<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. __ / /
POST-EFFECTIVE AMENDMENT NO. 2 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
(FILE NO. 811-09128)
AMENDMENT NO. 4 /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 LLP
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
It is proposed that this filing will become effective (check appropriate
box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/X/ 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
------------------------
Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940,
Jundt Funds, Inc. has elected to register an indefinite number of shares of its
Common Stock. The Registrant's most recent Rule 24f-2 Notice was filed with the
Commission on or about February 21, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JUNDT FUNDS, INC.
POST-EFFECTIVE AMENDMENT NO. 2 TO THE
REGISTRATION STATEMENT ON FORM N-1A
EXPLANATORY NOTE
Jundt Funds, Inc. is organized as a series fund and currently is authorized
to issue its shares of Common Stock in two series: Series A, which represent
interests in Jundt U.S. Emerging Growth Fund; and Series B, which represent
interests in Jundt Opportunity Fund. Each of the foregoing funds currently
offers its shares in four classes: Class A, Class B, Class C and Class D. In
each case, Classes B, C and D are the only classes offered for sale to the
general public; Class A shares are offered for sale exclusively to certain
specified investors. Part A of this Registration Statement is comprised of four
prospectuses: Jundt U.S. Emerging Growth Fund, Classes B, C and D; Jundt U.S.
Emerging Growth Fund, Class A; Jundt Opportunity Fund, Classes B, C and D; and
Jundt Opportunity Fund, Class A.
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
ITEM NO. CAPTION IN EACH PROSPECTUS
- -------- --------------------------------------------------------------------
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,
Other 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 EACH 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
i
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART A
PROSPECTUSES
<PAGE>
PROSPECTUS OF
JUNDT U.S. EMERGING GROWTH FUND
CLASSES B, C AND D
There is no change to the Prospectus of Jundt U.S. Emerging Growth Fund, Classes
B, C and D, and, therefore, such Prospectus is not included herewith.
<PAGE>
PROSPECTUS OF
JUNDT U.S. EMERGING GROWTH FUND
CLASS A
There is no change to the Prospectus of Jundt U.S. Emerging Growth Fund, Class
A, and, therefore, such Prospectus is not included herewith.
<PAGE>
PROSPECTUS OF
JUNDT OPPORTUNITY FUND
CLASSES B, C AND D
<PAGE>
JUNDT OPPORTUNITY FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
---------------------
Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-diversified series of Jundt Funds, Inc. (the "Company"), an open-end
management investment company (commonly known as a "mutual fund") that currently
offers its shares in two series. The Fund, in turn, currently offers its shares
in four classes, namely, 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 capital appreciation. In
pursuing its objective, the Fund employs an aggressive yet flexible investment
program emphasizing investments in domestic companies that are believed by the
Fund's investment adviser, Jundt Associates, Inc. (the "Investment Adviser"), to
have significant potential for capital appreciation. Income is not a
consideration in the selection of investments and is not an objective of the
Fund. The Fund may take positions that are different from those taken by most
other mutual funds. For example, the Fund may sell the stocks of some issuers
short, and may take positions in options and futures contracts in anticipation
of a market decline. The Fund may also borrow money to purchase portfolio
securities. 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 , 1996, 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 "RISK
FACTORS" AND "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 , 1996
<PAGE>
THE FUND
The Fund is a professionally managed, non-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 Company was
incorporated under the laws of the State of Minnesota on October 26, 1995. Its
principal business address is 1550 Utica Avenue South, Suite 950, Minneapolis,
Minnesota 55416.
RISK FACTORS
An investment in the Fund is subject to certain risks, as detailed under
"Investment Objective and Policies." As with other mutual funds, there can be no
assurance that the Fund will achieve its investment objective, and an investment
in the Fund will fluctuate in value (corresponding to the value of the Fund's
underlying investments).
The Fund may from time to time invest a substantial portion of its assets in
securities issued by smaller companies. Investments in smaller companies may
involve greater price volatility and may have less market liquidity than equity
securities of larger companies. See "Investment Objective and Policies --
Investment Policies and Risk Considerations."
Under normal market conditions, the Fund may invest up to 35% of its total
assets in debt securities, and may temporarily invest greater than 35% of its
assets in such securities when the Investment Adviser believes that market
conditions warrant a defensive investment posture. The value of debt securities
typically varies inversely with changes in market interest rates. See
"Investment Objective and Policies -- Investment Policies and Risk
Considerations."
The Fund may invest up to 10% of its total assets in securities of foreign
issuers. Such investments involve risks not typically associated with
investments in securities of domestic companies, including unfavorable changes
in currency exchange rates, potential political and economic instability in such
countries, limited liquidity and price volatility. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."
The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques involves unique risks. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."
PURCHASE INFORMATION
The Fund offers investors the choice among three Classes of shares, namely,
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.
2
<PAGE>
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., members of their
immediate families, and their direct lineal ancestors and descendants; and (b)
accounts for the benefit of any of the foregoing.
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).................... 1.30% 1.30% 1.30%
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................... 0.33% 0.33% 0.30%
Other (f)..................................... 0.09% 0.09% 0.09%
---------- -------- --------
Total Fund Operating Expenses (f)................. 2.92% 2.92% 2.14%
---------- -------- --------
---------- -------- --------
</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.
3
<PAGE>
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...................................................... $ 70 $ 40 $ 73
Three years................................................... 120 90 116
</TABLE>
- ------------------------
(1) Numbers do not reflect the 1% contingent deferred sales charge that may be
imposed on certain redemptions of Class D shares.
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................................................................... $ 30 $ 30
Three years................................................................ 90 90
</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 other expenses of
approximately 0.64%, 0.64% and 0.64%, respectively, and Total Fund Operating
Expenses of approximately 3.47 %, 3.47% and 2.69%, 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 shareholders owning a "majority of
the outstanding voting securities" of the Fund (as defined in the Investment
Company Act). 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 capital appreciation. Income
is not a consideration in the selection of investments and is not an objective
of the Fund. Like all mutual funds, attainment of the Fund's investment
objective cannot be assured.
INVESTMENT POLICIES AND RISK CONSIDERATIONS
In pursuing its investment objective, the Fund employs an aggressive yet
flexible investment program. The Fund may invest in varying combinations of
stocks and bonds, and various other investments (described below), that the
Investment Adviser believes will best enable the Fund to achieve its objective
of capital appreciation. The Investment Adviser anticipates that, in normal
market conditions, at least 65% of the Fund's investment portfolio will be
comprised of common stocks of large and small domestic companies that are
believed by the Investment Adviser to have significant potential for capital
appreciation.
The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques, described below, involves unique risks. The Statement of
Additional Information contains more detailed information about these investment
techniques, including limitations designed to reduce these risks.
The net asset value of the Fund will fluctuate with changes in the value of
its portfolio securities. The Fund should be viewed as a long-term investment
suitable for investors seeking long-term capital appreciation. The Fund is not
intended to provide a trading vehicle for investors who wish to profit from
short-term swings in the stock market.
INVESTMENTS IN SMALLER COMPANIES. The Fund may from time to time invest a
substantial portion of its assets in securities issued by smaller companies.
Such companies may offer greater opportunities for capital appreciation than
larger companies, but investments in such companies may involve certain special
risks. Such companies may have limited product lines, markets, or financial
resources and may be dependent on a limited management group. While the markets
in securities of such companies have grown rapidly in recent years, such
securities may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and the Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly
5
<PAGE>
available information about the issuers of these securities or less market
interest in such securities than in the case of larger companies, and it may
take a longer period of time for the prices of such securities to reflect the
full value of their issuers' underlying earnings potential or assets.
SHORT SALES. When the Investment Adviser anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. The Fund may
make a profit or incur a loss depending upon whether the market price of the
security decreases or increases between the date of the short sale and the date
on which the Fund must replace the borrowed security. An increase in the value
of a security sold short by the Fund over the price at which it was sold short
will result in a loss to the Fund, and there can be no assurance that the Fund
will be able to close out the position at any particular time or at an
acceptable price.
All short sales must be fully collateralized, and the Fund may not sell
securities short if, immediately after and as a result of the sale, the value of
all securities sold short by the Fund exceeds 25% of the Fund's total assets. In
addition, the Fund limits short sales of any one issuer's securities to 5% of
the Fund's total assets and to 5% of any one class of the issuer's securities.
FOREIGN SECURITIES. 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 exchange rates, 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.
DEBT SECURITIES. The Fund may invest in "investment grade" debt securities
from time to time if the Investment Adviser believes investing in such
securities might assist the Fund in achieving its overall objective of long-term
capital appreciation. In normal market conditions, the Investment Adviser
anticipates that the Fund will invest no more than 35% of its assets in debt
securities. However, in abnormal market conditions when the Investment Adviser
believes a defensive investment posture is warranted, the Fund may temporarily
invest up to 100% of its assets in high grade debt securities, as described
below.
Debt securities are deemed to be "investment grade" if rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's) or BBB or higher by Standard &
Poor's Corporation ("S&P), or if unrated that are judged by the Investment
Adviser to be of comparable quality. Securities rated Baa or BBB (and similar
unrated securities) lack outstanding investment characteristics, have
speculative characteristics, and are subject to greater credit and market risks
than higher-rated securities. The Fund will not necessarily dispose of a
security when its debt rating is reduced below its rating at the time of
purchase, although the Investment Adviser will monitor the investment to
determine whether continued investment in the security will assist in meeting
the Fund's investment objective.
DEFENSIVE STRATEGIES. At times, the Investment Adviser may judge that
market conditions make pursuing the Fund's basic investment strategy
inconsistent with the best interests of its shareholders. At such times, the
Investment Adviser may temporarily use defensive strategies primarily designed
to
6
<PAGE>
reduce fluctuations in the values of the Fund's assets. In implementing these
strategies, the Fund may temporarily invest up to 100% of its assets in U.S.
Government securities, other "high-quality" debt securities (securities rated A
or higher by Moody's and/or S&P or judged by the Investment Adviser to be of
comparable quality) and other securities the Investment Adviser believes to be
consistent with the Fund's best interests.
ZERO-COUPON BONDS. The Fund may at times invest in "zero-coupon" bonds.
Zero-coupon bonds are issued at a significant discount from face value and pay
interest only at maturity rather than at intervals during the life of the
security. The values of zero-coupon bonds are subject to greater fluctuation in
response to changes in market interest rates than bonds which pay interest
currently, and may involve greater credit risk than such bonds.
BORROWING AND LEVERAGE. The Fund may borrow money to invest in additional
portfolio securities. This practice, known as "leverage," increases the Fund's
market exposure and its risk. When the Fund has borrowed money for leverage and
its investments increase or decrease in value, the Fund's net asset value will
normally increase or decrease more than if it had not borrowed money. In
addition, the interest the Fund must pay on borrowed money will reduce the
amount of any potential gains or increase any losses. The extent to which the
Fund will borrow money, and the amount it may borrow, depend on market
conditions and interest rates. Successful use of leverage depends on the
Investment Adviser's ability to predict market movements correctly. The Fund may
at times borrow money by means of reverse repurchase agreements. Reverse
repurchase agreements generally involve the sale by the Fund of securities held
by it and an agreement to repurchase the securities at an agreed-upon price,
date, and interest payment. Reverse repurchase agreements will increase the
Fund's overall investment exposure and may result in losses. The amount of money
borrowed by the Fund for leverage may generally not exceed one-third of the
Fund's assets (including the amount borrowed).
OPTIONS AND FUTURES. The Fund may buy and sell call and put options to
hedge against changes in net asset value or to attempt to realize a greater
current return. In addition, through the purchase and sale of future contracts
and related options, the Fund may at times seek to hedge against fluctuations in
net asset value and to attempt to increase its investment return.
The Fund's ability to engage in options and futures strategies will depend
on the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that the Fund
will be able to utilize these instruments effectively for the purposes stated
above. Options and futures transactions involve certain risks which are
described below and in the Statement of Additional Information.
Transactions in options and futures contracts involve brokerage costs and
may require the Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.
INDEX FUTURES AND OPTIONS. The Fund may buy and sell index futures
contracts ("index futures") and options on index futures and on indices (or may
purchase investments whose values are based on the value from time to time of
one or more securities indices) for hedging purposes. An index future is a
contract to buy or sell units of a particular bond or stock index at an agreed
price on a specified future date. Depending on the change in value of the index
between the time when the Fund enters into and terminates an index futures or
option transaction, the Fund realizes a gain or loss. A Fund may also buy and
sell index futures and options to increase its investment return.
7
<PAGE>
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by the Fund that are the subject of a hedge. The
successful use by the Fund of the strategies described above further depends on
the ability of the Investment Adviser to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close out futures or
options positions. Although the Fund will enter into options or futures
transactions only if the Investment Adviser believes that a liquid secondary
market exists for such option or futures contracts, there can be no assurance
that the Fund will be able to effect closing transactions at any particular time
or at an acceptable price. In addition, certain provisions of the Internal
Revenue Code may limit the Fund's ability to engage in options and futures
transactions.
The Fund expects that its options and futures transactions generally will be
conducted on recognized exchanges. The Fund may in certain instances purchase
and sell options in the over-the-counter markets. The Fund's ability to
terminate options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. The Fund will, however, engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in the opinion of the Investment Adviser, the pricing
mechanism and liquidity of over-the-counter markets are satisfactory and the
participants are responsible parties likely to meet their obligations.
Consistent with the rules and regulations of the Commodity Futures Trading
Commission exempting the Fund from regulation as a "commodity pool," the Fund
will not purchase or sell futures contracts or related options if, as a result,
the sum of the initial margin deposit on the Fund's existing futures and related
options positions and premiums paid for options on futures contracts entered
into for other than bona fide hedging purposes would exceed 5% of the Fund's
assets. (For options that are "in-the-money" at the time of purchase, the amount
by which the option is "in-the-money" is excluded from this calculation.)
NON-DIVERSIFICATION AND SECTOR CONCENTRATION. As a "non-diversified" fund,
the Fund may invest its assets in a more limited number of issuers than may
other investment companies. Under the Internal Revenue Code, however, the Fund
may not invest more than 25% of its assets in obligations of any one issuer
other than U.S. Government obligations and, with respect to 50% of its total
assets, may not invest more than 5% of its total assets in the securities of any
one issuer (except U.S. Government securities). Thus, as a non-diversified fund,
the Fund may invest up to 25% of its total assets in the securities of each of
any two issuers. This practice involves an increased risk of loss to the Fund if
the market value of a security should decline or its issuer were otherwise not
to meet its obligations.
At times the Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. The Fund would only concentrate its investments in a particular
market sector if the Investment Adviser were to believe the investment return
available from concentration in that sector justifies any additional risk
associated with concentration in that sector. When the Fund concentrates its
investments in a market sector, financial, economic, business, and other
developments affecting issuers in that sector will have a greater effect on the
Fund than if it had not concentrated its assets in that sector.
8
<PAGE>
SECURITIES LOANS AND REPURCHASE AGREEMENTS. The Fund may lend portfolio
securities to broker-dealers and may enter into repurchase agreements. These
transactions must be fully collateralized at all times, but involve some risk to
the Fund if the other party should default on its obligations and the Fund is
delayed or prevented from recovering the collateral.
PORTFOLIO TURNOVER. The length of time the Fund has held a particular
security is not generally a consideration in investment decisions. The Fund's
investment policies may lead to frequent changes in the Fund's investments,
particularly in periods of volatile market movements. A change in the
investments held by the Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. During the initial year of the Fund's
operations, the Fund's portfolio turnover is expected to exceed 100%.
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 of the outstanding voting securities" of the Fund (as defined in
the Investment Company Act). These restrictions prohibit the Fund, among other
matters, from: (a) investing 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); or
(b) borrowing money, except from banks for temporary or emergency purposes or as
required in connection with otherwise permissible leverage activities and then
only in an amount not in excess of one-third of the value of the Fund's total
assets. 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 invest more than 15% of its assets in
illiquid securities.
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.
9
<PAGE>
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 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, 1996, the Investment Adviser managed approximately $2.0
billion of assets for The Jundt Growth Fund, Inc., Jundt U.S. Emerging Growth
Fund and 13 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 1.30% 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
10
<PAGE>
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. (now known
as American Express Financial Advisers, Inc.) in Minneapolis, Minnesota in 1969,
where he served in analytical and portfolio management positions 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 and of Jundt Funds, Inc. since 1995. Mr.
Jundt has approximately 32 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
and of Jundt Funds, Inc. since 1995. Mr. Longlet has approximately 28 years of
investment experience.
Thomas L. Press was a Senior Vice President of Investment Advisers, Inc. in
Minneapolis and Co-Manager of the IAI Emerging Growth Fund from 1992 until 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 a
portfolio manager of The Jundt Growth Fund, Inc. since 1993 and of Jundt Funds,
Inc. since 1995. Mr. Press has approximately 11 years of investment experience.
Marcus E. Jundt has been a portfolio manager for the Investment Adviser
since 1992. Mr. Jundt was employed as a research analyst for Victoria Investors
in New York, New York from 1988 to 1992, and from 1987 to 1988 was employed by
Cargill Investor Services, Inc., 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 1992 and of Jundt Funds, Inc. since 1995. Mr. Jundt has
approximately 9 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
11
<PAGE>
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, 1997, 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 9095, Princeton, New Jersey
08543. The Administrator is an affiliate of Merrill Lynch.
THE DISTRIBUTOR; RULE 12B-1 DISTRIBUTION PLANS
Pursuant to a Distribution Agreement by and between the Fund's principal
distributor, U.S. Growth Investments, Inc. ("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 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.
12
<PAGE>
HOW TO BUY FUND SHARES
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers investors the choice among three Classes of shares, namely,
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.
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.
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, but does
permit banks to purchase and sell securities without recourse solely upon the
order of and for customers. 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 from federal law, and vary from
state to state, 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, any federal agency or the FDIC.
13
<PAGE>
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.
No share certificates will be issued 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 Opportunity Fund" to:
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
You may not purchase shares with a third party check.
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 Opportunity Fund
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.
PURCHASES BY TAX-DEFERRED RETIREMENT PLANS. Individual investors may
establish an account in the Fund as an Individual Retirement Account ("IRA").
IRAs allow such investors to save for retirement and shelter their investment
income from current taxes. Investors should consult with their tax advisors to
determine if they qualify to deduct all or part of any IRA contribution for
purposes of federal and state income tax returns.
14
<PAGE>
Fund shares may also be purchased as an investment for other qualified
retirement plans in which investors participate, such as profit-sharing and
money purchase plans, 401(k) programs, 403(b) plans, Simplified Employer Pension
(SEP) Plans and others. Such investors should consult their employers or plan
administrators before investing.
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 a front-end sales
charge ("FESC") at the time of purchase 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 FESC at the time of purchase. Although Class B
shares are sold without a FESC, 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 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
15
<PAGE>
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 conversion is due. 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 a FESC at the time
of purchase 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 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 FESC at the time of purchase. Although Class C
shares are sold without a FESC, the Distributor pays a sales commission equal to
1% 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% 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
- -- The 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 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.
16
<PAGE>
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."
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
17
<PAGE>
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, employees of contractual service
providers to the Fund, 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.
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.
18
<PAGE>
SIGNATURE GUARANTEES
Certain requests must include a signature guarantee. Signature guarantees
are designed to protect shareholders and the Fund from fraud. A request to sell
shares must be made in writing and include a signature guarantee if any of the
following situations apply:
- A shareholder request in writing to redeem more than $50,000 worth of
shares,
- A shareholder's account registration or address has changed within the
last 30 days,
- The check is being mailed to a different address than the one on the
account (record address),
- The check is being made payable to someone other than the account owner,
or
- The redemption or exchange proceeds are being transferred to an account
with a different registration.
A shareholder should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association. The Fund
reserves the right to waive the requirement of a signature guarantee in certain
limited circumstances. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.
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 or
Class C 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 the 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
19
<PAGE>
of a 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. or Jundt U.S. Emerging
Growth Fund, 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. or
Jundt U.S. Emerging Growth Fund, Class C shareholders may exchange their shares
for Class C shares of The Jundt Growth Fund, Inc. or Jundt U.S. Emerging Growth
Fund 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. or for Class D shares of Jundt U.S. Emerging Growth
Fund.
The minimum amount which may be exchanged is $1,000. The Fund and The Jundt
Growth Fund, Inc. or Jundt U.S. Emerging Growth Fund, as the case may be, 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. or
Jundt U.S. Emerging Growth Fund, the transaction will not be subject to a CDSC.
However, when 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. or Jundt U.S. Emerging
Growth Fund, as the case may be, 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 (less any
applicable CDSC) 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 (less
any applicable CDSC) 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
20
<PAGE>
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. However, the CDSC
will be waived for redemptions representing a minimum required distribution from
an Individual Retirement Account processed under a Withdrawal Plan. See "Monthly
Cash Withdrawal Plan" in the Statement of Additional Information.
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.
21
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS
Substantially all of the Fund's net investment income and net realized
gains, if any, will be paid to shareholders annually. Dividends and other
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
other distributions relate) at net asset value on the ex-distribution date.
Dividends and other distributions will be automatically reinvested in additional
Fund shares unless the shareholder has elected in writing to receive dividends
and other 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, if any, 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 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 other 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 other distributions
may also be subject to state or local taxes, and if the shareholder lives
outside the United States, the dividends and other distributions could also be
taxed by the country in which the shareholder resides.
"BUYING A DISTRIBUTION"
On the distribution date for a dividend or other distribution by the Fund,
its share price is reduced by the amount of the dividend or other distribution.
If an investor purchases shares of the Fund on or before the record date
("buying a distribution"), 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.
22
<PAGE>
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 other
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 FESC (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 other distributions
during the period. The return is expressed as a percentage rate which, if
applied on a 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 other 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 FESC or CDSC
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.
23
<PAGE>
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.
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 two Series: Series A, which
represent interests in the Jundt U.S. Emerging Growth Fund; and Series B,which
represent interests in the Fund. The Fund, in turn, currently offers its shares
in four Classes, namely, 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".
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 automatically convert into Class D
shares if held for the applicable time period, any proposed amendment to the
Class D Rule 12b-1 Distribution Plan that would increase the fees payable
thereunder must be approved by the Class D AND Class B shareholders (each voting
separately as a Class).
The Fund's shares are freely transferable, are entitled to dividends and
other distributions 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, are 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
24
<PAGE>
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 10% 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.
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.
25
<PAGE>
JUNDT OPPORTUNITY 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 OPPORTUNITY 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 #
</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>
<TABLE>
<S> <C>
$ ------------------------ Class B Shares Note: The Fund will not accept third party
$ ------------------------ Class C Shares checks.
$ ------------------------ Class D Shares
</TABLE>
- --------------------------------------------------------------------------------
<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. DIVIDENDS NOTE: IF NO ELECTION IS MADE, DIVIDENDS AND OTHER DISTRIBUTIONS WILL AUTOMATICALLY BE REINVESTED.
AND OTHER
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 DISTRIBUTION.
/ / Savings / / Checking
/ / Mail check to my address listed in Section A.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
E. AUTOMATIC / / Please arrange with my bank to invest $ ($50 minimum) per month in the Fund.
INVESTMENT Please charge my bank account on the 5th 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, shares of the Fund, The Jundt Growth Fund, Inc. and Jundt U.S.
Emerging Growth Fund 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 of Intention, 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 20th day (or preceding business day) of each month
WITHDRAWAL (minimum $100). This service is available only for accounts with balances of $10,000 or more. 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 OPPORTUNITY 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 NOTE: If UGMA/UTMA, provide minor's Social Security or Tax
Number. Identification Number.
Tax Residency: / /U.S. / / Other ---------------
(If you are not a U.S. tax resident,
please attach Form W-8 to this application.)
</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.
THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER
THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
________________________________________________________________________________
PLEASE
REQUIRED
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
JOINT
Signature--> Date-->
________________________________________
INVESTORS
PLEASE
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
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 shares of the Fund, The Jundt Growth
Fund, Inc. and Jundt U.S. Emerging Growth Fund. The Letter of Intention does not
obligate you to make purchases totaling a given amount, nor is any 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 in any Fund can receive the appropriate (lower) sales
charge. You or your dealer must inform the applicable Fund 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 Funds 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 applicable 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; 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 Code); tax-exempt organizations
enumerated in Section 501(c)(3) of the 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 a 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(s) 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 a 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(s) 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(s) will prepare and mail a statement to you and your dealer or
representative, if any, who shall be responsible for notifying you of the
difference due. You may pay the difference due in cash or have it liquidated
from the escrowed shares. If a check has not been received by the Fund(s) within
21 days of notification, it will be assumed that the preferred method is
liquidation and a number of escrowed shares sufficient to realize the difference
due will be redeemed and the remainder will be released or delivered.
Each 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 Opportunity Fund
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
BY WIRE/TELEPHONE: Call your investment dealer/adviser 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 Opportunity Fund
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 OPPORTUNITY 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)
/ / 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, an employee of a
contractual service provider to the Fund, or a parent or immediate family member
of any such person. Please give details, including name of person and
broker-dealer, financial institution or service provider:
_______________________________________________________________________________
_______________________________________________________________________________
/ / 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
ineligible for net asset value purchases.
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: _______________________________
<PAGE>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
JUNDT OPPORTUNITY FUND
------------------
PROSPECTUS
DECEMBER , 1996
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Fund.............................. 2
Risk Factors.......................... 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Investment Objective and Policies..... 5
Management of the Fund................ 10
How to Buy Fund Shares................ 13
How to Redeem Fund Shares............. 18
Determination of Net Asset Value...... 21
Dividends, Other Distributions and
Taxes................................ 22
Performance Information............... 23
General Information................... 24
</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 9095
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 LLP
2200 Norwest Center
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<PAGE>
PROSPECTUS OF
JUNDT OPPORTUNITY FUND
CLASS A
<PAGE>
JUNDT OPPORTUNITY FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
---------------------
Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-diversified series of Jundt Funds, Inc. (the "Company"), an open-end
management investment company (commonly known as a "mutual fund") that currently
offers its shares in two series. The Fund, in turn, currently offers its shares
in four classes, namely, 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 A shares. See "Purchase Information" and "General Information."
The Fund's investment objective is to provide capital appreciation. In
pursuing its objective, the Fund employs an aggressive yet flexible investment
program emphasizing investments in domestic companies that are believed by the
Fund's investment adviser, Jundt Associates, Inc. (the "Investment Adviser"), to
have significant potential for capital appreciation. Income is not a
consideration in the selection of investments and is not an objective of the
Fund. The Fund may take positions that are different from those taken by most
other mutual funds. For example, the Fund may sell the stocks of some issuers
short, and may take positions in options and futures contracts in anticipation
of a market decline. The Fund may also borrow money to purchase portfolio
securities. 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 , 1996, 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 "RISK
FACTORS" AND "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 , 1996
<PAGE>
THE FUND
The Fund is a professionally managed, non-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 Company was
incorporated under the laws of the State of Minnesota on October 26, 1995. Its
principal business address is 1550 Utica Avenue South, Suite 950, Minneapolis,
Minnesota 55416.
RISK FACTORS
An investment in the Fund is subject to certain risks, as detailed under
"Investment Objective and Policies." As with other mutual funds, there can be no
assurance that the Fund will achieve its investment objective, and an investment
in the Fund will fluctuate in value (corresponding to the value of the Fund's
underlying investments).
The Fund may from time to time invest a substantial portion of its assets in
securities issued by smaller companies. Investments in smaller companies may
involve greater price volatility and may have less market liquidity than equity
securities of larger companies. See "Investment Objective and Policies --
Investment Policies and Risk Considerations."
Under normal market conditions, the Fund may invest up to 35% of its total
assets in debt securities, and may temporarily invest greater than 35% of its
assets in such securities when the Investment Adviser believes that market
conditions warrant a defensive investment posture. The value of debt securities
typically varies inversely with changes in market interest rates. See
"Investment Objective and Policies -- Investment Policies and Risk
Considerations."
The Fund may invest up to 10% of its total assets in securities of foreign
issuers. Such investments involve risks not typically associated with
investments in securities of domestic companies, including unfavorable changes
in currency exchange rates, potential political and economic instability in such
countries, limited liquidity and price volatility. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."
The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques involves unique risks. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."
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. This Prospectus relates exclusively to the Fund's Class A shares.
2
<PAGE>
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 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).................... 1.30%
12b-1 Fees...................................... NONE
Other Expenses:
Administrative Fees........................... .20%
Shareholder Servicing Costs................... .30%
Other (c)..................................... .09%
-------
Total Annual Fund Operating Expenses (c).......... 1.89%
-------
-------
</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...................................................................... $ 19
Three years................................................................... 59
</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 other expenses of approximately 0.64% and
Total Fund Operating Expenses of approximately 2.44%.
3
<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 shareholders owning a "majority of
the outstanding voting securities" of the Fund (as defined in the Investment
Company Act). 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 capital appreciation. Income
is not a consideration in the selection of investments and is not an objective
of the Fund. Like all mutual funds, attainment of the Fund's investment
objective cannot be assured.
INVESTMENT POLICIES AND RISK CONSIDERATIONS
In pursuing its investment objective, the Fund employs an aggressive yet
flexible investment program. The Fund may invest in varying combinations of
stocks and bonds, and various other investments (described below), that the
Investment Adviser believes will best enable the Fund to achieve its objective
of long-term capital appreciation. The Investment Adviser anticipates that, in
normal market conditions, at least 65% of the Fund's investment portfolio will
be comprised of common stocks of large and small domestic companies that are
believed by the Investment Adviser to have significant potential for capital
appreciation.
The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques, described below, involves unique risks. The Statement of
Additional Information contains more detailed information about these investment
techniques, including limitations designed to reduce these risks.
The net asset value of the Fund will fluctuate with changes in the value of
its portfolio securities. The Fund should be viewed as a long-term investment
suitable for investors seeking long-term capital appreciation. The Fund is not
intended to provide a trading vehicle for investors who wish to profit from
short-term swings in the stock market.
INVESTMENTS IN SMALLER COMPANIES. The Fund may from time to time invest a
substantial portion of its assets in securities issued by smaller companies.
Such companies may offer greater opportunities for capital appreciation than
larger companies, but investments in such companies may involve certain special
risks. Such companies may have limited product lines, markets, or financial
resources and may be dependent on a limited management group. While the markets
in securities of such companies have grown rapidly in recent years, such
securities may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and the Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly
4
<PAGE>
available information about the issuers of these securities or less market
interest in such securities than in the case of larger companies, and it may
take a longer period of time for the prices of such securities to reflect the
full value of their issuers' underlying earnings potential or assets.
SHORT SALES. When the Investment Adviser anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. The Fund may
make a profit or incur a loss depending upon whether the market price of the
security decreases or increases between the date of the short sale and the date
on which the Fund must replace the borrowed security. An increase in the value
of a security sold short by the Fund over the price at which it was sold short
will result in a loss to the Fund, and there can be no assurance that the Fund
will be able to close out the position at any particular time or at an
acceptable price.
All short sales must be fully collateralized, and the Fund may not sell
securities short if, immediately after and as a result of the sale, the value of
all securities sold short by the Fund exceeds 25% of the Fund's total assets. In
addition, the Fund limits short sales of any one issuer's securities to 5% of
the Fund's total assets and to 5% of any one class of the issuer's securities.
FOREIGN SECURITIES. 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 exchange rates, 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.
DEBT SECURITIES. The Fund may invest in "investment grade" debt securities
from time to time if the Investment Adviser believes investing in such
securities might assist the Fund in achieving its overall objective of long-term
capital appreciation. In normal market conditions, the Investment Adviser
anticipates that the Fund will invest no more than 35% of its assets in debt
securities. However, in abnormal market conditions when the Investment Adviser
believes a defensive investment posture is warranted, the Fund may temporarily
invest up to 100% of its assets in high grade debt securities, as described
below.
Debt securities are deemed to be "investment grade" if rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's) or BBB or higher by Standard &
Poor's Corporation ("S&P), or if unrated that are judged by the Investment
Adviser to be of comparable quality. Securities rated Baa or BBB (and similar
unrated securities) lack outstanding investment characteristics, have
speculative characteristics, and are subject to greater credit and market risks
than higher-rated securities. The Fund will not necessarily dispose of a
security when its debt rating is reduced below its rating at the time of
purchase, although the Investment Adviser will monitor the investment to
determine whether continued investment in the security will assist in meeting
the Fund's investment objective.
DEFENSIVE STRATEGIES. At times, the Investment Adviser may judge that
market conditions make pursuing the Fund's basic investment strategy
inconsistent with the best interests of its shareholders. At such times, the
Investment Adviser may temporarily use defensive strategies primarily designed
to
5
<PAGE>
reduce fluctuations in the values of the Fund's assets. In implementing these
strategies, the Fund may temporarily invest up to 100% of its assets in U.S.
Government securities, other "high-quality" debt securities (securities rated A
or higher by Moody's and/or S&P or judged by the Investment Adviser to be of
comparable quality) and other securities the Investment Adviser believes to be
consistent with the Fund's best interests.
ZERO-COUPON BONDS. The Fund may at times invest in "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from face value and pay interest only at maturity rather than at intervals
during the life of the security. The values of zero-coupon bonds are subject to
greater fluctuation in response to changes in market interest rates than bonds
which pay interest currently, and may involve greater credit risk than such
bonds.
BORROWING AND LEVERAGE. The Fund may borrow money to invest in additional
portfolio securities. This practice, known as "leverage," increases the Fund's
market exposure and its risk. When the Fund has borrowed money for leverage and
its investments increase or decrease in value, the Fund's net asset value will
normally increase or decrease more than if it had not borrowed money. In
addition, the interest the Fund must pay on borrowed money will reduce the
amount of any potential gains or increase any losses. The extent to which the
Fund will borrow money, and the amount it may borrow, depend on market
conditions and interest rates. Successful use of leverage depends on the
Investment Adviser's ability to predict market movements correctly. The Fund may
at times borrow money by means of reverse repurchase agreements. Reverse
repurchase agreements generally involve the sale by the Fund of securities held
by it and an agreement to repurchase the securities at an agreed-upon price,
date, and interest payment. Reverse repurchase agreements will increase the
Fund's overall investment exposure and may result in losses. The amount of money
borrowed by the Fund for leverage may generally not exceed one-third of the
Fund's assets (including the amount borrowed).
OPTIONS AND FUTURES. The Fund may buy and sell call and put options to
hedge against changes in net asset value or to attempt to realize a greater
current return. In addition, through the purchase and sale of future contracts
and related options, the Fund may at times seek to hedge against fluctuations in
net asset value and to attempt to increase its investment return.
The Fund's ability to engage in options and futures strategies will depend
on the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that the Fund
will be able to utilize these instruments effectively for the purposes stated
above. Options and futures transactions involve certain risks which are
described below and in the Statement of Additional Information.
Transactions in options and futures contracts involve brokerage costs and
may require the Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.
INDEX FUTURES AND OPTIONS. The Fund may buy and sell index futures
contracts ("index futures") and options on index futures and on indices (or may
purchase investments whose values are based on the value from time to time of
one or more securities indices) for hedging purposes. An index future is a
contract to buy or sell units of a particular bond or stock index at an agreed
price on a specified future date. Depending on the change in value of the index
between the time when the Fund enters into and terminates an index futures or
option transaction, the Fund realizes a gain or loss. A Fund may also buy and
sell index futures and options to increase its investment return.
6
<PAGE>
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by the Fund that are the subject of a hedge. The
successful use by the Fund of the strategies described above further depends on
the ability of the Investment Adviser to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close out futures or
options positions. Although the Fund will enter into options or futures
transactions only if the Investment Adviser believes that a liquid secondary
market exists for such option or futures contracts, there can be no assurance
that the Fund will be able to effect closing transactions at any particular time
or at an acceptable price. In addition, certain provisions of the Internal
Revenue Code may limit the Fund's ability to engage in options and futures
transactions.
The Fund expects that its options and futures transactions generally will be
conducted on recognized exchanges. The Fund may in certain instances purchase
and sell options in the over-the-counter markets. The Fund's ability to
terminate options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. The Fund will, however, engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in the opinion of the Investment Adviser, the pricing
mechanism and liquidity of over-the-counter markets are satisfactory and the
participants are responsible parties likely to meet their obligations.
Consistent with the rules and regulations of the Commodity Futures Trading
Commission exempting the Fund from regulation as a "commodity pool," the Fund
will not purchase or sell futures contracts or related options if, as a result,
the sum of the initial margin deposit on the Fund's existing futures and related
options positions and premiums paid for options on futures contracts entered
into for other than bona fide hedging purposes would exceed 5% of the Fund's
assets. (For options that are "in-the-money" at the time of purchase, the amount
by which the option is "in-the-money" is excluded from this calculation.)
NON-DIVERSIFICATION AND SECTOR CONCENTRATION. As a "non-diversified" fund,
the Fund may invest its assets in a more limited number of issuers than may
other investment companies. Under the Internal Revenue Code, however, the Fund
may not invest more than 25% of its assets in obligations of any one issuer
other than U.S. Government obligations and, with respect to 50% of its total
assets, may not invest more than 5% of its total assets in the securities of any
one issuer (except U.S. Government securities). Thus, as a non-diversified fund,
the Fund may invest up to 25% of its total assets in the securities of each of
any two issuers. This practice involves an increased risk of loss to the Fund if
the market value of a security should decline or its issuer were otherwise not
to meet its obligations.
At times the Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. The Fund would only concentrate its investments in a particular
market sector if the Investment Adviser were to believe the investment return
available from concentration in that sector justifies any additional risk
associated with concentration in that sector. When the Fund concentrates its
investments in a market sector, financial, economic, business, and other
developments affecting issuers in that sector will have a greater effect on the
Fund than if it had not concentrated its assets in that sector.
7
<PAGE>
SECURITIES LOANS AND REPURCHASE AGREEMENTS. The Fund may lend portfolio
securities to broker-dealers and may enter into repurchase agreements. These
transactions must be fully collateralized at all times, but involve some risk to
the Fund if the other party should default on its obligations and the Fund is
delayed or prevented from recovering the collateral.
PORTFOLIO TURNOVER. The length of time the Fund has held a particular
security is not generally a consideration in investment decisions. The Fund's
investment policies may lead to frequent changes in the Fund's investments,
particularly in periods of volatile market movements. A change in the
investments held by the Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. During the initial year of the Fund's
operations, the Fund's portfolio turnover is expected to exceed 100%.
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 of the outstanding voting securities" of the Fund (as defined in
the Investment Company Act). These restrictions prohibit the Fund, among other
matters, from: (a) investing 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); or
(b) borrowing money, except from banks for temporary or emergency purposes or as
required in connection with otherwise permissible leverage activities and then
only in an amount not in excess of one-third of the value of the Fund's total
assets. 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 invest more than 15% of its assets in
illiquid securities.
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.
8
<PAGE>
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 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, 1996, the Investment Adviser managed approximately $2.0
billion of assets for The Jundt Growth Fund, Inc., Jundt U.S. Emerging Growth
Fund and 13 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 1.30% 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
9
<PAGE>
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. (now known
as American Express Financial Advisers, Inc.) in Minneapolis, Minnesota in 1969,
where he served in analytical and portfolio management positions 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 and of Jundt Funds, Inc. since 1995. Mr.
Jundt has approximately 32 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
and of Jundt Funds, Inc. since 1995. Mr. Longlet has approximately 28 years of
investment experience.
Thomas L. Press was a Senior Vice President of Investment Advisers, Inc. in
Minneapolis and Co-Manager of the IAI Emerging Growth Fund from 1992 until 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 a
portfolio manager of The Jundt Growth Fund, Inc. since 1993 and of Jundt Funds,
Inc. since 1995. Mr. Press has approximately 11 years of investment experience.
Marcus E. Jundt has been a portfolio manager for the Investment Adviser
since 1992. Mr. Jundt was employed as a research analyst for Victoria Investors
in New York, New York from 1988 to 1992, and from 1987 to 1988 was employed by
Cargill Investor Services, Inc., 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 1992 and of Jundt Funds, Inc. since 1995. Mr. Jundt has
approximately 9 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
10
<PAGE>
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, 1997, 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 9095, Princeton, New Jersey
08543. The Administrator is an affiliate of Merrill Lynch.
THE DISTRIBUTOR
Pursuant to a Distribution Agreement by and between the Fund's principal
distributor, U.S. Growth Investments, Inc. ("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 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.
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
The Fund offers its shares in four separate Classes, namely, Class A, Class
B, Class C and Class D, which offer different sales charges and bear different
expenses. 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 Investment Adviser, and the Distributor,
members of their immediate families, and their direct lineal ancestors and
descendants, as well as accounts for the benefit of any of the foregoing. This
Prospectus relates exclusively to the Fund's Class A Shares.
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.
11
<PAGE>
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. 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.
No share certificates will be issued 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 Opportunity Fund" to:
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
You may not purchase shares with a third party check.
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 Opportunity Fund
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.
PURCHASES BY TAX-DEFERRED RETIREMENT PLANS. Individual investors may
establish an account in the Fund as an Individual Retirement Account ("IRA").
IRAs allow such investors to save for retirement and shelter their investment
income from current taxes. Investors should consult with their tax advisors to
determine if they qualify to deduct all or part of any IRA contribution for
purposes of federal and state income tax returns.
12
<PAGE>
Fund shares may also be purchased as an investment for other qualified
retirement plans in which investors participate, such as profit-sharing and
money purchase plans, 401(k) programs, 403(b) plans, Simplified Employer Pension
(SEP) Plans and others. Such investors should consult their employers or plan
administrators before investing.
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.
The Fund imposes no charges when its Class A 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 shares 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.
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.
SIGNATURE GUARANTEES
Certain requests must include a signature guarantee. Signature guarantees
are designed to protect shareholders and the Fund from fraud. A request to sell
shares must be made in writing and include a signature guarantee if any of the
following situations apply:
- A shareholder request in writing to redeem more than $50,000 worth of
shares,
- A shareholder's account registration or address has changed within the
last 30 days,
- The check is being mailed to a different address than the one on the
account (record address),
- The check is being made payable to someone other than the account owner,
or
- The redemption or exchange proceeds are being transferred to an account
with a different registration.
13
<PAGE>
A shareholder should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association. The Fund
reserves the right to waive the requirement of a signature guarantee in certain
limited circumstances. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.
EXCHANGE PRIVILEGE
Except as described below, shareholders may exchange some or all of their
Class A Fund shares for Class A shares of The Jundt Growth Fund, Inc. or Jundt
U.S. Emerging Growth Fund, provided that the shares to be acquired in the
exchange are eligible for sale in the shareholder's state of residence.
The minimum amount which may be exchanged is $1,000. The Fund and The Jundt
Growth Fund, Inc. or Jundt U.S. Emerging Growth Fund, as the case may be, will
execute the exchange on the basis of the relative net asset values next
determined after receipt by the Fund. 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. or Jundt U.S. Emerging Growth Fund, as the case may be 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
14
<PAGE>
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. See "Monthly Cash
Withdrawal Plan" in the Statement of Additional Information.
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, OTHER DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS
Substantially all of the Fund's net investment income and net realized
gains, if any, will be paid to shareholders annually. Dividends and other
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
other distributions relate) at net asset value on the ex-distribution date.
Dividends and other distributions will be automatically reinvested in additional
Fund shares unless the shareholder has elected in writing to receive dividends
and other distributions in cash.
15
<PAGE>
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, if any, 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 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 other 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 other distributions
may also be subject to state or local taxes, and if the shareholder lives
outside the United States, the dividends and other distributions could also be
taxed by the country in which the shareholder resides.
"BUYING A DISTRIBUTION"
On the ex-distribution date for a dividend or other distribution by the
Fund, its share price is reduced by the amount of the dividend or other
distribution. If an investor purchases shares of the Fund on or before the
record date ("buying a distribution"), 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 other
distributions made by the Fund during the measuring period
16
<PAGE>
were reinvested in shares of the same Class. The Fund presents performance
information for each Class of shares commencing with the Fund's inception.
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 other distributions
during the period. The return is expressed as a percentage rate which, if
applied on a 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 other 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 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.
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.
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 two Series: Series A, which
represent interests in the Jundt U.S. Emerging Growth Fund; and Series B, which
represent interests in The Fund. The Fund, in turn, currently offers its shares
in four Classes, namely, 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 A shares. The Fund's Class B, Class C and Class D shares are
offered pursuant to a separate prospectus. See "Purchase Information".
17
<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 automatically convert into Class D
shares if held for the applicable time period, any proposed amendment to the
Class D Rule 12b-1 Distribution Plan that would increase the fees payable
thereunder must be approved by the Class D AND Class B shareholders (each voting
separately as a Class).
The Fund's shares are freely transferable, are entitled to dividends and
other distributions 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, are 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 10% 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
18
<PAGE>
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.
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.
19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JUNDT OPPORTUNITY FUND
------------------
PROSPECTUS
DECEMBER , 1996
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Fund.............................. 2
Risk Factors.......................... 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Investment Objective and Policies..... 4
Management of the Fund................ 9
How to Buy Fund Shares................ 11
How to Redeem Fund Shares............. 13
Determination of Net Asset Value...... 15
Dividends, Other Distributions and
Taxes................................ 15
Performance Information............... 16
General Information................... 17
</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 9095
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 LLP
2200 Norwest Center
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART B
STATEMENTS OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
JUNDT U.S. EMERGING GROWTH FUND
There is no change to the Statement of Additional
Information of Jundt U.S. Emerging Growth Fund and,
therefore, such Statement of Additional Information is not
included herewith.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
JUNDT OPPORTUNITY FUND
<PAGE>
JUNDT OPPORTUNITY FUND
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER , 1996
Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-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 two series: Series A, which represent interests
in the Jundt U.S. Emerging Growth Fund; and Series B, which represent interests
in the Fund. The Fund, in turn, currently offers its shares in four classes,
namely, 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 , 1996 (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-11
Advisory, Administrative and Distribution Agreements.................. B-12
Special Purchase Plans................................................ B-16
Monthly Cash Withdrawal Plan.......................................... B-17
Determination of Net Asset Value...................................... B-18
Calculation of Performance Data....................................... B-18
Directors and Officers................................................ B-20
Counsel and Auditors.................................................. B-22
General Information................................................... B-22
Financial and Other Information....................................... B-23
</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.
OPTIONS
The Fund may purchase and sell put and call options on its portfolio
securities to enhance investment performance and to protect against changes in
market prices. There is no assurance that the use of put and call options will
achieve the desired objective and could result in losses.
COVERED CALL OPTIONS. The Fund may write call options on its securities to
realize a greater current return, through the receipt of premiums, than it would
realize on its securities alone. A call option gives the holder the right to
purchase, and obligates the writer to sell, a security at the exercise price at
any time before the expiration date. A call option is "covered" if the writer,
at all times while obligated as a writer, either owns the underlying securities
(or comparable securities satisfying the cover requirements of the securities
exchanges), or has the right to immediately acquire such securities.
In return for the premiums received when it writes a covered call option,
the Fund gives up some or all of the opportunity to profit from an increase in
the market price of the securities covering the call option during the life of
the option. The Fund retains the risk of loss should the price of such
securities decline. If the option expires unexercised, the Fund realizes a gain
equal to the premium, which may be offset by a decline in price of the
underlying security. If the option is exercised, the Fund realizes a gain or
loss equal to the difference between the Fund's cost for the underlying security
and the proceeds of sale (exercise price minus commission) plus the amount of
the premium.
The Fund may terminate a call option that it has written before it expires
by entering into a closing purchase transaction. The Fund may enter into closing
transactions in order to free itself to sell the underlying security or to write
another call option on the security, realize a profit on a previously written
call option, or protect a security from being called in an unexpected market
rise. Any profits from a closing purchase transaction may be offset by a decline
in the value of the underlying security. Conversely, 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 a closing purchase
transaction is likely to be offset in whole or in part by unrealized
appreciation of the underlying security owned by the Fund.
COVERED PUT OPTIONS. The Fund may write covered put options in order to
enhance its current return. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.
In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, the Fund also
receives interest on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security later appreciates in value.
B-2
<PAGE>
The Fund may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.
PURCHASING PUT AND CALL OPTIONS. The Fund may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it sold
the underlying security instead of buying the put option.
The Fund may purchase call options to hedge against an increase in the price
of securities that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.
The Fund may also purchase put and call options to enhance its current
return.
RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve certain
risks, including the risks that the Investment Adviser will not forecast market
movements correctly, that the Fund may be unable at times to close out such
positions, or that hedging transactions may not accomplish their purpose because
of imperfect market correlations.
An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. There is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close out
an option position. As a result, the Fund may be forced to continue to hold, or
to purchase at a fixed price, a security on which it has sold an option at a
time when the Investment Adviser believes it is inadvisable to do so.
Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict the Fund's use of
options. The exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an investor or group
of investors acting in concert. It is possible that the Fund and other clients
of the Investment Adviser may be considered such a group. These position limits
may restrict the Fund's ability to purchase or sell options on particular
securities.
Options which are not traded on national securities exchanges may be closed
out only with the other party to the option transaction. For that reason, it may
be more difficult to close out unlisted options than listed options.
Furthermore, unlisted options are not subject to the protection afforded
purchasers of listed options by The Options Clearing Corporation.
Government regulations, particularly the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code, may also
restrict the Fund's use of options.
B-3
<PAGE>
SPECIAL EXPIRATION PRICE OPTIONS
The Fund may purchase over-the-counter ("OTC") put and call options with
respect to specified securities ("special expiration price options") pursuant to
which the Fund in effect may create a custom index relating to a particular
industry or sector that the Investment Adviser believes will increase or
decrease in value generally as a group. In exchange for a premium, the
counterparty, whose performance is guaranteed by a broker-dealer, agrees to
purchase (or sell) a specified number of shares of a particular stock at a
specified price and further agrees to cancel the option at a specified price
that decreases straight line over the term of the option. Thus, the value of the
special expiration price option is comprised of the market value of the
applicable underlying security relative to the option exercise price and the
value of the remaining premium. However, if the value of the underlying security
increases (or decreases) by a pre-negotiated amount, the special expiration
price option is canceled and becomes worthless. A portion of the dividends
during the term of the option are applied to reduce the exercise price if the
options are exercised. Brokerage commissions and other transaction costs will
reduce the Fund's profits if the special expiration price options are exercised.
The Fund will not purchase special expiration price option with respect to more
than 25% of the value of its net assets, and will limit premiums paid for such
options in accordance with state securities laws.
FUTURE CONTRACTS
INDEX FUTURES CONTRACTS AND OPTIONS. The Fund may buy and sell index
futures contracts and related options for hedging purposes or to attempt to
increase investment return. A stock index futures contract is a contract to buy
or sell units of a stock index at a specified future date at a price agreed upon
when the contract is made. A unit is the current value of the stock index.
The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P 100
Index") is composed of 100 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 100 Index assigns relative weightings to
the common stocks included in the Index, and the Index fluctuates with changes
in the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if the Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).
Positions in index futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures.
In order to hedge its investments successfully using futures contracts and
related options, the Fund must invest in futures contracts with respect to
indexes or sub-indexes the movements of which will, in the Investment Adviser's
judgment, have a significant correlation with movements in the prices of the
Fund's securities.
B-4
<PAGE>
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in a index future contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.
As an alternative to purchasing and selling call and put options on index
futures contracts, the Fund may purchase and sell call and put options on the
underlying indexes themselves to the extent that such options are traded on
national securities exchanges. Index options are similar to options on
individual securities in that the purchaser of an index option acquires the
right to buy (in the case of a call) or sell (in the case of a put), and the
writer undertakes the obligation to sell or buy (as the case may be), units of
an index at a stated exercise price during the term of the option. Instead of
giving the right to take or make actual delivery of securities, the holder of an
index option has the right to receive a cash "exercise settlement amount." This
amount is equal to the amount by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of the exercise, multiplied by
a fixed "index multiplier."
The Fund may purchase or sell options on stock indices in order to close out
outstanding positions in options on stock indices which it has purchased. The
Fund may also allow such options to expire unexercised.
Compared to the purchase or sale of futures contracts, the purchase of call
or put options on an index involves less potential risk to the Fund because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.
MARGIN PAYMENTS. When the Fund purchases or sells a futures contract, it is
required to deposit with its custodian an amount of cash, U.S. Treasury bills,
or other permissible collateral equal to a small percentage of the amount of the
future contract. This amount is known as "initial margin." The nature of the
initial margin is different from that of margin in security transactions in that
it does not involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that is returned
to the Fund upon termination of the contract, assuming the Fund satisfies its
contractual obligations.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when the Fund sells a futures contract and the price of the
underlying index rises above the delivery price, the Fund's position declines in
value. The Fund then pays the broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the value of
the index underlying the futures contract. Conversely, if the price of the
underlying index falls below the delivery price of the contract, the Fund's
future
B-5
<PAGE>
position increases in value. The broker then must make a variation margin
payment equal to the difference between the delivery price of the futures
contract and the value of the index underlying the futures contract.
When the Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.
SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS
LIQUIDITY RISKS. Positions in futures contracts may be closed out only on
an exchange or board of trade which provides a secondary market for such
futures. Although the Fund intends to purchase or sell futures only on exchanges
or boards of trade where there appears to be an active secondary market, there
is no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, the Fund would continue to be required to make daily variation margin
payments. However, in the event financial futures are used to hedge portfolio
securities, such securities will not generally be sold until the financial
futures can be terminated. In such circumstances, an increase in the price of
the portfolio securities, if any, may partially or completely offset losses on
the financial futures.
The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the Fund generally will purchase only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option or at any particular
time. In the event no such market exists for particular options, it might not be
possible to effect closing transaction in such options, with the result that the
Fund would have to exercise the options in order to realize any profit.
HEDGING RISKS. There are several risks in connection with the use by the
Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying securities or
index or movements in the prices of the Fund's securities which are the subject
of a hedge. The Investment Adviser will attempt to reduce the risk by purchasing
and selling, to the extent possible, futures contracts and related options on
securities and indexes the movements of which will, in its judgment, correlate
closely with movements in the prices of the underlying securities or index and
the Fund's portfolio securities sought to be hedged.
Successful use of futures contracts and options by the Fund for hedging
purposes is also subject to the Investment Adviser's ability to predict
correctly movements in the direction of the market. It is possible that, where
the Fund has purchased puts on futures contracts to hedge its portfolio against
a decline in the market, the securities or index on which the puts are purchased
may increase in value and the value of securities held in the portfolio may
decline. If this occurred, the Fund would lose money on the puts and also
experience a decline in value in its portfolio securities. In addition, the
prices of futures, for a number of reasons, may not correlate perfectly with
movements in the underlying securities or index due to certain market
distortions. All participants in the futures market are subject to margin
deposit requirements. Such requirements may cause investors to close futures
contracts through offsetting transactions which could distort the normal
relationship between the
B-6
<PAGE>
underlying security or index and futures markets. Further, the margin
requirements in the futures markets are less onerous than margin requirements in
the securities markets in general, and as a result the futures markets may
attract more speculators than the securities markets do. Increased participation
by speculators in the futures markets may also cause temporary price
distortions. Due to the possibility of price distortion, even a correct forecast
of general market trends by the Investment Adviser may not result in a
successful hedging transaction over a short time period.
OTHER RISKS. The Fund will incur brokerage fees in connection with its
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks, those
transactions themselves entail certain other risks. Thus, while the Fund may
benefit from the use of futures and related options, unanticipated changes in
market movements may result in a poorer overall performance for the Fund than if
it had not entered into any futures contracts or options transactions. Moreover,
in the event of an imperfect correlation between the futures position and the
portfolio position which is intended to be protected, the desired protection may
not be obtained and the Fund may be exposed to risk of loss.
INDEXED SECURITIES
The Fund may purchase securities whose prices are indexed to the prices of
other securities, securities indices or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic. The performance of indexed securities depends to a
great extent on the performance of the security or other instrument to which
they are indexed. At the same time, indexed securities are subject to the credit
risks associated with the issuer of the security, and their values may decline
substantially if the issuer' creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
Government agencies.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. A repurchase agreement is a
contract under which the Fund acquires a security for a relatively short period
(usually not more than one week) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). The Fund presently intends to
enter into repurchase agreements only with member banks of the Federal Reserve
System and securities dealers meeting certain criteria as to creditworthiness
and financial condition established by the Company's Board of Directors and only
with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high-quality, short-term debt obligations. Repurchase
agreements may also be viewed as loans made by the Fund which are collateralized
by the securities subject to repurchase. The Investment Adviser will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the total amount of the
repurchase obligation, including the interest factor. If the seller defaults,
the Fund could realize a loss on the sale of the underlying security to the
extent that the proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest. In addition, if the
seller should be involved in bankruptcy or insolvency proceedings, the Fund may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Fund is treated as an unsecured creditor and
required to return the underlying collateral to the seller's estate.
B-7
<PAGE>
LEVERAGE
Leveraging the Fund creates an opportunity for increased net income but, at
the same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of the Fund's shares and in the yield
on the Fund's portfolio. Although the principal of such borrowings will be
fixed, the Fund's assets may change in value during the time the borrowing is
outstanding. Since any decline in value of the Fund's investments will be borne
entirely be the Fund's shareholders (and not by those persons providing the
leverage to the Fund), the effect of leverage in a declining market would be a
greater decrease in net asset value than if the Fund were not so leveraged.
Leveraging will create an interest expenses for the Fund, which can exceed the
investment return from the borrowed funds. To the extent the investment return
derived from securities purchased with borrowed funds exceeds the interest the
Fund will have to pay, the Fund's investment return will be greater than if
leveraging were not used. Conversely, if the investment return from the assets
retained with borrowed funds is not sufficient to cover the cost of leveraging,
the investment return of the Fund will be less than if leveraging were not used.
REVERSE REPURCHASE AGREEMENTS
In connection with its leveraging activities, the Fund may enter into
reverse repurchase agreements, in which the Fund sells securities and agrees to
repurchase them at a mutually agreed date and time. A reverse repurchase
agreement may be viewed as a borrowing by the Fund, secured by the security
which is the subject of the agreement. In addition to the general risks involved
in leveraging, reverse repurchase agreements involve the risk that, in the event
of the bankruptcy or insolvency of the Fund's counterparty, the Fund would be
unable to recover the security which is the subject of the agreement, that the
amount of cash or other property transferred by the counterparty to the Fund
under the agreement prior to such insolvency or bankruptcy is less than the
value of the security subject to the agreement, or that the Fund may be delayed
or prevented, due to such insolvency or bankruptcy, from using such cash or
property or may be required to return it to the counterparty or its trustee or
receiver.
SECURITIES LENDING
The Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. Government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities of any Fund loaned will not at any time exceed
one-third (or such other limit as the Company's Board of Directors may
establish) of the total assets of the Fund. 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 that it will be paid a premium for the loan.
Before the Fund enters into a loan, the Investment Adviser considers all
relevant facts and circumstances, including the creditworthiness of the
borrower. The risks in lending portfolio securities, as with other extensions of
credit, consist of possible delay in recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially. Although
voting rights or rights to consent with respect to the loaned securities pass to
the borrower, the Fund retains the right to call the loans at any time on
reasonable notice, and it will do so in order that the securities may be voted
by the Fund if holders of such securities are asked to vote upon or consent to
matters materially affecting the investment. The Fund will not lend portfolio
securities to borrowers affiliated with the Fund.
B-8
<PAGE>
SHORT SALES
The Fund may seek to hedge investments or realize additional gains through
short sales. Short sales are transactions in which the Fund sells a security it
does not own, in anticipation of a decline in the market value of that security.
To complete such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by the Fund. Until the security is replaced, the Fund is
required to repay the lender any dividends or interest that accrue during the
period of the loan. To borrow the security, the Fund also may be required to pay
a premium, which would increase the cost of the security sold. The net proceeds
of the short sale will be retained by the broker (or by the Fund's custodian in
a special custody account), to the extent necessary to meet margin requirements,
until the short position is closed out. The Fund also will incur transaction
costs in effecting short sales.
The Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses the Fund may be required to pay in connection
with a short sale. An increase in the value of a security sold short by the Fund
over the price at which it was sold short will result in a loss to the Fund, and
there can be no assurance that the Fund will be able to close out the position
at any particular time or at an acceptable price.
ZERO-COUPON DEBT SECURITIES
Zero-coupon securities in which the Fund may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity.
Zero-coupon securities usually trade at a deep discount from their face or par
value and are subject to greater market value fluctuations from changing
interest rates than debt obligations of comparable maturities which make current
distributions of interest. As a result, the net asset value of shares of a
mutual fund investing in zero-coupon securities may fluctuate over a greater
range than shares of other mutual funds investing in securities making current
distributions of interest and having similar maturities.
When debt obligations have been stripped of their unmatured interest coupons
by the holder, the stripped coupons are sold separately. The principal is sold
at a deep discount because the buyer receives only the right to receive a future
fixed payment on the security and does not receive any rights to periodic cash
interest payments. Once stripped or separated, the principal and coupons may be
sold separately. Typically, the coupons are sold separately or grouped with
other coupons with like maturity dates and sold in such bundled form. Purchasers
of stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero-coupon securities issued directly by the
obligor.
Zero-coupon securities allow an issuer to avoid the need to generate cash to
meet current interest payments. Even though zero-coupon securities do not pay
current interest in cash, the Fund is nonetheless required to accrue interest
income on them and to distribute the amount of that interest at least annually
to shareholders. Thus, the Fund could be required at times to liquidate other
investments in order to satisfy its distribution requirements.
B-9
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted certain Fundamental Restrictions that may not be
changed except by a vote 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, a "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 asset in any one industry
(securities issued or guaranteed by the United States Government, its
agencies or instrumentalities are not considered to represent industries);
2. Borrow money, except from banks for temporary or emergency purposes
or as required in connection with otherwise permissible leverage activities
(as described elsewhere in the Fund's Prospectus and in this Statement of
Additional Information) and then only in an amount not in excess of
one-third of the value of the Fund's total assets;
3. Purchase or sell commodities or commodity contracts, except as
required in connection with otherwise permissible options, futures and
commodity activities (as described elsewhere in the Fund's Prospectus and in
this Statement of Additional Information);
4. Make loans of its assets to other parties, including loans of its
securities (although it may, subject to the other restrictions or policies
stated in the Fund's Prospectus and in this Statement of Additional
Information, purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase agreement is
deemed to be a loan), in excess of one-third of its total assets;
5. Issue senior securities, as defined in the Investment Company Act,
except as required in connection with otherwise permissible options, futures
and leverage activities (as described elsewhere in the Fund's Prospectus and
in this Statement of Additional Information);
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;
7. Underwrite securities of other issuers, except insofar as it may be
deemed an underwriter under the Securities Act of 1933, as amended (the
"Securities Act") in selling certain of its portfolio securities;
In addition to the foregoing fundamental restrictions, the Fund has adopted
certain Non-Fundamental Restrictions, which may be changed by the Company's
Board of Directors without the approval of the Fund's shareholders. As
non-fundamental policies, the Fund may not:
1. Make short sales or purchases on margin, although it may obtain
short-term credit necessary for the clearance of purchases and sales of its
portfolio securities, and except as required in connection with otherwise
permissible options, futures, short selling and leverage activities (as
described elsewhere in the Fund's Prospectus and in this Statement of
Additional Information);
B-10
<PAGE>
2. Mortgage, hypothecate, or pledge any of its assets as security for
any of its obligations, except as required to secure otherwise permissible
borrowings (including reverse repurchase agreements), short sales, financial
options and other hedging activities;
3. Invest in securities issued by other investment companies in excess
of limitations imposed by applicable law;
4. Make investments for the purpose of exercising control or
management;
5. Invest more than 15% of its assets in illiquid securities;
6. 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.
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 the 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: (a) at least 98% of its taxable ordinary income (not taking into
account any capital gains or losses) for the calendar year; (b) 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 (c) 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
B-11
<PAGE>
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.
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
B-12
<PAGE>
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 1.3% 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, 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.
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
B-13
<PAGE>
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, 1997, 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 on 60 days' written notice to
the Administrator and by the Administrator on 90 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 9095, 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
B-14
<PAGE>
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.
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.
B-15
<PAGE>
SPECIAL PURCHASE PLANS
AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares may be
purchased through an automatic investment plan. Under such a plan, the investor
authorizes the Fund to withdraw a specific amount (minimum dollars $50 per
withdrawal) from the investor's bank account and to invest such amount in shares
of the Fund. Such purchases are normally made on the 5th day 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;
(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 a 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.
B-16
<PAGE>
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 shares of the Fund, The Jundt Growth Fund, Inc. and Jundt
U.S. Emerging Growth Fund. 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 of
Intention. 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 of Intention 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 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 day of the month (or on the
preceding business day if the 20th day 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 a FESC would normally be disadvantageous to the investor because
of
B-17
<PAGE>
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 a 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.
The portfolio securities in which the Fund invests fluctuate in value, and
hence the Fund's net asset value per share also fluctuates.
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
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.
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.
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
B-18
<PAGE>
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.
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 Adviser's
personnel and their reputation in the financial community.
B-19
<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, Chief
Executive Officer and a portfolio manager of The
Jundt Growth Fund, Inc. since 1991 and the
Company since 1995. 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
807 East Highland View Ct. School of Law, since 1991; previously Senior
Spokane, WA 99223-6210 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 and the
Company since 1995. 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 1995.
Troy, MI 48084 Chairman and Chief Executive Officer of The
Museum Company (retailing) and Alva Replicas
Company (manufacturer of statuary and sculpture)
from 1989 to 1995; from 1984 to 1989, Chairman
and Chief Executive Officer of The Grand Union
Company (grocery store chain). Director of The
Jundt Growth Fund, Inc. since 1991 and the
Company since 1995. Also a director of Jamesway
Corp. (discount retailing) as well as a private
company.
</TABLE>
B-20
<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 and the Company since 1995. 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) in Louisville, Kentucky.
Suite 310 Director of The Jundt Growth Fund, Inc. since
Louisville, KY 40207 1991 and the Company since 1995. 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 with the Investment Adviser
1550 Utica Avenue South since May 1989. Portfolio manager with AMEV
Suite 950 Advisers, Inc., St. Paul, Minnesota, from 1983
Minneapolis, MN 55416 to 1989. Vice President, Treasurer and a
portfolio manager of The Jundt Growth Fund, Inc.
since 1991 and the Company since 1995.
James E. Nicholson Secretary Partner with the law firm of Faegre & Benson LLP,
2200 Norwest Center Minneapolis, Minnesota, which has served as
Minneapolis, MN 55402 general counsel to the Investment Adviser since
its inception. Secretary of The Jundt Growth
Fund, Inc. since 1991 and the Company since
1995.
</TABLE>
- ------------------------
(1) Director who is an "interested person" of the Fund, as defined in the
Investment Company Act.
B-21
<PAGE>
(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.
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 $13,000 per year plus
$1,300 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, 1997):
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.............................. 15,600 None
</TABLE>
COUNSEL AND AUDITORS
Faegre & Benson LLP, 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 Company
for its fiscal years ending December 31, 1996 and 1997, 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
B-22
<PAGE>
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 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 or
the Securities Exchange Act of 1934, as amended, 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 15 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 90 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 15 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% 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 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
B-23
<PAGE>
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.
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-24
<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 U.S. Emerging Growth Fund, Series A of
Jundt Funds, Inc. (the "Registrant"), are included in part and incorporated by
reference in part in Part B of this Registration Statement. No financial
statements are required in connection with Jundt Opportunity Fund, Series B of
the Registrant.
(b) Exhibits:
<TABLE>
<C> <S>
1 Articles of Incorporation and Certificates of Designation
2 Bylaws
3 Not applicable
4 Not applicable
5.1 Jundt U.S. Emerging Growth Fund Investment Advisory
Agreement*
5.2 Jundt Opportunity Fund Investment Advisory Agreement
6.1 Jundt U.S. Emerging Growth Fund Distribution Agreement**
6.2 Jundt Opportunity Fund Distribution Agreement
6.3 Form of Selected Dealer Agreement
7 Not applicable
8 Custodian Contract
9.1 Transfer Agency and Service Agreement
9.2 Administration Agreement
10 Opinion and Consent of Faegre & Benson LLP
11 Consent of KPMG Peat Marwick LLP
12 Not applicable
13 Not applicable
14 Not applicable
15.1 Jundt U.S. Emerging Growth Fund Class B Distribution Plan**
15.2 Jundt U.S. Emerging Growth Fund Class C Distribution Plan**
15.3 Jundt U.S. Emerging Growth Fund Class D Distribution Plan**
15.4 Jundt Opportunity Fund Class B Distribution Plan
15.5 Jundt Opportunity Fund Class C Distribution Plan
15.6 Jundt Opportunity Fund Class D Distribution Plan
16 Not applicable
17 Not applicable
18.1 Jundt U.S. Emerging Growth Fund Rule 18f-3 Plan**
</TABLE>
C-1
<PAGE>
<TABLE>
<C> <S>
18.2 Jundt Opportunity Fund Rule 18f-3 Plan
19 Code of Ethics
20 Powers of Attorney**
</TABLE>
- ------------------------
*Incorporated by reference to Exhibit 5 to the Registrant's Pre-Effective
Amendment No. 1 to Registration Statement on Form N-1A filed on December 22,
1995 (File No. 33-99080).
**Incorporated by reference to the like numbered Exhibit to the Registrant's
Pre-Effective Amendment No. 1 to Registration Statement on Form N-1A filed on
December 22, 1995 (File No. 33-99080).
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.
ITEM 26 -- NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of the
Registrant as of November 29, 1996:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- -------------------------------------------------------------- --------------
<S> <C>
Series A, Class A Common Shares, par value $.01 per share..... 33
Series A, Class B Common Shares, par value $.01 per share..... 225
Series A, Class C Common Shares, par value $.01 per share..... 73
Series A, Class D Common Shares, par value $.01 per share..... 78
Series B, Class A Common Shares, par value $.01 per share..... None
Series B, Class B Common Shares, par value $.01 per share..... None
Series B, Class C Common Shares, par value $.01 per share..... None
Series B, Class D Common Shares, par value $.01 per share..... None
</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.
C-2
<PAGE>
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, 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, Jundt
Associates, Inc. serves as the investment adviser to The Jundt Growth Fund, Inc.
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.
C-3
<PAGE>
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) The Registrant hereby undertakes to file a post-effective amendment with
respect to its Series B Common Shares, using financial statements which need not
be certified, within four to six months from the effective date of the
registration of said Series B Common Shares.
(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-4
<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
Post-Effective Amendment to its 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 3rd day of December, 1996.
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
Post-Effective Amendment to 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 3, 1996
James R. Jundt Executive Officer)
/s/ DONALD M. LONGLET Vice President and Treasurer
------------------------------------------- (Principal Financial and December 3, 1996
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 3, 1996
ATTORNEY-IN-FACT
(Pursuant to Powers of Attorney filed with Pre-Effective
Amendment No. 1 to this Registration Statement on Form N-1A
(File No. 33-99080).)
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
METHOD
NUMBER AND NAME OF EXHIBIT OF FILING
- -------------------------------------------------------- --------------------
<S> <C> <C>
1 Articles of Incorporation and Certificates of
Designation Filed Electronically
2 Bylaws Filed Electronically
3 Not applicable Filed Electronically
4 Not applicable Filed Electronically
5.1 Jundt U.S. Emerging Growth Fund Investment
Advisory Agreement* Incorporated by
Reference
5.2 Jundt Opportunity Fund Investment Advisory
Agreement Filed Electronically
6.1 Jundt U.S. Emerging Growth Fund Distribution
Agreement** Incorporated by
Reference
6.2 Jundt Opportunity Fund Distribution Agreement Filed Electronically
6.3 Form of Selected Dealer Agreement Filed Electronically
7 Not applicable Filed Electronically
8 Custodian Contract Filed Electronically
9.1 Transfer Agency and Service Agreement Filed Electronically
9.2 Administration Agreement Filed Electronically
10 Opinion and Consent of Faegre & Benson LLP Filed Electronically
11 Not applicable Filed Electronically
12 Not applicable Filed Electronically
13 Not applicable Filed Electronically
14 Not applicable Filed Electronically
15.1 Jundt U.S. Emerging Growth Fund Class B
Distribution Plan** Incorporated by
Reference
15.2 Jundt U.S. Emerging Growth Fund Class C
Distribution Plan** Incorporated by
Reference
15.3 Jundt U.S. Emerging Growth Fund Class D
Distribution Plan** Incorporated by
Reference
15.4 Jundt Opportunity Fund Class B Distribution Plan Filed Electronically
15.5 Jundt Opportunity Fund Class C Distribution Plan Filed Electronically
15.6 Jundt Opportunity Fund Class D Distribution Plan Filed Electronically
16 Not applicable Filed Electronically
17 Not applicable Filed Electronically
18.1 Jundt U.S. Emerging Growth Fund Rule 18f-3
Plan** Incorporated by
Reference
18.2 Jundt Opportunity Fund Rule 18f-3 Plan Filed Electronically
19 Code of Ethics Filed Electronically
20 Powers of Attorney** Incorporated by
Reference
</TABLE>
- ------------------------
* Incorporated by reference to Exhibit 5 to the Registrant's Pre-Effective
Amendment No. 1 to Registration Statement on Form N-1A filed on December 22,
1995 (File No. 33-99080).
** Incorporated by reference to the like numbered Exhibit to the Registrant's
Pre-Effective Amendment No. 1 to Registration Statement on Form N-1A filed on
December 22, 1995 (File No. 33-99080).
<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.
-2-
<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.
-3-
<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;
-4-
<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
-5-
<PAGE>
willful 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
-6-
<PAGE>
Minneapolis, Minnesota 55402
-7-
<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
-8-
<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
<PAGE>
determining 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
<PAGE>
CERTIFICATE OF DESIGNATION
OF
SERIES B COMMON SHARES
AND CLASS A, CLASS B, CLASS C AND CLASS D SHARES THEREOF
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 3, 1996:
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 (individually, a "Share" and, collectively, the "Shares," as set
forth in the Corporation's Articles of Incorporation (the "Articles").
WHEREAS, ten billion of the Shares have been designated in the
Articles as Series A Common Shares, and the remaining nine hundred ninety
billion authorized Shares are undesignated as to series (the "Undesignated
Shares").
WHEREAS, pursuant to Section 5(a) of the Articles: the Undesignated
Shares may be issued in such series (individually, a "Series" and,
collectively, together with any other designated series, the "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; and each Series of Shares which the Board of Directors
may establish 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.
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
(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.
NOW, THEREFORE, BE IT RESOLVED, that ten billion shares of the
Undesignated Shares be, and they hereby are, designated as Series B Common
Shares, which shall evidence interests in a separate and distinct portion
of the Corporation's assets taking the form of a separate portfolio of
investment securities, cash and other assets, and the remaining nine
hundred eighty billion authorized Shares of the Corporation shall remain
undesignated as to Series.
FURTHER RESOLVED, that of the ten billion Series B Common Shares
designated herein, one billion are hereby designated as Series B, Class A
Common Shares, one billion are hereby designated as Series B, Class B
Common Shares, one billion are hereby designated as Series B, Class C
Common Shares and one billion are hereby designated as Series B, Class D
Common Shares, and the remaining six billion Series B Common Shares shall
remain undesignated as to Class.
<PAGE>
FURTHER RESOLVED, that the Series B, Class A Common Shares, Series B,
Class B Common Shares, Series B, Class C Common Shares and and Series B,
Class D Common Shares designated by these resolutions shall have the
relative rights and preferences set forth in the Articles. Without
limiting the generality of this resolution, and 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 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 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 3rd day of December, 1996.
-------------------------------
James E. Nicholson, Secretary
-2-
<PAGE>
BYLAWS
OF
JUNDT FUNDS, INC.
(AS AMENDED THROUGH DECEMBER 3, 1996)
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." The name of the series represented by the
Corporation's Series B Common Shares shall be "Jundt Opportunity 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
-2-
<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.
-3-
<PAGE>
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.
-4-
<PAGE>
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.
-5-
<PAGE>
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
-6-
<PAGE>
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.
-7-
<PAGE>
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
-8-
<PAGE>
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.
-9-
<PAGE>
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.
-10-
<PAGE>
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
-11-
<PAGE>
(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.
-12-
<PAGE>
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.
-13-
<PAGE>
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.
-14-
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, is made and entered into this 3rd day of December, 1996, by
and between Jundt Opportunity 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 1.30%
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
-2-
<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 3, 1998, 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".
-3-
<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:
---------------------------
-4-
<PAGE>
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 3rd day of December, 1996, by and between Jundt
Opportunity 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
-2-
<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.
-3-
<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
------------------------------------
-4-
<PAGE>
SELECTED DEALER AGREEMENT
Ladies and Gentlemen: January 1, 1997
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 conclusively evidence your agreement to be
bound thereby. We shall make a reasonable effort to notify
<PAGE>
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 which are not networked, 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.
-2-
<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 monthly basis within ten business
days following the end of the month 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.
-3-
<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 10 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 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 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: , 1997 U.S. GROWTH INVESTMENTS, INC.
---------------
By:
--------------------------------
Thomas L. Press, President
- --------------------------------------
(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
(REVISED JANUARY 1, 1997)
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
Jundt Opportunity Fund -- Class B Shares
Jundt Opportunity Fund -- Class C Shares
Jundt Opportunity 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>
AGREEMENT
AGREEMENT made this 3rd day of December, 1996 by and between Jundt
Funds, Inc., a Minnesota corporation (the "Fund"), with respect to Jundt
Opportunity Fund, a series of the Company (the "Opportunity Fund"), and Norwest
Bank Minnesota, N.A., a National Banking Association (the "Custodian").
W I T N E S S E T H
WHEREAS, the parties are parties to that certain Custody Agreement
dated December 4, 1995 (the "Agreement"); and
WHEREAS, the parties intend that the provisions of the Agreement apply
with respect to the Opportunity Fund.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the Fund and the Custodian agree as follows:
1. The provisions of the Agreement shall apply in all respects to
the Opportunity Fund.
2. The Agreement shall continue to be in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
JUNDT FUNDS, INC.
By:
------------------------------
Title:
NORWEST BANK MINNESOTA, N.A.
By:
--------------------------------
Title:
<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 l7f-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 l7f-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.
<PAGE>
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 /s/ James R. Jundt By /s/ Jim G. Burke
- ------------------------------ -------------------------------
ATTEST ATTEST
By /s/ Charlotte Bohmer By
------------------------------ -------------------------------
<PAGE>
NORWEST CUSTODY FEE SCHEDULE
FOR THE
JUNDT ASSOCIATES, INCORPORATED RELATIONSHIP
JANUARY 1, 1996
RATE
ANNUAL SAFEKEEPING CHARGES
Fee Per Issue Held $5.00
Fee Per Market Value $0.0001
Fee Per Market Value, Global Securities $0.0012
TRANSACTION CHARGES (PER TRANSACTION)
Purchase/Sale/Maturity/Call/Deposit/Withdrawal/Corporate Action $10.00
Global Purchase/Sale/Maturity $100.00
Money Movement $10.00
MISCELLANEOUS CHARGES
Norwest ACCESS (Annual) $3,600.00
On-Line Connection Charge .20/Minute
OUT OF POCKET CHARGES
Normal out-of-pocket (postage, shipping, Brinks and other customary items)
will be billed to the client.
EXTRAORDINARY SERVICES
Fees will be charged for extraordinary services requested of Norwest.
REVIEW PERIOD
Fees are subject to yearly review on the anniversary date of
the Custody Agreement and are billed on a monthly basis.
<PAGE>
AGREEMENT
AGREEMENT made this 3rd day of December, 1996 by and between Jundt Funds,
Inc., a Minnesota corporation (the "Fund"), with respect to Jundt Opportunity
Fund, a series of the Company (the "Opportunity Fund"), and Investors Fiduciary
Trust Company, a Missouri trust company ("IFTC").
W I T N E S S E T H
WHEREAS, the parties are parties to that certain Transfer Agency and
Service Agreement dated December 28, 1995 (the "Agreement"); and
WHEREAS, the parties intend that the provisions of the Agreement apply with
respect to the Opportunity Fund.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and IFTC agree as follows:
1. The provisions of the Agreement shall apply in all respects to the
Opportunity Fund.
2. The Agreement shall continue to be in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JUNDT FUNDS, INC.
By:
-------------------------------
Title:
INVESTORS FIDUCIARY TRUST COMPANY
By:
--------------------------------
Title:
M1:0202756.01
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AGREEMENT is made as of the 28TH day of December, 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:
1. 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
2
<PAGE>
confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing
and 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
3
<PAGE>
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.
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
4
<PAGE>
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.
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;
5
<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.
6
<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
7
<PAGE>
indemnified in acting upon any paper or document finished by or on
behalf of the Fund, reasonably 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
8
<PAGE>
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 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
<PAGE>
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 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: /s/ James R. Jundt
--------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By: /s/ ILLEGIBLE
-------------------------------
12
<PAGE>
INVESTORS FIDUCIARY TRUST COMPANY
JUNDT FUNDS, INC.
FEE SCHEDULE
EFFECTIVE FROM DATE OF ACTIVATION THROUGH DECEMBER 31, 1997
1. TRANSFER AGENCY
ACCOUNT MAINTENANCE FEES (per open account within a fund) $10.00-per year*
An annual minimum account maintenance fee applies to each fund/cusip at the
following rates:
First Cusip(within a portfolio) $36,000 per year*
Subsequent Cusips(within an existing portfolio) $21,000 per year*
Upon the introduction of a new cusip, the first year's minimum account
maintenance fee will be reduced as follows:
<TABLE>
<CAPTION>
Months Months Months
1-4 5-8 9-12
-----------------------------------------
<S> <C> <C> <C> <C>
First Cusip (within a portfolio) $750.00 $1,500.00 $2,250.00 per month, per cusip
Subsequent Cusips (within an existing portfolio) $437.50 $875.00 $1,312.50 per month, per cusip
</TABLE>
The full minimum will be charged beginning on the cusip's one year
anniversary. The reduced minimum account maintenance fee does not apply
to the Jundt Growth Fund, Class A.
<TABLE>
<CAPTION>
OTHER ACCOUNT FEES (IF APPLICABLE)
<S> <C> <C>
Closed Account Fee (per closed account within a fund) $ 1.80 per year*
12B-1 Processing Fee (per open account within a 12B-1 fund) $ 0.60 per year*
CDSC Processing Fee (per open account within a CDSC fund) $ 0.60 per year*
Investor Processing Fee (per investor link) $ 1.80 per year*
ACTIVIY FEES
New Account Set-Up $ 4.00 each
Manual Financial and Maintenance $ 1.50 each
Transactions
ACH Transactions $ 0.50 each
Omnibus Transactions $ 5.00 each
Shareholder/Dealer Telephone Calls $ 1.50 each
Shareholder/Dealer Correspondence $ 3.00 each
Research Requests $ 3.00 each
FULFILLMENT SERVICES
Record Maintenance Fees $ 0.35 each
Fulfillment Calls Serviced $ 1.50 each
Fulfillment Mailers Serviced $ 1.50 each
Conversion Fee (one-time fee) $ 20,000
</TABLE>
* FEES ARE BILLED MONTHLY AT 1/12 OF THE ANNUAL RATE.
JANUARY 17, 1996 PAGE 1 OF 2
<PAGE>
JUNDT FUNDS, INC.
FEE SCHEDULE CONTINUED
II. NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include out-of-pocket expenses that would
be incurred by IFTC on the client's behalf.
B. The fees stated above are exclusive of terminal equipment required in
the client's location(s) and communication line costs.
C. Any fees or out-of-pocket expenses not paid within 30 days of the date
of the original invoice will be charged a late payment fee of 1% per
month until payment of the fees are received by IFTC.
D. The above fee schedule is applicable for selections made and
communicated within 90 days of the date of this proposal. The fees
are guaranteed commencing on the effective date of the service
agreement between IFTC and the client through December 31, 1997. All
changes to the fee schedule will be communicated in writing at least
60 days prior to their effective date.
/s/ ILLEGIBLE /s/ James R. Jundt
- ------------------------------------- ------------------------------
Investors Fiduciary Trust Company Jundt Funds, Inc.
3-15-96 March 4, 1996
- ------------------------------------- -----------------------------
Date Date
JANUARY 17,1996 PAGE 2 OF 2
<PAGE>
AGREEMENT
AGREEMENT made this 3rd day of December, 1996 by and between Jundt Funds,
Inc., a Minnesota corporation (hereinafter called the "Company"), with respect
to Jundt Opportunity Fund, a series of the Company (hereinafter the "Opportunity
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 parties are parties to that certain Administration
Agreement dated December 4, 1995, as modified by an Addendum dated December
4, 1995 and a Second Addendum dated October 10, 1996 (collectively, the
"Agreement"); and
WHEREAS, the parties intend that the provisions of the Agreement apply
with respect to the Opportunity Fund.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the Company and the Administrator agree as
follows:
1. The provisions of the Agreement shall apply in all respects to
the Opportunity Fund, and the Opportunity Fund shall be considered a Fund under
the Agreement.
2. The Agreement shall continue to be in full force and effect.
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:
<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-BB 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
4
<PAGE>
Administrator is entitled 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:
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:
<PAGE>
SECOND ADDENDUM
TO THE
ADMINISTRATION AGREEMENT
This Second Addendum to the Administration Agreement dated December 4,
1995 (the "Administration Agreement") 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"),
modifies the Administration Agreement for the period January 1, 1997 through
December 31, 1997 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-lA, 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.
This Second Addendum, as of its effectiveness on January 1, 1997, will
supersede and replace the Addendum to the Administration Agreement executed and
delivered by the parties as of December 4, 1995.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum on
the 10th day of October, 1996.
JUNDT FUNDS, INC.
By
---------------------------
James R. Jundt, Chairman
PRINCETON ADMINISTRATORS, L.P.
By: Princeton Services, Inc.,
General Partner
By
---------------------------
Stephen M.M. Miller
<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 B, Class A common shares;
Series B, Class B common shares; Series B, Class C common shares; and Series B,
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 __, 1996
Very truly yours,
/s/ Faegre & Benson LLP
Faegre & Benson LLP
<PAGE>
CLASS B DISTRIBUTION PLAN
OF
JUNDT OPPORTUNITY FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 3rd day of December, 1996, by and
between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and on
behalf of Jundt Opportunity 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
<PAGE>
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. 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, 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 B 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 B 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.
2
<PAGE>
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.
12. 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:
3
<PAGE>
CLASS C DISTRIBUTION PLAN
OF
JUNDT OPPORTUNITY FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 3rd day of December, 1996, by and
between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and on
behalf of Jundt Opportunity 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
<PAGE>
shares. Such expenditures may 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, 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 C 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 C 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.
-2-
<PAGE>
11. 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:
-3-
<PAGE>
CLASS D DISTRIBUTION PLAN
OF
JUNDT OPPORTUNITY FUND
(A SERIES OF JUNDT FUNDS, INC.)
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the 3rd day of December, 1996, by and
between Jundt Funds, Inc., a Minnesota corporation (the "Company"), for and on
behalf of Jundt Opportunity 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
<PAGE>
its 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, 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.
6. 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 5.
7. 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.
8. 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 5 hereof, and no material amendment to the
Plan shall be made unless approved in the manner provided for approval and
annual renewal in paragraph 5 hereof.
9. 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.
10. 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:
-3-
<PAGE>
JUNDT OPPORTUNITY 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 Opportunity 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
<PAGE>
third 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)(1) 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:
Amount of Sales Load As A Sales Load As A
Transaction Percentage Percentage of
at Offering Price of Offering Price Net Asset Value
----------------- ----------------- ---------------
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%
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.
-3-
<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 by 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.
-2-
<PAGE>
(e) "CONTROL" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
(f) "DISINTERESTED DIRECTOR" means directors or trustees of a Fund who are
not "interested persons," as defined in the 1940 Act, of a 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 a Fund, Jundt
or USG.
(j) "PERSONAL SECURITIES TRANSACTION" means a transaction in a Security in
which a person has or thereby acquires Beneficial Ownership. A person shall be
considered to be "engaging in" or "effecting" a Personal Securities Transaction
if the person, directly or indirectly, directs, participates in or receives
advance notification or advice of or regarding such transaction. A person shall
not be considered to be "engaging in" or "effecting" a Personal Securities
Transaction if such transaction is effected on the person's behalf by an
independent fiduciary or broker with investment discretion, provided the person
did not, directly or indirectly, direct, participate in or receive advance
notification or advice of or regarding such transaction.
(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
-3-
<PAGE>
(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 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;
-4-
<PAGE>
(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.
(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 engage in or effect any Personal Securities
Transaction involving the purchase of any Security that a 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
-5-
<PAGE>
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 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
-6-
<PAGE>
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
(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.
-7-
<PAGE>
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.
(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;
-8-
<PAGE>
(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 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.
-9-
<PAGE>
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).
-10-
