights, or qualifications, limitations or restrictions
thereof, as shall be stated or expressed in a resolution or resolutions
providing for the issue of any Series as may be adopted from time to time by the
Board of Directors pursuant to the authority hereby vested in the Board of
Directors. Each Series of Shares which the Board of Directors may establish, as
provided herein, may evidence, if the Board of Directors shall so determine by
resolution, an interest in a separate and distinct portion of the Corporation's
assets, which shall take the form of a separate portfolio of investment
securities, cash and other assets. Authority to establish such separate
portfolios is hereby vested in the Board of Directors, and such separate
portfolios may be established by the Board of Directors without the
authorization or approval of the holders of any Series of Shares of the
Corporation. Such investment portfolios in which Shares of the Series represent
interests are also hereinafter referred to as "Series."
(b) The Shares of each Series may be classified by the Board of Directors
in one or more classes (individually, a "Class" and, collectively, together with
any other class or classes within any Series, the "Classes") with such relative
rights and preferences as shall be stated or expressed in a resolution or
resolutions providing for the issue of any such Class or Classes as may be
adopted from time to time by the Board of Directors pursuant to the authority
hereby vested in the Board of Directors and Minnesota Statutes, Section
302A.401, Subd. 3, or any successor provision. The Shares of each Class within
a Series may be subject to such charges and expenses (including by way of
example, but not by way of limitation, front-end and deferred sales charges,
expenses under Rule 12b-1 plans, administration plans, service plans, or other
plans or arrangements, however designated) adopted from time to time by the
Board of Directors in accordance, to the extent applicable, with the Investment
Company Act of 1940 and the rules and regulations promulgated thereunder, as now
enacted, promulgated or hereafter amended (collectively, the "Investment Company
Act"), which charges and expenses may differ from those applicable to another
Class within such Series, and all of the charges and expenses to which a Class
is subject shall be borne by such Class and shall be appropriately reflected (in
the manner determined by the Board of Directors in the resolution or resolutions
providing for the issue of such Class) in determining the net asset value and
the amounts payable with respect to dividends and distributions on and
redemptions or liquidations of, such Class. Subject to compliance with the
requirements of the Investment Company Act, the Board of Directors shall have
the authority to provide that Shares of any Class shall be convertible
(automatically, optionally or otherwise) into Shares of one or more other
Classes in accordance with such requirements and procedures as may be
established by the Board of Directors.
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<PAGE>
6. The shareholders of each Series of Shares (or Class thereof) of the
Corporation:
(a) shall not have the right to cumulate votes for the election of
directors; and
(b) shall have no preemptive right to subscribe to any issue of Shares of
any Series (or Class thereof) of the Corporation now or hereafter created,
designated or classified.
7. A description of the relative rights and preferences of all Series of
Shares (and Classes thereof) is as follows, unless otherwise set forth in one or
more amendments to these Articles of Incorporation or in the resolution
providing for the issue of such Series (and Classes thereof):
(a) On any matter submitted to a vote of shareholders of the Corporation,
all Shares of the Corporation then issued and outstanding and entitled to vote,
irrespective of Series or Class, shall be voted in the aggregate and not by
Series or Class, except: (i) when otherwise required by Minnesota Statutes,
Chapter 302A, in which case Shares will be voted by individual Series or Class,
as applicable; (ii) when otherwise required by the Investment Company Act, in
which case Shares shall be voted by individual Series or Class, as applicable;
and (iii) when the matter does not affect the interests of a particular Series
or Class, in which case only shareholders of the Series or Class affected shall
be entitled to vote thereon and shall vote by individual Series or Class, as
applicable.
(b) All consideration received by the Corporation for the issue or sale of
Shares of any Series, together with all assets, income, earnings, profits and
proceeds derived therefrom (including all proceeds derived from the sale,
exchange or liquidation thereof and, if applicable, any assets derived from any
reinvestment of such proceeds in whatever form the same may be) shall become
part of the assets of the portfolio to which the Shares of that Series relate,
for all purposes, subject only to the rights of creditors, and shall be so
treated upon the books of account of the Corporation. Such assets, income,
earnings, profits and proceeds (including any proceeds derived from the sale,
exchange or liquidation thereof and, if applicable, any assets derived from any
reinvestment of such proceeds in whatever form the same may be) are herein
referred to as "assets belonging to" such Series of Shares of the Corporation.
(c) Assets of the Corporation not belonging to any particular Series of
Shares are referred to herein as "General Assets." General Assets shall be
allocated to each Series of Shares in proportion to the respective net assets
belonging to such Series. The determination of the Board of Directors shall be
conclusive as to the amount of assets, as to the characterization of assets as
those belonging to a Series of Shares or as General Assets, and as to the
allocation of General Assets.
(d) The assets belonging to a particular Series of Shares shall be charged
with the liabilities incurred specifically on behalf of such Series ("Special
Liabilities"). Such assets shall also be charged with a share of the general
liabilities of the Corporation ("General Liabilities") in proportion to the
respective net assets belonging to such Series of Shares. The determination of
the Board of Directors shall be conclusive as to the amount of liabilities,
including accrued expenses and reserves, as to the characterization of any
liability as a Special Liability or General Liability, and as to the allocation
of General Liabilities among Series of Shares.
(e) The Board of Directors may, to the extent permitted by Minnesota
Statutes, Chapter 302A or any successor provision thereto, declare and pay
dividends or distributions in Shares, cash or other property on any or all
Series of Shares (or Classes thereof), the amount of such dividends and the
payment thereof being wholly in the discretion of the Board of Directors.
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<PAGE>
(f) In the event of the liquidation or dissolution of the Corporation,
holders of the Shares of any Series shall have priority over the holders of any
other Series with respect to, and shall be entitled to receive, out of the
assets of the Corporation available for distribution to holders of Shares, the
assets belonging to such Series of Shares and the General Assets allocated to
such Series, and the assets so distributable to the holders of the Shares of any
Series shall be distributed among such holders in proportion to the number of
Shares of such Series held by each such shareholder and recorded on the books of
the Corporation, except that, in the case of a Series of Shares with more than
one Class of Shares, such distributions shall be adjusted to appropriately
reflect any charges and expenses borne by each individual Class.
(g) With the approval of a majority of the shareholders of each of the
affected Series of Shares present in person or by proxy at a meeting called for
the following purpose (provided that at least 10% of the issued and outstanding
Shares of the affected Series is present at such meeting in person or by proxy),
the Board of Directors may transfer the assets of any Series of Shares to any
other Series. Upon such a transfer, the Corporation shall issue Shares
representing interests in the Series of Shares to which the assets were
transferred in exchange for all Shares representing interests in the Series from
which the assets were transferred. Such Shares shall be exchanged at their
respective net asset values.
8. The following additional provisions, when consistent with law, are
hereby established for the management of the business of the Corporation, for
the conduct of the affairs of the Corporation and for the purpose of describing
certain specific powers of the Corporation and of its directors and
shareholders.
(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of Directors
is expressly authorized to do the following:
(i) to make, adopt, alter, amend and repeal Bylaws of the Corporation
unless reserved to the shareholders by the Bylaws or by the laws of the
State of Minnesota, subject to the power of the shareholders to change or
repeal such Bylaws;
(ii) to distribute, in its discretion, for any fiscal year (in the
year or in the next fiscal year) as ordinary dividends and as capital gains
distributions, respectively, amounts sufficient to enable each Series of
Shares to qualify under the Internal Revenue Code as a regulated investment
company to avoid any liability for federal income tax in respect of such
year. Any distribution or dividend paid to shareholders from any capital
source shall be accompanied by a written statement showing the source or
sources of such payment;
(iii) to authorize, subject to such vote, consent, or approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the execution and performance by
the Corporation of any agreement or agreements with any person,
corporation, association, company, trust, partnership (limited or general)
or other organization whereby, subject to the supervision and control of
the Board of Directors, any such other person, corporation, association,
company, trust, partnership (limited or general), or other organization
shall render managerial, investment advisory, distribution, transfer agent,
accounting and/or other services to the Corporation (including, if deemed
advisable, the management or supervision of the investment portfolios of
the Corporation) upon such terms and conditions as may be provided in such
agreement or agreements;
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<PAGE>
(iv) to authorize any agreement of the character described in
subparagraph (iii) of this paragraph (a) with any person, corporation,
association, company, trust, partnership (limited or general) or other
organization, although one or more of the members of the Board of Directors
or officers of the Corporation may be the other party to any such agreement
or an officer, director, employee, shareholder, or member of such other
party, and no such agreement shall be invalidated or rendered voidable by
reason of the existence of any such relationship;
(v) to allot and authorize the issuance of the authorized but
unissued Shares of any Series, or Class thereof, of the Corporation;
(vi) to accept or reject subscriptions for Shares of any Series, or
Class thereof, made after incorporation;
(vii) to fix the terms, conditions and provisions of and authorize
the issuance of options to purchase or subscribe for Shares of any Series,
or Class thereof, including the option price or prices at which Shares may
be purchased or subscribed for;
(viii) to take any action which might be taken at a meeting of the
Board of Directors, or any duly constituted committee thereof, without a
meeting pursuant to a writing signed by that number of directors or
committee members that would be required to take the same action at a
meeting of the Board of Directors or committee thereof at which all
directors or committee members were present; provided, however, that, if
such action also requires shareholder approval, such writing must be signed
by all of the directors or committee members entitled to vote on such
matter; and
(ix) to determine what constitutes net income, total assets and the
net asset value of the Shares of each Series (or Class thereof) of the
Corporation. Any such determination made in good faith shall be final and
conclusive, and shall be binding upon the Corporation and all holders
(past, present and future) of Shares of each Series and Class thereof.
(b) Except as provided in the next sentence of this paragraph (b), Shares
of any Series, or Class thereof, hereafter issued which are redeemed, exchanged,
or otherwise acquired by the Corporation shall return to the status of
authorized and unissued Shares of such Series or Class. Upon the redemption,
exchange, or other acquisition by the Corporation of all outstanding Shares of
any Series (or Class thereof), hereafter issued, such Shares shall return to the
status of authorized and unissued Shares without designation as to series (if no
Shares of the Series remain outstanding) or with the same designation as to
Series, but no designation as to class within such Series (if Shares of such
Series remain outstanding, but no Shares of such Class thereof remain
outstanding), and all provisions of these Articles of Incorporation relating to
such Series, or Class thereof (including, without limitation, any statement
establishing or fixing the rights and preferences of such Series, or Class
thereof), shall cease to be of further effect and shall cease to be a part of
these Articles of Incorporation. Upon the occurrence of such events, the Board
of Directors shall have the power, pursuant to Minnesota Statutes Section
302A.135, Subdivision 5, or any successor provision, and without shareholder
action, to cause restated Articles of Incorporation of the Corporation to be
prepared and filed with the Secretary of State of the State of Minnesota which
reflect such removal from these Articles of Incorporation of all such provisions
relating to such Series, or Class thereof.
(c) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful
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<PAGE>
misfeasance, bad faith, gross negligence or reckless disregard of duties,
shall be final and conclusive and shall be binding upon the Corporation and
every holder of Shares: namely, the amount of the assets, obligations,
liabilities and expenses of each Series of Shares (or Class thereof) of the
Corporation; the amount of the net income of each Series of Shares (or Class
thereof) of the Corporation from dividends and interest for any period and
the amount of assets at any time legally available for the payment of
dividends in each Series of Shares (or Class thereof); the amount of paid-in
surplus, other surplus, annual or other net profits, or net assets in excess
of capital, undivided profits, or excess of profits over losses on sales of
securities of each Series of Shares (or Class thereof); the amount, purpose,
time of creation, increase or decrease, alteration or cancellation of any
reserves or charges and the propriety thereof (whether or not any obligation
or liability for which such reserves or charges shall have been created shall
have been paid or discharged); the market value, or any sale, bid or asked
price to be applied in determining the market value, of any security owned or
held by or in each Series of Shares of the Corporation; the fair value of any
other asset owned by or in each Series of Shares of the Corporation; the
number of Shares of each Series (or Class thereof) of the Corporation issued
or issuable; any matter relating to the acquisition, holding and disposition
of securities and other assets by each Series of Shares of the Corporation;
and any question as to whether any transaction constitutes a purchase of
securities on margin, a short sale of securities, or an underwriting of the
sale of, or participation in any underwriting or selling group in connection
with the public distribution of any securities.
(d) The Board of Directors or the shareholders of the Corporation may
adopt, amend, affirm or reject investment policies and restrictions upon
investment or the use of assets of each Series of Shares of the Corporation and
may designate some such policies as fundamental and not subject to change other
than by a vote of a majority of the outstanding voting securities, as such
phrase is defined in the Investment Company Act, of the affected Series of
Shares of the Corporation.
9. The Corporation shall indemnify such persons for such expenses and
liabilities, in such manner, under such circumstances, and to the full extent
permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or
hereafter amended, provided, however, that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act, as
now enacted or hereafter amended.
10. To the fullest extent permitted by the Minnesota Statutes, Chapter
302A, as now enacted or hereafter amended (except as prohibited by the
Investment Company Act), a director of the Corporation shall not be liable to
the Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director.
11. The name and address of the Company's first director, who shall serve
until the first regular meeting of shareholders or until his successor is
elected and qualified, is:
James R. Jundt
1550 Utica Avenue South, Suite 950
Minneapolis, Minnesota 55416.
12. The name and address of the incorporator, who is a natural person of
full age, is:
P. Graham van der Leeuw
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
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<PAGE>
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation on this 26th of October, 1995.
/s/ P. Graham van der Leeuw
----------------------------------------
P. Graham van der Leeuw, Incorporator
M1:0062250.01
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<PAGE>
CERTIFICATE OF DESIGNATION
OF
CLASS A, CLASS B, CLASS C AND CLASS D COMMON SHARES OF SERIES A
OF
JUNDT FUNDS, INC.
The undersigned duly elected Secretary of Jundt Funds, Inc., a Minnesota
corporation (the "Corporation"), hereby certifies that the following is a true,
complete and correct copy of resolutions duly adopted by a majority of directors
of the Board of Directors of the Corporation on December 4, 1995:
WHEREAS, the total authorized number of shares of the Corporation is
one trillion, all of which shares are common shares, par value $.01 per
share, as set forth in the Corporation's Articles of Incorporation (the
"Articles");
WHEREAS, ten billion of such shares have been designated in the
Articles as Series A Common Shares; and
WHEREAS pursuant to Section 5(b) of the Articles, the shares of each
Series may be classified by the Board of Directors in one or more classes
with such relative rights and preferences as shall be stated or expressed
in a resolution or resolutions providing for the issue of any such class or
classes as may be adopted from time to time by the Board of Directors of
the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that of the ten billion shares
designated in the Articles as Series A Common Shares, one billion are
hereby designated as Series A, Class A Common Shares, one billion are
hereby designated as Series A, Class B Common Shares, one billion are
hereby designated as Series A, Class C Common Shares and one billion are
hereby designated as Series A, Class D Common Shares, and the remaining six
billion Series A Common Shares shall remain undesignated as to class.
FURTHER RESOLVED, that the Class A, Class B, Class C and Class D
Common Shares designated by these resolutions shall have the relative
rights and preferences set forth in the Articles. As provided in
Section 5(b) of the Articles: (a) each Class of Common Shares designated
by these resolutions may be subject to such charges and expenses
(including, by way of example, but not by way of limitation, front-end and
deferred sales charges, expenses under Rule 12b-1 plans, administration
plans, service plans, or other plans or arrangements, however designated)
adopted from time to time by the Board of Directors in accordance, to the
extent applicable, with the Investment Company Act of 1940 and the rules
and regulations promulgated thereunder, as now enacted, promulgated or
hereafter amended (collectively, the "Investment Company Act"), which
charges and expenses may differ from those applicable to another Class, and
all of the charges and expenses to which a Class is subject shall be borne
by such Class and shall be appropriately reflected in determining
<PAGE>
the net asset value and the amounts payable with respect to dividends and
distributions on, and redemptions or liquidation of, such Class; and (b)
the Board of Directors shall have the authority, subject to compliance with
the requirements of the Investment Company Act, to provide that shares of
any Class shall be convertible (automatically, optionally or otherwise)
into shares of one or more other Classes in accordance with such
requirements and procedures as may be established by the Board of
Directors.
FURTHER RESOLVED that the officers of the Corporation are hereby
authorized and directed to file with the office of the Secretary of State
of Minnesota a Certificate of Designation setting forth the relative rights
and preferences of the Class A, Class B, Class C and Class D Common Shares
designated hereby, as required by Section 302A.401, Subd. 3(b) of the
Minnesota Statutes.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of the Corporation this 18th day of December, 1995.
/s/ James E. Nicholson
-------------------------------
James E. Nicholson, Secretary
M1:0068752.01
<PAGE>
BYLAWS
OF
JUNDT FUNDS, INC.
(AS ADOPTED BY THE BOARD OF DIRECTORS
ON _____________, 1995)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is Jundt Funds, Inc.
The name of the series represented by the Corporation's Series A Common
Shares shall be "Jundt U.S. Emerging Growth Fund."
Section 1.02. REGISTERED OFFICE. The registered office of the
Corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of
Incorporation or resolution of the directors filed with the Secretary of
State of Minnesota changing the registered office.
Section 1.03. OTHER OFFICES. The Corporation may have such other
offices, within or without the State of Minnesota, as the directors shall,
from time to time, determine.
Section 1.04. NO CORPORATE SEAL. The Corporation shall have no
corporate seal.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETING. Except as provided otherwise
by Minnesota Statutes Chapter 302A, meetings of the shareholders may be held
at any place, within or without the State of Minnesota, designated by the
directors and, in the absence of such designation, shall be held at the
registered office of the Corporation in the State of Minnesota. The
directors shall designate the time of day for each meeting and, in the
absence of such designation, every meeting of shareholders shall be held at
ten o'clock a.m.
Section 2.02. REGULAR MEETINGS. The Corporation is not required to
hold annual meetings of shareholders. Regular meetings shall be held only
with such frequency and at such times and places as provided in and required
by Minnesota Statutes Section 302A.431.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman
of the Board, the President, any two
<PAGE>
directors, or by one or more shareholders holding ten percent (10%) or more
of the shares entitled to vote on the matters to be presented to the meeting.
Section 2.04. QUORUM, ADJOURNED MEETINGS. The holders of ten percent
(10%) of the shares outstanding and entitled to vote shall constitute a
quorum for the transaction of business at any regular or special meeting. In
case a quorum shall not be present at a meeting, those present in person or
by proxy shall adjourn the meeting to such day as they shall, by majority
vote, agree upon without further notice other than by announcement at the
meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at
the meeting as originally noticed. If a quorum is present, the shareholders
may continue to transact business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in
person or by proxy. Each shareholder, unless the Articles of Incorporation
provide otherwise, shall have one vote for each share having voting power
registered in his name on the books of the Corporation. Except as otherwise
specifically provided by these Bylaws or as required by provisions of the
Investment Company Act of 1940 and the rules and regulations promulgated
thereunder, as now enacted, promulgated or hereafter amended (collectively,
the "Investment Company Act"), or other applicable laws, all questions shall
be decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote. If the matter(s) to be
presented at a regular or special meeting relates only to particular classes
or series of the Corporation, then only the shareholders of such classes or
series are entitled to vote on such matter(s).
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed
in writing by the shareholder himself or by his attorney thereunto duly
authorized in writing. No proxy shall be voted after eleven months from its
date unless it provides for a longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a time,
not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the Corporation after any record date so
fixed. The Board of Directors may close the books of the Corporation against
the transfer of shares during the whole or any part of such period. If the
Board of Directors fails to fix a record date for determination of the
shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.
Section 2.08. NOTICE OF MEETINGS. There shall be mailed to each
shareholder, shown by the books of the Corporation to be a holder of record
of voting shares, at his address as shown by the books of the Corporation, a
notice setting out the date, time and place of each regular meeting
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<PAGE>
and each special meeting, except where the meeting is an adjourned meeting
and the date, time and place of the meeting were announced at the time of
adjournment, which notice shall be mailed within the period required by law.
Every notice of any special meeting shall state the purpose or purposes for
which the meeting has been called, pursuant to Section 2.03, and the business
transacted at all special meetings shall be confined to the purpose stated in
such notice.
Section 2.09. WAIVER OF NOTICE. Notice of any regular or special
meeting may be waived either before, at or after such meeting orally or in a
writing signed by each shareholder or representative thereof entitled to vote
the shares so represented. A shareholder, by his attendance at any meeting
of shareholders, shall be deemed to have waived notice of such meeting,
except where the shareholder objects at the beginning of the meeting to the
transaction of business because the item may not lawfully be considered at
that meeting and does not participate at that meeting in the consideration of
the item at that meeting.
Section 2.10. WRITTEN ACTION. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by all of the shareholders entitled to vote on that action. If
the action to be taken relates to particular classes or series of the
Corporation, then only shareholders of such classes or series are entitled to
vote on such action.
ARTICLE III
DIRECTORS
Section 3.01. NUMBER, QUALIFICATION AND TERM OF OFFICE. Until the
first meeting of shareholders, the number of directors shall be the number
named in the Articles of Incorporation. Thereafter, the number of directors
shall be established by resolution of the shareholders (subject to the
authority of the Board of Directors to increase or decrease the number of
directors as permitted by law). In the absence of such shareholder
resolution, the number of directors shall be the number last fixed by the
shareholders, the Board of Directors or the Articles of Incorporation.
Directors need not be shareholders. Each of the directors shall hold office
until the regular meeting of shareholders next held after his election and
until his successor shall have been elected and shall qualify, or until the
earlier death, resignation, removal or disqualification of such director.
Section 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in
Sections 3.11 and 3.12 hereof, the directors shall be elected at the regular
shareholders' meeting. In the event that directors are not elected at a
regular shareholders' meeting, then directors may be elected at a special
shareholders' meeting, provided that the notice of such meeting shall contain
mention of such purpose. At each shareholders' meeting for the election of
directors, the directors shall be elected by a plurality of the votes validly
cast at such election. Each holder of shares of each class or series of
shares of the Corporation shall be entitled to vote for directors and shall
have equal voting power for each share of each class or series of the
Corporation.
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Section 3.03. GENERAL POWERS.
(a) Except as otherwise permitted by statute, the property, affairs and
business of the Corporation shall be managed by the Board of Directors, which
may exercise all the powers of the Corporation except those powers vested solely
in the shareholders of the Corporation by statute, the Articles of Incorporation
or these Bylaws, as amended.
(b) All acts done by any meeting of the directors or by any person
acting as a director, so long as his successor shall not have been duly
elected or appointed, shall, notwithstanding that it be afterwards discovered
that there was some defect in the election of the directors or such person
acting as aforesaid or that they or any of them were disqualified, be as
valid as if the directors or such other person, as the case may be, had been
duly elected and were or was qualified to be directors or a director of the
Corporation.
Section 3.04. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
Corporation, out of any source available for dividends, to the shareholders
of each class or series of shares of the Corporation according to their
respective rights and interests in the investment portfolio of the
Corporation issuing such class or series of shares.
(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than:
(i) the accumulated and accrued undistributed net income of each
class or series of shares (determined in accordance with generally accepted
accounting practice and the rules and regulations of the Securities and
Exchange Commission (the "SEC") then in effect) and not including profits
or losses realized upon the sale of securities or other properties; or
(ii) the net income of each class or series of shares so
determined for the current or preceding fiscal year.
Such statement shall adequately disclose the source or sources of such
payment and the basis of calculation and shall be in such form as the SEC may
prescribe.
(c) Notwithstanding the above provisions of this Section 3.04, the
Board of Directors may at any time declare and distribute pro rata among the
shareholders of each class or series of shares a "stock dividend" out of the
authorized but unissued shares of each class or series, including any shares
previously purchased by a class or series of the Corporation.
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Section 3.05. BOARD MEETINGS. Meetings of the Board of Directors may
be held from time to time at such time and place within or without the State
of Minnesota as may be designated in the notice of such meeting.
Section 3.06. CALLING MEETINGS, NOTICE. A director may call a meeting
of the Board of Directors by giving ten (10) days notice to all directors of
the date, time and place of the meeting; provided that if the day or date,
time and place of a meeting of the Board of Directors have been announced at
a previous meeting of the Board of Directors, no notice is required.
Section 3.07. WAIVER OF NOTICE. Notice of any meeting of the Board of
Directors may be waived by any director either before, at or after such
meeting orally or in a writing signed by such director. A director, by his
attendance and participation in the action taken at any meeting of the Board
of Directors, shall be deemed to have waived notice of such meeting, except
where the director objects at the beginning of the meeting to the transaction
of business because the item may not lawfully be considered at that meeting
and does not participate at that meeting in the consideration of the item at
that meeting.
Section 3.08. QUORUM. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting; provided however,
notwithstanding the above, if the Board of Directors is taking action
pursuant to the Investment Company Act, a majority of directors who are not
"interested persons" (as defined by the Investment Company Act) of the
Corporation shall constitute a quorum for taking such action.
Section 3.09. ADVANCE CONSENT OR OPPOSITION. A director may give
advance written consent or opposition to a proposal to be acted on at a
meeting of the Board of Directors. If such director is not present at the
meeting, consent or opposition to a proposal does not constitute presence for
purposes of determining the existence of a quorum, but consent or opposition
shall be counted as a vote in favor of or against the proposal and shall be
entered in the minutes or other record of action at the meeting, if the
proposal acted on at the meeting is substantially the same or has
substantially the same effect as the proposal to which the director has
consented or objected. This procedure shall not be used to act on any
investment advisory agreement or plan of distribution adopted under Rule
12b-1 of the Investment Company Act.
Section 3.10. CONFERENCE COMMUNICATIONS. Any or all directors may
participate in any meeting of the Board of Directors, or of any duly
constituted committee thereof, by any means of communication through which
the directors may simultaneously hear each other during such meeting. For
the purposes of establishing a quorum and taking any action at the meeting,
such directors participating pursuant to this Section 3.10 shall be deemed
present in person at the meeting, and the place of the meeting shall be the
place of origination of the conference communication. This procedure shall
not be used to act on any investment advisory agreement or plan of
distribution adopted under Rule 12b-1 of the Investment Company Act.
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Section 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in the
Board of Directors of the Corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired
term by a majority of the remaining directors, although less than a quorum;
newly created directorships resulting from an increase in the authorized
number of directors by action of the Board of Directors as permitted by
Section 3.01 may be filled by a two-thirds (2/3) vote of the directors
serving at the time of such increase; and each person so elected shall be a
director until his successor is elected by the shareholders at their next
regular or special meeting; provided, however, that no vacancy can be filled
as provided above if prohibited by the provisions of the Investment Company
Act.
Section 3.12. REMOVAL. The entire Board of Directors or an individual
director may be removed from office, with or without cause, by a vote of the
shareholders holding a majority of the shares entitled to vote at an election
of directors. In the event that the entire Board of Directors or any one or
more directors be so removed, new directors shall be elected at the same
meeting, or the remaining directors may, to the extent vacancies are not
filled at such meeting, fill any vacancy or vacancies created by such
removal. A director named by the Board of Directors to fill a vacancy may be
removed from office at any time, with or without cause, by the affirmative
vote of the remaining directors if the shareholders have not elected
directors in the interim between the time of the appointment to fill such
vacancy and the time of the removal.
Section 3.13. COMMITTEES. A resolution approved by the affirmative
vote of a majority of the Board of Directors may establish committees having
the authority of the Board of Directors in the management of the business of
the Corporation to the extent provided in the resolution. A committee shall
consist of one or more persons, who need not be directors, appointed by
affirmative vote of a majority of the directors present. Committees are
subject to the direction and control of, and vacancies in the membership
thereof shall be filled by, the Board of Directors.
A majority of the members of the committee present at a meeting is a
quorum for the transaction of business, unless a larger or smaller proportion
or number is provided in a resolution approved by the affirmative vote of a
majority of the directors present.
Section 3.14. WRITTEN ACTION. Except as provided in the Investment
Company Act, any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken without a
meeting if done in writing and signed by that number of directors or
committee members that would be required to take the same action at a meeting
of the Board of Directors or committee thereof at which all directors or
committee members were present; provided, however, that any action which also
requires shareholder approval may be taken by written action only if such
writing is signed by all of the directors or committee members entitled to
vote on such matter.
Section 3.15. COMPENSATION. Directors shall receive such fixed sum per
meeting attended or such fixed annual sum as shall be determined, from time
to time, by resolution of the Board of Directors. All directors shall
receive their expenses, if any, of attendance at meetings of the Board of
Directors or any committee thereof. Nothing herein contained shall be
construed to
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preclude any director from serving this Corporation in any other capacity and
receiving proper compensation therefor.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the Corporation shall consist of
a Chairman of the Board (if one is elected by the Board of Directors), the
President, one or more Vice Presidents (if desired by the Board of
Directors), a Secretary, a Treasurer and such other officers and agents as
may, from time to time, be elected by the Board of Directors. Any number of
offices may be held by the same person.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Board
of Directors shall elect, from within or without their number, the officers
referred to in Section 4.01, each of whom shall have the powers, rights,
duties, responsibilities and terms in office provided for in these Bylaws or
a resolution of the Board of Directors not inconsistent therewith. The
President and all other officers who may be directors shall continue to hold
office until the election and qualification of their successors,
notwithstanding an earlier termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his office at any
time by delivering a written resignation to the Corporation. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his office by a majority of the Board of Directors with or without cause.
Such removal, however, shall be without prejudice to the contract rights of
the person so removed. If there be a vacancy among the officers of the
Corporation by reason of death, resignation or otherwise, such vacancy shall
be filled for the unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
is elected, shall preside at all meetings of the shareholders and directors
and shall have such other duties as may be prescribed, from time to time, by
the Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active
management of the business of the Corporation. In the absence of the
Chairman of the Board, he shall preside at all meetings of the shareholders
and directors. He shall be the chief executive officer of the Corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. He shall be ex officio a member of all standing
committees. He may execute and deliver, in the name of the Corporation, any
deeds, mortgages, bonds, contracts or other instruments pertaining to the
business of the Corporation and, in general, shall perform all duties usually
incident to the office of the President. He shall have such other duties as
may, from time to time, be prescribed by the Board of Directors.
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Section 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in these Bylaws or
prescribed by the Board of Directors or by the President. In the event of
the absence or disability of the President, Vice Presidents shall succeed to
his power and duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend, all meetings of the shareholders and Board of Directors and
shall record all proceedings of such meetings in the minute book of the
Corporation. He shall give proper notice of meetings of shareholders and
directors. He shall keep the seal of the Corporation and shall affix the
same to any instrument requiring it and may, when necessary, attest the seal
by his signature. He shall perform such other duties as may, from time to
time, be prescribed by the Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall be the chief financial
officer and shall keep accurate accounts of all money of the Corporation
received or disbursed. He shall deposit all moneys, drafts and checks in the
name of, and to the credit of, the Corporation in such banks and depositories
as a majority of the Board of Directors shall, from time to time, designate.
He shall have power to endorse, for deposit, all notes, checks and drafts
received by the Corporation. He shall disburse the funds of the Corporation,
as ordered by the Board of Directors, making proper vouchers therefor. He
shall render to the President and the directors, whenever required, an
account of all his transactions as Treasurer and of the financial condition
of the Corporation, and shall perform such other duties as may, from time to
time, be prescribed by the Board of Directors or by the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the Secretary,
or in his absence or disability, any Assistant Secretary shall have power to
perform all the duties of the Secretary, and, when so acting, shall have all
the powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time
may be assigned to them by the Board of Directors or by the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and, when so acting, shall have all
the powers of, and be subject to all the restrictions upon, the Treasurer.
The Assistant Treasurers shall perform such other duties as from time to time
may be assigned to them by the Board of Directors or by the President.
Section 4.12. COMPENSATION. The officers of this Corporation shall
receive such compensation for their services as may be determined, from time
to time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the Corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act and the rules and
regulations of the SEC) to the Corporation in such sum and with such surety
or sureties as the Board of Directors may determine, conditioned upon the
faithful performance of his duties to the Corporation, including
responsibility for negligence
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and for the accounting of any of the Corporation's property, funds or
securities that may come into his hands. In any such case, a new bond of
like character shall be given at least every six years, so that the date of
the new bond shall not be more than six years subsequent to the date of the
bond immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATE FOR SHARES.
(a) The Corporation may have certificated or uncertificated shares, or
both, as designated by resolution of the Board of Directors. Every owner of
certificated shares of the Corporation shall be entitled to a certificate, to
be in such form as shall be prescribed by the Board of Directors, certifying
the number of shares of the Corporation owned by him. Within a reasonable
time after the issuance or transfer of uncertificated shares, the Corporation
shall send to the new shareholder the information required to be stated on
certificates. Certificated shares shall be numbered in the order in which
they shall be issued and shall be signed, in the name of the Corporation, by
the President or a Vice President and by the Secretary or an Assistant
Secretary or by such officers as the Board of Directors may designate. Such
signatures may be by facsimile if authorized by the Board of Directors.
Every certificate surrendered to the Corporation for exchange or transfer
shall be canceled, and no new certificate or certificates shall be issued in
exchange for any existing certificate until such existing certificate shall
have been so canceled, except in cases provided for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued
and delivered by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is authorized
to cause to be issued shares of the Corporation up to the full amount
authorized by the Articles of Incorporation in such classes or series and in
such amounts as may be determined by the Board of Directors and as may be
permitted by law. No shares shall be allotted except in consideration of
cash or other property, tangible or intangible, received or to be received by
the Corporation under a written agreement, of services rendered or to be
rendered to the Corporation under a written agreement, or of an amount
transferred from surplus to stated capital upon a share dividend. At the
time of such allotment of shares, the Board of Directors making such
allotments shall state, by resolution, their determination of the fair value
to the Corporation in monetary terms of any consideration other than cash for
which shares are allotted. No shares issued by the Corporation shall be
issued, sold or exchanged by or on behalf of the Corporation for any amount
less than the net asset value per share of the shares outstanding as
determined pursuant to Article X hereunder.
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Section 5.03. REDEMPTION OF SHARES. Upon the demand of any
shareholder, this Corporation shall redeem any share issued by it held and
owned by such shareholder at the net asset value thereof as determined
pursuant to Article X hereunder. The Board of Directors may suspend the
right of redemption or postpone the date of payment during any period when:
(a) trading on the New York Stock Exchange is restricted or such Exchange is
closed for other than weekends or holidays; (b) the SEC has by order
permitted such suspension; or (c) an emergency as defined by rules of the SEC
exists, making disposal of portfolio securities or valuation of net assets of
the Corporation not reasonably practicable.
If following a redemption request by any shareholder of the Corporation,
the value of such shareholder's interest in the Corporation falls below the
required minimum investment, as may be set from time to time by the Board of
Directors, the Corporation's officers are authorized, in their discretion and
on behalf of the Corporation, to redeem such shareholder's entire interest
and remit such amount, provided that such a redemption will only be effected
by the Corporation following: (a) a redemption by a shareholder, which
causes the value of such shareholder's interest in the Corporation to fall
below the required minimum investment; (b) the mailing by the Corporation to
such shareholder of a "notice of intention to redeem"; and (c) the passage of
at least sixty (60) days from the date of such mailing, during which time the
shareholder will have the opportunity to make an additional investment in the
Corporation to increase the value of such shareholder's account to at least
the required minimum investment.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of
the Corporation may be authorized only by the shareholder named in the
certificate, or the shareholder's legal representative, or the shareholder's
duly authorized attorney-in-fact, and upon surrender of the certificate or
the certificates for such shares or a duly executed assignment covering
shares held in uncertificated form. The Corporation may treat, as the
absolute owner of shares of the Corporation, the person or persons in whose
name shares are registered on the books of the Corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The Corporation shall be
entitled to treat the holder of record of any share or shares as the holder
in fact thereof and accordingly shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of the State of Minnesota.
Section 5.06. TRANSFER OF AGENTS AND REGISTRARS. The Board of
Directors may from time to time appoint or remove transfer agents and/or
registrars of transfers of shares of the Corporation, and it may appoint the
same person as both transfer agent and registrar. Upon any such appointment
being made all certificates representing shares thereafter issued shall be
countersigned by one of such transfer agents or by one of such registrars of
transfers or by both and shall not be valid unless so countersigned. If the
same person shall be both transfer agent and registrar, only one
countersignature by such person shall be required.
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Section 5.07. TRANSFER REGULATIONS. The shares of the Corporation may
be freely transferred, and the Board of Directors may from time to time adopt
rules and regulations with reference to the method of transfer of shares of
the Corporation.
Section 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The
holder of any shares of the Corporation shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of any certificate
therefor, and the Board of Directors may, in its discretion, cause to be
issued to him a new share certificate or certificates, upon the surrender of
the mutilated certificate or, in case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction. A
new share certificate or certificates will be issued to the owner of the
lost, stolen or destroyed certificate only after such owner, or his legal
representatives, gives to the Corporation and to such registrar or transfer
agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft or destruction of any such certificate.
ARTICLE VI
DIVIDENDS
Section 6.01. The net investment income of each class or series of
shares of the Corporation will be determined, and its dividends shall be
declared and made payable at such time(s), as the Board of Directors shall
determine; dividends shall be payable to shareholders of record as of the
date of declaration.
It shall be the policy of each class or series of shares of the
Corporation to qualify for and elect the tax treatment applicable to
regulated investment companies under the Internal Revenue Code, so that such
class or series will not be subjected to federal income tax on such part of
its income or capital gains as it distributes to shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. SHARE REGISTER. The Board of Directors of the
Corporation shall cause to be kept at its principal executive office, or at
another place or places within the United States determined by the Board of
Directors:
(1) a share register not more than one year old, containing the
names and addresses of the shareholders and the number and classes or
series of shares held by each shareholder; and
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(2) a record of the dates on which certificates or transaction
statements representing shares were issued.
Section 7.02. OTHER BOOKS AND RECORDS. The Board of Directors shall
cause to be kept at the Corporation's principal executive office, or, if its
principal executive office is not in the State of Minnesota, shall make
available at its registered office within ten days after receipt by an
officer of the Corporation of a written demand for them made by a shareholder
or other person authorized by Minnesota Statutes Section 302A.461, originals
or copies of:
(1) records of all proceedings of shareholders for the last three
years;
(2) records of all proceedings of the Board of Directors for the
last three years;
(3) its Articles of Incorporation and all amendments currently in
effect;
(4) its Bylaws and all amendments currently in effect;
(5) financial statements required by Minnesota Statutes Section
302A.463 and the financial statement for the most recent interim period
prepared in the course of the operation of the Corporation for
distribution to the shareholders or to a governmental agency as a matter
of public record;
(6) reports made to shareholders generally within the last three
years;
(7) a statement of the names and usual business addresses of its
directors and principal officers;
(8) any shareholder voting or control agreements of which the
Corporation is aware; and
(9) such other records and books of account as shall be necessary
and appropriate to the conduct of the corporate business.
Section 7.03. AUDIT; ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of account
of the Corporation to be audited at least once in each fiscal year and at
such other times as it may deem necessary or appropriate.
(b) The Corporation shall employ an independent public accountant or
firm of independent public accountants to examine the accounts of the
Corporation and to sign and certify financial statements filed by the
Corporation. The independent accountant's certificates and reports shall be
addressed both to the Board of Directors and to the shareholders.
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Section 7.04. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.
ARTICLE VIII
INDEMNIFICATION OF CERTAIN PERSONS
Section 8.01. The Corporation shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to
such extent as permitted by Section 302A.521 of the Minnesota Statutes, as
now enacted or hereafter amended; provided, however, that no such
indemnification may be made if it would be in violation of Section 17(h) of
the Investment Company Act.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of
the Corporation, in the name and on behalf of the Corporation, to cast the
votes which the Corporation may be entitled to cast as a shareholder or
otherwise in any other corporation or association, any of whose shares or
securities may be held by the Corporation, at meetings of the holders of the
shares or other securities of any such other corporation or association, or
to consent in writing to any action by any such other corporation or
association, and may instruct the person or persons so appointed as to the
manner of casting such votes or giving such consent, and may execute or cause
to be executed on behalf of the Corporation and under its corporate seal, or
otherwise, such written proxies, consents, waivers or other instruments as it
may deem necessary or proper; or any of such officers may themselves attend
any meeting of the holders of shares or other securities of any such
corporation or association and thereat vote or exercise any or all other
rights of the Corporation as the holder of such shares or other securities of
such other corporation or association, or consent in writing to any action by
any such other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
10.01. The net asset value per share of each class or series of shares
of the Corporation shall be determined in good faith by or under supervision
of the officers of the Corporation as authorized by the Board of Directors as
often and on such days and at such time(s) as the Board of Directors shall
determine, or as otherwise may be required by law, rule, regulation or order
of the SEC.
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ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by the Corporation shall,
as hereinafter provided, be held by or deposited with a bank or trust company
having (according to its last published report) not less than two million
dollars ($2,000,000) aggregate capital, surplus and undivided profits (the
"Custodian").
The Corporation shall enter into a written contract with the Custodian
regarding the powers, duties and compensation of the Custodian with respect
to the cash and securities of the Corporation held by the Custodian. Such
contract and all amendments thereto shall be approved by the Board of
Directors of the Corporation. In the event of the Custodian's resignation or
termination, the Corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by
the Corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is
subject to the power of the shareholders to change or repeal such Bylaws by a
majority vote of the shareholders present or represented at any regular or
special meeting of shareholders called for such purpose, and the Board of
Directors shall not make or alter any Bylaws fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling
vacancies in the Board of Directors, or fixing the number of directors or
their classifications, qualifications or terms of office, except that the
Board of Directors may adopt or amend any Bylaw to increase or decrease their
number.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. INTERPRETATION. When the context in which words are
used in these Bylaws indicates that such is the intent, singular words will
include the plural and vice versa, and masculine words will include the
feminine and neuter genders and vice versa.
Section 13.02. ARTICLE AND SECTION TITLES. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not
control or alter the meaning of any of these Bylaws as set forth in the text.
M1:0062272.01
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INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, is made and entered into this 4th day of December, 1995, by
and between Jundt U.S. Emerging Growth Fund (the "Fund"), a separately managed
series of Jundt Funds, Inc., a Minnesota corporation (the "Company") and Jundt
Associates, Inc., a Minnesota corporation (the "Adviser").
1. INVESTMENT ADVISORY SERVICES
The Company, for and on behalf of the Fund, hereby engages the Adviser, and
the Adviser hereby agrees to act as investment adviser for, and to manage the
affairs, business and the investment of the assets of the Fund.
The investment of the assets of the Fund shall at all times be subject to
the applicable provisions of the Company's Articles of Incorporation, By-Laws
and Registration Statement on Form N-1A and any representations contained in the
Prospectus of the Fund and shall conform to the policies and purposes of the
Fund as set forth in such Registration Statement and Prospectus and (i) as
interpreted from time to time by the Board of Directors of the Company and
(ii) as may be amended from time to time by the Board of Directors of the
Company and/or the shareholders of the Fund as permitted by the Investment
Company Act of 1940, as amended. Within the framework of the investment
policies of the Fund, the Adviser shall have the sole and exclusive
responsibility for the management of the Fund's assets and making and execution
of all investment decisions for the Fund. The Adviser shall report to the Board
of Directors of the Company regularly at such times and in such detail as the
Board may from time to time determine to be appropriate, in order to permit the
Board to determine the adherence of the Adviser to the investment policies of
the Fund.
The Adviser shall, at its own expense, furnish the Fund with suitable
office space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Adviser shall arrange, if requested
by the Fund, for officers, employees or other Affiliated Persons (as defined in
Section 2(a)(3) of the Investment Company Act of 1940, as amended and the rules,
regulations and releases relating thereto) of the Adviser to serve without
compensation from the Fund as directors, officers, or employees of the Company
if duly elected to such positions by the shareholders or directors of the
Company.
The Adviser hereby acknowledges that all records necessary in the operation
of the Fund, including records pertaining to its shareholders and investments,
are the property of the Fund, and in the event that a transfer of management or
investment advisory services to someone other than the Adviser should ever
occur, the Adviser will promptly, and at its own cost, take all steps necessary
to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES
In payment for all services, facilities, equipment and personnel, and for
other costs of the Adviser hereunder, the Fund shall pay to the Adviser a
monthly investment advisory fee determined by applying the annual rate of 1.00%
to the Fund's average daily net assets.
For purposes of the calculation of such fee, the Fund's net assets shall be
computed at the times and in the manner specified in the Company's Registration
Statement on Form N-1A. Such fee shall be payable on the fifth day of each
calendar month for service performed hereunder during the preceding
<PAGE>
month. The fee applicable during the first and last months that this
Agreement is in effect shall be prorated according to the proportion which
such portion of the month bears to the full month.
3. ALLOCATION OF EXPENSES
(a) In addition to the fees described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by the Adviser in its capacity as the
Fund's investment adviser. These Fund expenses include, by way of example, but
not by way of limitation, (a) brokerage and commission expenses; (b) interest
charges on borrowings; (c) fees and expenses of legal counsel and independent
auditors; (d) the Fund's organizational and offering expenses, whether or not
advanced by the Adviser; (e) Federal, state, local and foreign taxes, including
issue and transfer taxes incurred by or levied on the Fund; (f) cost of
certificates representing common shares of the Fund and any other expenses
(including clerical expenses) of issuance, sale or repurchase of the common
shares of the Fund; (g) association membership dues; (h) fees and expenses of
registering the Fund's shares under the appropriate Federal securities laws and
of qualifying the Fund's shares under applicable state securities laws;
(i) expenses of printing and distributing reports, notices and proxy materials
to shareholders; (j) costs of annual and special shareholders' meetings;
(k) expenses of filing reports and other documents with governmental agencies;
(l) charges and expenses of the Fund's administrator, custodian, registrar,
transfer agent and dividend disbursing agent; (m) expenses of disbursing
dividends and distributions; (n) compensation of the Fund's officers, directors
and employees that are not Affiliated Persons or Interested Persons (as defined
in Section 2(a) of the Investment Company Act of 1940, as amended and the rules,
regulations and releases relating thereto) of the Adviser; (o) the cost of other
personnel providing services to the Fund; (p) travel expenses for attendance of
Board of Directors meetings by all members of the Board of Directors of the
Fund; (q) insurance expenses; (r) costs of stationery and supplies; and (s) any
extraordinary expenses of a nonrecurring nature.
(b) Notwithstanding the foregoing, if the aggregate expenses incurred by,
or allocated to, the Fund in any fiscal year shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Adviser shall reimburse the Fund for such excess, provided that
Adviser's reimbursement obligation will be limited to the amount of fees it
receives from the Fund during the period in which such expense limitations were
exceeded, unless otherwise required by applicable laws or regulations. With
respect to portions of a fiscal year in which this contract shall be in effect,
the foregoing limitations shall be prorated according to the proportion which
that portion of the fiscal year bears to the full fiscal year. Any payments
required to be made by this Paragraph 3(b) shall be made once a year promptly
after the end of the Fund's fiscal year.
4. FREEDOM TO DEAL WITH THIRD PARTIES
The Adviser shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective as of the day and date first above
written (the "Effective Date"). Wherever referred to in this Agreement, the
vote or approval of the holders of a majority of the outstanding shares of the
Fund shall mean the vote of 67% or more of such shares if the holders of more
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<PAGE>
than 50% of such shares are present in person or by proxy or the vote of more
than 50% of such shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect through December 4, 1997, and thereafter shall continue in
effect for successive periods of 12 months thereafter, provided that each
continuance is specifically approved annually by (a) the vote of a majority of
the Company's Board of Directors who are not parties to the Agreement or
interested persons (as defined in the Investment Company Act of 1940, as amended
and the rules, regulations and releases relating thereto) of the Company or the
Adviser, cast in person at a meeting called for the purpose of voting on
approval and (b) either (i) the vote of a majority of the outstanding voting
securities of the Fund or (ii) the vote of a majority of the Company's Board of
Directors.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Company or by the vote of
the holders of a majority of the outstanding shares of the Fund, upon sixty (60)
days written notice to the Adviser. The Adviser may terminate this Agreement
without penalty on ninety (90) days written notice to the Company. This
Agreement shall automatically terminate in the event of its assignment as
defined in the Investment Company Act of 1940 and the rules thereunder. This
Agreement shall automatically terminate upon completion of the dissolution,
liquidation and winding up of the Fund.
6. LIMITATION OF LIABILITY
The Adviser will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund or its shareholders in connection with the
performance of its duties under this Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
7. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until approved
by vote of the holders of a majority of the outstanding shares of the Fund.
8. NOTICES
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
9. NAME
The Fund may use "Jundt" as part of its name for so long as the Adviser
serves as investment adviser to the Fund. The Adviser may at any time permit
others, including companies registered under the Investment Company Act of 1940,
as amended, to use the name "Jundt".
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<PAGE>
IN WITNESS WHEREOF, the Company and the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
JUNDT FUNDS, INC.
By: _______________________________
Its: ___________________________
JUNDT ASSOCIATES, INC.
By: _______________________________
Its: ___________________________
M1:0075107.01
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<PAGE>
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 4th day of December, 1995, by and between Jundt
U.S. Emerging Growth Fund (the "Fund"), a separately managed series of Jundt
Funds, Inc., a Minnesota corporation (the "Company"), and U.S. Growth
Investments, Inc., a Minnesota corporation (the "Distributor").
W I T N E S S E T H:
1. DISTRIBUTION SERVICES. The Company, on behalf of the Fund, hereby
engages the Distributor, and the Distributor hereby agrees to act, as principal
underwriter for the Fund in the sale and distribution to the public of the
Fund's shares of common stock, $.01 par value (the "Shares"), either through
dealers or otherwise. The Distributor agrees to offer such Shares for sale at
all times when such Shares are available for sale and may lawfully be offered
for sale and sold. The Shares may be offered in one or more classes (each a
"Class") in accordance with Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"). The classes currently authorized are Class A,
Class B, Class C and Class D.
2. SALE OF FUND SHARES. Such Shares are to be sold only on the following
terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed
to have been accepted by the Fund if the Fund shall fail to notify the
Distributor of the rejection of such offer or sale prior to the computation
of the net asset value of the shares next following receipt by the Fund of
notice of such offer and sale.
(b) No Share shall be sold by the Fund for any consideration other
than cash or for any amount less than the net asset value of such Share,
computed as provided in the currently effective prospectus of the Fund (the
"Net Asset Value"). All Shares sold by the Distributor shall be sold at
the public offering price, as hereinafter defined, provided that the
Distributor may allow, or sell at, a discount from said public offering
price to broker-dealers that have entered into sales agreements with the
Distributor, which discount shall be no greater than the applicable sales
load or charge.
(c) The public offering price of the Shares shall be the Net Asset
Value thereof next determined following receipt of an order by the
Distributor plus any applicable sales load or charge. The sales load or
charge may be an initial charge of a percentage of the public offering
price or a contingent deferred sales charge upon redemption of Shares
within specified periods of purchase, as set forth in Fund's current
prospectus and specifically approved by the Board of Directors of the Fund.
(d) Any applicable sales loads or charges may, at the discretion of
the Fund and the Distributor, be reduced or eliminated as permitted by the
1940 Act and the rules and regulations thereunder, as they may be amended
from time to time, provided that such reduction or elimination shall be set
forth in the currently effective prospectus for the Fund, and provided that
the Fund shall in no event receive for any Shares sold an amount less than
the Net Asset Value thereof.
3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. The Fund may extend to its
shareholders the right to purchase Shares of any Class at the Net Asset Value
thereof with the proceeds of any dividend or capital gain distribution paid or
payable with respect to Shares of such Class.
<PAGE>
4. REGISTRATION OF SHARES. The Fund agrees to make prompt and reasonable
efforts to effect and keep in effect, at its own expense, the registration or
qualification of its Shares for sale in such jurisdictions as the Fund may
designate.
5. INFORMATION TO BE FURNISHED TO DISTRIBUTOR. The Fund agrees that it
will furnish the Distributor with such information with respect to the affairs
and accounts of the Fund as the Distributor may from time to time reasonably
require, and further agrees that the Distributor, at all reasonable times, shall
be permitted to inspect the books and records of the Fund.
6. ALLOCATION OF EXPENSES. During the period of this Agreement, the Fund
shall pay or cause to be paid all expenses, costs and fees incurred by the Fund
which are not assumed by the Distributor or Jundt Associates, Inc. (the
"Adviser"). The Distributor shall pay all costs of distributing the Shares,
including, but not limited to, (a) compensation paid to broker-dealers,
including the Distributor and its registered representatives, for their sales of
Shares, including the payment of trailer commissions and the implementation of
various incentive programs with respect to broker-dealers, banks and other
financial institutions; (b) compensation paid to banks and other institutions
for providing administrative and accounting services with respect to the Fund's
shareholders; (c) other advertising and promotional expenses in connection with
the distribution of Shares; and (d) other distribution-related costs as set
forth in the Plans of Distribution adopted by the Fund with respect to the
Class B Shares, Class C Shares and Class D Shares (collectively, the "Rule 12b-1
Plans"); provided that the Adviser, rather than the Distributor, may bear the
expenses referred to in this sentence, but the Distributor shall be primarily
liable for such expenses until paid.
7. COMPENSATION TO DISTRIBUTOR. As compensation for all of its services
provided and its costs assumed under this Agreement, the Distributor shall
receive such front-end sales charges, contingent deferred sales charges and fees
payable pursuant to Rule 12b-1 Plans, all as described in the Fund's current
prospectus, as amended and supplemented from time to time.
8. LIMITATION OF DISTRIBUTOR'S AUTHORITY. The Distributor shall be
deemed to be an authorized independent contractor and, except as specifically
provided or authorized herein, shall have no authority to act for or represent
the Fund.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS. The Distributor
shall subscribe for the Shares of the Fund only for the purpose of covering
purchase orders already received by it or for the purpose of investment for its
own account. In the event that an order for the purchase of Shares is placed
with the Distributor by a customer or dealer and subsequently canceled, the
Distributor shall forthwith cancel the subscription for such Shares entered on
the books of the Fund and, if the Distributor has paid the Fund for such Shares,
shall be entitled to receive from the Fund in refund of such payment the lesser
of:
(a) the consideration received by the Fund for said Shares; or
(b) the Net Asset Value of such Shares at the time of cancellation by
the Distributor.
10. INDEMNIFICATION OF FUND. The Distributor agrees to indemnify the
Company and the Fund against any and all litigation and other legal proceedings
of any kind or nature and against any liability, judgment, cost or penalty
imposed as a result of such litigation or proceedings in any way arising out of
or in connection with the sale or distribution of the Shares of the Fund by the
Distributor. In the event of the threat or institution of any such litigation
or legal proceedings against the Company or the Fund, the
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<PAGE>
Distributor shall defend such action on behalf of the Company and the Fund at
its own expense, and shall pay any such liability, judgment, cost or penalty
resulting therefrom, whether imposed by legal authority or agreed upon by way
of compromise and settlement; provided, however, that the Distributor shall
not be required to pay or reimburse the Company or the Fund for any
liability, judgment, cost or penalty incurred as a result of an omission to
supply information by the Company or the Fund to the Distributor, or to the
Distributor by a director, officer or employee of the Company who is not an
Interested Person of the Distributor (as defined in Section 2(a)(19) of the
1940 Act and the rules, regulations and releases relating thereto), unless
the information so supplied or omitted was available to the Distributor or
the Fund's investment adviser without recourse to the Company or the Fund or
any such Interested Person of the Company or the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES. The Distributor shall be free to
render to others services of a nature either similar to or different from those
rendered under this Agreement, except such as may impair its performance of the
services and duties to be rendered by it hereunder.
12. EFFECTIVE DATE. This Agreement shall become effective upon the
initial effective date of the Company's Registration Statement on Form N-1A.
Wherever referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding Shares of the Fund or of a Class of Shares shall
mean the vote of 67% or more of such Shares if the holders of more than 50% of
such Shares are present in person or by proxy or the vote of more than 50% of
such Shares, whichever is less.
13. DURATION. Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect from year to year but only so long as such
continuance is specifically approved at least annually either (a) by the Board
of Directors of the Company, including the specific approval of a majority of
the directors who are not Interested Persons of the Company or of the
Distributor and who have no direct or indirect financial interest in the
operation of the Rule 12b-1 Plans, or in any agreements relating to the Rule
12b-1 Plans, cast in person at a meeting called for the purpose of voting on
such approval; or (b) by the vote of the holders of a majority of the
outstanding Shares of the Fund, provided that, if a majority of the outstanding
Shares of any Class approves this Agreement, this Agreement shall continue in
effect with respect to such approving Class whether or not the shareholders of
any other Class of the Fund have approved this Agreement.
14. TERMINATION. This Agreement may be terminated at any time without the
payment of any penalty by the vote of a majority of the members of the Board of
Directors of the Company who are not Interested Persons of the Company and who
have no direct or indirect financial interest in the operation of the Rule 12b-1
Plans or in any agreements relating to the Rule 12b-1 Plans, or by the
Distributor, upon not more than 60 days' written notice to the other party.
This Agreement may be terminated with respect to a particular Class at any time
without the payment of any penalty by the vote of the holders of a majority of
the outstanding Shares of such Class, upon 60 days' written notice to the
Distributor. This Agreement shall automatically terminate in the event of its
assignment.
15. AMENDMENTS TO AGREEMENT. No material amendment to this Agreement
shall be effective until approved by the Distributor and by the vote of a
majority of the Board of Directors of the Company who are not Interested Persons
of the Distributor.
16. NOTICES. Any notices under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notice.
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<PAGE>
IN WITNESS WHEREOF, the Fund and the Distributor have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
JUNDT FUNDS, INC.
By _______________________________________
Its ____________________________________
U.S. GROWTH INVESTMENTS, INC.
By _______________________________________
Its ____________________________________
M1:0075111.01
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<PAGE>
SELECTED DEALER AGREEMENT
Ladies and Gentlemen: _____________, 199_
We, U.S. Growth Investments, Inc., a Minnesota corporation, have entered
into a distribution agreement with each registered, open-end management
investment company, or series thereof, set forth on EXHIBIT A hereto
(collectively, the "FUNDS") pursuant to which we act as distributor and
principal underwriter of each Fund's shares (the "SHARES").
1. THE OFFERING. The Shares will be offered continuously in
accordance with the terms and conditions set forth in each Fund's Prospectus
and Statement of Additional Information, as most currently amended or
supplemented (referred to hereinafter, together, as the applicable Fund's
"PROSPECTUS").
2. AUTHORIZED DEALERS. Pursuant to the distribution agreement between
each Fund and us, we have agreed to use our best efforts to enter into
arrangements with selected securities dealers to solicit from the public
orders to purchase Shares. You are hereby invited to become one of such
securities dealers (each such securities dealer, an "AUTHORIZED DEALER").
This will confirm our mutual agreement as to the terms and conditions
applicable to your participation as an Authorized Dealer, such agreement to
be effective on your confirmation hereof. You understand (a) that we may, at
any time at our option, also act as an Authorized Dealer, (b) that we are
seeking to enter into this Agreement in counterparts with you and certain
other securities dealers, which also may act as Authorized Dealers, (c) that,
except as we may otherwise agree with you, we may enter into agreements
(which may or may not be the same as this Agreement) with Authorized Dealers,
(d) that each Fund and we may modify, suspend, terminate or withdraw entirely
the offering of Shares at any time without giving notice to you pursuant to
Section 11 and without incurring any liability or obligation to you, (e) that
we may upon notice change the public offering price, sales load, or dealer
allowance or modify, cancel or change the terms of this Agreement, and (f) we
shall be under no liability to you except for lack of good faith and for
obligations expressly assumed by us herein. All purchases of Shares from,
and redemptions of Shares by, the applicable Fund shall be effected through
us acting as principal underwriters on behalf of the applicable Fund. (You
understand that we shall have no obligation to sell Shares to you at such
times as we are not acting as distributor and principal underwriter for the
applicable Fund.)
3. ROLE OF AUTHORIZED DEALERS. (a) As an Authorized Dealer, you
shall have no obligation to purchase or sell or to solicit the purchase or
sale of Shares. As, when and if you determine to purchase Shares or you
receive a customer order for the purchase of Shares and you determine to
accept such order, you shall comply with the procedures for the purchase of
Shares set forth in the applicable Fund's Prospectus. The procedure relating
to the handling of orders shall be subject to such further instructions as we
shall forward to you in writing from time to time.
(b) You agree to offer Shares to the public at the applicable public
offering price and subject to the minimum investment amount set forth in the
applicable Fund's Prospectus, subject to any waivers or reductions of sales
loads and dealer allowances described in the applicable Prospectus (as
amended or supplemented from time to time). Any amendment or supplement to
the applicable Prospectus which affects the sales load, dealer allowances,
waivers or discounts shall not affect sales load, dealer allowances,
discounts or waivers with respect to sales on which orders have been accepted
by us prior to the date of such amendment. Your placement of an order for
Shares after the date of any such amendment shall
<PAGE>
conclusively evidence your agreement to be bound thereby. We shall make a
reasonable effort to notify you of any redetermination or suspension of the
public offering price, but we shall be under no liability for failure to do
so. Reduced sales loads may also be available as a result of a cumulative
discount or pursuant to a statement of intent as set forth in the Prospectus.
You agree to advise us promptly as to the amounts of any sales made by you
to the public qualifying for reduced sales loads.
(c) You agree to purchase Shares from us only to cover purchase orders
already received from your customers, or for your own bona fide investment.
You will not withhold placing with us orders received from your customers so
as to profit yourself as a result of such withholding. All orders for Shares
are subject to acceptance or rejection by us or the applicable Fund in the
sole discretion of either.
(d) In purchasing Shares through us, you shall rely solely on the
representations contained in the applicable Fund's Prospectus and the
applicable Fund's registration statement (as most recently amended, the
"REGISTRATION STATEMENT") relating to the Shares. You will not furnish to
any person any information relating to the Shares, the applicable Fund or us
that is inconsistent with information contained in the Prospectus, the
Registration Statement or any printed information issued by the Fund or us as
information supplemental to such Prospectus or cause any advertisement to be
published or posted in any public place without our prior written consent or
the prior written consent of the applicable Fund.
(e) In all sales of Shares to the public, you shall act as dealer for
your own account, whether as agent or principal. Nothing herein shall be
deemed to constitute you or any other Authorized Dealer as agent for the
Fund, us, or any other Authorized Dealer. You agree not to act as our agent
and not to claim to act as our agent or as agent of any of the foregoing.
You agree to buy Shares only through us and not from any other sources and to
sell Shares only to us, as the applicable Fund's redemption agent, and not to
any other purchasers.
(f) You agree that we shall have full authority to act upon your
express instructions to redeem or exchange Shares through us on behalf of
your customers under the terms and conditions provided in the applicable
Fund's Prospectus. You agree to hold us harmless as a result of any action
taken with respect to authorized redemptions or exchanges upon your express
instructions.
(g) If any Shares confirmed to you under the terms of this Agreement
are redeemed by the issuing Fund or by us as agent for the Fund, or are
tendered for redemption, within seven business days after the date of our
confirmation of the original purchase order, you shall forthwith refund to us
the full discount, commission, finder's fee or other concession, if any,
allowed or paid to you on such Shares.
(h) You understand and acknowledge that each Fund offers its Shares in
multiple classes, each subject to differing sales charges and financing
structures. You hereby represent and warrant that you have established
compliance procedures designed to ensure that your customers are made aware
of the terms of each available class of the applicable Fund's Shares, to
ensure that each customer is offered only Shares that are suitable
investments of that customer and to ensure proper supervision of your
registered representatives in recommending and offering multiple classes of
Shares to your customers.
(i) You understand and acknowledge that certain Shares may be subject
to a contingent deferred sales charge when such shares are redeemed. As to
such Shares, you agree either (A) to refrain from issuing such Shares in
street name, or (B) to monitor the time period during which the applicable
contingent deferred sales charges remains in effect, to deduct from any
redemption proceeds the applicable contingent deferred sales charges and to
promptly remit to us any such contingent deferred sales charges.
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<PAGE>
4. COMPENSATION. You shall be entitled to receive such dealer
allowances, concessions, finder's fees and other compensation as are payable
to Authorized Dealers, generally, or to you or to certain specified
Authorized Dealers, specifically, as described and set forth in each
applicable Fund's Prospectus. You acknowledge that each Prospectus may set
forth a description of waivers or reduction of applicable sales loads and
dealer allowances in certain cases. In remitting the proceeds of any
investment in Shares to us or our agent (as provided herein), you are hereby
authorized to deduct from any such remittance the dealer allowance or
finder's fee applicable to the investment to which you are entitled (as
provided in the applicable Fund's Prospectus). As to any payments to be made
to you pursuant to any Rule 12b-1 plans adopted by the Funds, we shall remit
such amounts to you on a [quarterly] basis within [____] business days
following the end of the calendar quarter to which such payments relate;
provided, however, that no such Rule 12b-1 payments shall be due to you
unless and until we receive such payments from the applicable Fund.
5. ORDERS AND PAYMENT FOR SHARES. Payment for the Shares ordered from
us shall be made in Federal Funds and must be received by the Funds' agent,
[Norwest Bank Minnesota, N.A.], within three business days of a receipt and
acceptance by us of an order. If payment in Federal Funds is not received
within three business days after the execution of the order, we reserve the
right, without any notice, to cancel the sale and to hold you responsible for
any loss, including loss of profits, suffered by us or by the applicable Fund
resulting from such failure.
6. BLUE SKY AND OTHER QUALIFICATIONS. The Funds have registered an
indefinite number of Shares under the Securities Act of 1933. In addition,
the Funds intend to register or qualify in certain states where registration
or qualification is required. We will inform you as to the states or other
jurisdictions in which we believe the Shares have been qualified for sale
under, or exempt from the requirements of, the respective securities laws of
such states. You agree that you will offer Shares to your customers only in
those states where such Shares have been registered, qualified, or an
exemption is available. We assume no responsibility or obligation as to your
right to sell Shares in any jurisdiction.
7. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. You represent and
warrant to and undertake that:
(a) You are familiar with all applicable federal and state
securities laws, rules and regulations relating to the distribution
and delivery of prospectuses and agree that you will comply
therewith. You agree to deliver thereafter to any purchaser whose
Shares you are holding as record holder copies of the annual and
interim reports and proxy solicitation materials relating to the
Shares. You further agree to make reasonable efforts to endeavor to
obtain proxies from such purchasers whose Shares you are holding as
record holder. Additional copies of each applicable Fund's
Prospectus, annual or interim reports and proxy solicitation
materials will be supplied to you as you reasonably request.
(b) You are a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD") or, if you are not such a
member, you are a foreign bank, dealer or institution not eligible
for membership in the NASD which agrees to make no sales within the
United States, its territories or its possessions or to persons who
are citizens thereof or residents therein, and in making other sales
to comply, as though you were a member of NASD, with the provisions
of Sections 8, 24 and 36 of Article III of the Rules of Fair Practice
of the NASD and with Section 25 thereof as that Section applies to a
non-NASD member broker or dealer in a foreign country.
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<PAGE>
(c) You undertake to comply with respect to your offering of
Shares to the public pursuant to this Agreement with all applicable
provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and the rules and regulations thereunder and with
the applicable rules of the NASD.
8. TERMINATION. Either party to this Agreement may cancel this
Agreement by written notice to the other party. Such cancellation shall be
effective upon receipt of such notice.
9. REPRESENTATION TO SURVIVE. The agreements, representations,
warranties and other statements set forth in or made pursuant to this
Agreement will remain in full force and effect, to the extent permitted by
applicable law, regardless of any investigation made by or on behalf of us or
any Authorized Dealer. The provisions of Section 7 and 9 of this Agreement
shall survive the offer and sales of the Shares, to the extent permitted by
applicable law, and the termination or cancellation of this Agreement.
10. INDEMNIFICATION. (a) We agree to indemnify, defend and hold you,
your several officers and directors, and any person who controls you with the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands liabilities and
expenses (including reasonable costs of investigating and defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which you, your officers or directors, or any such
controlling person, may incur under the Securities Act of 1933, as amended,
or under common law or otherwise, arising out of or based upon (i) any breach
of any representation, warranty or covenant made by us herein, (ii) any
failure by us to perform our obligations as set forth herein, or (iii) any
untrue statement, or alleged untrue statement, of a material fact contained
in any Registration Statement or any Prospectus, or arising out of or based
upon any omission, or alleged omission, to state a material fact required to
be stated in either any Registration Statement or any Prospectus, or
necessary to make the statements in any thereof not misleading; provided,
however, that our agreement to indemnify you, your officers and directors,
and any such controlling person shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Statement or Prospectus in reliance upon and in conformity with
information furnished to us or the applicable Fund by you for use in the
preparation thereof.
(b) You agree to indemnify, defend and hold us and our several officers
and directors, and each Fund and its several officers and directors or
trustees, and any person who controls you and/or each Fund within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including reasonable costs of investigating and defending such claims,
demands or liabilities and any reasonable counsel fees incurred in connection
therewith) which we and our several officers and directors, or the applicable
Fund and its officers and directors or trustees, or any such controlling
person, may incur under the Securities Act of 1933, as amended, or under
common law or otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by you herein, or (ii) any failure
by you to perform your obligations as set forth herein, or (iii) any untrue,
or alleged untrue, statement of a material fact contained in the information
furnished by you to us or any Fund for use in such Fund's Registration
Statement or Prospectus, or used in the answers to any of the items of the
Registration Statement or in the corresponding statements made in the
Prospectus, or arising out of or based upon any omission, or alleged
omission, to state a material fact in connection with such information
furnished by you to us or the applicable Fund and required to be stated in
such answers or necessary to make such information not misleading.
-4-
<PAGE>
(c) Each party's agreement to indemnify the other (and its respective
officers, directors and controlling persons, as aforesaid) is expressly
conditioned upon the indemnifying party being notified of any action brought
against any person entitled to indemnification hereunder, such notification
to be given by letter or by telex, telegram, fax or similar means of same day
delivery received by the indemnifying party at the address to which notices
are to be sent hereunder within seven (7) days after the summons or other
first legal process shall have been served. The indemnifying party shall
have the right to control the defense of such action, with counsel of its own
choosing (provided such counsel is reasonably satisfactory to the person
seeking indemnification). The failure so to notify the indemnifying party as
specified herein shall not relieve the indemnifying party from any liability
which such party may have to the person claiming indemnification, otherwise
than on account of the indemnifying party's agreement contained in this
Section 10. This Section 10 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any person
entitled to indemnification hereunder and shall survive the delivery of any
Shares and termination of this Agreement. The agreements to indemnify
contained herein shall inure exclusively to the benefit of the persons
entitled to indemnification pursuant to this Agreement and their respective
estates, successors and assigns.
11. NOTICES. Notices hereunder shall be deemed to have been duly given
if delivered by hand or facsimile (a) if to you, at your address or facsimile
number set forth below and (b) if to us, to U.S. Growth Investments, Inc.,
1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota 55416, or, in each
case, such other address as may be notified to the other party.
12. AMENDMENTS. We may modify this Agreement at any time by written
notice to you. The first order placed by you subsequent to the giving of
such notice shall be deemed acceptance by you of the modification described
in such notice.
13. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
14. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the then existing NASD Code of Arbitration Procedure. Any
arbitration shall be conducted in Minneapolis, Minnesota, and each arbitrator
shall be from the securities industry. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
-5-
<PAGE>
Please confirm your agreement by signing and returning to us the two
enclosed duplicate copies of this Agreement. Upon our acceptance hereof, the
Agreement shall constitute a valid and binding contract between us. After
our acceptance, we will deliver to you one fully executed copy of this
Agreement.
Confirmed: ___________, 199 U.S. GROWTH INVESTMENTS, INC.
By: _______________________________
___________________________________ Its: ______________________________
(Name of Authorized Dealer)
By: _______________________________
(Authorized Signature)
___________________________________
Printed name of person signing
___________________________________
Title of person signing
___________________________________
Street Address
___________________________________
City State Zip
___________________________________
Fax No.
___________________________________
Telephone No.
___________________________________
Telex No.
___________________________________
Firm Taxpayer Identification No.
-6-
<PAGE>
EXHIBIT A
TO THE
SELECTED DEALER AGREEMENT
The following listing constitutes the Funds for which U.S. Growth
Investments, Inc. serves as distributor and principal underwriter and which are
offered for sale to the Authorized Dealer and its customers:
The Jundt Growth Fund, Inc. -- Class A Shares*
The Jundt Growth Fund, Inc. -- Class B Shares
The Jundt Growth Fund, Inc. -- Class C Shares
The Jundt Growth Fund, Inc. -- Class D Shares
Jundt U.S. Emerging Growth Fund -- Class B Shares
Jundt U.S. Emerging Growth Fund -- Class C Shares
Jundt U.S. Emerging Growth Fund -- Class D Shares
- ---------------------
* Class A Shares of The Jundt Growth Fund, Inc. are available only to certain
investors and are not otherwise generally available for sale to the public.
See the Fund's Prospectus for details.
<PAGE>
CUSTODY AGREEMENT
This Contract between Jundt Funds, Inc., a corporation organized and
existing under the laws of Minnesota, having its principal place of business at
1550 Utica Avenue South, Suite 950, Minneapolis, MN 55416, hereinafter called
the "Fund", and Norwest Bank Minnesota, N.A., a National Banking Association,
having its principal place of business at Sixth and Marquette, Minneapolis,
Minnesota, 55479, hereinafter called the "Custodian",
WITNESSETH, that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the authority delegated by the Board of Directors of the Fund. The
Fund agrees to deliver to the Custodian all securities and cash owned by it, and
all payments of income, payments of principal or capital distributions received
by it with respect to all securities owned by the Fund from time to time, and
the cash consideration received by it for such new or treasury shares of capital
stock ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the Board of Directors of the
Fund, and provided that the Custodian shall have no more or less responsibility
or liability to the Fund on account of any actions or omissions of any sub-
custodian so employed than any such sub-custodian has to the Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN
2.1 HOLDING SECURITIES.
The Custodian shall hold and physically segregate for the account of the
Fund all non-cash property, including all securities owned by the Fund, other
than (a) securities which are maintained pursuant to Section 2.12 in a clearing
agency which acts as a securities depository or in a book-
<PAGE>
entry system authorized by the U.S. Department of the Treasury, collectively
referred to herein as a "Securities System".
2.2 DELIVERY OF SECURITIES.
The Custodian shall release and deliver securities owned by the Fund held
by the Custodian or in a Securities System account of the Custodian only upon
receipt of Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and receipt
of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund:
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the Custodian
or into the name or nominee name of any agent appointed pursuant to
Section 2.11 or into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to
the broker or its clearing agent, against a receipt, for examination
in accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
<PAGE>
8) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts of temporary
securities for definitive securities; provided that, in any such case,
the new securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made by the
Fund, BUT ONLY against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund, which may be in the
form of cash or obligations issued by the United States government,
its agencies or instrumentalities, except that in connection with any
loans for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S. Department of
the Treasury, the Custodian will not be held liable or responsible for
the delivery of securities owned by the Fund prior to the receipt of
such collateral;
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, BUT ONLY against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of
the National Association of Securities Dealers, Inc. ("NASD"),
relating to the compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange, or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission
<PAGE>
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind; and
15) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Directors or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, specifying the securities to the be delivered, setting
forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES.
Securities held by the Custodian (other than bearer securities) shall be
registered in the name of the Fund or in the name of any nominee of the Fund or
of any nominee of the Custodian which nominee shall be assigned exclusively to
the Fund, UNLESS the Fund has authorized in writing the appointment of a nominee
to be used in common with other registered investment companies having the same
investment adviser as the Fund, or in the name of nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of any sub-
custodian appointed pursuant to Article 1. All securities accepted by the
Custodian on behalf of the Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 BANK ACCOUNTS.
The Custodian shall open and maintain a separate bank account or accounts
in the name of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a bank
account established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be deposited
by it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable;
<PAGE>
PROVIDED, however, that every such bank or trust company shall be qualified
to act as a custodian under the Investment Company Act of 1940 and that each
such bank or trust company and the funds to be deposited with each such bank
or trust company shall be approved by or pursuant to a vote of a majority of
the Board of Directors of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 PAYMENTS FOR SHARES.
The Custodian shall receive and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS.
Upon mutual agreement between the Fund and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions, make federal funds available to
the Fund as of specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of the Fund
which are deposited into the Fund's account.
2.7 COLLECTION OF INCOME.
The Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer securities if, on the date of payment by the issuer, such securities are
held by the Custodian or its agent thereof and shall credit such income, as
collected, to the Fund's custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due and
shall collect interest when due on securities held hereunder. Income due the
Fund on securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is properly
entitled.
<PAGE>
2.8 PAYMENT OF FUND MONIES.
Upon receipt of Proper Instructions, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out monies of
the fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the Fund but only (a)
against the delivery of such securities or evidence of title to such
options, futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the Investment
Company Act of 1940 to act as a custodian and has been designated by
the Custodian as its agent for this purpose) registered in the name of
the Fund or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the case of
a purchase effected through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof or (c) in the case of
the repurchase agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against delivery of
the receipt evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the repurchase of Shares issued by the Fund as set forth in
Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management, administration, accounting,
transfer agent and legal fees and expenses, disinterested directors'
fees and expenses, and operating expenses of the Fund whether or not
such expenses are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
<PAGE>
7) For any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions, a certified copy of a resolution of the Board
of Directors of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from the
Fund to so pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been received by
the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND.
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares in connection with any repurchase of Shares of the
Fund pursuant to an issuer tender offer or otherwise. In connection with the
repurchase of Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by shareholders whose shares are being repurchased. In
connection with the redemption or repurchase of Shares of the Fund, the
Custodian shall honor checks drawn on the Custodian by a holder of Shares, which
checks have been furnished by the Fund to the holder of Shares, when presented
to the Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Fund and the Custodian.
2.11 APPOINTMENT OF AGENTS.
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) any other bank or trust company which is itself qualified
under the Investment Company Act of 1940 to act as a custodian, as its agent to
carry out such of the provisions of this Article 2 as the Custodian may from
time
<PAGE>
to time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities hereunder.
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS.
The Custodian may deposit and/or maintain securities owned by the Fund in a
clearing agency registered with the Securities and Exchange commission under
Section 17A of the Exchange Act, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities System"
in accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment
for the account of the Fund. Copies of all advices from the
Securities System of transfers of securities for the account of the
Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Fund at its request. Upon request,
the Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund in the form of a written advice or
notice and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the Securities System for
the account of the Fund.
<PAGE>
4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the Securities System or any other
person which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made whole
for any such loss or damage.
2.13 SEGREGATED ACCOUNT.
The Custodian shall upon receipt of Proper Instructions establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.12
hereof, (i) in accordance with the provisions of any agreement among the Fund,
the Custodian and a broker-dealer registered under the Exchange Act and a member
of NASD (or any futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for the purpose of segregating
cash or government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon purchased
or sold by the Fund, (iii) for the purpose of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
<PAGE>
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper purposes, BUT ONLY, in the case of the
clause (iv), upon receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Directors or of an Executive Committee
signed by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES.
The Custodian shall execute ownership and other certificates and affidavits
for all federal and state tax purposes in connection with receipt of income or
other payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
2.15 PROXIES.
The Custodian shall, with respect to the securities held hereunder, cause
to be promptly executed by the registered holder of such securities, if the
securities are registered otherwise than in the name of the Fund or a nominee of
the Fund, all proxies, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Fund such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES.
The Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange offers
or any other similar transaction, the Custodian shall transmit promptly to the
Fund all written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offers or from the appropriate party in connection
with any other similar transaction. If the Fund desires to take action with
respect to any tender offer, exchange offer or any other similar transaction,
the Fund shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
<PAGE>
2.17 PROPER INSTRUCTIONS.
Proper Instructions as used throughout this Article 2 means a writing
signed or initialed by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY.
The Custodian may in its discretion, without express authority from the
Fund;
1) Make payments to itself or others for minor expenses of handling
securities PROVIDED that all such payments shall be accounted for to
the Fund;
2) Surrender securities in temporary form for securities in definitive
form;
3) Endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) In general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as
otherwise directed by the Board of Directors of the Fund.
2.19 EVIDENCE OF AUTHORITY.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument of paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) or any determination or of any action
duly made or taken by the Board of Directors
<PAGE>
pursuant to the Articles of Incorporation as described in such vote, and such
vote may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
2.20 CLASS ACTIONS. The Custodian shall transmit promptly to the Fund all
notices or other communications received by it in connection with any class
action lawsuit relating to securities currently or previously held for the
Fund. Upon being directed by the Fund to do so, the Custodian shall furnish
to the Fund any and all written materials which establish the
holding/ownership, amount held/owned, and period of holding/ownership of the
securities in question.
3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share.
4. RECORDS.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rule 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be
the property of the Fund and shall at all times during the regular business
hours of the Custodian be open for inspection by duly authority officers,
employees or agents of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the
Fund with a tabulation of securities owned by the Fund and held by the Custodian
and shall, when requested to do so by the Fund and for such compensation as
shall be agreed upon between the Fund and the Custodian, include certificate
numbers in such tabulations.
5. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's, Form N-2, and Form N-SAR or other
<PAGE>
annual reports to the Securities and Exchange Commission and with respect to
any other requirements of such Commission.
6. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be of
sufficient scope, and in sufficient detail, as may reasonably be required by the
Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
7. COMPENSATION OF CUSTODIAN`
For performance by the Custodian pursuant to this Agreement, the Fund
agrees to pay the Custodian annual fees and supplemental charges as set out in
the fee schedule attached hereto as the same may be amended from time to time as
agreed to by the parties.
8. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties. The Custodian shall
be held to the exercise of reasonable care in carrying out the provisions of
this Contract, but shall be kept indemnified by and shall be without liability
to the Fund for any action taken or omitted by it without negligence. It shall
be entitled to rely on and may act upon advice of counsel (who may be counsel
for the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Notwithstanding the
foregoing, the responsibility of the Custodian with respect to redemptions
effected by check shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the
<PAGE>
Custodian or its nominee assigned to the Fund being liable for the payment of
money or incurring liability of some other form, the Fund, as a prerequisite
to requiring the Custodian to take such action, shall provide indemnity to
the Custodian in an amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of Fund
assets to the extent necessary to obtain reimbursement.
9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
The Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; PROVIDED, however, that the
Custodian shall not act under Section 2.12 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Directors of the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Directors has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, PROVIDED FURTHER, however, that the Fund shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust, and further provided,
that the Fund may at any time by action of its Board of Directors(i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
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Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
10. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Directors of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer to an account of the successor custodian all of the Fund's securities
held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, or not less than $25,000,000, all
securities, funds and other properties held by the Custodian and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Fund's securities held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, Funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
<PAGE>
11. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. MINNESOTA LAW TO APPLY.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The State of Minnesota.
13. PRIOR CONTRACTS.
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 4th day of December, 1995.
JUNDT FUNDS, INC. NORWEST BANK MINNESOTA, N.A.
By _______________________________ By ________________________________
ATTEST ATTEST
By _______________________________ By ________________________________
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AGREEMENT is made as of the ______ day of ___________, 1995, by and between
JUNDT FUNDS, INC., a Minnesota corporation, having its principal office and
place of business at 1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota
55416 (the "Fund"), and INVESTORS FIDUCIARY TRUST COMPANY, a Missouri trust
company having its principal office and place of business at 127 West 10th
Street, Kansas City, Missouri, 64105 ("IFTC").
WHEREAS, the Fund desires to appoint IFTC as its transfer agent, dividend
disbursing agent, and agent in connection with certain other activities, and
IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
l. TERMS OF APPOINTMENT; DUTIES OF IFTC
1.1 Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints IFTC to act as, and IFTC agrees to act as,
transfer agent for each series of the Fund's authorized and issued common
shares ("Shares"), dividend disbursing agent, and agent in connection
with any accumulation, open-account or similar plans provided to the
shareholders of the Fund ("Shareholders") and set out in the currently
effective prospectus(es) and statement(s) of additional information
("prospectus") of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.2 IFTC agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and IFTC, IFTC shall:
(i) Receive for acceptance orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof
to the Custodian of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance redemption requests and redemption
directions, and deliver the appropriate documentation therefor
to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii)
above, IFTC shall execute transactions directly with
broker-dealers authorized by the Fund who shall thereby be
deemed to be acting on behalf of the Fund;
<PAGE>
(v) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over
or cause to be paid over in the appropriate manner such monies
as instructed by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and distributions
declared by the Fund;
(viii) Issue replacement certificates for those certificates alleged
to have been lost, stolen or destroyed upon receipt by IFTC of
indemnification satisfactory to IFTC and protecting IFTC and
the Fund, and IFTC at its option may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity;
(ix) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(x) Record the issuance of Shares and maintain pursuant to SEC
Rule 17Ad-10(e) a record of the total number of Shares which
are authorized, based upon data provided to it by the Fund,
and issued and outstanding. IFTC shall also provide the Fund
on a regular basis with the total number of Shares which are
authorized and issued and outstanding but shall have no
obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), IFTC shall: (i)
perform all of the customary services of a transfer agent, dividend
disbursing agent, and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing Shareholder reports and
prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required
with respect to dividends and distributions by federal authorities
for all Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and
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<PAGE>
mailing activity statements for Shareholders, and providing
Shareholder account information, (ii) provide a system reasonably
acceptable to the Fund or its agent which will enable the Fund or its
agent to monitor the total number of Shares sold in each state, and
(iii) open and maintain one or more non-interest bearing deposit
accounts as agent for the Fund, with such financial institution(s) as
may be designated by it or by the Fund in writing (such accounts,
however, to be in the name of IFTC and subject only to its draft or
order), into which accounts the moneys received for the account of
the Fund and moneys for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder will be
deposited, and against which checks, drafts and payment orders
will be drawn.
(c) In addition, the Fund or its agent shall (i) identify to IFTC in
writing those transactions and assets to be treated as exempt from
blue sky reporting for each state and (ii) verify the establishment
of transactions for each state on the system prior to activation and
thereafter monitor the daily activity for each state. The
responsibility of IFTC for the Fund's blue sky state registration
status is solely limited to the initial establishment of transactions
subject to blue sky compliance by the Fund and the reporting of such
transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services in
Section 1 may be established from time to time by agreement between
the Fund and IFTC. IFTC may at times perform only a portion of these
services, and the Fund or its agent shall perform the remainder of
these services on the Fund's behalf.
(e) IFTC shall provide additional services on behalf of the Fund (e.g.,
escheatment services) which may be agreed upon in writing between the
Fund and IFTC.
2. FEES AND EXPENSES
2.1 For the performance of services by IFTC pursuant to this Agreement, the
Fund agrees to pay IFTC an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached hereto. Such fees
and out-of-pocket expenses and advances identified under Section 2.2 below
may be changed from time to time subject to mutual written agreement
between the Fund and IFTC.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees to
reimburse IFTC for reasonable out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by
IFTC for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by IFTC at the request or with the
consent of the Fund, will be reimbursed by the Fund.
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<PAGE>
2.3 The Fund agrees to pay all fees and reimbursable expenses promptly
following the receipt of the respective billing notice.
3. REPRESENTATIONS AND WARRANTIES OF IFTC
IFTC represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of the State of Missouri; provided, however, that the Fund
acknowledges that IFTC intends to merge with a newly-chartered national
association which shall be the surviving entity following such merger.
3.2 It is duly qualified to carry on its business in the State of Missouri.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to IFTC that:
4.1 It is a corporation duly organized and existing and in good standing under
the laws of the State of Minnesota.
4.2 It is empowered under applicable laws and by its Articles of Incorporation
and By-Laws to enter into and perform this Agreement.
4.3 All proceedings required by said Articles of Incorporation and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.4 It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended, is
currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale.
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<PAGE>
5. DATA ACCESS AND PROPRIETARY INFORMATION
5.1 The Fund acknowledges that the computer programs, screen formats, report
formats, interactive design techniques, and documentation manuals
("Software") furnished to the Fund by IFTC as part of the Fund's ability
to access the Fund-related data ("Customer Data") maintained by IFTC on
data bases under the control and ownership of IFTC or to access data
provided by other third parties ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to IFTC and such third
parties. In no event shall Proprietary Information be deemed Customer
Data nor shall Customer Data be deemed Proprietary Information. The Fund
agrees to treat all Proprietary Information as proprietary to IFTC and
further agrees that it shall not divulge any Proprietary Information to
any person or organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its employees and
agents:
(a) to electronically access Customer Data solely through computer
hardware operating at locations agreed to by IFTC and solely in
accordance with IFTC's applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information except as required to operate and maintain the Software;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently
obtained, to inform IFTC in a timely manner of such fact and dispose
of such information in accordance with IFTC's instructions;
(d) to refrain from causing or allowing data, other than Customer Data,
acquired hereunder from being retransmitted to any other computer
facility or other location, except with the prior written consent of
IFTC;
(e) that the Fund shall have access to the Data Access Services only for
purposes of performing the functions and services which are to be
performed by the Fund or its agent pursuant to Section 1.2(d) hereof
as agreed upon by the parties;
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<PAGE>
(f) to honor all reasonable written requests made by IFTC to protect at
IFTC's expense the rights of IFTC in Proprietary Information at
common law, under federal copyright law and under other federal or
state law.
5.2 Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section
shall survive any termination of this Agreement.
5.3 If the Fund notifies IFTC that the Software or any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, IFTC shall endeavor in a
timely manner to correct such failure. Organizations from which IFTC may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make no
claim against IFTC arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
5.4 If the transactions available to the Fund include the ability to originate
electronic instructions to IFTC in order to (i) effect the transfer or
movement of cash or Shares or (ii) transmit Shareholder information or
other information, then in such event IFTC shall be entitled to rely on
the validity and authenticity of such instructions without undertaking any
further inquiry as long as such instructions are undertaken in conformity
with security procedures established by IFTC from time to time.
5.5 All Customer Data shall be considered confidential and proprietary
information owned by the Fund. IFTC agrees to cooperate as necessary to
withdraw Customer Data from its Software when requested by the Fund. IFTC
further agrees to use all reasonable efforts to prevent any of the
Customer Data from being disclosed to third-parties, other than to agents
of the Fund and the Fund's administrator and as required by law.
5.6 If a third-party claims that the Software infringes its patent, copyright,
or trade secret, or any similar intellectual property right, IFTC will
defend, indemnify and hold the Fund harmless against that claim at IFTC's
expense and pay any costs, damages, or awards of settlement, including
court costs, arising out of any such claim, demand, or action, provided
that the Fund promptly notifies IFTC in writing of the claim, allows IFTC
to control, and cooperates with IFTC in, the defense or any related
settlement negotiations.
5.7 IFTC represents and warrants that Software will perform substantially in
accordance with IFTC's applicable user documentation. IFTC further
represents and warrants that IFTC has a license to use the Software for
purposes of this Agreement.
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<PAGE>
5.8 DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS
USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS.
IFTC EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED
HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
6. INDEMNIFICATION
6.1 IFTC shall not be responsible for, and the Fund shall indemnify and hold
IFTC and its agents and subcontractors harmless from and against, any and
all losses, damages, costs, charges (including reasonable counsel fees),
payments, expenses and liabilities arising out of or attributable to:
(a) All actions of IFTC or its agents or subcontractors taken pursuant to
this Agreement, provided that such actions are taken in good faith
and without negligence or willful misconduct.
(b) The breach of any representation or warranty of the Fund hereunder.
(c) The reliance on or use by IFTC or its agents or subcontractors of
information, records, documents or services which are received by
IFTC or its agents or subcontractors and have been prepared,
maintained or performed by the Fund or any other person or firm on
behalf of the Fund including but not limited to any previous transfer
agent or registrar.
(d) The reliance on, or the carrying out by IFTC or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
6.2 At any time IFTC may apply to any officer of the Fund for instructions,
and may consult with legal counsel with respect to any matter arising in
connection with the services to be performed by IFTC under this Agreement,
and IFTC and its agents and subcontractors shall not be liable and shall
be indemnified by the Fund for any action taken or omitted by IFTC or any
such agent or subcontractor in reliance upon such instructions or upon the
opinion of such counsel. IFTC, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished
by or on behalf of the Fund, reasonably
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<PAGE>
believed to be genuine and to have been signed by the proper person or
persons, or upon any instruction, information, data, records or documents
provided to IFTC or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority of
any person until receipt of written notice thereof from the Fund. IFTC,
its agents and subcontractors shall also be protected and indemnified in
recognizing stock certificates which are reasonably believed to bear the
proper manual or facsimile signatures of the officers of the Fund, and the
proper countersignature of any former transfer agent or former registrar,
or of a co-transfer agent or co-registrar.
6.3 The Fund shall not be responsible for, and IFTC shall indemnify and hold
the Fund harmless from and against, any and all losses, damages, costs,
charges (including reasonable counsel fees), payments, expenses and
liabilities arising out of or attributable to:
(a) The bad faith, negligence or willful misconduct of IFTC or its agents
or subcontractors in taking or failing to take any action pursuant to
this Agreement.
(b) The breach of any representation or warranty of IFTC hereunder.
6.4 In order that the indemnification provisions contained in this Section 6
shall apply, upon the assertion of a claim for which an indemnifying party
may be required to indemnify an indemnified party, the indemnified party
shall promptly notify the indemnifying party of such assertion, and shall
keep the indemnifying party advised with respect to all developments
concerning such claim. The indemnifying party shall have the option to
participate with the indemnified party in the defense of such claim or to
defend against said claim in its own name or in the name of the
indemnified party through counsel reasonably acceptable to the indemnified
party. The indemnified party shall in no case confess any claim or make
any compromise in any case in which the indemnifying party may be required
to indemnify the indemnified party except with the indemnifying party's
prior written consent.
7. COVENANTS OF THE FUND AND IFTC
7.1 The Fund shall promptly furnish to IFTC the following:
(a) A certified copy of the resolution of the Board of Directors of the
Fund authorizing the appointment of IFTC and the execution and
delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and
all amendments thereto (or restatements thereof).
7.2 IFTC hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of stock certificates,
check forms and facsimile
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<PAGE>
signature imprinting devices, if any; and for the preparation or use of,
and for keeping account of, such certificates, forms and devices.
7.3 IFTC shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, IFTC agrees that all such records prepared or
maintained by IFTC relating to the services to be performed by IFTC
hereunder are the property of the Fund and will be preserved, maintained
and made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
7.4 IFTC and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any
other person, other than to agents of the Fund, the Fund's administrator
and agents and subcontractors of IFTC, except as may be required by law.
7.5 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, IFTC will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such
inspection. IFTC reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be
held liable for the failure to exhibit the Shareholder records to such
person.
8. TERMINATION OF AGREEMENT
8.1 This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other.
8.2 Should the Fund exercise its right to terminate this Agreement, all
out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund.
9. ASSIGNMENT
9.1 Except as provided in Section 9.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party; provided, that the planned merger
described in Section 3.1 shall not be subject to this requirement.
9.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
9.3 IFTC may, without further consent on the part of the Fund, subcontract for
the
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performance hereof with (i) Boston Financial Data Services, Inc., a
Massachusetts corporation ("BFDS"), or National Financial Data Services,
Inc. a Massachusetts corporation ("NFDS"), which are each duly registered
as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934, as amended ("Section 17A(c)(1)"); or (ii) any other
IFTC affiliate which is duly registered as a transfer agent pursuant to
Section 17A(c)(1); provided, however, that IFTC shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor as
it is for its own acts and omissions.
10. AMENDMENT
This Agreement may be amended or modified only by a written agreement
executed by both parties and authorized or approved by a resolution of the
Board of Directors of the Fund.
11. MISSOURI LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Missouri, without
reference to the choice of laws principles thereof.
12. FORCE MAJEURE
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
13. CONSEQUENTIAL DAMAGES
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
10
<PAGE>
14. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
15. SURVIVAL OF TERMS.
The provisions of Sections 5.1, 6 and 8.2 shall survive the termination of
this Agreement.
16. COUNTERPARTS
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
17. NOTICES.
Notices, requests, instructions and other writings shall be addressed to a
party at the address set forth above, or at such other address as such
party may have designated to the other in writing.
18. WAIVER.
The failure of either party to insist upon the performance of any terms or
conditions of this Agreement or to enforce any rights resulting from any
breach of any of the terms or conditions of this Agreement, including the
payment of damages, shall not be construed as a continuing or permanent
waiver of any such terms, conditions, rights or privileges, but the same
shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred. No waiver, release or discharge of
any party's rights hereunder shall be effective unless contained in a
written instrument signed by the party sought to be charged.
19. INVALIDITY.
If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall remain in
full force and effect and this Agreement shall remain enforceable to the
fullest extent permitted by applicable law.
11
<PAGE>
20. OTHER AGREEMENTS.
This Agreement does not in any way affect any other agreements entered
into between the parties hereto and any actions taken or omitted by any
party hereunder shall not affect any rights or obligations of any other
party hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
JUNDT FUNDS, INC.
By:
---------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By:
---------------------------
12
<PAGE>
INVESTORS FIDUCIARY TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase of Shares.
2. Issue Shares and hold Shares in Shareholders accounts.
3. Receive redemption requests.
4. Effect transactions 1-3 above directly with broker-dealers.
5. Pay over monies to redeeming Shareholders.
6. Effect transfers of Shares.
7. Prepare and transmit dividends and distributions.
8. Issue Replacement Certificates.
9. Reporting of abandoned property.
10. Maintain records of account.
11. Maintain and keep a current and accurate control book
for each issue of securities.
12. Mail proxies.
13. Mail Shareholder reports.
14. Mail prospectuses to current Shareholders.
15. Withhold taxes on U.S. resident and non-resident
alien accounts.
16. Prepare and file U.S. Treasury Department forms.
17. Prepare and mail account and confirmation statements for
Shareholders.
13
<PAGE>
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
18. Provide Shareholder account information.
19. Blue sky reporting.
* Such services are more fully described in Section 1.2 (a), (b) and (c) of
the Agreement.
JUNDT FUNDS INC.
BY:
---------------------------
INVESTORS FIDUCIARY TRUST COMPANY
BY:
---------------------------
14
<PAGE>
ADMINISTRATION AGREEMENT
AGREEMENT made this 4th day of December, 1995 by and between Jundt Funds,
Inc., a Minnesota corporation (hereinafter called the "Company"), with respect
to Jundt U.S. Emerging Growth Fund and any other series of the Company (each, a
"Fund"), and Princeton Administrators, L.P., a Delaware limited partnership
(hereinafter called the "Administrator");
W I T N E S S E T H
WHEREAS, the Company and Jundt Associates, Inc. (the "Investment Adviser")
are entering into an Investment Advisory Agreement (the "Investment Agreement")
pursuant to which the Investment Adviser will agree to act as investment adviser
for, and to manage the affairs, business and investment of the assets of each
Fund; and
WHEREAS, the Company desires to retain the Administrator to render certain
administrative services for the Company in the manner and on the terms and
conditions hereafter set forth; and
WHEREAS, the Administrator desires to be retained to perform such services
on said terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Company and the Administrator agree as follows:
1. DUTIES OF THE ADMINISTRATOR. The Company hereby retains the
Administrator to act as administrator of the Company, subject to the supervision
and direction of the Board of Directors of the Company, as hereinafter set
forth. The Administrator shall perform or arrange for the performance of the
following administrative and clerical services: (i) maintain and keep certain
books and records of the Company and each Fund; (ii) prepare or review and,
subject to approval by the Company, file certain reports and other documents
required by U.S.
<PAGE>
Federal, state (subject to and contingent upon the Company's transfer agent
providing sales and redemption data to the Administrator via an automated
data electronic feed system compatible with the Administrator's system and
acceptable to the Administrator) and other applicable U.S. laws and
regulations to maintain the Company's registration as an open-end investment
company; (iii) coordinate tax related matters; (iv) respond to inquiries from
Fund shareholders; (v) calculate and publish, or arrange for the calculation
and publication of, the net asset value of each Fund's shares; (vi) oversee,
and, as the Board may reasonably request or deem appropriate, make reports
and recommendations to the Board on, the performance of administrative and
professional services rendered to the Company and each Fund by others,
including its custodian and any subcustodian, registrar, transfer agent,
dividend disbursing agent and dividend reinvestment plan agent, as well as
accounting, auditing and other services; (vii) provide the Company with the
services of persons competent to perform the foregoing administrative and
clerical functions; (viii) provide the Company with administrative offices
and data processing facilities; (ix) arrange for payment of the Company's and
each Fund's expenses; (x) consult with the Company's officers, independent
accountants, legal counsel, custodian and any sub-custodian, registrar,
transfer agent, and dividend disbursing agent and dividend reinvestment plan
agent in establishing the accounting policies of the Company; (xi) prepare
such financial information and reports as may be required by any banks from
which the Company borrows funds; and (xii) provide such assistance to the
Investment Adviser, the custodian and any sub-custodian, and the Company's
counsel and auditors as generally may be required to carry on properly the
business and operations of the Company and each Fund. The Company agrees to
cause its transfer agent, custodian and the Investment Adviser to deliver, on
a timely basis, such information to the Administrator as may be necessary or
appropriate for the Administrator's performance of its duties and
responsibilities hereunder, including but not limited to, daily records of
transactions, daily valuation of investments in local currency (which may be
based on information provided by a pricing service) as well as the daily
conversion factor in order for the Administrator to price each Fund in United
States dollars, reports of expenses borne by the Company and each Fund, the
Company's management letter to stockholders and such other information
necessary for the Administrator to prepare the
2
<PAGE>
above referenced reports and filings, and the Administrator shall be entitled
to rely on the accuracy and completeness of such information in performing
its duties hereunder.
2. EXPENSES OF THE ADMINISTRATOR. The Administrator assumes and shall
pay for maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall at its own expense, provide office space,
facilities, equipment and necessary personnel which it is obligated to provide
under paragraph 1 hereof, except that the Company shall pay reasonable travel
expenses of persons who perform administrative, clerical and bookkeeping
functions on behalf of the Company. The Company and the Investment Adviser
assume and shall pay or cause to be paid all other expenses of the Company and
each Fund as set forth in the Investment Agreement. The expenses of legal
counsel and accounting experts retained by the Administrator, after consulting
with the Company's counsel and independent auditors, as may be necessary or
appropriate for the Administrator's performance of its duties and
responsibilities under this Agreement are deemed expenses of, and shall be paid
by, the Company.
3. COMPENSATION OF THE ADMINISTRATOR. For the services rendered to the
Company and each Fund by the Administrator pursuant to this Agreement, the
Company shall pay to the Administrator on the first business day of each
calendar month a fee for the previous month at an annual rate equal to the
greater of (i) $125,000 per annum ($10,416.66 per month), or (ii) at an annual
rate equal to 0.20% of the Company's net assets up to and including U.S. $600
million and 0.175% of the Company's net assets in excess of U.S. $600 million.
For the purpose of determining fees payable to the Administrator, the net assets
of the Company shall mean the value of the total assets of the Company, minus
the sum of the accrued liabilities of the Company exclusive of capital stock and
surplus. The value of the Company's net assets shall be computed at the times
and in the manner specified in the Company's Registration Statement on Form N-
1A, as amended from time to time (the "Registration Statement"). Compensation
by the Company of the Administrator shall be pro-rated for any partial month of
service, according to the proportion that such period bears to the full monthly
period and shall
3
<PAGE>
be payable within seven (7) days after the end of the period to which such
compensation relates.
4. LIMITATION OF LIABILITY OF THE ADMINISTRATOR; INDEMNIFICATION.
(a) The Administrator shall not be liable to any person for any error
of judgment or mistake of law or for any loss arising out of any act or omission
by the Administrator in the performance of its duties hereunder; provided,
however, that nothing herein contained shall be construed to protect the
Administrator against any liability to the Company to which the Administrator
shall otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reckless disregard of its
obligations and duties hereunder.
(b) The Administrator may, with respect to questions of law, apply
for and obtain the advice or opinion of legal counsel and, with respect to the
application of generally accepted accounting principles or Federal tax
accounting principles, apply for and obtain the advice or opinion of accounting
experts. The Administrator shall be fully protected with respect to any action
taken or omitted by it in good faith in conformity with such advice or opinion.
(c) The Company agrees to indemnify and hold harmless the
Administrator from and against all charges, claims, expenses (including legal
fees) and liabilities reasonably incurred by the Administrator in connection
with the performance of its duties hereunder, except such as may arise from the
Administrator's willful misfeasance, bad faith, gross negligence in the
performance of its duties or by reckless disregard of its obligations and duties
hereunder. The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
Administrator's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that the Administrator is entitled
4
<PAGE>
to such indemnification and if the Directors of the Company determine that
the facts then known to them would not preclude indemnification. In
addition, at least one of the following conditions must be met: (A) the
Administrator shall provide a security for this undertaking, (B) the Company
shall be insured against losses arising by reason of any lawful advances, or
(C) a majority of a quorum consisting of Directors of the Company who are
neither "interested persons" of the Company (as defined in Section 2(a) (19)
of the 1940 Act) nor parties to the proceeding ("Disinterested Non-Party
Directors") or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Administrator
ultimately will be found entitled to indemnification.
(d) As used in this Paragraph 4, the term "Administrator" shall
include any affiliates of the Administrator performing services for the Company
contemplated hereby and directors, partners, officers, agents and employees of
the Administrator and such affiliates.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
under this Agreement are not to be deemed exclusive, and the Administrator and
any person controlled by or under common control with the Administrator shall be
free to render similar services to others.
6. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date first above written and shall remain in force
until terminated as provided herein. This Agreement may be terminated at any
time, without the payment of any penalty, by the Company on sixty days' written
notice to the Administrator and by the Administrator on ninety days' written
notice to the Company. This Agreement shall automatically terminate in the
event of its assignment.
7. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by the
parties hereto only if such amendment is specifically approved by the Board of
Directors of the
5
<PAGE>
Company and such amendment is set forth in a written instrument executed by
each of the parties hereto.
8. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of New York as at the
time in effect and the applicable provisions of the 1940 Act. To the extent
that the applicable law of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
9. COUNTERPARTS. This Agreement may be executed by the parties hereto in
counterparts and if executed in more than one counterpart, the separate
instruments shall constitute one agreement.
10. NOTICES. Any notice under this Agreement, shall be in writing and
shall be deemed to be received on the earlier of the date actually received or
on the fourth day after the postmark if such notice is mailed first class
postage prepaid. Notice shall be addressed:
(a) if to the Administrator, to: President, Princeton
Administrators, L.P., P.O. Box 9011, Princeton, New Jersey 08543-9011; or (b) if
to the Fund, to: Chairman, Jundt Funds, Inc., 1550 Utica Avenue South, Suite
950, Minneapolis, Minnesota 55416.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JUNDT FUNDS, INC.
By: ____________________________________
Title:
PRINCETON ADMINISTRATORS, L.P.
By: Princeton Services, Inc., General Partner
By: ____________________________________
Title:
M1:0075657.01
7
<PAGE>
ADDENDUM
TO THE
ADMINISTRATION AGREEMENT
This Addendum to the Administration Agreement dated December 4, 1995 by and
between Jundt Funds, Inc. (the "Company"), with respect to Jundt U.S. Emerging
Growth Fund and any other series of the Company, and Princeton Administrators,
L.P. (the "Administrator"), for the period December 4, 1995 through December 31,
1996 or for such shorter period if the Administration Agreement is earlier
terminated in accordance with its terms (the "Period"), modifies Section 3 of
the Administration Agreement to read in its entirety as follows:
3. COMPENSATION OF THE ADMINISTRATOR. For the services rendered to
the Company by the Administrator pursuant to this Agreement, the Company
shall pay to the Administrator on the first business day of each calendar
month a fee for the previous month at an annual rate equal to 0.20% of the
Company's net assets up to and including U.S. $600 million and 0.175% of
the Company's net assets in excess of U.S. $600 million. For the purpose
of determining fees payable to the Administrator, the net assets of the
Company shall mean the value of the total assets of the Company, minus the
sum of the accrued liabilities of the Company exclusive of capital stock
and surplus. The value of the Company's net assets shall be computed at
the times and in the manner specified in the Company's Registration
Statement on Form N-1A, as amended from time to time (the "Registration
Statement"). Compensation by the Company of the Administrator shall be
pro-rated for any partial month of service, according to the proportion
that such period bears to the full monthly period and shall be payable
within seven (7) days after the end of the period to which such
compensation relates.
Following the termination of the Period, this Addendum shall cease to be of
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the 4th day of December, 1995.
JUNDT FUNDS, INC.
By ____________________________________
Title:
PRINCETON ADMINISTRATORS, L.P.
By: Princeton Services, Inc., General Partner
By ____________________________________
Title:
M1:0077898.01
<PAGE>
FINANCIAL SERVICES AGREEMENT
AGREEMENT made as of the 4th day of December 1995, by and between (i)
each of the investment companies listed on Schedule A hereto as such Schedule
may be amended from time to time (collectively the "Funds," each a "Fund");
(ii) Investors Fiduciary Trust Company ("IFTC") (iii) Merrill Lynch Financial
Data Services, Inc. ("MLFDS") a Florida corporation; and (iv) Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a Delaware corporation.
WITNESSETH:
WHEREAS the Funds are classes of one or more investment companies
registered under the Investment Company Act of 1940, as amended (the "Act");
and
WHEREAS, IFTC is the transfer agent, dividend disbursing agent, and
shareholder servicing agent for the Funds; and
WHEREAS, MLFDS, a transfer agent registered under the Securities
Exchange Act of 1934, has presented to IFTC the various administrative services
that may be performed by MLPF&S; and
WHEREAS, the Funds desire to retain NMPF&S to perform such services
and MLPF&S is willing and able to furnish such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, each party hereto severally agrees, as follows:
I . MLPF&S agrees to perform the administrative services specified in
Exhibit A hereto (the "Services") for the benefit of the Funds' shareholders who
maintain shares of any of such Funds in brokerage accounts with MLPF&S and
whose shares are included in the master account referred to in paragraph 1 of
Exhibit A (collectively, the "MLPF&S customers").
2. MLPF&S agrees that it will maintain and preserve all records as
required by law to be maintained and preserved in connection with providing the
Services, and will otherwise comply with all law, rules and regulations
applicable to the Services. Upon the request of the Funds, MLPF&S shall provide
copies of all the historical records relating to transactions involving the
Funds and MLPF&S customers, in each case as may reasonably be requested to
enable the Funds or its representatives, including without limitation its
auditors, investment advisor, IFTC or successor transfer agent or distributor,
to monitor and review the Services, or to comply with any request of the board
of directors (the "Directors") of the Funds or of a governmental body, self-
regulatory organization or a shareholder. MLPF&S agrees that it will permit the
Funds and IFTC or their representatives to have reasonable access to its
personnel and records in order to facilitate the monitoring of the quality of
the services. It is understood that notwithstanding anything herein to the
contrary, neither MLFDS nor MLPF&S shall be required to provide the names and
addresses of MLPF&S customers to the Funds, IFTC or their representatives,
unless applicable laws otherwise require.
3 . MLPF&S may contract with or establish relationships with MLFDS,
or other parties for the provision of the Services or other activities of MLPF&S
required by the Agreement.
4. Each of MLPF&S and MLFDS, hereby agrees to notify promptly the
Funds if for any reason either of them is unable to perform fully and promptly
any of its obligations under this Agreement.
<PAGE>
5. Each of MLPF&S and MLFDS, hereby represent that neither of them
now owns or holds with power to vote any shares of the Funds which are
registered in the name of MLPF&S or the name of its nominee and which are
maintained in MLPF&S brokerage accounts.
6. The provisions of the Agreement shall in no way limit the
authority of any of the Funds or IFTC to take such action as either of such
parties may deem appropriate or advisable in connection with all matters
relating to the operations of any of such Funds and/or sale of its shares.
7. In consideration of the performance of the services by MLPF&S
and MLFDS, each of the Funds severally agrees to compensate MLFDS at the rate
of $16.00 annually per each MLPF&S customer account holding shares of a Fund
which shares were subject to an up-front sales load or no sales load, and
$19.00 annually per MLPF&S customer account holding shares of a Fund that are
subject to a contingent deferred sales charge ("CDSC"); provided, however, if
all shares in an MLPF&S customer account have been held for the requisite
time period such that the shares are no longer subject to a CDSC, then MLFDS
will be compensated at the rate of $16.00 annually for such MLPF&S customer
account. These rates are the current standard rates for the services provided
by MLFDS and MLPF&S hereunder. Payment shall be made monthly based upon the
number of MLPF&S customer/shareholders of a Fund who hold shares of such
Fund in a MLPF&S brokerage account for any part of the subject month. This
number shall be certified each year by independent public accountants
retained by MLPF&S as of a month selected by the Funds or IFTC, such
certification to be at the expense of MLPF&S. It is further agreed that,
notwithstanding anything herein to the contrary, MLPF&S will not request any
increase in the compensation hereunder to be effective prior to September 30,
1996.
In the event MLPF&S or MLFDS, as its agent were to mail any
Fund's proxy materials, reports, prospectuses and other information to MLPF&S
customers/shareholders of any Fund who are MLPF&S customers pursuant to
paragraph 4 of Exhibit A, IFTC or such Fund agrees to reimburse MLPF&S or
MLFDS, Inc., as the case may be, for postage, handling fees and reasonable
costs of supplies used by it in such mailings in an amount to be determined
in accordance with the rates set forth in Rule 451.90 of the New York Stock
Exchange Inc.
8. MLFDS shall indemnify and hold harmless the Funds and IFTC
from and against any and all of losses or liabilities that any one or more of
them may incur, including without limitation reasonable attorneys' fees,
expenses and cost, arising out of or related to the performance or
non-performance of MLPF&S or MLFDS of its responsibilities under this
Agreement, excluding, however, any such claims, suits, loss, damage or cost
caused by, or contributed to, by the Funds or IFTC, as to which the Funds and
IFTC shall indemnify, hold harmless and defend MLFDS and MLPF&S on the same
basis as set forth above.
9. This Agreement may be terminated at any time by each of MLPF&S
and MLFDS or by any of the Funds as to itself upon 30 days written notice to
MLFDS. This Agreement may also be terminated at any time without penalty upon
30 days written notice to MLFDS that a majority of the Directors of any of the
Funds have determined to terminate its agreement(s) with IFTC pertaining to its
transfer agent services. The provisions of paragraph 2 shall continue in full
force and effect after termination of this Agreement. Notwithstanding the
foregoing, this Agreement shall not require MLPF&S to preserve any records
relating to this Agreement beyond the time periods otherwise required by the
laws to which MLPF&S is subject.
10. Any other Fund for which IFTC serves as transfer agent may become
a party to this Agreement by giving written notice to MLPF&S or MLFDS that it
has elected to become a party hereto and by having this Agreement executed on
its behalf.
2
<PAGE>
11. It is understood and agreed that in performing the services under
this Agreement, neither MLPF&S nor MLFDS acting in its capacity described
herein shall be acting as an agent for any of the Funds.
12. This agreement including its Exhibit and Schedule, constitutes
the entire agreement between the parties with respect to the matters dealt with
herein, and supersedes any previous agreements and documents with respect to
such matters.
IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & MERRILL LYNCH FINANCIAL DATA
SMITH INCORPORATED SERVICES, INC.
By: By:
----------------------------- -----------------------------
Print Name: Harry P. Allex Print Name: Angelo V. Esposito
Title: Sr. Vice President Title: President
Jundt Associates, Inc. Funds Set Forth on Schedule A
INVESTORS FIDUCIARY TRUST THE JUNDT GROWTH FUND, INC.
COMPANY
By: By:
-------------------------- ----------------------------
Print Name: Print Name:
------------------ --------------------
Title: Title:
----------------------- --------------------------
JUNDT FUNDS, INC.
By:
----------------------------
Print Name:
--------------------
Title:
------------------------
3
<PAGE>
EXHIBIT A
Pursuant to the Agreement by and among the parties hereto, MLPF&S shall
perform the following Services:
1. Maintain separate records for each shareholder of the Funds who
hold shares of a Fund in a brokerage account with MLPF&S ("MLPF&S customers"),
which records shall reflect shares purchased and redeemed and share balances.
MLPF&S shall maintain a single master account with the transfer agent of the
Fund on behalf of MLPF&S customers and such account shall be in the name of
MLPF&S or its nominee as the record owner of the shares owned by such customers.
2. Disburse or credit to MLPF&S customers all proceeds of redemptions
of shares of the Fund and all dividends and other distributions not reinvested
in shares of the Fund.
3. Prepare and transmit to MLPF&S customers periodic account
statements showing the total number of shares owned by the customer as of the
statement closing date, purchases and redemptions of Fund shares by the customer
during the period covered by the statement and the dividends and other
distributions paid to the customer during the statement period (whether paid in
cash or reinvested in Fund shares).
4. Transmit to MLPF&S customers proxy materials and reports and other
information received by MLPF&S from any of the Funds and required to be sent to
shareholders under the federal securities laws, and, upon request of the Fund's
transfer agent transmit to MLPF&S customers material fund communications deemed
by the Fund, through its Board of Directors or other similar governing body, to
be necessary and proper for receipt by all fund beneficial shareholders.
5 . Transmit to the Fund's transfer agent purchase and redemption
orders on behalf of MLPF&S customers.
6. Provide to the Funds, or to IFTC acting in its capacity as
transfer agent for any of the Funds, or any of the agents designated by any of
them, such periodic reports as shall reasonably be concluded to be necessary to
enable any of the Funds and its distributor to comply with State Blue Sky
requirements.
4
<PAGE>
SCHEDULE A
to the
FINANCIAL SERVICES AGREEMENT
The Jundt Growth Fund, Inc. -- Class A
The Jundt Growth Fund, Inc. -- Class B
The Jundt Growth Fund, Inc. -- Class C
The Jundt Growth Fund, Inc. -- Class D
Jundt U.S. Emerging Growth Fund -- Class B
Jundt U.S. Emerging Growth Fund -- Class C
Jundt U.S. Emerging Growth Fund -- Class D
5
<PAGE>
FAEGRE & BENSON
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
2200 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
Jundt Funds, Inc.
1550 Utica Avenue South, Suite 950
Minneapolis, Minnesota 55416
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form N-1A (File Nos:
33-99080 and 811-09128) (the "Registration Statement") which you have filed with
the Securities and Exchange Commission for the purposes of registering Jundt
Funds, Inc. (the "Company") as an open-end management investment company
pursuant to the Investment Company Act of 1940, as amended, and of registering
for sale by the Company an indefinite number of the Company's common shares, par
value $.01 per share, pursuant to the Securities Act of 1933, as amended. This
opinion relates solely to the Company's Series A, Class A common shares;
Series A, Class B common shares; Series A, Class C common shares; and Series A,
Class D common shares (collectively, the "Shares").
We are familiar with the proceedings to date with respect to the proposed
sale by the Company of the Shares, and have examined such records, documents and
matters of law, and have satisfied ourselves as to such matters of fact, as we
consider relevant for the purposes of this opinion.
We are of the opinion that:
(a) The Company is a legally organized corporation under Minnesota
law; and
(b) The Shares to be sold by the Company will be legally issued,
fully paid and nonassessable, if and when issued and sold upon the
terms and in the manner set forth in the Registration Statement.
We consent to the reference to this firm under the caption "Counsel and
Auditors" in the Statement of Additional Information contained in the
Registration Statement and to the use of this opinion as an exhibit to the
Registration Statement.
Dated: December 21, 1995
Very truly yours,
/s/ Faegre & Benson
Professional Limited Liability Partnership
Faegre & Benson
Professional Limited Liability Partnership
M1:0084822.01
<PAGE>
Exhibit 11
[LOGO]
KPMG PEAT MARWICK LLP
4200 Norwest Center Telephone 612 305 5000 Telefax 612 305 5039
90 South Seventh Street
Minneapolis, MN 55402
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Jundt Funds, Inc.:
We consent to the use of our report included herein and to the reference to
our Firm under the heading "COUNSEL AND AUDITORS" in Part B of the
Registration Statement.
/s/ KPMG Peat Marwick LLP
--------------------------
KPMG Peat Marwick LLP
Minneapolis, Minnesota
December 22, 1995
<PAGE>
CLASS B DISTRIBUTION PLAN
OF
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 4th day of December, 1995, by
and between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and
on behalf of Jundt U.S. Emerging Growth Fund (the "Fund"), a separately managed
series of the Company, and U.S. Growth Investments, Inc., a Minnesota
corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Distributor is a securities firm engaged in the business
of selling shares of investment companies either directly to purchasers or
through other securities dealers; and
WHEREAS, the Company proposes to enter into a Distribution Agreement
with the Distributor, pursuant to which the Distributor will act as the
exclusive distributor and representative of the Fund in the offer and sale of
Class B shares of common stock, par value $.01 per share (the "Class B shares"),
of the Fund to the public; and
WHEREAS, the Fund desires to adopt this Class B Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee and a distribution fee to the
Distributor with respect to the Fund's Class B shares; and
WHEREAS, the Directors of the Company have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class B shareholders.
NOW, THEREFORE, the Company, for and on behalf of the Fund, hereby
adopts, and the Distributor hereby agrees to the terms of, the Plan in
accordance with Rule 12b-1 under the Investment Company Act on the following
terms and conditions:
1. The Fund shall pay Distributor an account maintenance fee under
the Plan at the end of each month at the annual rate of 0.25% of average daily
net assets of the Fund relating to Class B shares to compensate the Distributor
and securities firms with which the Distributor enters into related agreements
pursuant to paragraph 5 hereof ("Sub-Agreements") for account maintenance
activities with respect to Class B shareholders of the Fund.
2. The Fund shall pay the Distributor a distribution fee under the
Plan at the end of each month at the annual rate of 0.75% of average daily net
assets of the Fund relating to the Class B shares to compensate the Distributor
and securities firms with which Distributor enters into related Sub-Agreements
for providing sales and promotional activities and services relating to the
Class B shares. Such activities and services will relate to the sale, promotion
and marketing of the Class B shares. Such expenditures may consist of sales
commissions to financial consultant for selling Class B shares, compensation,
sales incentives and payments to sales and marketing personnel, payment of
expenses incurred in sales and promotional activities, including advertising
expenditures relating to the Fund and the
<PAGE>
costs of preparing and distributing promotional materials. The distribution
fee may also be used to pay the financing costs of carrying the expenditures
described in this paragraph 2. Payment of the distribution fee described in
this paragraph 2 shall be subject to any limitations set forth in any
applicable regulation of the National Association of Securities Dealers, Inc.
3. On the conversion date (as hereinafter defined) next following
the eighth anniversary of the purchase of a Class B share, such share shall
automatically convert into Class D shares, the conversion ratio being determined
by the relative net asset value of Class B and Class D shares on the conversion
date. The "conversion date" shall be the 15th day of each month (or if such day
is not a business day, the next following business day). For purposes hereof, a
"business day" means any day other than a Saturday, a Sunday or a day on which
banking or trust institutions in the cities of Minneapolis, Minnesota and New
York, New York are authorized or obligated by law, executive order or
governmental decree to be closed.
4. Payments made pursuant to the Plan will be imposed directly
against the assets of the Fund relating to the Class B shares.
5. The Fund hereby authorizes the Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraphs 1 and 2 hereof. The Distributor may reallocate all or
a portion of its account maintenance fee or distribution fee to such Securities
Firms as compensation for the above-mentioned activities and services. Such
Sub-Agreements shall provide that the Securities Firms shall provide the
Distributor with such information as is reasonably necessary to permit the
Distributor to comply with the reporting requirements set forth in paragraph 6
hereof.
6. The Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee and the distribution fee during such period.
7. The Plan shall not take effect until it has been approved by a
vote of at least a majority, as defined in the Investment Company Act, of the
outstanding Class B voting securities of the Fund.
8. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of a majority of both (a) the
Directors of the Company and (b) those Directors of the Company who are not
"interested persons" of the Company, as defined in the Investment Company Act,
and have no direct or indirect financial interest in the operation of the Plan
or any agreements related to it (the "Rule 12b-1 Directors"), cast in person at
a meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
9. The Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of the Plan in paragraph 8.
10. The Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by vote of a majority of the outstanding Class B
voting securities of the Fund.
11. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class B voting securities of the Fund, and by the Directors of
2
<PAGE>
the Company in the manner provided for in paragraph 8 hereof, and no material
amendment to the Plan shall be made unless approved in the manner provided
for approval and annual renewal in paragraph 8 hereof.
12. While the Plan is in effect, the selection and nomination of
Directors who are not interested persons, as defined in the Investment Company
Act, of the Company shall be committed to the discretion of the Directors who
are not interested persons.
13. The Fund shall preserve copies of the Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a period of
not less than six years from the date of the Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of
the date first above written.
JUNDT FUNDS, INC.
By:_____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By:_____________________________________
Title:
M1:0084953.01
3
<PAGE>
CLASS C DISTRIBUTION PLAN
OF
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 4th day of December, 1995, by and
between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and on
behalf of Jundt U.S. Emerging Growth Fund (the "Fund"), a separately managed
series of the Company, and U.S. Growth Investments, Inc., a Minnesota
corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Company proposes to enter into a Distribution Agreement with
the Distributor, pursuant to which the Distributor will act as the exclusive
distributor and representative of the Fund in the offer and sale of Class C
shares of common stock, par value $.01 per share (the "Class C shares"), of the
Fund to the public; and
WHEREAS, the Fund desires to adopt this Class C Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee and a distribution fee to the
Distributor with respect to the Fund's Class C shares; and
WHEREAS, the Directors of the Company have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class C shareholders.
NOW, THEREFORE, the Company, for and on behalf of the Fund, hereby adopts,
and the Distributor hereby agrees to the terms of, the Plan in accordance with
Rule 12b-1 under the Investment Company Act on the following terms and
conditions:
1. The Fund shall pay Distributor an account maintenance fee under the
Plan at the end of each month at the annual rate of 0.25% of average daily net
assets of the Fund relating to Class C shares to compensate the Distributor and
securities firms with which the Distributor enters into related agreements
pursuant to paragraph 5 hereof ("Sub-Agreements") for account maintenance
activities with respect to Class C shareholders of the Fund.
2. The Fund shall pay the Distributor a distribution fee under the Plan
at the end of each month at the annual rate of 0.75% of average daily net assets
of the Fund relating to the Class C shares to compensate the Distributor and
securities firms with which Distributor enters into related Sub-Agreements for
providing sales and promotional activities and services relating to the Class C
shares. Such activities and services will relate to the sale, promotion and
marketing of the Class C shares. Such expenditures may
<PAGE>
consist of sales commissions to financial consultant for selling Class C
shares, compensation, sales incentives and payments to sales and marketing
personnel, payment of expenses incurred in sales and promotional activities,
including advertising expenditures relating to the Fund and the costs of
preparing and distributing promotional materials. The distribution fee may
also be used to pay the financing costs of carrying the expenditures
described in this paragraph 2. Payment of the distribution fee described in
this paragraph 2 shall be subject to any limitations set forth in any
applicable regulation of the National Association of Securities Dealers, Inc.
3. Payments made pursuant to the Plan will be imposed directly against
the assets of the Fund relating to the Class C shares.
4. The Fund hereby authorizes the Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraphs 1 and 2 hereof. The Distributor may reallocate all or
a portion of its account maintenance fee or distribution fee to such Securities
Firms as compensation for the above-mentioned activities and services. Such
Sub-Agreements shall provide that the Securities Firms shall provide the
Distributor with such information as is reasonably necessary to permit the
Distributor to comply with the reporting requirements set forth in paragraph 5
hereof.
5. The Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee and the distribution fee during such period.
6. The Plan shall not take effect until it has been approved by a vote of
at least a majority, as defined in the Investment Company Act, of the
outstanding Class C voting securities of the Fund.
7. The Plan shall not take effect until it has been approved, together
with any related agreements, by votes of a majority of both (a) the Directors of
the Company and (b) those Directors of the Company who are not "interested
persons" of the Company, as defined in the Investment Company Act, and have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to it (the "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
8. The Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in paragraph 7.
9. The Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors, or by vote of a majority of the outstanding Class C voting
securities of the Fund.
10. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class C voting securities of the Fund, and by the Directors of the Company in
the manner provided for in paragraph 7 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval and
annual renewal in paragraph 7 hereof.
11. While the Plan is in effect, the selection and nomination of Directors
who are not interested persons, as defined in the Investment Company Act, of the
Company shall be committed to the discretion of the Directors who are not
interested persons.
-2-
<PAGE>
12. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not less
than six years from the date of the Plan, or the agreements or such report, as
the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first above written.
JUNDT FUNDS, INC.
By:_____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By:_____________________________________
Title:
M1:0075129.01
-3-
<PAGE>
CLASS D DISTRIBUTION PLAN
OF
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 4th day of December, 1995, by and
between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and on
behalf of Jundt U.S. Emerging Growth Fund (the "Fund"), a separately managed
series of the Company, and U.S. Growth Investments, Inc., a Minnesota
corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Company proposes to enter into a Distribution Agreement with
the Distributor, pursuant to which the Distributor will act as the exclusive
distributor and representative of the Fund in the offer and sale of Class D
shares of common stock, par value $.01 per share (the "Class D shares"), of the
Fund to the public; and
WHEREAS, the Fund desires to adopt this Class D Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee to the Distributor with
respect to the Fund's Class D shares; and
WHEREAS, the Directors of the Company have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class D shareholders.
NOW, THEREFORE, the Company, for and on behalf of the Fund, hereby adopts,
and the Distributor hereby agrees to the terms of, the Plan in accordance with
Rule 12b-1 under the Investment Company Act on the following terms and
conditions:
1. The Fund shall pay Distributor an account maintenance fee under the
Plan at the end of each month at the annual rate of 0.25% of average daily net
assets of the Fund relating to Class D shares to compensate the Distributor and
securities firms with which the Distributor enters into related agreements
pursuant to paragraph 3 hereof ("Sub-Agreements") for account maintenance
activities with respect to Class D shareholders of the Fund.
2. Payments made pursuant to the Plan will be imposed directly against
the assets of the Fund relating to the Class D shares.
3. The Fund hereby authorizes the Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraph 1 hereof. The Distributor may reallocate all or a
portion of its
<PAGE>
account maintenance fee to such Securities Firms as compensation for the
above-mentioned activities and services. Such Sub-Agreements shall provide
that the Securities Firms shall provide the Distributor with such information
as is reasonably necessary to permit the Distributor to comply with the
reporting requirements set forth in paragraph 4 hereof.
4. The Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee during such period.
5. The Plan shall not take effect until it has been approved by a vote of
at least a majority, as defined in the Investment Company Act, of the
outstanding Class D voting securities of the Fund.
6. The Plan shall not take effect until it has been approved, together
with any related agreements, by votes of a majority of both (a) the Directors of
the Company and (b) those Directors of the Company who are not "interested
persons" of the Company, as defined in the Investment Company Act, and have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to it (the "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
7. The Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in paragraph 6.
8. The Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Directors, or by vote of a majority of the outstanding Class D voting
securities of the Fund.
9. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class D voting securities of the Fund, and by the Directors of the Company in
the manner provided for in paragraph 6 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval and
annual renewal in paragraph 6 hereof.
10. While the Plan is in effect, the selection and nomination of Directors
who are not interested persons, as defined in the Investment Company Act, of the
Company shall be committed to the discretion of the Directors who are not
interested persons.
11. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 4 hereof, for a period of not less
than six years from the date of the Plan, or the agreements or such report, as
the case may be, the first two years in an easily accessible place.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the
date first above written.
JUNDT FUNDS, INC.
By:_____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By:_____________________________________
Title:
M1:0075132.01
-3-
<PAGE>
JUNDT U.S. EMERGING GROWTH FUND
(A SERIES OF JUNDT FUNDS, INC.)
RULE 18f-3 PLAN
FOR MULTIPLE CLASS DISTRIBUTION SYSTEM
Jundt Funds, Inc. (the "Company"), an open-end management investment
company, on behalf of Jundt U.S. Emerging Growth Fund (the "Fund"), a series of
the Company, hereby adopts this plan (the "Plan") pursuant to Rule 18f-3 under
the Investment Company Act of 1940.
1. The Fund shall initially issue four classes of Shares, consisting of
Class A Shares, Class B Shares, Class C Shares and Class D Shares. Except as
otherwise provided herein: each such Class shall be equal in all respects and
have the same rights and obligations as each other Class; and each share of any
Class will represent an identical interest in the investment portfolio of the
Fund.
2. Contemporaneously with the adoption of this Plan, the Fund has adopted
separate distribution plans pursuant to Rule 12b-1 under the Investment Company
Act of 1940 with respect to the Class B Shares, Class C Shares and Class D
Shares. Each such Class of shares shall bear the expense of the separate
Rule 12b-1 plan applicable to it, including the account maintenance fee and/or
distribution fee provided for therein.
3. Shareholder servicing costs attributable solely to a particular Class,
including the incremental transfer agency cost resulting from the deferred sales
charge arrangement relating to the Class B Shares and the Class C Shares, will
be allocated to such Class. Other incremental expenses that are subsequently
identified that are actually incurred in a different amount by any Class may,
subject to obtaining any necessary approvals that may be required by law with
respect to such allocation, be separately allocated to such Class.
4. Any expenses of the Fund not allocated to a particular Class pursuant
to this Plan shall be allocated to each Class on the basis of the net asset
value of such Class in relation to the net asset value of the Fund.
5. Expenses may be waived or reimbursed by the Fund's adviser,
distributor or any other provider of services to the Fund.
6. The separate Classes of Shares of the Fund shall have the following
characteristics:
(a) CLASS A SHARES. Class A Shares will not be publicly distributed
by the Fund, but will be sold at their net asset value, without a sales
load, only to directors, officers, employees and consultants of the Fund,
the distributor or Jundt Associates, Inc. and members of their immediate
families, as well as accounts for the benefit of any of the foregoing.
Class A Shares will also be issued upon reinvestment of dividends and
distributions on outstanding Class A Shares. Class A Shares will not be
subject to a distribution fee or account maintenance fee.
(b) CLASS B SHARES. Class B Shares will be sold at net asset value
subject to a contingent deferred sales charge of 4.0% (as a percentage of
the lower of original purchase price or redemption proceeds) during the
first and second years following purchase, 3.0% during the third
<PAGE>
and fourth years following purchase, 2.0% during the fifth year following
purchase, 1.0% during the sixth year following purchase and 0% following
the completion of the sixth year following purchase. Class B Shares will
be subject to an account maintenance fee at an annual rate of 0.25% on the
average daily net assets of the Fund attributable to Class B Shares and a
distribution fee at an annual rate of 0.75% of such net assets. For
purposes of conversion of Class B Shares to Class D Shares, the 15th day of
each month (or if such day is not a business day, the next following
business day) shall be deemed a "conversion date." On the conversion
date next following the eighth anniversary of the purchase of a Class B
Share, such Share shall automatically convert into Class D Shares, the
conversion ratio being determined by the relative net asset value of
Class B and Class D Shares on the conversion date.
(c) CLASS C SHARES. Class C Shares will be sold at net asset value
subject to a contingent deferred sales charge of 1.0% (as a percentage of
the lower of original purchase price or redemption proceeds) during the
first year following purchase. Class C Shares are subject to an account
maintenance fee at an annual rate of 0.25% on the average daily net assets
of the Fund attributable to Class C Shares and a distribution fee at an
annual rate of 0.75% of such net assets.
(d) CLASS D SHARES. Class D Shares will be sold at net asset value
plus a front-end sales load as set forth below:
<TABLE>
<CAPTION>
Amount of Sales Load As A Sales Load As A
Transaction Percentage Percentage of
at Offering Price of Offering Price Net Asset Value
----------------- ----------------- ---------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
$25,000 but less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 bus less than $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
</TABLE>
Investors in Class D Shares may qualify for reduced initial sales
charges through a right of accumulation taking into account an investor's
holdings in all Classes of Fund Shares. Investors who purchase or
accumulate at least $1 million in Fund shares qualify to add to their
investment in Class D Shares of the Fund without the imposition of a
front-end sales charge. Although such investors will not be subject to
front-end sales charge, they will be subject to a contingent deferred sales
charge of 1% (as a percentage of the lower of original purchase price or
redemption proceeds) during the first year following purchase. Class D
Shares will be subject to an account maintenance fee at an annual rate of
0.25% of the average daily net assets of the Fund attributable to the Class
D Shares. In addition, certain categories of investors (as specified from
time to time in the current prospectus of Class D Shares) may qualify to
purchase Class D shares at net asset value without the imposition of a
front-end or contingent deferred sales charge.
- --------------
(1) For purposes hereof, a "business day" means any day other than a Saturday,
a Sunday or a day on which banking or trust institutions in the cities of
Minneapolis, Minnesota and New York, New York, are authorized or obligated by
law, executive order or governmental decree to be closed.
-2-
<PAGE>
7. Each Class of Shares shall have exclusive voting rights on any matter
submitted to shareholders of the Fund that relates solely to such Class or the
arrangements contained herein relating to allocation of expenses to such Class.
8. Each Class shall have separate voting rights on any matter submitted
to shareholders of the Fund in which the interest of one Class differs from the
interest of any other Class. Before this Plan is amended in any material
respect, a majority of the directors of the Company, and a majority of the
directors who are not interested persons of the Company, shall find that the
Plan, as proposed to be amended, including the expense allocation, is in the
best interests of each Class individually and the Fund as a whole. Before any
vote on any such amendment, the directors shall request and evaluate, and any
agreement relating to the arrangements contained in this Plan shall require the
parties thereto to furnish, such information as may be reasonably necessary to
evaluate the Plan and such amendment.
M1:0075119.01
-3-
<PAGE>
CODE OF ETHICS
FOR
JUNDT ASSOCIATES, INC.
AND AFFILIATES
SUMMARY OF SUBSTANTIVE DUTIES
ALL ACCESS PERSONS MUST:
- - III(a) Maintain confidentiality of all completed and contemplated Fund
portfolio transactions.
- - III(b) AND (c) Report all actual and potential conflicts of interest and
contemplated dealings with affiliates of a Fund (in advance of any
contemplated transaction) to the Director of Compliance or General Counsel.
- - III(e) In all personal securities dealings, place the interests of each Fund
first.
- - IV(b) Submit a quarterly report to the Director of Compliance reporting
certain requested information on all permitted transactions in securities.
DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS may simply check the box
indicating they have "no reportable transactions" except where such director
or officer knew or, in the performance of his/her duties, should have known
that during the 15-day period immediately preceding or following any personal
securities transaction, such security was purchased or sold by a Fund or such
purchase or sale was being considered by a Fund or by Jundt Associates.
- - IV(d) Report any actual or apparent violations of the Code of Ethics to the
Director of Compliance.
- - IV(g) Certify initially and annually thereafter, as directed by the Director
of Compliance, that: (i) he/she has read and understands the Code of Ethics,
(iii) he/she is subject to the Code, (iii) he/she has reported all Personal
Securities Transactions, as required by the Code, and (iv) he/she has
complied with all other requirements of the Code.
ACCESS PERSONS, OTHER THAN DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS, MUST:
- - III(f)(1) Refrain from purchasing any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) in which any Fund is permitted to invest.
- - III(f)(2)(A) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) on any day during which a Fund has a pending "buy" or
"sell" order for the same "Security."
- - III(g) AND (h) Obtain pre-clearance from the Director of Compliance before
entering into any Personal Securities Transaction not prohibited under the
Code of Ethics and, if approved, direct the executing broker to send
duplicate confirmations and statements to the Director of Compliance.
<PAGE>
ADVISORY PERSONS MUST:
- - OBSERVE ALL DUTIES OF ACCESS PERSONS AND, IN ADDITION, MUST:
- - III(d) Use his/her best judgment in making portfolio decisions involving
a Fund.
- - III(f)(2)(C) Refrain from profiting from the purchase or sale, or sale and
purchase, of the same or equivalent "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper,
shares of mutual funds and Securities in which no Fund is permitted to
invest) within a 60 day period.
- - III(f)(3) Refrain from investing in IPO's.
III(f)(4) Observe certain special limitations (set forth in the Code)
applicable to pre-clearance of private placement transactions.
- - IV(a) Prepare and submit to the Director of Compliance, initially and at the
end of each calendar year thereafter, a listing of all personal securities
holdings.
- - VI(a) Refrain from accepting any gifts or other thing of more than DE
MINIMIS value from any securities broker, dealer, underwriter or placement
agent that does business with or on behalf of any Fund.
- - VI(b) Seek prior approval from the Director of Compliance prior to serving
on any Board of a public company.
PORTFOLIO MANAGERS MUST:
- - OBSERVE ALL DUTIES AND RESPONSIBILITIES OF ADVISORY PERSONS AND ACCESS
PERSONS AND, IN ADDITION, MUST:
- - III(f)(2)(B) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) within a seven day period before or after a Fund
trades in the same "Security."
DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS MUST:
- - OBSERVE ALL GENERAL DUTIES OF ACCESS PERSON (EXCEPT FOR DUTIES SPECIFICALLY
NOT APPLICABLE TO DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS, AS SET FORTH
ABOVE) AND, IN ADDITION, MUST:
- - III(f)(2) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) on any day during which such Disinterested Director
or Outside Officer has actual knowledge that a Fund has a pending "buy" or
"sell" order for the same "Security."
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<PAGE>
DISINTERESTED DIRECTORS
John E. Clute
Floyd Hall
Demetre M. Nicoloff
Darrell R. Wells
OUTSIDE OFFICER
James E. Nicholson
PORTFOLIO MANAGERS
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
ADVISORY PERSONS
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
Jean Smith
James Rogers
Lynn Halverson
Jean D. Scanlon
ACCESS PERSONS
John E. Clute
Floyd Hall
Demetre M. Nicoloff
Darrell R. Wells
James E. Nicholson
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
Jean Smith
James Rogers
Lynn Halverson
Jean D. Scanlon
Charlotte Bohmer
Julie O'Connell
DIRECTOR OF COMPLIANCE
Jean D. Scanlon
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<PAGE>
CODE OF ETHICS
FOR
JUNDT ASSOCIATES, INC.
AND AFFILIATES
I. PURPOSE AND CONSTRUCTION
This Code of Ethics (the "Code") is adopted by Jundt Associates, Inc.
("Jundt"), U.S. Growth Investments, Inc. ("USG") and the Funds in an effort
to prevent violations of Section 17 of the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations thereunder. The
focus of the Code is the prevention of investment activities by persons with
access to certain information that might be harmful to the interests of the
Funds or that might enable such persons to illicitly profit from their
relationship with the Funds.
II. DEFINITIONS
(a) "ACCESS PERSON" means any director, officer or Advisory Person of
Jundt or a Fund or, with respect to USG, any director or officer who in the
ordinary course of his or her business makes, participates in or obtains
information regarding the purchase or sale of securities for a Fund or whose
functions or duties as part of the ordinary course of his or her business
relate to the making of any recommendation to a Fund regarding the purchase
or sale of securities.
(b) "ADVISORY PERSON" means:
(1) any employee of Jundt or a Fund (or of any company in a
control relationship to Jundt or a Fund) who, in connection with his or
her regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of a security by a Fund, or
whose functions or duties relate to the making of any recommendations
with respect to such purchases or sales (including, but not limited to,
Portfolio Managers and all Jundt employees who provide information and
advice to Portfolio Managers or who help execute the Portfolio Managers'
decisions, such as securities analysts and traders); or
(2) any natural person in a control relationship to Jundt or
a Fund and who obtains information concerning recommendations made to a
Fund with regard to the purchase or sale of a security.
(c) "AFFILIATED PERSON" of another person means:
(1) any person directly or indirectly owning, controlling or
holding with power to vote five percent (5%) or more of the outstanding
voting securities of such other person;
(2) any person five percent (5%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held
with power to vote by such other person;
(3) any person directly or indirectly controlling, controlled
by or under common control with such other person;
(4) any officer, director, partner, co-partner or employee of
such other person;
<PAGE>
(5) if such other person is an investment company, any
investment adviser thereof or any member of an advisory board thereof;
and
(6) if such other person is an unincorporated investment
company not having a board of directors, the depositor thereof.
(d) "BENEFICIAL OWNERSHIP" for purposes of the Code, shall be determined
in accordance with the definition of "beneficial owner" set forth in Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, I.E., a person must
have a "direct or indirect pecuniary interest" to have "beneficial
ownership." Although the following list is not meant to be exhaustive, under
the rule a person would generally be regarded to be the beneficial owner of
the following securities:
(1) securities held in the person's own name;
(2) securities held with another in joint tenancy, community
property or other joint ownership;
(3) securities held be a bank or broker as nominee or
custodian on such person's behalf or pledged as collateral for a loan;
(4) securities held by members of the person's immediate
family sharing the same household;
(5) securities held by a relative not residing in the
person's home if the person is a custodian, guardian or otherwise has
controlling influence over the purchase, sale or voting of such
securities;
(6) securities held by a trust in which the person is a
beneficiary and has or shares the power to make purchase or sale
decisions;
(7) securities held by a trust for which the person serves as
a trustee and in which the person has a pecuniary interest (including
pecuniary interests by virtue of performance fees and by virtue of
holdings by the person's immediate family);
(8) securities held by a general partnership or limited
partnership in which the person is a general partner;
(9) securities owned by a corporation in which the person has
a control position or in which the person has or shares investment
control over the portfolio securities (other than a registered
investment company);
(10) securities in a portfolio giving the person certain
performance-related fees; and
(11) securities held by another person or entity pursuant to
any agreement, understanding, relationship or other arrangement giving
the person any direct or indirect pecuniary interest.
(e) "CONTROL" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
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<PAGE>
(f) "DISINTERESTED DIRECTOR" means directors or trustees of a Fund who
are not "interested persons," as defined in the 1940 Act, of the Fund.
(g) "FUND" means any investment company registered under the 1940 Act
for which Jundt acts as an investment adviser.
(h) "MEMBER OF IMMEDIATE FAMILY" of a person includes such person's
spouse, children under the age of twenty-five (25) years residing with such
person, and any trust or estate in which such person or any other member of
his or her immediate family has a substantial beneficial interest, unless
neither such person nor any other member of his or her immediate family is
able to control or participate in the investment decisions of such trust or
estate.
(i) "OUTSIDE FUND OFFICER" means any officer of a Fund who is not
otherwise an "interested person," as defined in the 1940 Act, of the Fund,
Jundt or USG.
(j) "PERSONAL SECURITIES TRANSACTION" means a transaction in a
Security in which an individual has or thereby acquires Beneficial Ownership.
A person shall be considered to be "engaging in" or "effecting" a Personal
Securities Transaction if such a Security is involved, regardless of whether
the transaction is effected by that person or by some other person (such as
an immediate family member).
(k) "PORTFOLIO MANAGER" means a Jundt employee entrusted with the
direct responsibility and authority to make investment decisions affecting a
Fund.
(l) "PURCHASE OR SALE OF A SECURITY" includes, among other things, the
writing of an option to purchase or sell a Security.
(m) "SECURITY" shall have the meaning set forth in Section 2(a)(36) of
the 1940 Act, except that it shall not include securities issued by the
government of the United States, bankers' acceptances, bank certificates of
deposit, commercial paper and shares of registered open-end investment
companies.
(n) "SECURITY HELD OR TO BE ACQUIRED" by a registered investment
company means any Security which, within the most recent fifteen (15) days,
(i) is or has been held by such company, or (ii) is being or has been
considered by such company or its investment adviser for purchase by such
company.
(o) "1940 ACT" means the Investment Company Act of 1940, 15 U.S.C.
Sections 80a-1 to 80a-52, as amended.
III. RESTRICTIONS
(a) NONDISCLOSURE OF INFORMATION. An Access Person shall not divulge
to any person contemplated or completed securities transactions of a Fund,
except in the performance of his or her duties, unless such information
previously has become a matter of public knowledge.
(b) SECTION 17(D) LIMITATIONS. Neither USG, an Affiliated Person of a
Fund or any Affiliated Person of USG or of such Affiliated Person of a Fund,
acting as principal, shall effect any transaction in which a Fund, or a
company controlled by a Fund, is a joint or a joint and several participant
with such person, USG or Affiliated Person, in contravention of such rules
and regulations as the Securities and Exchange Commission may prescribe under
Section 17(d) of the 1940 Act for the
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<PAGE>
purpose of limiting or preventing participation by a Fund or controlled
companies on a basis different from or less advantageous than that of such
other participant.
(c) PROSCRIBED ACTIVITIES UNDER RULE 17J-1(A). Rule 17j-1(a) under the
1940 Act provides:
It shall be unlawful for any affiliated person of or
principal underwriter for a registered investment company, or any
affiliated person of an investment adviser of or principal underwriter
for a registered investment company in connection with the purchase or
sale, directly or indirectly, by such person of a security held or to be
acquired, as defined in this section, by such registered investment
company--
(1) To employ any device, scheme or artifice to
defraud such registered investment company;
(2) To make to such registered investment company
any untrue statement of a material fact or omit to state to such
registered investment company a material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading;
(3) To engage in any act, practice or course of
business which operates or would operate as a fraud or deceit upon
any such registered investment company; or
(4) To engage in any manipulative practice with
respect to such registered investment company.
Any violation of Rule 17j-1(a) shall be deemed to be a violation of the
Code.
(d) COVENANT TO EXERCISE BEST JUDGMENT. An Advisory Person shall act
on his or her best judgment in effecting, or failing to effect, any
transaction by a Fund, and such Advisory Person shall not take into
consideration his or her personal financial situation in connection with
decisions regarding portfolio transactions by a Fund.
(e) GENERAL PRINCIPLES OF PERSONAL INVESTING. No Access Person shall
engage in any Personal Securities Transaction that such Access Person has
reason to know will be detrimental to the best interest of any Fund. When
engaging in a Personal Securities Transaction, an Access Person shall:
(1) place the interests of the Funds first;
(2) conduct such transaction in a manner consistent with the
Code and in such a manner as to avoid any actual or potential conflict
of interest or abuse of any such person's position of trust and
responsibility as an Access Person; and
(3) not take inappropriate advantage of such person's position in
relationship to the Funds.
-4-
<PAGE>
(f) LIMITATION ON PERSONAL SECURITIES TRANSACTIONS.
(1) PROHIBITION ON PERSONAL SECURITIES TRANSACTIONS BY CERTAIN
ACCESS PERSONS. No Access Person (other than Disinterested Directors
and Outside Fund Officers) shall purchase any Security that any Fund is
permitted, pursuant to its investment objectives and policies, to own.
(2) LIMITATIONS RELATED TO TIMING OF TRANSACTIONS. The timing of
Personal Securities Transactions not prohibited under paragraph
III(f)(1)--including, but not limited to, any proposed sale by an Access
Person (other than a Disinterested Director or an Outside Fund Officer)
of a Security that a Fund is permitted to own--shall be limited as
follows:
(A) No Access Person shall engage in a Personal Securities
Transaction on a day during which a Fund has a pending "buy" or
"sell" order for the same Security until that order is executed or
withdrawn. For purposes of this paragraph (A), Access Person shall
not include any Disinterested Director or Outside Fund Officer
unless such Disinterested Director or Outside Fund Officer has
actual knowledge that a Fund has a pending "buy" or "sell" order
for the same Security.
(B) No Portfolio Manager shall engage in a Personal Securities
Transaction within a seven (7) day period before or after a Fund
that he or she manages trades in the same Security.
(C) Advisory Persons shall not profit from the purchase and
sale, or sale and purchase, of the same (or equivalent) Securities
within sixty calendar days. For purposes of this paragraph (C),
"Securities" shall not be deemed to include any securities which
may not be purchased by any Fund because of investment limitations
set forth in the Funds' Registration Statements filed with the
Securities and Exchange Commission. The Director of Compliance may
grant an exception to this provision in cases of personal hardship
or other appropriate circumstances.
(3) INITIAL PUBLIC OFFERING LIMITATIONS. Advisory Persons shall
not engage in any Personal Securities Transaction that involves the
purchase of Securities in an initial public offering.
(4) PRIVATE PLACEMENT LIMITATIONS. Investments in privately placed
Securities shall be limited as follows:
(A) Advisory Persons shall not engage in any Personal
Securities Transaction that involves a private placement of
Securities without the express prior approval of the Director of
Compliance. In reviewing any such approval request, the Director
of Compliance shall consider, among other factors, whether the
investment opportunity should be reserved for a Fund and its
shareholders, and whether the opportunity is being offered to the
requesting individual by virtue of his or her position with the
Funds and Jundt.
(B) Advisory Persons who have a Beneficial Ownership interest
in any Securities obtained through a private placement shall
disclose such interest to the Director of Compliance if and when
they should become involved in any subsequent consideration of an
investment in the same issuer for any of the Funds. In such case,
the decision to invest in the Securities of such an issuer on
behalf of a Fund shall be subject
-5-
<PAGE>
to the review and approval of an individual categorized as an
Advisory Person who has no personal interest in such issuer, which
individual shall be appointed by the Director of Compliance.
(5) REPORTS. The Director of Compliance shall maintain and make
available written records of all actions taken under this Section III(f)
in the manner required by Rule 17j-1(d) under the 1940 Act.
(g) PRIOR CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS. Prior to
effecting a Personal Securities Transaction, an Access Person (other than a
Disinterested Director or an Outside Fund Officer) shall notify the Director
of Compliance of the proposed transaction, including the amount of the
transaction and the Security involved. The Director of Compliance, after
investigation, shall determine whether such transaction is consistent with
the Code and shall promptly communicate such determination to the Access
Person making the request. Transaction clearances must be obtained no more
than two days prior to making a purchase or sale of a Security. If the trade
is not made within two days of the date of clearance, a new clearance must be
obtained. Absent extraordinary circumstances, no Access Person shall be
deemed to have violated the Code for effecting a Personal Securities
Transaction if such Access Person has been advised by the Director of
Compliance that the transaction would be consistent with the Code. The
Director of Compliance shall maintain and make available written records of
all actions taken under this Section III(g) in the manner required by Rule
17j-1(d) under the 1940 Act.
(h) COPIES OF BROKERAGE REPORTS. When an Access Person (other than a
Disinterested Director or an Outside Fund Officer) engages in a Personal
Securities Transaction, the Access Person shall direct that the executing
broker send a duplicate copy of the confirmation to the Director of
Compliance at the same time as it is provided to such Access Person. Such
Access Person shall also direct such broker to provide duplicate copies of
any periodic statements on any account maintained by such person (or any
other account in which such Access Person has a Beneficial Ownership
interest) to the Director of Compliance.
IV. REPORTING REQUIREMENTS
(a) INITIAL AND ANNUAL REPORTS BY ADVISORY PERSONS. All Advisory Persons
shall submit to the Director of Compliance a report of all Securities owned
by them (or in which they otherwise have a Beneficial Ownership interest) at
the time that they commence employment with Jundt and shall also submit such
a report to the Director of Compliance at the end of each calendar year
thereafter.
(b) QUARTERLY REPORT. No later than ten (10) days after the end of each
calendar quarter, each Access Person shall submit a report to the Director of
Compliance who shall specify the following information with respect to
transactions during the then ended calendar quarter in any Security in which
such Access Person has, or by reason of such transaction acquired, any direct
or indirect Beneficial Ownership:
(1) the date of the transaction, the title and the number of shares,
and the principal amount of each Security involved;
(2) the nature of the transaction (I.E., purchase, sale or any other
type of acquisition or disposition);
(3) the price at which the transaction was effected; and
-6-
<PAGE>
(4) the name of the broker, dealer or bank with or through whom the
transaction was effected.
If no transactions have occurred during the period, the report shall so
indicate. Any report required to be made pursuant to this Section IV(b) may
contain a statement that the report shall not be construed as an admission by
the person making the report that he or she has any direct or indirect
Beneficial Ownership in the Security to which the report relates.
(c) LIMITATIONS ON REPORTING REQUIREMENTS. Notwithstanding the
provisions of Section IV(b), no Access Person shall be required to make a
report:
(1) with respect to transactions effected for any account over which
such person does not have any direct or indirect influence or control;
(2) if such a person is a Disinterested Director or an Outside Fund
Officer, EXCEPT where such Disinterested Director or Outside Fund
Officer knew or, in the ordinary course of fulfilling his or her
official duties as a Disinterested Director or Outside Fund Officer,
should have known that during the 15-day period immediately preceding or
after the date of the transactions in a Security by the Disinterested
Director or Outside Fund Officer, such Security is or was purchased or
sold by a Fund or such purchase or sale by a Fund is or was considered
by a Fund or Jundt; or
(3) where a report made to Jundt would duplicate information
recorded pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940.
(d) DUTY TO REPORT VIOLATIONS. Any person subject to the Code who
discovers a violation or apparent violation of the Code by any other person
shall bring the matter to the attention of the Director of Compliance.
(e) FILING OF REPORTS. All reports prepared pursuant to this Article
IV shall be filed with the Director of Compliance, except that reports
prepared by the Director of Compliance shall be filed with the Chief
Executive Officer of Jundt.
(f) REPORTS TO THE FUNDS' BOARDS OF DIRECTORS. At each quarterly
meeting of the Funds' Boards of Directors, Jundt shall report to the Board
any violations of the Code, if any, that occurred since Jundt's most recent
prior report to the Boards of Directors.
In addition, Jundt shall prepare an annual report to the Funds' Board(s)
of Directors containing the following:
(1) a summary of existing procedures concerning personal investing
and any changes in the procedures made during the past year;
(2) a list of any violations requiring significant remedial action
during the past year, including details of such violations and the action
taken; and
(3) any recommended changes in existing restrictions or procedures
based upon experience under the Code, evolving industry practices or
developments in applicable laws or regulations.
-7-
<PAGE>
(g) CERTIFICATION OF COMPLIANCE. All Access Persons must certify
annually in writing to the Director of Compliance that (1) they have read and
understand the Code and recognize that they are subject to the Code, (2) they
have disclosed or reported all Personal Securities Transactions required to
be disclosed or reported pursuant to the Code, and (3) they have complied
with all requirements of the Code. The Director of Compliance shall maintain
and make available copies of such written certifications in the manner
required by Rule 17j-1(d) under the 1940 Act.
V. ENFORCEMENT AND SANCTIONS
(a) GENERAL. The Director of Compliance shall bring all violations or
apparent violations of the Code to the attention of the Chairman of Jundt.
The Chairman of Jundt shall have the primary responsibility for enforcing the
Code and determining appropriate sanctions with respect to such company's
directors, officers and employees. If the alleged violator is the Chairman
of Jundt, the Director of Compliance shall bring such alleged violation to
the attention of the Funds' Board of Directors, who shall have the primary
responsibility for enforcing the Code and determining appropriate sanctions
with respect to such alleged violation. If the alleged violator is a
Disinterested Director or is otherwise not an director, officer or employee
of Jundt or USG, the Board of Directors of the affected Fund or Funds shall
have the primary responsibility for enforcing the Code and determining
appropriate sanctions. In addition to the sanctions prescribed by Section
V(b), any person who is found to have violated the Code may be permanently
dismissed, reduced in salary or position, temporarily suspended from
employment or sanctioned in such other manner as may be determined in the
discretion of the applicable person or persons responsible for enforcing the
Code. In determining appropriate sanctions to be imposed for violations of
the Code, the person or persons charged with enforcing the Code may consider
any factors they deem relevant, including, without limitation:
(1) the degree of willfulness' of the violation;
(2) the severity of the violation;
(3) the extent, if any, to which the violator profited or
benefited from the violation;
(4) the adverse effect, if any, of the violation on the involved
Fund;
(5) the market value and liquidity of the class of Securities
involved in the violation;
(6) the prior violations of the Code, if any, by the violator;
(7) the circumstances of discovery of the violation; and
(8) if the violation involved the purchase or sale of Securities in
violation of the Code, (A) the price at which the purchase or sale was
made, and (B) the violator's justification for making the purchase or
sale, including the violator's tax situation, the extent of the
appreciation or depreciation of the Securities involved, and the period
the Securities have been held.
(b) VIOLATIONS OF SECTION III(F). In addition to any sanction imposed
under Section V(a) of the Code, any profits realized on Personal Securities
Transactions effected in violation of Section III(f) of the Code must be
disgorged and contributed to the appropriate Fund. Each Personal Securities
Transaction will be considered individually, and there will be no netting of
profits and losses incurred in the case of multiple Personal Securities
Transactions effected in violation of the Code. In the event of a
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<PAGE>
violation involving more than one Fund, profits shall be allocated among the
affected Funds in proportion to the relative net asset values of the Funds as
of the date of the violation. Should the violation not involve any of the
Funds, profits shall be paid to a charitable organization chosen in the
discretion of the Disinterested Directors of the Funds.
(c) RIGHTS OF ALLEGED VIOLATOR. A person charged with a violation of the
Code shall have the opportunity to appear before the person or persons as may
have authority to impose sanctions pursuant to the Code, at which time such
person shall have the opportunity, orally or in writing, to respond to any
and all charges.
(d) NOTIFICATION TO FUND GENERAL COUNSEL. The applicable Fund's General
Counsel shall be advised promptly of the initiation and outcome of any
enforcement actions hereunder.
(e) NON-EXCLUSIVITY OF SANCTIONS. The imposition of sanctions under this
Section V shall not preclude the imposition of additional sanctions by the
Board(s) of Directors of the Funds and shall not be deemed a waiver of any
rights by any Fund.
VI. GIFTS AND DIRECTORSHIPS
(a) GIFTS. Advisory Persons shall not accept any gift or other thing of
more than DE MINIMIS value from any securities broker, dealer, underwriter or
placement agent that does business with or on behalf of any Fund.
(b) SERVICE AS A DIRECTOR. Advisory Persons may not serve as directors
of publicly traded companies without the prior written authorization of the
Director of Compliance. The Director of Compliance shall not provide such
authorization unless he or she finds that such board service would be
consistent with the interests of the Funds and their shareholders. Should
any person receive such authorization, any investments by the Funds in the
securities of any such publicly traded company while such person is serving
as a director will be required to be approved in advance, in writing, by the
Director of Compliance.
VII. MISCELLANEOUS PROVISIONS
(a) IDENTIFICATION OF ACCESS PERSONS, ADVISORY PERSONS AND PORTFOLIO
MANAGERS. Jundt shall, on behalf of itself, the Funds and USG, identify all
Access Persons who are under a duty to make reports under Article IV and
shall inform such persons of such duty. Jundt shall likewise identify all
individuals who are classified as Advisory Persons and Portfolio Managers
hereunder and inform such persons of such classifications.
(b) MAINTENANCE OF RECORDS. Jundt shall, on behalf of the Funds and USG,
maintain and make available records as required by Rule 17j-1(d).
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<PAGE>
REPORT PURSUANT TO ARTICLE IV
OF THE CODE OF ETHICS FOR
JUNDT ASSOCIATES, INC. AND AFFILIATES
INSTRUCTIONS:
(1) Not later than ten (10) days after the end of each calendar
quarter, each Access Person shall submit this Report, as provided by the Code
of Ethics (the "Code"). The Code should be reviewed before completing the
Report; terms defined in the Code have the same meanings in this Report.
(2) No Report need be filed under the circumstances set forth in
Section IV(c) of the Code.
(3) If no reportable transactions have occurred during the period, put
an "X" in the following box / /, and you may skip to the signature line.
(4) This Report may contain a statement that it shall not be construed
as an admission by the person making the Report that he has any direct or
indirect Beneficial Ownership in the Security to which the Report relates.
(5) If you must file this Report and transactions have occurred during
the period, set forth the following information with respect to transactions
during the most recently ended calendar quarter in any Security in which you
have, or by reason of such transaction acquired, any direct or indirect
beneficial ownership in the Security:
<TABLE>
<CAPTION>
Broker,
Date and Nature Price Dealer or
Title and of Transaction Transaction Bank Through
Name of Number of (i.e., purchase, was Whom Transfer
Issuer Shares or Units Sale or Other) Effected Effected
------- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
</TABLE>
(If you need additional space, please attach additional pages.)
(7) Questions regarding the completion of this Report may be
directed to James E. Nicholson at (612) 336-3203 or to Matthew L. Thompson at
(612) 336-3359.
The answers to the foregoing are true and correct to the best of my
information and belief.
Dated: _______________________ __________________________________
Signature of Person Filing Report
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<PAGE>
JUNDT FUNDS, INC.
POWER OF ATTORNEY
TO SIGN REGISTRATION STATEMENT
AND AMENDMENTS THERETO
The undersigned, duly elected directors and officers of Jundt Funds, Inc.
(the "Company"), hereby appoint James R. Jundt and Donald M. Longlet, or either
of them, on their behalf as directors and/or officers of the Company, as
attorney-in-fact and agent to do any and all acts and things, and execute in
their names any and all instruments, which said attorneys and agents my deem
necessary or advisable to enable the Company to comply with the Investment
Company Act of 1940, the Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof and any state securities
laws, in connection with the registration under said Acts of the Company and the
shares of the Company and the offerings of shares of the Company including
specifically power and authority to sign their names to any and all
Notifications of Registration and Registration Statements to be filed with the
Securities and Exchange Commission under either of said Acts in respect to the
Company and such shares of the Company, and any amendments (including pre-
effective and post-effective amendments) or applications for amendment or
supplements of or to such Notifications of Registration and Registration
Statements, and to file the same with the Securities and Exchange Commission;
and the undersigned do hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said agents and attorneys shall have, and may exercise, without the
others, all the powers conferred hereby.
IN WITNESS WHEREOF, the undersigned have signed their names hereto as of
the 4th day of December, 1995.
/s/ James R. Jundt /s/ Darrell R. Wells
- ---------------------------------------- ----------------------------------
James R. Jundt Darrell R. Wells
Director, Chairman of the Board, Director
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Donald M. Longlet /s/ John E. Clute
- ---------------------------------------- ----------------------------------
Donald M. Longlet John E. Clute
Vice President and Treasurer Director
(Principal Financial and Accounting Officer)
/s/ Demetre M. Nicoloff /s/ Floyd Hall
- ------------------------------------- ----------------------------------
Demetre M. Nicoloff Floyd Hall
Director Director
M1:0084875.01
