<PAGE>
File Numbers 33-_____ and 811-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment Number ___
Post-Effective Amendment Number ___
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment Number ___
ADVANTUS VENTURE FUND, INC.
(Exact Name of Registrant as Specified in Charter)
400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 228-4833
ERIC J. BENTLEY, 400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
(Name and Address of Agent for Service)
Copy to:
Michael J. Radmer, Esquire
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon As Practicable After This
Registration Statement Becomes Effective.
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
Being Being Price Per Offering Registration
Registered Registered Unit Unit Fee
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Common Shares,
and each class
thereof, par
value $.01 per
share ____ ____ ____ $500*
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* Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940,
Registrant hereby elects to register an indefinite number of its common
shares, and each class thereof.
_______________________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
ADVANTUS VENTURE FUND, INC.
Registration Statement on Form N-1A
--------------------------------
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
--------------------------------
ITEM NO. PROSPECTUS HEADING
1. Cover Page . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . Prospectus Summary; Fees
and Expenses
3. Financial Highlights . . . . . . . . . . . Financial Highlights;
Investment Performance
4. General Description of Registrant . . . . Investment Objectives,
Policies and Risks; Portfolio
Turnover; Management of the
Fund; General Information
5. Management of the Fund . . . . . . . . . . Management of the Fund;
Limitation of Director
Liability; General
Information
6. Capital Stock and Other Securities . . . . Dividends and Capital Gains
Distributions; Taxes;
General Information
7. Purchase of Securities Being Offered . . . Purchase of Fund Shares;
Sales Charges; Special
Purchase Plans
8. Redemption or Repurchase . . . . . . . . . Redemption of Fund Shares;
Reinstatement Privilege
9. Pending Legal Proceedings . . . . . . . . Not Applicable
STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION HEADING
10. Cover Page . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . General Information and
History
13. Investment Objectives and Policies . . . . Investment Objectives and
Policies; Investment
Restrictions; Portfolio
Turnover
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14. Management of the Fund . . . . . . . . . . Directors and Executive
Officers; Director Liability
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . Capital Stock and Ownership
of Shares
16. Investment Advisory and Other Services . . Investment Advisory and Other
Services
17. Brokerage Allocation . . . . . . . . . . . Portfolio Transactions and
Allocation of Brokerage
18. Capital Stock and Other Securities . . . . Capital Stock and Ownership
of Shares
19. Purchase, Redemption and Pricing
of Securities Being Offered . . . . . . . How to Buy Shares; Net Asset
Value and Public Offering
Price; Reduced Sales Charges;
Shareholder Services;
Redemptions
20. Tax Status . . . . . . . . . . . . . . . . Distributions and Tax Status
21. Underwriters . . . . . . . . . . . . . . . Investment Advisory and Other
Services
22. Calculation of Performance Data . . . . . Calculation of Performance
Data
23. Financial Statements . . . . . . . . . . . Financial Statements
<PAGE>
PART A. INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
[ADVANTUS -TM- FAMILY OF FUNDS]
PROSPECTUS DATED , 1996
ADVANTUS Venture Fund, Inc.
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400 Robert Street North - St. Paul, Minnesota 55101 - 1-800-443-3677
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Advantus Venture Fund, Inc. ("Venture Fund" or the "Fund") is an open-end
diversified management investment company, commonly called a mutual fund. The
Fund currently offers its shares in three classes: Class A, Class B and Class C.
Each class is sold pursuant to different sales arrangements and bears different
expenses.
The Fund's investment objective is to seek the long-term accumulation of
capital. In pursuit of this objective, the Venture Fund will follow a policy of
investing primarily in "value" equity securities issued by "small companies." A
company may be defined as "small" in terms of either its market capitalization
or gross revenues (see "Investment Objectives, Policies and Risks"). "Value"
securities are those whose issuers, in the opinion of the Fund's investment
adviser, have market values which appear low relative to their underlying value
or future earnings and growth potential. Dividend income will be incidental to
the investment objective for this Fund. Investments in small companies usually
involve greater investment risks than fixed income securities or corporate
equity securities generally.
There is risk in all investments. There can be no assurance that the Fund
will achieve its objective.
SHARES OF THE FUND MAY BE SOLD THROUGH BANKS OR OTHER FINANCIAL
INSTITUTIONS. THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND SUCH SHARES ARE NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISK, INCLUDING
POSSIBLE LOSS OF PRINCIPAL, DUE TO FLUCTUATIONS IN THE FUND'S NET ASSET VALUE.
This Prospectus sets forth concisely the information which a prospective
investor should know about the Fund before investing and it should be retained
for future reference. A "Statement of Additional Information" dated ,
1996, which provides a further discussion of certain areas in this Prospectus
and other matters which may be of interest to some investors, has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. For a free copy, write or call the Fund at the address or telephone
number shown above.
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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.
<PAGE>
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TABLE OF
CONTENTS
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PROSPECTUS SUMMARY.......................................................... 3
FEES AND EXPENSES........................................................... 6
INVESTMENT OBJECTIVES, POLICIES AND RISKS................................... 8
PORTFOLIO TURNOVER.......................................................... 14
MANAGEMENT OF THE FUND...................................................... 15
PURCHASE OF FUND SHARES..................................................... 17
SALES CHARGES............................................................... 19
SPECIAL PURCHASE PLANS...................................................... 22
EXCHANGE AND TELEPHONE TRANSFER OF FUND SHARES.............................. 23
REDEMPTION OF FUND SHARES................................................... 24
TELEPHONE TRANSACTIONS...................................................... 26
REINSTATEMENT PRIVILEGE..................................................... 26
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS................................... 26
TAXES....................................................................... 27
INVESTMENT PERFORMANCE...................................................... 28
LIMITATION OF DIRECTOR LIABILITY............................................ 29
GENERAL INFORMATION......................................................... 29
COUNSEL AND INDEPENDENT AUDITORS............................................ 30
CUSTODIAN................................................................... 30
APPENDIX-BOND RATINGS....................................................... 31
No dealer, sales representative or other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus (and/or in the Statement of Additional Information referred to
on the cover page of this Prospectus), and if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
MIMLIC Sales. This Prospectus does not constitute an offer or solicitation by
anyone in any state in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such offer or solicitation.
2
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PROSPECTUS
SUMMARY
- ------------ Advantus Venture Fund, Inc.
("Venture Fund" or the "Fund") is an open-end diversified
investment company, commonly called a mutual fund. The Fund offers investors the
choice between three classes of shares which offer different sales charges and
bear different expenses. These alternatives permit an investor to choose the
method of purchasing shares that the investor believes is most beneficial given
the amount of the purchase, the length of time the investor expects to hold the
shares and other circumstances. The Fund is a member of a family of mutual funds
known as the "Advantus Funds." The Advantus Funds consist of the Fund and nine
other mutual funds, all of which share the same investment adviser. Except for
Advantus Money Market Fund, Inc., all of the Advantus Funds offer more than one
class of shares (the "Advantus Load Funds").
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INVESTMENT
OBJECTIVE A summary of the investment objective of the Fund, together with a
brief description of the types of securities in which the Fund will invest in
pursuit of its investment objective, can be found on the cover page of this
Prospectus. See also "Investment Objectives, Policies and Risks."
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INVESTMENT
ADVISER Advantus Capital Management, Inc. ("Advantus Capital") acts as
investment adviser to the Fund and receives an annual fee equal to a stated
percentage of average daily net assets of the Fund. Advantus Capital is a
wholly-owned subsidiary of MIMLIC Asset Management Company ("MIMLIC
Management"). MIMLIC Management is a subsidiary of The Minnesota Mutual Life
Insurance Company ("Minnesota Mutual"). See "Management of the Fund."
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HOW TO PURCHASE
FUND SHARES MIMLIC Sales Corporation ("MIMLIC Sales"), a subsidiary of MIMLIC
Management, acts as the principal underwriter (distributor) of the shares of the
Fund. Shares of the Fund may be purchased from MIMLIC Sales, and from certain
other broker-dealers, at the price per share next determined after receipt of a
purchase order in proper form. The minimum initial purchase is $250. Additional
investments can be made at any time for $25 or more. Shares of the Fund are sold
in three classes which are subject to different sales charges. Broker-dealers
and sales personnel of MIMLIC Sales may receive different compensation depending
on which class of shares they sell.
CLASS A SHARES. An investor who purchases Class A shares pays a sales charge
at the time of purchase. (Purchase orders for $1,000,000 or more will be
accepted for Class A shares only and are not subject to a sales charge at the
time of purchase.) Class A shares are not subject to any charges when they are
redeemed. The initial sales charge may be reduced or waived for certain
purchases. Class A shares are subject to a Rule 12b-1 fee payable at an annual
rate of .30% of the Fund's average daily net assets attributable to Class A
shares. See "Sales Charges--Class A Shares."
CLASS B SHARES. Class B shares are sold without an initial sales charge, but
are subject to a contingent deferred sales charge of up to 5% if redeemed within
six years of purchase. Class B shares are also subject to a higher Rule 12b-1
fee than Class A shares. The Rule 12b-1 fee for Class B shares will be paid at
an annual rate of 1.00% of the Fund's average daily net assets attributable to
Class B shares. Class B shares will automatically convert to Class A shares at
net asset value approximately twenty-eight to eighty-four months after purchase,
depending on the amount purchased. Class B shares provide an investor the
benefit of putting all of the investor's
3
<PAGE>
dollars to work from the time the investment is made, but until conversion will
have a higher expense ratio and pay lower dividends than Class A shares due to
the higher Rule 12b-1 fee. See "Sales Charges--Class B Shares."
CLASS C SHARES. Class C shares are sold without either an initial sales
charge or a contingent deferred sales charge. Class C shares are also subject to
a higher Rule 12b-1 fee, paid at an annual rate of 1.00% of the Fund's average
daily net assets attributable to Class C shares. Class C shares will
automatically convert to Class A shares at net asset value approximately forty
to ninety-six months after purchase, depending on the amount purchased. Class C
shares also provide an investor the benefit of putting all of the investor's
dollars to work from the time the investment is made. Although not subject to a
contingent deferred sales charge, Class C shares must be held longer than Class
B shares before they convert automatically to Class A shares, and are subject to
the higher Rule 12b-1 fee during the longer holding period. In addition, like
Class B shares, Class C shares will have a higher expense ratio and pay lower
dividends than Class A shares, due to the higher Rule 12b-1 fee, prior to
conversion. See "Sales Charges--Class C Shares."
CHOOSING A CLASS. The decision as to which class of shares provides a more
suitable investment for an investor may depend on a number of factors, including
the amount and intended length of the investment. Investors making investments
that qualify for a waiver of initial sales charges should purchase Class A
shares. Other investors might consider Class B or Class C shares because all of
the purchase price is invested immediately. Investors who expect to hold shares
for relatively shorter periods of time may prefer Class C shares because such
shares may be redeemed at any time without payment of a contingent deferred
sales charge. Investors who expect to hold shares longer, however, may choose
Class B shares because such shares convert to Class A shares sooner than do
Class C shares and thus pay the higher Rule 12b-1 fee for a shorter period.
Orders for Class B or Class C shares for $1,000,000 or more will be treated as
orders for Class A shares or declined.
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HOW TO REDEEM
FUND SHARES Shareholders may redeem (sell) shares of the Fund at the per share
net asset value next determined following receipt by the Fund (at the mailing
address listed on the cover page) of a written redemption request. Class A and
Class C shares of the Fund are redeemable at net asset value without charge.
Class B shares of the Fund are also redeemable at net asset value but are
subject to a contingent deferred sales charge of up to 5% if redeemed within six
years of purchase. The amount of the contingent deferred sales charge, as well
as the period during which it applies, varies with the amount purchased. Shares
of the Fund may also be redeemed by telephone if this option has been selected.
See "Redemption of Fund Shares."
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INCOME AND
TAXES Net investment income is the amount of dividends and interest earned on
the Fund's securities less operating expenses. It is distributed to shareholders
quarterly. Capital gains may be realized on the sale of the Fund's securities.
Capital gains, when available, are generally distributed once a year during
December. See "Dividends and Capital Gains Distributions."
As a regulated investment company, the Fund is not taxed on the net investment
income and capital gains it distributes to its shareholders. For income tax
purposes, shareholders must report any net investment income and capital gains
distribution reported to them as income. Shareholders of the Fund receive an
annual statement detailing federal tax information. See "Taxes."
4
<PAGE>
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RISK
FACTORS In addition to the other information set forth in this Prospectus,
prospective investors in the Fund should consider the following factors:
- - The Fund may invest up to 10% of its net assets
in securities which are considered illiquid.
- - The Fund may, with respect to 25% of its total
assets, invest in excess of 5% of its total assets in securities of a single
issuer.
- - Equity securities, such as those purchased by
the Fund, are more volatile and present greater risk than some other forms of
investment.
- - Investments in securities of small companies,
such as those made by Venture Fund, involve greater risks than equity
securities generally, because small companies usually have less experienced
management, less access to capital and fewer product lines to support their
operations. In addition, securities of small companies are subject to greater
short-term price volatility.
- - There is risk that Advantus Capital will be
unable to identify "value" securities on a consistent basis, and also that
value securities may be out of favor during certain market cycles and
therefore underperform other types of equity securities.
- - The Fund has the right to purchase securities in
foreign countries. Investors should consider carefully the substantial risks
involved in investing in securities issued by companies of foreign nations,
which are in addition to the usual risks inherent in domestic investments. The
Fund may also be affected either unfavorably by fluctuations in the relative
rates of exchange between the currencies of different nations, by exchange
control regulations and by indigenous economic and political developments.
- - The Fund may invest up to 10% of its assets in
convertible debt securities rated below investment grade. These securities are
regarded as predominately speculative.
- - The Fund may purchase and sell certain types
of options contracts. The use of options contracts involves additional
potential risks, in addition to the risks associated with the underlying
securities on which such options are written, including the risk that the
prices of such underlying securities will not move as anticipated.
For discussions of risks associated with specific investments and risks
associated with investing in the Fund see "Investment Objectives, Policies and
Risks."
5
<PAGE>
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The purpose of this table is to assist the investor in understanding
FEES AND the various costs and expenses that an investor in the Fund will bear
EXPENSES directly or indirectly.
- ---------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
MAXIMUM SALES LOAD IMPOSED ON PURCHASES (AS A
PERCENTAGE OF OFFER PRICE) 5.00% 0.00% 0.00%
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MAXIMUM DEFERRED SALES LOAD (AS A PERCENTAGE OF
REDEMPTION PROCEEDS) 0.00% 5.00% 0.00%
- ------------------------------------------------------------------------------------
SALES LOAD IMPOSED ON REINVESTED DIVIDENDS 0 0 0
- ------------------------------------------------------------------------------------
REDEMPTION FEES+ 0 0 0
- ------------------------------------------------------------------------------------
EXCHANGE FEES
- ON FIRST FOUR EXCHANGES EACH YEAR 0 0 0
- ON EACH ADDITIONAL EXCHANGE $7.50 $7.50 $7.50
+REDEMPTION PROCEEDS SENT BY WIRE ARE SUBJECT TO A
WIRE CHARGE OF $7.50, WHICH WILL BE ADDED TO THE
AMOUNT REDEEMED.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
INVESTMENT ADVISORY FEES 0.80% 0.80% 0.80%
- ------------------------------------------------------------------------------------
RULE 12b-1 FEES (AFTER EXPENSES WAIVED)* 0.10%** 1.00% 1.00%
- ------------------------------------------------------------------------------------
OTHER EXPENSES (AFTER EXPENSES WAIVED)*** 0.45% 0.45% 0.45%
------- ------- -------
TOTAL FUND OPERATING EXPENSES
(AFTER EXPENSES WAIVED)*** 1.35% 2.25% 2.25%
------- ------- -------
</TABLE>
*A LONG-TERM SHAREHOLDER MAY PAY MORE IN ASSET-BASED SALES CHARGES THAN THE
ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGE PERMITTED BY THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (SEE MANAGEMENT OF THE
FUND--THE UNDERWRITER AND PLANS OF DISTRIBUTION).
**THE FUND HAS ADOPTED A PLAN OF DISTRIBUTION, PURSUANT TO RULE 12B-1 UNDER
THE INVESTMENT COMPANY ACT OF 1940, WHICH PROVIDES FOR THE PAYMENT TO MIMLIC
SALES OF A DISTRIBUTION FEE EQUAL TO AN ANNUAL RATE OF .30% OF AVERAGE DAILY NET
ASSETS ATTRIBUTABLE TO CLASS A SHARES OF THE FUND.MIMLIC SALES IS CURRENTLY
WAIVING THAT PORTION OF DISTRIBUTION FEE WHICH EXCEEDS, AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS ATTRIBUTABLE TO CLASS A SHARES, .10%. IT IS MIMLIC
SALES' PRESENT INTENTION TO WAIVE DISTRIBUTION FEES AT SUCH LEVEL DURING THE
CURRENT FISCAL YEAR, BUT IT RESERVES THE RIGHT TO CEASE SUCH WAIVER, IN WHOLE OR
IN PART, AT ANY TIME.
***BECAUSE THE FUND HAS ONLY RECENTLY COMMENCED OPERATIONS, THE FIGURES FOR
OTHER EXPENSES HAVE BEEN BASED ON ESTIMATED EXPENSES FOR THE CURRENT FISCAL
YEAR. THE FUND'S INVESTMENT ADVISER AND MIMLIC SALES HAVE VOLUNTARILY AGREED TO
ABSORB OR WAIVE CERTAIN EXPENSES OF VENTURE FUND FOR THE PERIOD ENDED JULY 31,
1997. IF THE FUND WERE TO BE CHARGED FOR THESE EXPENSES, IT IS ESTIMATED THAT
THE RATIO OF TOTAL FUND OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS WOULD BE
1.63% FOR CLASS A SHARES, 2.33% FOR CLASS B SHARES AND 2.33% FOR CLASS C SHARES.
IN ADDITION, IT IS THE FUND'S INVESTMENT ADVISER'S PRESENT INTENTION TO ABSORB
OTHER EXPENSES DURING THE CURRENT FISCAL YEAR WHICH EXCEED, AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS, .45%. THE FUND'S INVESTMENT ADVISER ALSO RESERVES THE
OPTION TO REDUCE THE LEVEL OF OTHER EXPENSES WHICH IT WILL VOLUNTARILY ABSORB.
6
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SHAREHOLDER EXPENSE
EXAMPLE An investor would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of each time period.
YEAR REDEEMED CLASS A CLASS B CLASS C
- ----------------------------------------------------------
1 $ 63 $ 73 $ 23
3 91 105 70
An investor would pay the following expenses on the same investment in Class B
shares, assuming no redemption:
YEAR REDEEMED CLASS B
- ----------------------------------------------------------
1 $ 23
3 70
THE EXAMPLES CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
7
<PAGE>
- ------------------------------------------------------------
INVESTMENT
OBJECTIVES,
POLICIES AND RISKS
- --------------------
Venture Fund seeks the long-term accumulation of
capital. In pursuit of this objective, the Fund will follow a policy of
investing primarily in "value" equity securities issued by "small companies." A
company may be defined as "small" in terms of either its market capitalization
or gross revenues. "Value" securities are those whose issuers, in the opinion of
Advantus Capital, have market values which appear low relative to their
underlying value or future earnings and growth potential. Dividend income will
be incidental to the investment objective for this Fund. Investments in small
companies usually involve greater investment risks than fixed income securities
or corporate equity securities generally. This investment objective may not be
changed without the approval of a majority of the outstanding shares of the
Fund. The Fund's other investment policies, except "fundamental" investment
restrictions (see below), may be changed at any time without shareholder
approval, although shareholders will be notified of those changes.
- ------------------------------------------
INVESTMENT
POLICIES The Venture Fund will primarily purchase securities which, at the time
of purchase, are issued by "small companies" and are considered by Advantus
Capital to be "value" securities. Small companies are those which have a market
capitalization of less than $1.5 billion or annual gross revenues of less than
$1.5 billion (see "Small Companies" below). Value securities are issued by
companies which could be described as follows: (a) companies whose securities
Advantus Capital believes are selling at low market valuations relative to the
securities markets in general, or companies that may currently be earning a very
low return on assets but which have the potential to earn higher returns; (b)
companies whose securities Advantus Capital believes are undervalued in relation
to their potential for improved operating performance and financial strength; or
(c) companies which have recently changed management or control and whose
securities, in the judgment of Advantus Capital, are therefore undervalued in
relation to their potential to achieve sharply improved operating performance.
Securities of companies that may be temporarily out of favor or whose value is
not yet recognized by the market may also be considered by Advantus Capital to
be value securities (see, "Value Securities" below).
The Venture Fund will ordinarily invest at least 65% of the value of its total
assets in common stocks with the characteristics described above. The balance of
its assets may be invested in other equity securities, including stocks with
larger market capitalization whose long-term appreciation potential is believed
by Advantus Capital to be well above average, debt obligations convertible into
common stock and which may produce capital appreciation, other corporate debt
obligations, U.S. Government securities, cash or cash equivalents. However,
Venture Fund may temporarily take a defensive position by investing a
substantial portion of its assets in bonds, notes or other evidences of
indebtedness, including United States Government securities and corporate debt
securities, provided that such debt securities (excluding debt securities
convertible into common stock as described below) are rated BBB or Baa or higher
by Standard & Poor's Corporation ("S&P") or Moody's Investors Services, Inc.
("Moody's"), respectively, or may hold its assets in cash. Venture Fund may also
temporarily hold its assets in cash or money market instruments pending
investments in accordance with its policies.
VALUE SECURITIES. Tests applied by Advantus Capital to measure the value of
securities will include their price/earnings ratio, price/book ratio, price to
cash flow ratio and yield. A price/earnings ratio is the price of a share of
stock divided by its earnings per share and it is a measure of the market price
of the security relative to its earnings per share. A price/book
8
<PAGE>
ratio is the price of a share of stock divided by its book value per share and
it is a measure of the market price of the security relative to its book value
per share. Book value per share is generally equal to assets less liabilities
divided by the total number of outstanding shares (i.e., the "net worth" per
share). A price to cash flow ratio is the price of a share of stock divided by
the firm's net income after taxes, plus depreciation and other non-cash
expenses, expressed on a per share basis. Yield is the annual dividend of a
share of stock divided by its market price. Stocks will be selected by Advantus
Capital using statistical measures of relative value. Returns on such stocks are
likely to be influenced by the recognition of their undervaluation by other
investors and the market. Under most circumstances, if Advantus Capital
determines that a stock has reached an over-valued position, it may be sold and
replaced by securities which are deemed to be undervalued in the marketplace.
The Venture Fund's investments in value securities will typically be
characterized by the purchase of securities with lower price to normalized
earnings ratios ("normalized earnings" are average earnings under average
business conditions), lower price to cash flow ratios and/or price to book value
ratios relative to the equity markets in general. This value approach to
investing may be considered to differ from a growth approach which would
consider the purchase of securities with an anticipated above-average earnings
growth potential over time. This distinction between these two approaches to
equity investing is important because historically there are periods in which
either growth or value investing may be successful approaches to total return in
the equity markets. Securities that meet the criteria of the Venture Fund may
not be popular during certain market cycles.
SMALL COMPANIES. Companies characterized as "small" companies may encompass
well-known and established companies as well as newer and relatively unknown
companies, and will have, at the time of purchase, a market capitalization of
less than $1.5 billion or annual gross revenues of less than $1.5 billion.
Market capitalization is the term which refers to the total market value of a
company's outstanding shares of common stock. Application of the market
capitalization or gross revenue tests will be made only at the time that the
Fund's initial position in the company is taken. Thus, for purposes of the 65%
test, any company deemed to be a small company at the time of the Fund's initial
position therein will be treated as a small company, regardless of subsequent
developments, so long as the Fund maintains a position in the company.
Small companies may be in a relatively early stage of development or may
produce goods and services which have favorable prospects for growth due to
increasing demand or developing markets. Frequently, such companies have a small
management group and single product or product-line expertise that may result in
an enhanced entrepreneurial spirit and greater focus which allow such firms to
be successful. Advantus Capital believes that such companies may develop into
significant business enterprises and that an investment in such companies offers
a greater opportunity for capital appreciation than an investment in larger more
established entities. However, small companies frequently retain a large part of
their earnings for research, development and investment in capital assets, so
that the prospects for immediate dividend income are limited.
While historically securities issued by small capitalization companies have
produced better market results than the securities of larger issuers, there is
no assurance that they will continue to do so or that the Fund will invest
specifically in those companies which produce those results. Because of the
risks involved, Venture Fund is not intended as a complete investment program.
See "Risks Of Investing In The Fund," below, for further information about risks
associated with investments in small companies.
CONVERTIBLE SECURITIES. The Fund may invest in debt or preferred equity
securities convertible
9
<PAGE>
into or exchangeable for equity securities. Traditionally, convertible
securities have paid dividends or interest at rates higher than common stocks
but lower than non-convertible securities. They generally participate in the
appreciation or depreciation of the underlying stock into which they are
convertible, but to a lesser degree. The total return and yield of lower quality
(high yield/ high risk) convertible bonds can be expected to fluctuate more than
the total return and yield of higher quality, shorter-term bonds, but not as
much as common stocks. The Fund will limit its purchase of convertible debt
securities to those that, at the time of purchase, are rated at least B-by S&P
or B3 by Moody's, or if not rated by S&P or Moody's, are of equivalent
investment quality as determined by Advantus Capital. Debt securities rated
below the four highest categories (i.e., below BBB) are not considered
"investment grade" obligations and are commonly called "junk bonds." These
securities in fact have speculative characteristics and present more credit risk
than investment grade obligations. Bonds rated below BBB are regarded as
predominately speculative with respect to the issuer's continuing ability to
meet principal and interest payments. As an operating policy, the Fund will not
purchase a non-investment grade convertible debt security if immediately after
such purchase the Fund would have more than 10% of its total assets invested in
such securities. See the Appendix for a description of the ratings used by S&P
and Moody's.
DEBT SECURITIES. The Fund may also invest in non-convertible, debt securities
rated BBB or Baa or higher by S&P or Moody's, respectively. The market value of
debt securities generally varies in response to changes in interest rates and
the financial condition of each issuer. During periods of declining interest
rates, the value of debt securities generally increases. Conversely, during
periods of rising interest rates, the value of such securities generally
declines. These changes in market value will be reflected in the Fund's net
asset value. Although they may offer higher yields than do higher rated
securities, low rated (i.e., below BBB) and unrated debt securities generally
involve greater volatility of price and risk of principal and income, including
the possibility of default by, or bankruptcy of, the issuers of the securities.
In addition, the markets in which low rated and unrated debt securities are
traded are more limited than those in which higher rated securities are traded.
The existence of limited markets for particular securities may diminish the
Fund's ability to sell the securities at fair value either to meet redemption
requests or to respond to changes in the economy or in the financial markets and
could adversely affect and cause fluctuations in the daily net asset value of
the Fund's shares.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of low rated debt
securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of low rated debt securities may be more complex
than for issuers of higher rated securities, and the ability of the Fund to
achieve its investment objective may, to the extent of investment in low rated
debt securities, be more dependent upon such creditworthiness analysis than
would be the case if the Fund were investing in higher rated securities.
Low rated debt securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment grade securities.
The prices of low rated debt securities have been found to be less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic downturns or individual corporate developments. A projection of
an economic downturn or of a period of rising interest rates, for example, could
cause a decline in low rated debt securities prices because the advent of a
recession could lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If the issuer of low
rated debt securities defaults, the Fund may incur additional expenses to seek
recovery. The low rated bond market is relatively new, and many of
10
<PAGE>
the outstanding low rated bonds have not endured a major business recession.
After purchase by the Fund, a debt security may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require a sale of such security by the Fund, but Advantus
Capital will consider such event in the determination of whether the Fund should
continue to hold the security.
OPTIONS. Venture Fund may write covered call options which are traded on
national securities exchanges with respect to common stocks in its portfolio
("covered options") in an attempt to earn additional current income on its
portfolio or to guard against an expected decline in the price of a security. By
writing a covered call option, the Fund gives the purchaser of the option the
right to buy the underlying security at the price specified in the option. The
Fund realizes income from the sale of the option, but foregoes the opportunity
to profit during the option period from an increase in the market value of the
underlying security above the exercise price. The Fund does not write call
options in an aggregate amount greater than 15% of its net assets. See
"Investment Restrictions," below. Venture Fund purchases call options only to
close out a position, and will neither write nor purchase put options. The use
of options contracts involves additional risk of loss to the Fund, including the
risk that the Fund may incur a loss because the prices of the underlying
securities do not move as anticipated. See the Statement of Additional
Information for a more detailed discussion of options and the risks associated
therewith.
LOANS OF PORTFOLIO SECURITIES. For the purpose of realizing additional
income, the Fund may make secured loans of portfolio securities amounting to not
more than 20% of its total assets. Securities loans are made to broker-dealers
or financial institutions pursuant to agreements requiring that the loans be
continuously secured by collateral at least equal at all times to the value of
the securities lent. The collateral received will consist of cash or securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities. While the securities are being lent, the Fund will continue
to receive the equivalent of the interest or dividends paid by the issuer on the
securities, as well as interest on the investment of the collateral or a fee
from the borrower. The Fund has a right to call each loan and obtain the
securities on five business days' notice. The Fund will not have the right to
vote securities while they are being lent, but it will call a loan in
anticipation of any important vote. The risks in lending portfolio securities,
as with other extensions of secured credit, consist of possible delay in
receiving additional collateral or in the recovery of the securities or possible
loss of rights in the collateral should the borrower fail financially. Loans
will only be made to firms deemed by the Fund's investment adviser to be of good
standing and to have sufficient financial responsibility, and will not be made
unless, in the judgment of the Fund's investment adviser, the consideration to
be earned from such loans would justify the risk. The creditworthiness of
entities to which the Fund makes loans of portfolio securities is monitored by
the Fund's investment adviser throughout the term of each loan.
WARRANTS. The Fund may invest in warrants; however, not more than 5% of its
assets (at the time of purchase) will be invested in warrants other than
warrants acquired in units or attached to other securities. Of such 5% not more
than 2% of the Fund assets at the time of purchase may be invested in warrants
that are not listed on the New York or American Stock Exchanges. Warrants are
pure speculation in that they have no voting rights, pay no dividends and have
no rights with respect to the assets of the corporation issuing them. The prices
of warrants do not necessarily move parallel to the prices of the underlying
securities.
ILLIQUID SECURITIES AND RULE 144A PAPER. The Fund is permitted to invest up
to 10% of its net assets in securities or other assets which are illiquid. An
investment is generally deemed to be "illiquid" if it cannot be disposed of
within seven
11
<PAGE>
days in the ordinary course of business at approximately the amount at which the
investment company is valuing the investment. "Restricted securities" are
securities which were originally sold in private placements and which have not
been registered under the Securities Act of 1933 (the "1933 Act"). Such
securities generally have been considered illiquid by the staff of the
Securities and Exchange Commission (the "SEC"), since such securities may be
resold only subject to statutory restrictions and delays or if registered under
the 1933 Act.
The SEC has acknowledged, however, that a market exists for certain restricted
securities (for example, securities qualifying for resale to certain "qualified
institutional buyers" pursuant to Rule 144A under the 1933 Act). Additionally,
Advantus Capital and the Fund believe that a similar market exists for
commercial paper issued pursuant to the private placement exemption of Section
4(2) of the 1933 Act. The Fund may invest without limitation in these forms of
restricted securities if such securities are deemed by Advantus Capital to be
liquid in accordance with standards established by the Fund's Boards of
Directors. Under these guidelines, Advantus Capital must consider (a) the
frequency of trades and quotes for the security, (b) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers, (c) dealer undertakings to make a market in the security, and (d)
the nature of the security and the nature of the marketplace trades (for
example, the time needed to dispose of the security, the method of soliciting
offers and the mechanics of transfer). At the present time, it is not possible
to predict with accuracy how the markets for certain restricted securities will
develop. Investing in such restricted securities could have the effect of
increasing the level of the Fund's illiquidity to the extent that qualified
purchasers of the securities become, for a time, uninterested in purchasing
these securities.
FOREIGN SECURITIES. Venture Fund may also invest up to 10% of the market
value of the Fund's total assets in securities of foreign issuers which are not
publicly traded in the United States. (Securities of foreign issuers which are
publicly traded in the United States, usually in the form of sponsored American
Depositary Receipts, are not subject to this 10% limitation.) Investing in
securities of foreign issuers may result in greater risk than that incurred in
investing in securities of domestic issuers. There is a possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations; foreign exchange controls (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations. In addition, in many countries there is less publicly available
information about issuers than is available in reports about companies in the
United States. Foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to United States
companies. Further, the Fund may encounter difficulties or be unable to pursue
legal remedies and obtain judgments in foreign courts. Commission rates in
foreign countries, which are sometimes fixed rather than subject to negotiation
as in the United States, are likely to be higher. Further, the settlement period
of securities transactions in foreign markets may be longer than in domestic
markets. In many foreign countries there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. The foreign securities markets of
many of the countries in which the Fund may invest may also be smaller, less
liquid, and subject to greater price volatility than those in the United States.
Also, some countries may withhold portions of interest, dividends and gains at
the source. There are further risk considerations, including possible losses
through
12
<PAGE>
the holding of securities in domestic and foreign custodial banks and
depositories.
An ADR is sponsored if the original issuing company has selected a single U.S.
bank to serve as its U.S. depositary and transfer agent. This relationship
requires a deposit agreement which defines the rights and duties of both the
issuer and depositary. Companies that sponsor ADRs must also provide their ADR
investors with English translations of company information made public in their
own domiciled country. Sponsored ADR investors also generally have the same
voting rights as ordinary shareholders, barring any unusual circumstances. ADRs
which meet these requirements can be listed on U.S. stock exchanges. Unsponsored
ADRs are created at the initiative of a broker or bank reacting to demand for a
specific foreign stock. The broker or bank purchases the underlying shares and
deposits them in a depositary. Unsponsored shares issued after 1983 are not
eligible for U.S. stock exchange listings. Furthermore, they do not generally
include voting rights.
REPURCHASE AGREEMENTS. The Fund may also enter into repurchase agreements.
Repurchase agreements are agreements by which the Fund purchases a security and
obtains a simultaneous commitment from the seller (a member bank of the Federal
Reserve System or, if permitted by law or regulation and if the Board of
Directors of the Fund has evaluated its creditworthiness through adoption of
standards of review or otherwise, a securities dealer) to repurchase the
security at an agreed upon price and date. The creditworthiness of entities with
whom the Fund enters into repurchase agreements is monitored by the Fund's
investment adviser throughout the term of the repurchase agreement. The resale
price is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security. Such transactions afford
the Fund the opportunity to earn a return on temporarily available cash. The
Fund's custodian, or a duly appointed subcustodian, holds the securities
underlying any repurchase agreement in a segregated account or such securities
may be part of the Federal Reserve Book Entry System. The market value of the
collateral underlying the repurchase agreement is determined on each business
day. If at any time the market value of the collateral falls below the
repurchase price of the repurchase agreement (including any accrued interest),
the Fund promptly receives additional collateral, so that the total collateral
is in an amount at least equal to the repurchase price plus accrued interest.
While the underlying security may be a bill, certificate of indebtedness, note
or bond issued by an agency, authority or instrumentality of the United States
Government, the obligation of the seller is not guaranteed by the U.S.
Government. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying security and losses, including: (a) possible decline in the value of
the underlying security during the period while the Fund seeks to enforce its
rights thereto; (b) possible subnormal levels of income and lack of access to
income during this period; and (c) expenses of enforcing its rights.
INVESTMENT RESTRICTIONS. Venture Fund has certain investment restrictions,
set forth in their entirety in the Statement of Additional Information, some of
which are fundamental policies and may not be changed without the approval of
the holders of a majority of the outstanding shares of Venture Fund. The Fund
will not: (i) purchase any security if, as a result, 25% or more of Venture
Fund's total assets would be invested in the securities of issuers conducting
their principal business activities in a single industry; (ii) borrow money,
except from banks and only as a temporary measure for extraordinary or emergency
purposes and not in excess of 5% of its net assets; (iii) make loans, except by
purchase of bonds, debentures, commercial paper, certificates of deposit,
corporate notes and similar evidences of indebtedness, which are part of an
issue to the public or to financial institutions, and except certain loans of
portfolio securities to broker-
13
<PAGE>
dealers and financial institutions, determined by Venture Fund to have
sufficient financial responsibility, (see "Loans of Portfolio Securities"
above); (iv) write put or call options, except covered call options which are
traded on national securities exchanges with respect to common stocks in its
portfolio in an aggregate amount not greater than 15% of its net assets; or
purchase options, except call options in order to close out a position; or (v)
invest more than a total of 10% of Venture Fund's net assets in illiquid
securities, which include repurchase agreements with a maturity of over seven
days, or more than 5% of its net assets in securities of businesses (including
predecessors) less than three years old (this restriction is not fundamental).
- ------------------------------------------
RISKS OF INVESTING
IN THE FUND The price of the Fund's shares is not guaranteed. There is risk in
all investment and, depending on the performance of the Fund's investments, the
value of an investment in the Fund may decrease as well as increase.
Equity securities, in which the Fund will be primarily invested, are more
volatile than debt securities and involve greater investment risk. The Fund is
dependent on Advantus Capital's judgment as to general economic and market
policies and trends in investment yields, as well as its judgment as to the
composition of the portfolio.
Investments in small companies, such as those made by Venture Fund, involve
greater risks than equity securities generally due to their small size and the
fact that they may have limited product lines, less access to the financial
market for additional corporate financings or less management depth. In
addition, many of the securities of these firms trade less frequently and in
lower volumes than do securities issued by larger firms. The result is that the
short-term volatility of the prices of those securities is greater than the
prices of larger, more established companies which are more widely held in the
market. The securities of small companies may also be more sensitive to market
changes generally than the securities of large companies.
Some of the investment policies which the Fund may employ, such as investing
in options, repurchase agreements, and illiquid and foreign securities, involve
special risks not associated with more traditional investment instruments and
policies. Loans of portfolio securities, for example, involve risks of possible
delay in receiving additional collateral or in the recovery of the loaned
securities, or possible loss of rights in the collateral should the borrower
fail financially. The use of options may, in the case of a sale of a covered
call option, result in a loss to the Fund as a result of the foregone increase
in value of the underlying security. The Fund will purchase a covered call
option only to close out an option which the Fund has written and, in such
circumstances, may also experience a loss if the amount paid to purchase the
call option is greater than the premium received for writing the option being
closed out. Illiquid securities include certain types of restricted securities,
which may be sold only in a privately negotiated transaction or in a public
offering for which a registration statement is in effect under the Securities
Act of 1933. Because of such restrictions, the Fund may not be able to dispose
of a block of restricted securities for a substantial period of time or at
prices as favorable as those prevailing in the open market should like
securities of an unrestricted class of the same issuer be freely traded. The
Fund may be required to bear the expenses of registration of such restricted
securities. See "Prospectus Summary--Risk Factors" and "Investment Policies"
above, and the Statement of Additional Information for risks associated with
specific investments.
- ------------------------------------------
PORTFOLIO
TURNOVER
- ----------- Portfolio turnover is the
ratio of the lesser of annual purchases or sales of portfolio
securities to the average monthly value of portfolio securities, not including
short-term securities. A 100% portfolio
14
<PAGE>
turnover rate would occur, for example, if the lesser of the value of purchases
or sales of portfolio securities for a particular year were equal to the average
monthly value of the portfolio securities owned during such year.
Venture Fund makes changes in its portfolio securities which are considered
advisable in light of market conditions. Frequent changes may result in higher
brokerage and other costs for the Fund. Portfolio turnover rates may vary
greatly from year to year and within a particular year and may also be affected
by cash requirements for redemptions of Fund shares. Venture Fund does not
emphasize short-term trading profits and usually expects to have annual turnover
rates not exceeding 100%.
Higher portfolio turnover rates (100% or more) may also result in greater tax
consequences for investors. A fund with a higher rate of portfolio turnover may
realize substantial additional capital gains, both long-term and short-term,
which gains would then result in additional taxable distributions to
shareholders. See "Dividends and Capital Gains Distributions" and "Taxes."
- ------------------------------------------
MANAGEMENT
OF THE FUND
- ------------- Under Minnesota law,
the Board of Directors of the Fund has overall
responsibility for managing the Fund in good faith, in a manner reasonably
believed to be in the best interests of the Fund, and with the care an ordinary
prudent person in like position would exercise in similar circumstances.
However, this management may be delegated.
The Fund's investment adviser is Advantus Capital. Advantus Capital commenced
its business in June 1994, and provides investment advisory services to each of
the other Advantus Funds, one other mutual fund (MIMLIC Cash Fund, Inc.) and
various private accounts. Advantus Capital is a wholly-owned subsidiary of
MIMLIC Management. MIMLIC Management commenced its current business in January,
1984, and provides investment advisory services to one other mutual fund (MIMLIC
Series Fund, Inc.) and various private accounts. The personnel of Advantus
Capital and MIMLIC Management have also had experience in managing investments
for The Minnesota Mutual Life Insurance Company ("Minnesota Mutual") and its
separate accounts. MIMLIC Management is a subsidiary of Minnesota Mutual, which
was organized in 1880, and has assets of more than $9.8 billion. The address of
the Fund, Advantus Capital, MIMLIC Management, MIMLIC Sales and Minnesota Mutual
is 400 Robert Street North, St. Paul, Minnesota 55101.
Advantus Capital selects and reviews the Fund's investments, and provides
executive and other personnel for the management of the Fund. The Fund's Board
of Directors supervises the affairs of the Fund as conducted by Advantus
Capital.
The name and title of the portfolio manager employed by Advantus Capital who
is primarily responsible for the day-to-day management of the Fund's portfolio,
the length of time employed in that position, and his other business experience
during the past five years are set forth below:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER PRIMARY PORTFOLIO BUSINESS EXPERIENCE
AND TITLE MANAGER SINCE DURING PAST FIVE YEARS
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
MATTHEW D. FINN INCEPTION VICE PRESIDENT OF ADVANTUS CAPITAL; INVESTMENT
VICE PRESIDENT AND PORTFOLIO MANAGER OFFICER OF MIMLIC MANAGEMENT; OWNER, MANAGING
DIRECTOR, UNIFIED CAPITAL MANAGEMENT, BLOOMFIELD
HILLS, MICHIGAN, SEPTEMBER 1993 TO APRIL 1994;
VICE PRESIDENT/ PORTFOLIO MANAGER, ACORN ASSET
MANAGEMENT, BLOOMFIELD HILLS, MICHIGAN, FEBRUARY
1990 TO SEPTEMBER 1993
</TABLE>
15
<PAGE>
The Fund pays Advantus Capital an advisory fee equal on an annual basis to .8%
of the Fund's average daily net assets. For this fee, Advantus Capital acts as
investment adviser and manager for the Fund and pays the Fund's transfer agent,
dividend disbursing agent and redemption agent expenses. The Fund has engaged
Minnesota Mutual to act as its transfer agent, dividend disbursing agent and
redemption agent. While the advisory fee paid by the Fund is higher than those
paid by most mutual funds, it is partially offset by Advantus Capital's payment
of certain expenses, such as the transfer agent, dividend disbursing agent and
redemption agent expenses, which expenses are not customarily paid for by a
mutual fund's investment adviser. In addition, separate from the investment
advisory agreement, the Fund has entered into an agreement with Minnesota Mutual
under which Minnesota Mutual provides accounting, legal and other administrative
services to the Fund at a monthly cost of $3,600.
Under the Advisory Agreement with Advantus Capital, Advantus Capital furnishes
the Fund office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund, and pays the salaries and
fees of all officers and directors of the Fund who are affiliated with Advantus
Capital. MIMLIC Sales, the underwriter of the Fund's shares, bears all
promotional expenses in connection with the distribution of the Fund's shares,
including paying for prospectuses and statements of additional information for
new shareholders, shareholder reports for new shareholders and the costs of
sales literature. The Fund pays all other expenses not so expressly assumed.
- ------------------------------------------
THE UNDERWRITER AND
PLANS OF DISTRIBUTION The Fund has entered into a Distribution Agreement with
MIMLIC Sales pursuant to which MIMLIC Sales acts as the underwriter of the
Fund's shares. In addition, the Fund has adopted separate Plans of Distribution
applicable to Class A shares, Class B shares and Class C shares relating to the
payment of certain distribution expenses pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The Fund, pursuant to its Plans of Distribution,
pays fees to MIMLIC Sales equal, on an annual basis, to a percentage of the
Fund's average daily net assets attributable to Class A shares, Class B shares
and Class C shares, respectively, as set forth in the following table:
RULE 12B-1 FEE AS PERCENTAGE OF
AVERAGE DAILY NET ASSETS ATTRIBUTABLE TO
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------------------------------------------
.30 % 1.00% 1.00%
Such fees are used for distribution-related services and for servicing of
shareholder accounts.
All of the Rule 12b-1 fee payable by the Fund and attributable to Class A
shares, and a portion of the fee payable with respect to Class B and Class C
shares equal to .75% of the average daily net assets attributable to such Class
B and Class C shares, respectively, constitute distribution fees designed to
compensate MIMLIC Sales for advertising, marketing and distributing the Class A,
Class B and Class C shares of the Fund. The distribution fees may be used by
MIMLIC Sales for the purpose of financing any activity which is primarily
intended to result in the sale of shares of the Fund. For example, such
distribution fee may be used by MIMLIC Sales: (a) to compensate (in addition to
the sales load) broker-dealers, including MIMLIC Sales and its registered
representatives, for their sale of Fund shares and for providing administrative
support services to their customers who directly or beneficially own shares of
the Fund, banks, and other financial institutions; and (b) to pay other
advertising and promotional expenses in connection with the distribution of the
Fund's shares. These advertising and promotional expenses include, by way of
example but not by way of limitation, costs of prospectuses for other than
current shareholders; preparation and distribution of sales literature;
advertising of any
16
<PAGE>
type; expenses of branch offices provided jointly by MIMLIC Sales and any
affiliate thereof; and compensation paid to and expenses incurred by officers,
employees or representatives of MIMLIC Sales or of other broker-dealers, banks,
or financial institutions.
A portion of the Rule 12b-1 fee payable with respect to Class B and Class C
shares of the Fund, equal to .25% of the average daily net assets attributable
to such Class B and Class C shares, respectively, constitutes a shareholder
servicing fee designed to compensate MIMLIC Sales for the provision of certain
services to the holders of Class B and Class C shares. The services provided may
include personal services provided to shareholders, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
MIMLIC Sales may use the Rule 12b-1 fee to make payments to qualifying broker-
dealers and financial institutions that provide such services.
MIMLIC Sales may also provide compensation to certain institutions such as
banks ("Service Organizations") which have purchased shares of the Fund for the
accounts of their clients, or which have made the Fund's shares available for
purchase by their clients, and/or which provide continuing service to such
clients. The Glass-Steagall Act and other applicable laws, among other things,
prohibit certain banks from engaging in the business of underwriting securities.
In such circumstances, MIMLIC Sales, if so requested, will engage such banks as
Service Organizations only to perform administrative and shareholder servicing
functions, but at the same fees and other terms applicable to dealers. If a bank
were prohibited from acting as a Service Organization, its shareholder clients
would be permitted to remain shareholders of the Fund and alternative means for
continuing servicing of such shareholders would be sought. In such event changes
in the operation of the Fund might occur and a shareholder serviced by such bank
might no longer be able to avail itself of any automatic investment or other
services then being provided by the bank. It is not expected that shareholders
would suffer any adverse financial consequences as a result of any of these
occurrences.
- ------------------------------------------
PURCHASE OF
FUND SHARES
- ------------- The Fund's shares may be
purchased at the public offering price from MIMLIC Sales
(the underwriter of the Fund's shares), and from certain other broker-dealers.
MIMLIC Sales reserves the right to reject any purchase order.
Certificates representing shares purchased are not currently issued. However,
shareholders will receive written confirmation of their purchases. Shareholders
will have the same rights of ownership with respect to such shares as if
certificates had been issued.
ALTERNATIVE PURCHASE ARRANGEMENTS. The Fund offers investors the choice among
three classes of shares which offer different sales charges and bear different
expenses. These alternatives permit an investor to choose the method of
purchasing shares that the investor believes is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares and
other circumstances. For a detailed discussion of these alternative purchase
arrangements see "Sales Charges" below, or for a summary of these alternative
purchase arrangements see "Prospectus Summary."
The decision as to which class of shares provides a more suitable investment
for an investor may depend on a number of factors, including the amount and
intended length of the investment. Investors making investments that qualify for
a waiver of initial sales charges should purchase Class A shares. Other
investors should consider Class B or Class C shares because all of the purchase
price is invested immediately. Investors who expect to hold shares for
relatively shorter periods of time may prefer Class C shares because such shares
may be redeemed at any time without payment of a contingent deferred sales
17
<PAGE>
charge. Investors who expect to hold shares longer, however, may choose Class B
shares because such shares convert to Class A shares sooner than do Class C
shares and thus pay the higher Rule 12b-1 fee for a shorter period.
Purchase orders for $1,000,000 or more will be accepted for Class A shares
only and are not subject to a sales charge at the time of purchase. Orders for
Class B or Class C shares for $1,000,000 or more will be treated as orders for
Class A shares or declined.
MINIMUM INVESTMENTS. A minimum initial investment of $250 is required, and
the minimum subsequent investment is $25.
PURCHASE BY CHECK. Investors may purchase shares of the Fund by completing an
account application and sending it, together with a check payable to the Fund,
to MIMLIC Sales, at P.O. Box 64132, St. Paul, Minnesota 55164-0132.
A purchase is effected, at the price next determined, on the business day on
which a purchase order and properly drawn check are received by MIMLIC Sales.
PURCHASE BY WIRE. Shares may also be purchased by Federal Reserve or bank
wire. This method will result in a more rapid investment in shares of the Fund.
Before wiring any funds, contact MIMLIC Sales at (800) 443-3677 for
instructions. Promptly after making an initial purchase by wire, an investor
should complete an account application and mail it to MIMLIC Sales.
Subsequent purchases may be made in the same manner. Wire purchases normally
take two or more hours to complete, and to be accepted the same day must be
received by 3:00 p.m. (Central Time). Banks may charge a fee for transmitting
funds by wire.
PUBLIC OFFERING PRICE. The public offering price of the Fund will be the net
asset value per share of the Fund next determined after an order is received by
MIMLIC Sales and becomes effective, plus the applicable sales charge, if any.
The net asset value per share of each class is determined by dividing the value
of the securities, cash and other assets (including dividends accrued but not
collected) of the Fund attributable to such class less all liabilities
(including accrued expenses but excluding capital and surplus) attributable to
such class, by the total number of shares of such class outstanding.
The net asset value of the shares of the Fund is determined as of the primary
closing time for business on the New York Stock Exchange (as of the date of this
Prospectus the primary close of trading is 3:00 p.m. (Central Time), but this
time may be changed) on each day, Monday through Friday, except (i) days on
which changes in the value of the Fund's portfolio securities will not
materially affect the current net asset value of Fund shares, (ii) days during
which no Fund shares are tendered for redemption and no order to purchase or
sell Fund shares is received by the Fund and (iii) customary national business
holidays on which the New York Stock Exchange is closed for trading (as of the
date hereof, New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day). The offering
price for a purchase order is based on the net asset value next determined after
receipt of such order in the office of the Fund.
Securities, including put and call options, which are traded over-the-counter
and on a national exchange will be valued according to the broadest and most
representative market. A security which is only listed or traded on an exchange,
or for which an exchange is the most representative market, is valued at its
last sale price (prior to the time as of which assets are valued) on the
exchange where it is principally traded. Lacking any sales on the exchange where
it is principally traded on the day of valuation, prior to the time as of which
assets are valued, the security generally is valued at the last bid price on
that exchange. All other securities for which over-the-counter market quotations
are readily available are valued on the basis of the last current bid price.
When market quotations are not readily available, such securities are valued at
fair value as determined in good faith by the Board of Directors. Other assets
18
<PAGE>
also are valued at fair value as determined in good faith by the Board of
Directors. However, debt securities may be valued on the basis of valuations
furnished by a pricing service which utilizes electronic data processing
techniques to determine valuations for normal institutional-size trading units
of debt securities, without regard to sale or bid prices, when such valuations
are believed to more accurately reflect the fair market value of such
securities. Short-term investments in debt securities are valued daily at
market.
- ------------------------------------------
SALES
CHARGES
- -------- The sales charges applicable to
purchases of the Fund's shares, and also the Rule 12b-1 fees paid
by the Fund which are attributable to such shares, will vary depending on the
class of shares purchased, as described below. An investor should carefully
consider which sales charge alternative is most beneficial in the investor's
circumstances.
- ------------------------------------------
CLASS A
SHARES The public offering price of Class A shares of the Fund is the net asset
value of the Fund's shares plus the applicable front end sales charge ("FESC"),
which will vary with the size of the purchase. MIMLIC Sales receives all
applicable sales charges. The Fund receives the net asset value. The current
sales charges are:
<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENTAGE OF:
NET
OFFERING AMOUNT
VALUE OF TOTAL INVESTMENT PRICE INVESTED
<S> <C> <C>
- ----------------------------------------------------------------------
LESS THAN $50,000 5.0% 5.26%
$50,000 BUT LESS THAN $100,000 4.5 4.71
$100,000 BUT LESS THAN $250,000 3.5 3.63
$250,000 BUT LESS THAN $500,000 2.5 2.56
$500,000 BUT LESS THAN $1,000,000 1.5 1.52
$1,000,000 AND OVER -0- -0-
</TABLE>
Note that the sales charge depends on the total value of your investment (net
asset value of shares currently owned plus the cost of any new investment) in
the Fund, and not on the amount of a single investment. For example, if you
already own shares with a net asset value of $40,000 and you decide to invest in
additional Class A shares having a public offering price of $10,000, you will
pay a sales charge equal to 4.5% of your entire additional $10,000 investment,
since the total value of your investment is now $50,000.
RULE 12B-1 FEES. Class A shares are subject to a Rule 12b-1 fee payable at an
annual rate of .30% of average daily net assets of the Fund attributable to
Class A shares. For additional information about this fee, see "Management of
the Fund--The Underwriter and Plans of Distribution," above.
If shares are purchased through a broker-dealer which has a selling agreement
with MIMLIC Sales, the broker-dealer will receive a commission from MIMLIC Sales
of up to 100% of the above sales charge. The amount of the commission will
depend on various factors, including whether or not the broker-dealer is
affiliated with Minnesota Mutual and the volume of sales of such broker-dealer.
The exact amount of such commission is subject to prior negotiation between
MIMLIC Sales and each such broker-dealer. A broker-dealer receiving more than
90% of the sales charge may be deemed to be an "underwriter" under the
Securities Act of 1933, as amended. In addition, MIMLIC Sales or Minnesota
Mutual will pay to such broker-dealers, based uniformly on the sale of Fund
shares by such broker-dealers, credits which allow such broker-dealers'
registered representatives who are responsible for such broker-dealers' sales of
Fund shares to attend conventions and other meetings sponsored by Minnesota
Mutual or its affiliates for the purpose of promoting the sale of the insurance
and/or investment products offered by Minnesota Mutual and its affiliates. Such
credits may cover the registered representatives' transportation, hotel
accommodations, meals,
19
<PAGE>
registration fees and the like. Broker-dealers earning such credits will be
allowed to elect to receive from MIMLIC Sales or Minnesota Mutual, in lieu of
such credits, cash in an amount equal to the cost of providing such credits.
WAIVER OF SALES CHARGES FOR CLASS A SHARES. Officers, directors, full-time and
part-time employees, sales representatives, and retirees of the Fund, Advantus
Capital, MIMLIC Management, MIMLIC Sales, Minnesota Mutual or any of Minnesota
Mutual's other affiliated companies, any trust, pension or benefit plan for such
persons, the spouses, siblings, direct ancestors or direct descendents of such
persons, Minnesota Mutual and its affiliates themselves, advisory clients of
Advantus Capital or MIMLIC Management, employees of sales representatives
employed in offices maintained by such sales representatives, certain accounts
as to which a bank or broker-dealer charges an account management fee, provided
the bank or broker-dealer has an agreement with MIMLIC Sales, and certain
accounts sold by registered investment advisers who charge clients a fee for
their services are allowed to buy Class A shares of the Fund without paying the
FESC.
- ------------------------------------------
CLASS B
SHARES Class B shares of the Fund are sold without an initial sales charge so
that the Fund receives the full amount of the investor's purchase. However, a
contingent deferred sales charge ("CDSC") of up to 5% will be imposed if shares
are redeemed within six years of purchase. For additional information, see
"Redemption of Fund Shares." Class B shares will automatically convert to Class
A shares of the Fund on the fifteenth day of the month (or, if different, the
last business day prior to such date) following the expiration of a specified
holding period. In addition, Class B shares are subject to higher Rule 12b-1
fees as described below. The amount of the CDSC will depend on the number of
years since the purchase was made, the amount of shares originally purchased and
the dollar amount being redeemed. The amount of the applicable CDSC and the
holding period prior to conversion are determined in accordance with the
following table:
<TABLE>
<CAPTION>
SHARES CONVERT
TO CLASS A
IN THE
SHARES PURCHASED IN AN CDSC APPLICABLE IN YEAR MONTH AFTER
AMOUNT 1 2 3 4 5 6 EXPIRATION OF
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------
LESS THAN $50,000 5.0% 4.5% 3.5% 2.5% 1.5% 1.5% 84 MONTHS
$50,000 BUT LESS THAN
$100,000 4.5 3.5 2.5 1.5 1.5 0 76 MONTHS
$100,000 BUT LESS THAN
$250,000 3.5 2.5 1.5 1.5 0 0 60 MONTHS
$250,000 BUT LESS THAN
$500,000 2.5 1.5 1.5 0 0 0 44 MONTHS
$500,000 BUT LESS THAN
$1,000,000 1.5 1.5 0 0 0 0 28 MONTHS
</TABLE>
Proceeds from the CDSC are paid to MIMLIC Sales and are used to defray
expenses 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 enables the Fund to sell the Class B shares
without deduction of a sales charge at the time of purchase. Although Class B
shares are sold without an initial sales charge, MIMLIC Sales pays a sales
commission to broker-dealers, and to registered representatives of MIMLIC Sales,
who sell Class B shares. The amount of this commission may differ from the
amount of the commission paid in connection with sales of Class A shares. The
higher Rule 12b-1 fee will cause Class B shares to have a higher expense
20
<PAGE>
ratio and to pay lower dividends than Class A shares.
RULE 12B-1 FEES. Class B shares are subject to a Rule 12b-1 fee payable at an
annual rate of 1.00% of the average daily net assets of the Fund attributable to
Class B shares. For additional information about this fee, see "Management of
the Fund-The Underwriter and Plans of Distribution," above.
CONVERSION FEATURE. On the fifteenth day of the month (or, if different, the
last business day prior to such date) after the expiration of the applicable
holding period described in the table above, Class B shares will automatically
convert to Class A shares and will no longer be subject to a higher Rule 12b-1
fee. Such conversion will be on the basis of the relative net asset values of
the two classes. Class A shares issued upon such conversion will not be subject
to any FESC or CDSC. Class B shares acquired by exchange from Class B shares of
another Advantus Load Fund will convert into Class A shares based on the time of
the initial purchase. Purchased Class B shares ("Purchased B Shares") will
convert after the specified number of months following the purchase date. All
Class B shares in a shareholder's account that were acquired through the
reinvestment of dividends and distributions ("Reinvestment B Shares") will be
held in a separate sub-account. Each time any Purchased B Shares convert to
Class A shares, a PRO RATA portion (based on the ratio that the total converting
Purchased B Shares bears to the shareholder's total converting and non-
converting Purchased B Shares immediately prior to the conversion) of the
Reinvestment B Shares then in the sub-account will also convert to Class A
shares.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel 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,
and that such conversions do not constitute taxable events for Federal tax
purposes. There can be no assurance that such ruling or opinion will be
available, and the conversion of Class B shares to Class A shares will not occur
if such ruling or opinion is not available. In such event, Class B shares would
continue to be subject to higher expenses than Class A shares for an indefinite
period.
- ------------------------------------------
CLASS C
SHARES Class C shares of the Fund are sold without an initial sales charge so
that the Fund receives the full amount of the investor's purchase. Unlike Class
B shares, however, no CDSC is imposed when Class C shares are redeemed. Class C
shares will automatically convert to Class A shares of the Fund on the fifteenth
day of the month (or, if different, the last business day prior to such date)
following the expiration of a specified holding period. In addition, Class C
shares are subject to higher Rule 12b-1 fees (as described below), and are
subject to such higher fees for a longer period than are Class B shares because
of a longer holding period prior to conversion. The applicable holding period
prior to conversion is determined in accordance with the following table:
<TABLE>
<CAPTION>
SHARES CONVERT
TO CLASS A
IN THE
MONTH AFTER
SHARES PURCHASED IN AN AMOUNT EXPIRATION OF
<S> <C>
- --------------------------------------------------------------
LESS THAN $50,000 96 MONTHS
$50,000 BUT LESS THAN $100,000 88 MONTHS
$100,000 BUT LESS THAN $250,000 72 MONTHS
$250,000 BUT LESS THAN $500,000 56 MONTHS
$500,000 BUT LESS THAN $1,000,000 40 MONTHS
</TABLE>
The longer period during which the Rule 12b-1 fee is charged enables the Fund
to sell the Class C shares without deduction of a sales charge at the time of
purchase and without imposing a CDSC at redemption. MIMLIC Sales does not pay a
21
<PAGE>
sales commission to broker-dealers, or to registered representatives of MIMLIC
Sales, who sell 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 A
shares.
RULE 12B-1 FEES. Class C shares are subject to a Rule 12b-1 fee payable at an
annual rate of 1.00% of the average daily net assets of the Fund attributable to
Class C shares. For additional information about this fee, see "Management of
the Fund-The Underwriter and Plans of Distribution," above.
CONVERSION FEATURE. On the fifteenth day of the month (or, if different, the
last business day prior to such date) after the expiration of the applicable
holding period described in the table above, Class C shares will automatically
convert to Class A shares and will no longer be subject to a higher Rule 12b-1
fee. Such conversion will be on the basis of the relative net asset values of
the two classes. Class A shares issued upon such conversion will not be subject
to any FESC or CDSC. Class C shares acquired by exchange from Class C shares of
another Advantus Load Fund will convert into Class A shares based on the time of
the initial purchase. Purchased Class C shares ("Purchased C Shares") will
convert after the specified number of months following the purchase date. All
Class C shares in a shareholder's account that were acquired through the
reinvestment of dividends and distributions ("Reinvestment C Shares") will be
held in a separate sub-account. Each time any Purchased C Shares convert to
Class A shares, a PRO RATA portion (based on the ratio that the total converting
Purchased C Shares bears to the shareholder's total converting and non-
converting Purchased C Shares immediately prior to the conversion) of the
Reinvestment C Shares then in the sub-account will also convert to Class A
shares.
The conversion of Class C shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel 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,
and that such conversions do not constitute taxable events for Federal tax
purposes. There can be no assurance that such ruling or opinion will be
available, and the conversion of Class C shares to Class A shares will not occur
if such ruling or opinion is not available. In such event, Class C shares would
continue to be subject to higher expenses than Class A shares for an indefinite
period.
- ------------------------------------------
SPECIAL
PURCHASE
PLANS
- ----------
The following are alternative purchase plans applicable to the
Fund, all of which offer the possibility of a reduced sales
charge:
- - Letter of Intent. (See instructions on
application.)
- - Combined purchases with spouse, children,
and/or single trust estates--all accounts, whether invested in Class A shares,
Class B shares or Class C shares, or any combination, are combined to
determine sales charge. It is the obligation of each investor desiring this
discount in sales charge to notify MIMLIC Sales, through his or her dealer or
otherwise, that he or she is entitled to the discount.
- - Group Purchases--individuals who are
members of a qualified group (which must meet criteria established by MIMLIC
Sales) may purchase shares at the reduced sales charge applicable to the group
taken as a whole.
- - Combined investments in all Advantus Load
Funds--all accounts, whether invested in Class A shares, Class B shares or
Class C shares, or any combination, are combined to determine sales charge.
- - Systematic Investment Plan--voluntary
periodic purchases enable an investor to lower
22
<PAGE>
his or her average cost per share through the principle of "dollar cost
averaging."
The Fund also offers an Automatic Investment Plan, which allows an investor to
automatically invest a specified amount in the Fund each month. For more
information on any of these plans, contact MIMLIC Sales or a MIMLIC Sales
representative.
- ------------------------------------------
EXCHANGE AND
TELEPHONE TRANSFER
OF FUND SHARES
- ---------------------
A shareholder can exchange some or all of his or
her Class A, Class B and Class C shares in the Fund, including shares acquired
by reinvestment of dividends, for shares of the same class of any of the other
Advantus Load Funds (provided that the shareholder has an already open account
in such other Advantus Load Fund), and can thereafter re-exchange such exchanged
shares back for shares of the same class of the Fund, provided that the minimum
amount which may be transferred is $250. The exchange will be made on the basis
of the relative net asset values without the imposition of any additional sales
load. When Class B 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 period and applying the CDSC.
Class A, Class B and Class C shares may also be exchanged for shares of
Advantus Money Market Fund, Inc. ("Money Market Fund") at net asset values. No
CDSC will be imposed at the time of any such exchange of Class B shares;
however, the Money Market Fund shares acquired in any such exchange will remain
subject to the CDSC otherwise applicable to such Class B shares as of the date
of exchange, and the period during which such shares of Money Market Fund are
held will not be included in the calculation of the CDSC due at redemption of
such Money Market Fund shares or any reacquired Class B shares, except as
follows. MIMLIC Sales is currently waiving the entire Rule 12b-1 fee due from
Money Market Fund. In the event MIMLIC Sales begins to receive any portion of
such fee, either (i) the time period during which shares of Money Market Fund
acquired in exchange for Class B shares are held will be included in the
calculation of the CDSC due at redemption, or (ii) such time period will not be
included but the amount of the CDSC will be reduced by the amount of any Rule
12b-1 payments made by Money Market Fund with respect to those shares.
Shares of Money Market Fund acquired in an exchange for Class A, Class B or
Class C shares from any of the Advantus Load Funds may also be re-exchanged at
relative net asset values for Class A, Class B and Class C shares, respectively,
of the Fund. Class C shares re-acquired in this manner will have a remaining
holding period prior to conversion equal to the remaining holding period
applicable to the prior Class C shares at the time of the initial exchange.
Shares of Money Market Fund not acquired in an exchange from any of the Advantus
Load Funds may be exchanged at relative net asset values for either Class A,
Class B or Class C shares of the Fund, subject to the sales charge applicable to
the class selected.
The exchange privilege is available only in states where such exchanges may
legally be made (at the present time the Fund believes this privilege is
available in all states). An exchange may be made by written request or by a
pre-authorized telephone call (see "Telephone Transactions"). Up to four
exchanges each year may be made without charge. A $7.50 service charge will be
imposed on each subsequent exchange and/or telephone transfer. No service charge
is imposed in connection with systematic exchange plans. However, MIMLIC Sales
reserves the right to restrict the frequency of--or otherwise modify, condition,
terminate, or impose additional charges upon--the exchange and/or telephone
transfer privileges, upon 60 days' prior notice to shareholders. Telephone
transfers and other exchanges can only be made
23
<PAGE>
between Advantus Fund accounts having identical registrations. An exchange is
considered to be a sale of shares for federal income tax purposes on which an
investor may realize a long-or short-term capital gain or loss. See "Taxes" for
a discussion of the effect of redeeming shares within 90 days after acquiring
them and subsequently acquiring new shares in any mutual fund at a reduced sales
charge. For further information on the exchange privilege, contact MIMLIC Sales.
- ------------------------------------------
SYSTEMATIC EXCHANGE
PLAN Shareholders of the Fund may elect to have shares of the Fund
systematically exchanged for shares of any of the other Advantus Funds (provided
that such Advantus Fund accounts must have identical registrations) on a monthly
basis. The minimum amount which may be exchanged on such a systematic basis is
$25. The terms and conditions otherwise applicable to exchanges generally, as
described above, also apply to such systematic exchange plans.
- ------------------------------------------
REDEMPTION OF
FUND SHARES
- --------------- Registered holders of
shares of the Fund may redeem their shares at the per
share net asset value next determined following receipt by the Fund (at its
mailing address listed on the cover page) of a written redemption request signed
by all shareholders exactly as the account is registered (and a properly
endorsed stock certificate if one has been issued). Class A and Class C shares
may be redeemed without charge. A contingent deferred sales charge may be
applicable upon redemption of Class B shares (see "Contingent Deferred Sales
Charge," below). Both share certificates and stock powers, if any, tendered in
redemption must be endorsed and executed exactly as the Fund shares are
registered. If the redemption proceeds are less than $25,000 and are to be paid
to the registered holder and sent to the address of record for that account, or
if the written redemption request is from pre-authorized trustees of plans,
trusts and other tax-exempt organizations and the redemption proceeds are less
than $25,000, no signature guarantee is required. However, if the redemption
proceeds are $25,000 or more or are to be paid to someone other than the
registered holder, or are to be mailed to an address other than the registered
shareholder's address, or the shares are to be transferred, or the request does
not come from such a plan trustee, the owner's signature must be guaranteed by
an eligible guarantor institution, including (1) national or state banks,
savings associations, savings and loan associations, trust companies, savings
banks, industrial loan companies and credit unions; (2) national securities
exchanges, registered securities associations and clearing agencies; (3)
securities broker-dealers which are members of a national securities exchange or
a clearing agency or which have minimum net capital of $100,000; or (4)
institutions that participate in the Securities Transfer Agent Medallion Program
("STAMP") or other recognized signature medallion program. A signature guarantee
is also required in connection with any redemption if, within the 30-day period
prior to receipt of the redemption request, instructions have been received to
change the shareholder's address of record. The Fund reserves the right to
require signature guarantees on all redemptions. Any certificates should be sent
to the Fund by certified mail. Payment will be made as soon as possible, but not
later than seven days after receipt of a properly executed written redemption
request (and any certificates). The amount received by the shareholder may be
more or less than the shares' original cost.
If stock certificates have not been issued, and if no signature guarantee is
required, shareholders may also submit their signed written redemption request
to MIMLIC Sales by facsimile (FAX) transmission. MIMLIC Sales' FAX number is
1-612-223-5959.
24
<PAGE>
CONTINGENT DEFERRED SALES CHARGE. The CDSC applicable upon redemption of
Class B shares 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 charge will be imposed on increases in net asset
value above the initial purchase price. In addition, no charge will be assessed
on shares derived from reinvestment of dividends or capital gains distributions
or on shares held for longer than the applicable CDSC period. See "Sales
Charges--Class B Shares," above.
In determining whether a CDSC is payable with respect 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 shares that are not subject to
the CDSC are redeemed first, shares subject to the lowest level of CDSC are
redeemed next, and so forth. If a shareholder owns Class A or Class C shares in
addition to Class B shares, then absent a shareholder choice to the contrary,
Class C shares will first be redeemed in full, and Class B shares not subject to
a CDSC will next be redeemed in full, prior to any redemption of Class A shares.
Class A shares will also be redeemed in full, absent a shareholder choice to the
contrary, prior to any redemption of Class B shares which are subject to a CDSC.
The CDSC does not apply to: (1) redemption of Class B shares in connection
with the automatic conversion to Class A shares; (2) redemption of shares when a
Fund exercises its right to liquidate accounts which are less than the minimum
account size; and (3) redemptions in the event of the death or disability of the
shareholder within the meaning of Section 72(m)(7) of the Internal Revenue Code.
The CDSC will also not apply to certain exchanges. See "Exchange and Telephone
Transfer of Fund Shares," above.
TELEPHONE REDEMPTION. The Fund's shareholders may elect this option by
completing the appropriate portion of the application, and may redeem shares by
calling MIMLIC Sales at 1-800-443-3677 (see "Telephone Transactions"). The
maximum amount which may be redeemed by telephone is $25,000. The proceeds will
be sent by check to the address of record for the account. If the amount is
$1,000 or more, and if the shareholder has designated a bank account, the
proceeds may be wired to the shareholder's designated bank account, and the
prevailing wire charge (currently $5.00) will be added to the amount redeemed
from the Fund. During periods of marked economic or market changes, shareholders
may experience difficulty in implementing a telephone redemption due to a heavy
volume of telephone calls. In such a circumstance, shareholders should consider
submitting a written redemption request while continuing to attempt a telephone
redemption. MIMLIC Sales reserves the right to modify, terminate or impose
charges upon the telephone redemption privilege.
DELAY IN PAYMENT OF REDEMPTION PROCEEDS. Payment of redemption proceeds will
ordinarily be made as soon as possible and within the periods of time described
above. However, an exception to this is that if redemption is requested after a
purchase by non-guaranteed funds (such as a personal check), the Fund will delay
mailing the redemption check or wiring proceeds until it has reasonable
assurance that the purchase check has cleared (good payment has been collected).
This delay may be up to 14 days.
The Fund has the right to redeem the shares in inactive accounts which, due to
redemptions and not to decreases in market value of the shares in the account,
have a total current value of less than $250. Therefore, shareholders who invest
only $250 (the minimum investment in the Fund), and who redeem any amount in
excess of any market appreciation, may have the remaining shares redeemed by the
Fund. Before redeeming an account, the Fund will mail to the shareholder a
written notice of its intention to redeem, which will give the investor an
opportunity to make an additional investment. If no additional
25
<PAGE>
investment is received by the Fund within 60 days of the date the notice was
mailed, the shareholder's account will be redeemed.
- ------------------------------------------
TELEPHONE
TRANSACTIONS
- -------------- Shareholders of the
Fund are permitted to exchange or redeem the Fund's shares
by telephone. See "Exchange and Telephone Transfer of Fund Shares" and
"Redemption of Fund Shares" for further details. The privilege to initiate such
transactions by telephone is not made available automatically but must be
elected by a shareholder on the account application.
The Fund and its transfer agent, Minnesota Mutual, will not be liable for
following instructions communicated by telephone which they reasonably believe
to be genuine; provided, however, that the Fund and Minnesota Mutual will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine, and that if they do not, they may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures for processing telephone
transactions include tape recording of telephone instructions, asking
shareholders for their account and social security numbers, and providing
written confirmation of such transactions.
- ------------------------------------------
REINSTATEMENT
PRIVILEGE
- --------------- Shareholders who
redeem shares in the Fund have a one-time privilege to
apply their redemption proceeds (at no sales charge) to the purchase of shares
of any of the Advantus Load Funds by notifying MIMLIC Sales within 90 days after
their redemption. All shares issued as a result of the reinstatement privilege
applicable to redemptions of Class A and Class B shares will be issued only as
Class A shares. Any CDSC incurred in connection with the prior redemption
(within 90 days) of Class B shares will not be refunded or re-credited to the
shareholder's account. Shareholders who redeem Class C shares and exercise their
reinstatement privilege will be issued only Class C shares, which shares will
have a remaining holding period prior to conversion equal to the remaining
holding period applicable to the prior Class C shares at redemption. See "Taxes"
for a discussion of the effect of redeeming shares within 90 days after
acquiring them and subsequently acquiring new shares in any mutual fund at a
reduced sales charge.
- ------------------------------------------
DIVIDENDS AND
CAPITAL GAINS
DISTRIBUTIONS
- ---------------
The policy of the Fund is to pay dividends from net
investment income quarterly. Any net realized capital
gains are generally distributed once a year, during December. Distributions paid
by the Fund, if any, with respect to Class A, Class B and Class C shares will be
calculated in the same manner, at the same time, on the same day and will be in
the same amount, except that the higher Rule 12b-1 fees applicable to Class B
and Class C shares will be borne exclusively by such shares. The per share
distributions on Class B and Class C shares will be lower than the per share
distributions on Class A shares as a result of the higher Rule 12b-1 fees
applicable to Class B and Class C shares.
Any dividend payments or net capital gains distributions made by the Fund are
in the form of additional shares of the same class of the Fund rather than in
cash, unless a shareholder specifically requests the Fund in writing that the
payment be made in cash. The distribution of these shares is made at net asset
value on the payment date of the dividend, without any sales or other charges to
the shareholder. The taxable status of income dividends and/or net capital gains
distributions is not affected by whether they are reinvested or paid in cash.
Authorization may be made on the Application form, or at any time by letter.
26
<PAGE>
Upon written request to the Fund, a shareholder may also elect to have
dividends from the Fund invested without sales charge in shares of Money Market
Fund or shares of the same class of another of the Advantus Load Funds (provided
that such Advantus Fund accounts must have identical registrations) at the net
asset value of such other Advantus Fund on the payable date for the dividends
being distributed. To use this privilege of investing dividends from the Fund in
shares of another of the Advantus Funds, shareholders must maintain a minimum
account value of $250 in both the Fund and the Advantus Fund in which dividends
are reinvested.
- ------------------------------------------
TAXES
- -----
The following is a general summary of certain federal tax
considerations affecting the Fund and its shareholders. No attempt is made to
present a detailed explanation of the tax treatment of the Fund or its
shareholders, and the discussion here is not intended as a substitute for
careful tax planning.
The Fund intends to fulfill the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), as a regulated investment
company. If so qualified, the Fund will not be liable for federal income taxes
to the extent it distributes its taxable income to its shareholders.
Distributions of investment company taxable income from the Fund generally
will be taxable to shareholders as ordinary income, regardless of whether such
distributions are paid in cash or are invested in additional shares of the
Fund's stock. A distribution of net capital gain (a "capital gain
distribution"), whether paid in cash or reinvested in shares, is taxable to
shareholders as long-term capital gain, regardless of the length of time a
shareholder has held his shares or whether such gain was realized by the Fund
before the shareholder acquired such shares and was reflected in the price paid
for the shares. However, if a shareholder holds for less than six months a share
with respect to which a long-term capital gain distribution has been made, any
loss on the sale of such share will be treated as a long-term capital loss to
the extent that the shareholder previously recognized long-term capital gain.
Under the Revenue Reconciliation Act of 1993, long-term capital gains of
individuals are taxed at a maximum rate of 28%, while the highest marginal
regular tax rates on ordinary income for individuals for 1994 and subsequent
years are 36% (applicable to taxable income in excess of $115,000 for
individuals filing single returns and taxable income in excess of $140,000 for
married couples filing joint returns), and 39.6% (for both individuals filing
single returns and married couples filing joint returns with taxable income in
excess of $250,000). (Effective rates on ordinary income may be somewhat higher,
resulting from a combination of the nominal rates, a phase-out of personal
exemptions for individuals filing single returns with adjusted gross income in
excess of $111,800 and for married couples filing joint returns with adjusted
gross income in excess of $167,700, and a partial disallowance of itemized
deductions for individuals with adjusted gross income in excess of $111,800.)
Some or all of the dividend distributions from the Fund will qualify for the
70% dividend received deduction for corporations.
Prior to purchasing shares of the Fund, prospective shareholders (except for
tax qualified retirement plans) should consider the impact of dividends or
capital gains distributions which are expected to be announced, or have been
announced but not paid. Any such dividends or capital gains distributions paid
shortly after a purchase of shares by an investor prior to the record date will
have the effect of reducing the per share net asset value by the amount of the
dividends or distributions. All or a portion of such dividends or distributions,
although in effect a return of capital, is subject to taxation.
If shares of the Fund are sold or otherwise disposed of more than twelve
months from the date of acquisition, the Fund shareholder will
27
<PAGE>
realize a long-term capital gain or loss equal to the difference between the
purchase price and the sale price of the shares disposed of, if, as is usually
the case, the Fund shares are a capital asset in the hands of the Fund
shareholder.
The Code provides that a shareholder who pays a sales charge in acquiring
shares of a mutual fund, redeems those shares within 90 days after acquiring
them, and subsequently acquires new shares in any mutual fund for a reduced
sales charge or no sales charge (pursuant to a reinvestment right acquired with
the first shares), may not take into account the sales charge imposed on the
first acquisition, to the extent of the reduction in the sales charge on the
second acquisition, for purposes of computing gain or loss on disposition of the
first acquired shares. The amount of sales charge disregarded under this rule
will, however, be treated as incurred in connection with the acquisition of the
second acquired shares.
Before investing in the Fund, an investor should consult a tax adviser
concerning the consequences of any local and state tax laws, and of any
retirement plan offering tax benefits.
Shareholders of the Fund receive an annual statement detailing federal tax
information. Distributions by the Fund, including the amount of any redemption,
are reported to shareholders in such annual statement and to the Internal
Revenue Service to the extent required by the Code. Such distributions received
by a Fund shareholder are ordinarily not subject to withholding of federal
income tax. However, a withholding of such tax at a rate of 31% may be made by
reason of the events specified in Section 3406 of the Code and the regulations
promulgated thereunder, including the failure of a Fund shareholder to supply
the Fund or its agent with such shareholder's taxpayer identification number.
Such withholding may also apply to a Fund shareholder who is otherwise exempt
from such withholding if such shareholder fails to properly document its status
as an exempt recipient.
- ------------------------------------------
INVESTMENT
PERFORMANCE
- -------------- Advertisements and
other sales literature for the Fund may refer to "yield,"
"average annual total return" and "cumulative total return." Performance
quotations are computed separately for Class A, Class B and Class C shares of
the Fund. All quotations of yield, average annual total return and cumulative
total return are based upon historical information and are not intended to
indicate future performance. The investment return on and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
The advertised yield of the Fund will be based upon a 30-day period stated in
the advertisement. Yield is calculated by dividing the net investment income per
share (as defined under Securities and Exchange Commission rules and
regulations) earned during the period by the maximum offering price per share on
the last day of the period. The result is then "annualized" using a formula that
provides for semi-annual compounding of income.
Both average annual total return and cumulative total return are based on a
hypothetical $1,000 payment to the Fund at the beginning of the advertised
period. Average annual total return is calculated by finding the average annual
compounded rate of return over the period that would equate the initial
investment to the ending redeemable value. Cumulative total return is the
percentage change between the public offering price of one Fund share at the
beginning of a period and the net asset value of that share at the end of the
period with dividend and capital gain distributions treated as reinvested. In
calculating both average annual total return and cumulative total return, the
maximum initial or deferred sales charge is deducted from the hypothetical
investment and all dividends and distributions during the period are assumed to
be reinvested. Such average
28
<PAGE>
annual total return and cumulative total return figures may also be accompanied
by average annual total return and cumulative total return figures, for the same
or other periods, which do not reflect the deduction of any sales charges.
- ------------------------------------------
RANKINGS AND
RATINGS The Fund may from time to time also advertise rankings or other ratings
of the Fund as determined by Morningstar, Inc., Lipper Analytical Services,
Inc., INVESTORS DAILY, Wiesenberger Financial Services, FORTUNE MAGAZINE, or
other mutual fund rating firms.
Shareholders of the Fund may also telephone MIMLIC Sales at (800) 443-3677 for
current quotations of yield, average annual total return and cumulative total
return.
For additional information regarding the calculation of yield, average annual
total return and cumulative total return see the Statement of Additional
Information.
- ------------------------------------------
ADDITIONAL PERFORMANCE
INFORMATION Further information about the performance of the Fund is contained
in the Fund's Annual Report to Shareholders, which may be obtained without
charge by writing or calling the Fund at the address or telephone number shown
on the cover of this Prospectus.
- ------------------------------------------
LIMITATION
OF DIRECTOR
LIABILITY
- ------------
Under Minnesota law, the directors of the Fund owe the Fund
and its shareholders certain fiduciary duties, including a
duty of "loyalty" (to act in good faith and in the best interests of the Fund)
and a duty of "care" (to act with the care that a reasonably prudent person
would exercise under similar circumstances). Minnesota law authorizes
corporations to eliminate the personal monetary liability of directors to the
corporation or its shareholders for breach of the duty of "care." Directors of
corporations adopting such a limitation provision still owe the corporation a
duty of "care" but under most circumstances cannot be sued for monetary damages
for breaches of such duty. The Fund's Articles of Incorporation limit the
liability of directors to the fullest extent permitted by law.
Directors of the Fund remain fully liable (including possibly for monetary
damages) for breaches of their duty of "loyalty", for self-dealing, for bad
faith and intentional misconduct, and for violations of the Securities Act of
1933, the Securities Exchange Act of 1934, and certain provisions of Minnesota
corporation law. Additionally, the Investment Company Act of 1940 prohibits
limiting a Fund director's liability for gross negligence and reckless
misconduct, and it is uncertain whether and to what extent directors remain
liable for monetary damages for violations of the Investment Company Act.
- ------------------------------------------
GENERAL
INFORMATION
- ------------- The Fund was
incorporated in July 1996 as a Minnesota corporation. The
Fund's authorized capital stock is of three classes (Class A, Class B and Class
C), common shares, with a par value of $.01 per share. All shares of the Fund
are nonassessable, fully transferable and have one vote and equal rights to
share in dividends and assets of the Fund. The shares of the Fund possess no
preemptive or conversion rights. Cumulative voting is not authorized for the
Fund. This means that the holders of more than 50% of the shares of the Fund
voting for the election of directors of the Fund can elect 100% of the directors
if they choose to do so, and in such event the holders of the remaining shares
of the Fund will be unable to elect any directors.
On September 4, 1996, Minnesota Mutual and its subsidiaries owned shares in
each class of
29
<PAGE>
shares of the Fund as set forth in the following table:
<TABLE>
<CAPTION>
NUMBER OF SHARES OWNED BY MINNESOTA
SHARES OUTSTANDING MUTUAL AND SUBSIDIARIES
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
Due to its ownership of more than 25% of the outstanding shares of the Fund,
Minnesota Mutual may be said to control the Fund. Minnesota Mutual, Advantus
Capital, MIMLIC Management and MIMLIC Sales are all organized as Minnesota
corporations.
The Fund does not 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 does
not require an annual meeting; instead, it provides for the Board of Directors
to convene shareholder meetings when it deems appropriate. In addition, if a
regular meeting of shareholders has not been held during the immediately
preceding fifteen months, a shareholder or shareholders holding 3% or more of
the voting shares of the Fund may demand a regular meeting of shareholders of
the Fund by written notice of demand given to the chief executive officer or the
chief financial officer of the Fund. Within 30 days after receipt of the demand
by one of those officers, the Board of Directors shall cause a regular meeting
of shareholders to be called and held no later than 90 days after receipt of the
demand, all at the expense of the Fund. Additionally, the Investment Company Act
of 1940 requires shareholder votes for all amendments to fundamental investment
policies and restrictions and for all investment advisory contracts and
amendments thereto.
The Fund sends to its shareholders a six-month unaudited and annual audited
financial report of the Fund, which includes a list of investment securities
held by the Fund. Shareholder inquiries should be directed to a registered
representative of the shareholder's broker-dealer, or to the Underwriter or the
Fund at the telephone number or mailing address listed on the cover of this
Prospectus.
- ------------------------------------------
COUNSEL AND
INDEPENDENT
AUDITORS
- -------------
The firm of Dorsey & Whitney LLP, 220 South Sixth Street,
Minneapolis, Minnesota 55402, is the General Counsel for the
Fund. KPMG Peat Marwick LLP, 4200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, are the independent auditors for the Fund.
- ------------------------------------------
CUSTODIAN
- -----------
First Trust National Association, 180 East Fifth Street, St.
Paul, Minnesota 55101, acts as custodian of the securities held by the Fund.
30
<PAGE>
- ------------------------------------------
APPENDIX--
BOND RATINGS
- --------------- Moody's Investors
Service, Inc. describes its six highest ratings for
corporate bonds, including convertible debt, as follows:
Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in Aaa
securities.
Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.
Bonds which are rated Baa are considered medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Moody's Investors Service, Inc. also applies numerical modifiers, 1, 2, and 3,
in each of these generic rating classifications. The modifier 1 indicates that
the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end of its generic rating category.
Standard & Poor's Corporation describes its six highest ratings for corporate
bonds, including convertible debt, as follows:
AAA. Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA. Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degrees.
A. Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB. Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
31
<PAGE>
BB. Debt rated "BB" has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could
lead to inadequate capacity to meet timely interest and principal payments.
B. Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
Standard & Poor's Corporation applies indicators "+," no character, and "-" to
the above rating categories. The indicators show relative standing within the
major rating categories.
32
<PAGE>
ADVANTUS VENTURE FUND, INC.
FUND INFORMATION:
INVESTMENT ADVISER
Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
(612) 292-5923
UNDERWRITER
MIMLIC Sales Corporation
P.O. Box 64132
St. Paul, Minnesota 55164-0132
(612) 228-4833
(800) 443-3677
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
The Minnesota Mutual Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
(800) 443-3677
CUSTODIAN
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
GENERAL COUNSEL
Dorsey & Whitney LLP
[ADVANTUS -TM- FAMILY OF FUNDS]
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ADVANTUS VENTURE FUND, INC.
ADVANTUS INDEX 500 FUND, INC.
______________, 1996
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the separate Prospectuses dated
___________, 1996 and should be read in conjunction therewith. A copy of each
Prospectus may be obtained from MIMLIC Sales Corporation, P.O. Box 64132,
St. Paul, Minnesota 55101 (telephone (800) 443-3677).
THIS STATEMENT OF ADDITIONAL INFORMATION MUST BE ACCOMPANIED OR PRECEDED BY A
COPY OF THE CURRENT PROSPECTUS FOR EACH OF THE ADVANTUS FUNDS NAMED ABOVE.
<PAGE>
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Venture Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Index Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . .10
DIRECTOR LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . .13
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Control and Management of Advantus Capital and MIMLIC Sales. . . . . . . . .13
Investment Advisory Agreement. . . . . . . . . . . . . . . . . . . . . . . .13
Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Payment of Certain Distribution Expenses of the Funds. . . . . . . . . . . .15
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE . . . . . . . . . . . . . .18
CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . .19
CAPITAL STOCK AND OWNERSHIP OF SHARES. . . . . . . . . . . . . . . . . . . . .21
HOW TO BUY SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
NET ASSET VALUE AND PUBLIC OFFERING PRICE. . . . . . . . . . . . . . . . . . .22
REDUCED SALES CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Right of Accumulation-Cumulative Purchase Discount . . . . . . . . . . . . .24
Letter of Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Combining Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Purchases of Class A shares by Certain Persons Affiliated with the Fund,
Advantus Capital MIMLIC Management, MIMLIC Sales, Minnesota Mutual, or
Any of Minnesota Mutual's Other Affiliated Companies . . . . . . . . . . . .25
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Open Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Systematic Investment Plan . . . . . . . . . . . . . . . . . . . . . . . . .26
Group Systematic Investment Plan . . . . . . . . . . . . . . . . . . . . . .26
Automatic Investment Plan. . . . . . . . . . . . . . . . . . . . . . . . . .27
Group Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Retirement Plans Offering Tax Benefits . . . . . . . . . . . . . . . . . . .27
<PAGE>
Systematic Withdrawal Plans. . . . . . . . . . . . . . . . . . . . . . . . .28
Exchange and Telephone Transfer Privilege. . . . . . . . . . . . . . . . . .29
REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Reinstatement Privilege. . . . . . . . . . . . . . . . . . . . . . . . . . .30
DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . . . . . . . . . . . . . .30
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
APPENDIX A - BOND AND COMMERCIAL PAPER RATINGS . . . . . . . . . . . . . . . A-1
Bond Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Commercial Paper Ratings . . . . . . . . . . . . . . . . . . . . . . . . . A-2
APPENDIX B - FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . B-1
<PAGE>
GENERAL INFORMATION AND HISTORY
Advantus Venture Fund, Inc. ("Venture Fund") and Advantus Index 500
Fund, Inc. ("Index Fund"), collectively referred to as the "Funds," are open-end
diversified investment companies, commonly called mutual funds. The Funds,
together with eight other mutual funds which share the same investment adviser,
are members of a family of mutual funds known as the "Advantus Funds." Each of
the Advantus Funds, excluding Advantus Money Market Fund, Inc., offers more than
one class of shares (the "Advantus Load Funds"). The Advantus Load Funds
currently offer three classes of shares (Class A, Class B and Class C), except
for Advantus International Balanced Fund, Inc. which currently offers its shares
in two classes (Class A and Class C). Each class is sold pursuant to different
sales arrangements and bears different expenses. The Funds were incorporated as
Minnesota corporations in July 1996.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective and policies of each of the Funds are
summarized on the front page of each Fund's Prospectus and are set forth in
detail in the text of each Fund's Prospectus under "Investment Objectives,
Policies and Risks."
STOCK INDEX FUTURES CONTRACTS
The Index Fund may purchase and sell stock index futures contracts. A
stock index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the stock index value at the close of
trading of the contract and the price at which the futures contract is
originally struck. No physical delivery of the stocks comprising the stock
index is made; generally contracts are closed out prior to the expiration date
of the contract. Closing out an open futures position is done by taking an
opposite position ("buying" a contract which has previously been "sold," or
"selling" a contract previously purchased) in an identical contract to terminate
the position. Brokerage commissions are incurred when a futures contract is
bought or sold. No price is paid upon entering into futures contracts.
Instead, the Fund is required to deposit an amount of cash or U.S. Treasury
securities known as "initial margin." Subsequent payments, called "variation
margin," are required on a daily basis as the value of the futures position
varies.
Because the value of index futures depends primarily on the value of
their underlying indexes, the performance of broad-based contracts will
generally reflect broad changes in common stock prices. The Index Fund's
investments may be more or less heavily weighted in securities of particular
types of issuers, or securities of issuers in particular industries, than the
index underlying its index futures positions. Therefore, while the Fund's index
futures positions should provide exposure to changes in value of the underlying
index (or protection against declines in their value in the case of hedging
transactions), it is likely that, in the case of hedging transactions, the price
changes of the Fund's index futures positions will not match the price changes
of the Fund's other investments. Other factors that could affect the
correlation of the Fund's index futures positions with its other investments are
discussed below.
1
<PAGE>
FUTURES MARGIN PAYMENTS. Both the purchaser and seller of a futures
contract are required to deposit "initial margin" with a futures broker (known
as a "futures commission merchant," or "FCM"), when the contract is entered
into. Initial margin deposits are equal to a percentage of the contract's
value, as set by the exchange where the contract is traded, and may be
maintained in cash or high quality liquid securities. If the value of either
party's position declines, that party will be required to make additional
"variation margin" payments to settle the change in value on a daily basis. The
party that has a gain may be entitled to receive all or a portion of this
amount. Initial and variation margin payments are similar to good faith
deposits or performance bonds, unlike margin extended by a securities broker,
and initial and variation margin payments do not constitute purchasing
securities on margin for purposes of the Fund's investment limitations. In the
event of the bankruptcy of a FCM that holds margin on behalf of the Fund, the
Fund may be entitled to return of margin owed to it only in proportion to the
amount received by the FCM's other customers. Advantus Capital will attempt to
minimize this risk by monitoring the creditworthiness of the FCMs with which the
Index Fund does business.
LIMITATIONS ON STOCK INDEX FUTURES TRANSACTIONS. The Index Fund has
filed a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association, which regulate trading in the
futures markets. Pursuant to regulations under the Commodity Exchange Act, the
Fund may use futures contracts for bona fide hedging purposes within the meaning
of CFTC regulations; PROVIDED, HOWEVER, that, with respect to positions in
futures contracts which are not used for bona fide hedging purposes within the
meaning of CFTC regulations, the aggregate initial margin required to establish
such position will not exceed 5% of the liquidation value of the Fund's
portfolio, after taking into account unrealized profits and unrealized losses on
any such contracts into which the Fund has entered.
Advantus Capital also intends to follow certain other limitations on the
Fund's futures activities. Under normal conditions, the Fund will not enter
into any futures contract if, as a result, the sum of (i) the current value of
assets hedged in the case of strategies involving the sale of securities, and
(ii) the current value of the indexes or other instruments underlying the Fund's
other futures positions would exceed 20% of the Fund's total assets. In
addition, the Fund does not intend to enter into futures contracts that are not
traded on exchanges or boards of trade.
The Index Fund may purchase index futures contracts in order to attempt
to remain fully invested in the stock market. For example, if the Fund had cash
and short-term securities on hand that it wished to invest in common stocks, but
at the same time it wished to maintain a highly liquid position in order to be
prepared to meet redemption requests or other obligations, it could purchase an
index futures contract in order to approximate the activity of the index with
that portion of its portfolio. The Index Fund may also purchase futures
contracts as an alternative to purchasing actual securities. For example, if
the Fund intended to purchase stocks but had not yet done so, it could purchase
a futures contract in order to participate in the index's activity while
deciding on particular investments. This strategy is sometimes known as an
anticipatory hedge. In these strategies the Fund would use futures contracts to
attempt to achieve an overall return -- whether positive or negative -- similar
to the return from the stocks included in the underlying index, while taking
advantage of potentially greater liquidity that futures contracts may offer.
Although the Fund would hold cash and liquid debt securities in a segregated
account with a value
2
<PAGE>
sufficient to cover its open future obligations, the segregated assets would be
available to the Fund immediately upon closing out the futures position, while
settlement of securities transactions can take several days.
When the Fund wishes to sell securities, it may sell stock index futures
contracts to hedge against stock market declines until the sale can be
completed. For example, if Advantus Capital anticipated a decline in common
stock prices at a time when the Fund anticipated selling common stocks, it could
sell a futures contract in order to lock in current market prices. If stock
prices subsequently fell, the futures contract's value would be expected to rise
and offset all or a portion of the anticipated loss in the common stocks the
Fund had hedged in anticipation of selling them. Of course, if prices
subsequently rose, the futures contract's value could be expected to fall and
offset all or a portion of any gains from those securities. The success of this
type of strategy depends to a great extent on the degree of correlation between
the index futures contract and the securities hedged.
ASSET COVERAGE FOR FUTURES POSITIONS. The Index Fund will comply with
guidelines established by the Securities and Exchange Commission with respect to
coverage of futures strategies by mutual funds, and if the guidelines so require
will set aside cash and appropriate liquid assets (e.g., United States
Government securities or other high grade debt obligations) in a segregated
custodial account in the amount prescribed. Securities held in a segregated
account cannot be sold while the futures contract is outstanding, unless they
are replaced with other suitable assets. As a result, there is a possibility
that segregation of a large percentage of the Fund's assets could impede
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
CORRELATION OF PRICE CHANGES. As noted above, price changes of the
Fund's futures positions may not be well correlated with price changes of its
other investments because of differences between the underlying index and the
types of securities the Fund invests in. For example, if the Fund sold a broad-
based index futures contract to hedge against a stock market decline while the
Fund completed a sale of specific securities in its portfolio, it is possible
that the price of the securities could move differently from the broad market
average represented by the index futures contract, resulting in an imperfect
hedge which could affect the correlation between the Fund's return and that of
the benchmark index. In the case of an index futures contract purchased by the
Fund either in anticipation of actual stock purchases or in an effort to be
fully invested, failure of the contract to track its index accurately could
hinder the Fund in the achievement of its objective.
Stock index futures prices can also diverge from the prices of their
underlying indexes. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
index, and the time remaining until expiration of the contract, which may not
affect security prices the same way. Imperfect correlation may also result from
differing levels of demand in the futures markets and the securities markets,
from structural differences in how futures and securities are traded, or from
imposition of daily price fluctuation limits for futures contract. The Fund may
sell futures contracts with a greater or lesser value than the securities it
wishes to hedge in order to attempt to compensate for differences in
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<PAGE>
historical volatility between the futures contract and the securities, although
this may not be successful in all cases.
LIQUIDITY OF FUTURES CONTRACTS. Because futures contracts are generally
settled within a day from the date they are closed out, compared with a
settlement period of three days for some types of securities, the futures
markets can provide liquidity superior to the securities markets in many cases.
Nevertheless, there is no assurance a liquid secondary market will exist for any
particular futures contract at any particular time. In addition, futures
exchanges may establish daily price fluctuation limits for futures contracts,
and may halt trading if a contract's price moves upward or downward more than
the limit in a given day. On volatile trading days when the price fluctuation
limit is reached, it may be impossible for the Fund to enter into new positions
or close out existing positions. Trading in index futures can also be halted if
trading in the underlying index stocks is halted. If the secondary market for a
futures contract is not liquid because of price fluctuation limits or otherwise,
it would prevent prompt liquidation of unfavorable futures positions, and
potentially could require the Fund to continue to hold a futures position until
the delivery date regardless of potential consequences. If the Fund must
continue to hold a futures position, its access to other assets held to cover
the position could also be impaired.
FEDERAL TAX TREATMENT. The Internal Revenue Code of 1986, as amended
(the "Code"), forbids the Fund from earning more than 30% of its gross income
from the sale or other disposition of certain investments, including futures
contracts, which are owned for less than three months. The likelihood of
violating this 30% test is increased by the amount of investing the Fund does in
futures contract. Additionally, the Code requires the Fund to diversify its
investment holdings. The Internal Revenue Service position regarding the
treatment of futures contracts for diversification purposes is not clear, and
the extent to which the Fund may engage in these transactions may be limited by
this requirement. The Code also provides that, with respect to certain futures
contracts held by the Fund at the end of its taxable year, unrealized gain or
loss on such contracts may have to be recognized for tax purposes under a
special system within the Code. The actual gain or loss recognized by the Fund
in an eventual disposition of such contract, however, will be adjusted by the
amount of the gain or loss recognized earlier under the Code's system. See
"Distributions and Tax Status."
OPTIONS
Venture Fund may write covered call options which are traded on national
securities exchanges with respect to common stocks in its portfolio ("covered
options") in an attempt to earn additional current income on its portfolio or to
guard against an expected decline in the price of a security. When the Fund
writes a covered call option, it gives the purchaser of the option the right to
buy the underlying security at the price specified in the option (the "exercise
price") at any time during the option period. If the option expires
unexercised, the Fund realizes income, typically in the form of short-term
capital gain, to the extent of the amount received for the option (the
"premium"). If the option is exercised, a decision over which the Fund has no
control, the Fund must sell the underlying security to the option holder at the
exercise price. By writing a covered option, the Fund foregoes, in exchange for
the premium less the commission ("net premium"), the opportunity to profit
during the option period from an increase in the market value
4
<PAGE>
of the underlying security above the exercise price. The Fund does not write
call options in an aggregate amount greater than 15% of its net assets.
The Fund purchases call options only to close out a position. When an
option is written on securities in the Fund's portfolio and it appears that the
purchaser of that option is likely to exercise the option and purchase the
underlying security, it may be considered appropriate to avoid liquidating the
Fund's position, or the Fund may wish to extinguish a call option sold by it so
as to be free to sell the underlying security. In such instances the Fund may
purchase a call option on the same security with the same exercise price and
expiration date which had been previously written. Such a purchase would have
the effect of closing out the option which the Fund has written. The Fund
realizes a short-term capital gain if the amount paid to purchase the call
option is less than the premium received for writing a similar option.
Generally, the Fund realizes a short-term loss if the amount paid to purchase
the call option is greater than the premium received for writing the option. If
the underlying security has substantially risen in value, it may be difficult or
expensive to purchase the call option for the closing transaction.
UNITED STATES GOVERNMENT AND AGENCY OBLIGATIONS
The Funds may invest in bills, certificates of indebtedness, notes and
bonds issued or guaranteed as to principal or interest by the United States
Government or by agencies or authorities controlled or supervised by and acting
as instrumentalities of the United States Government established under authority
granted by Congress. Obligations issued or guaranteed by agencies of the United
States Government include, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the United States
Government include, among others, the Federal Home Loan Mortgage Corporation,
the Federal Land Banks and the U.S. Postal Service. Some of these securities
are supported by the full faith and credit of the U.S. Treasury (e.g.,
Government National Mortgage Association securities), others are supported by
the right of the issuer to borrow from the Treasury (e.g., Federal Farm Credit
Bank securities), while still others are supported only by the credit of the
instrumentality (e.g., Federal National Mortgage Association securities).
Guarantees of principal by agencies or instrumentalities of the United States
Government may be a guarantee of payment at the maturity of the obligation so
that in the event of a default prior to maturity there might not be a market and
thus no means of realizing on the obligation prior to maturity. Guarantees as
to the timely payment of principal and interest do not extend to the value or
yield of these securities nor to the value of the Funds' shares.
DEBT SECURITIES AND DOWN-GRADED INSTRUMENTS
Venture Fund may invest in non-convertible debt securities rated BBB or
Baa or higher by S&P or Moody's, respectively. (Venture Fund may also invest in
debt securities convertible into common stock which are rated lower than BBB or
Baa. See the Venture Fund Prospectus for information regarding these securities
and the Fund's policy regarding them.)
The market value of debt securities generally varies in response to
changes in interest rates and the financial condition of each issuer. During
periods of declining interest rates, the value of debt securities generally
increases. Conversely, during periods of rising interest rates, the value of
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<PAGE>
such securities generally declines. These changes in market value will be
reflected in the Fund's net asset value.
Venture Fund may, however, acquire non-convertible debt securities
which, after acquisition, are down-graded by the rating agencies to a rating
lower than BBB or Baa by S&P or Moody's, respectively. In such an event it is
the Fund's general policy to dispose of such down-graded securities except when,
in the judgment of the Fund's investment adviser, it is to the Fund's advantage
to continue to hold such securities. In no event, however, will the Fund hold
more than 5% of its net assets in securities rated lower than BBB or Baa by S&P
or Moody's, respectively. Although they may offer higher yields than do higher
rated securities, low rated and unrated debt securities generally involve
greater volatility of price and risk of principal and income, including the
possibility of default by, or bankruptcy of, the issuers of the securities. In
addition, the markets in which low rated and unrated debt securities are traded
are more limited than those in which higher rated securities are traded. The
existence of limited markets for particular securities may diminish the Fund's
ability to sell the securities at fair value either to meet redemption requests
or to respond to changes in the economy or in the financial markets and could
adversely affect and cause fluctuations in the daily net asset value of the
Fund's shares.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of low rated debt
securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of low rated debt securities may be more complex
than for issuers of higher rated securities, and the ability of the Fund to
achieve its investment objective may, to the extent of investment in low rated
debt securities, be more dependent upon such creditworthiness analysis than
would be the case if the Fund were investing in higher rated securities.
Low rated debt securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than investment grade
securities. The prices of low rated debt securities have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic downturns or individual corporate developments. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in low rated debt securities prices because the
advent of a recession could lessen the ability of a highly leveraged company to
make principal and interest payments on its debt securities. If the issuer of
low rated debt securities defaults, the Fund may incur additional expenses to
seek recovery. The low rated bond market is relatively new, and many of the
outstanding low rated bonds have not endured a major business recession.
INVESTMENT RESTRICTIONS
Each of the Funds is "diversified" as defined in the Investment Company
Act of 1940. This means that at least 75% of the value of the Fund's total
assets is represented by cash and cash items, government securities, securities
of other investment companies, and securities of other issuers, which for
purposes of this calculation, are limited in respect of any one issuer to an
amount not greater in value than 5% of the Fund's total assets and to not more
than 10% of the outstanding voting securities of such issuer.
6
<PAGE>
Each Fund is also subject to certain "fundamental" investment
restrictions, which may not be changed without the vote of a "majority" of the
Fund's outstanding shares. As used in the Prospectus and this Statement of
Additional Information, "majority" means the lesser of (i) 67% of a Fund's
outstanding shares present at a meeting of the holders if more than 50% of the
outstanding shares are present in person or by proxy or (ii) more than 50% of a
Fund's outstanding shares. An investment restriction which is not fundamental
may be changed by vote of the Board of Directors without further shareholder
approval. Except as otherwise noted, each of the investment restrictions below
is fundamental.
VENTURE FUND (The investment restrictions numbered 1 through 7 below are
fundamental. Restrictions numbered 8 through 14 are not fundamental and may
be changed by the Fund's Board of Directors.)
Venture Fund will NOT:
(1) Purchase any security if, as a result, 25% or more of the
Fund's total assets would be invested in the securities of issuers
conducting their principal business activities in a single industry;
(2) Purchase securities on margin (but it may obtain such short-
term credits as may be necessary for the clearance of purchases and
sales or securities); or make short sales except short sales against the
box where it owns the securities sold or, by virtue of ownership of
other securities, it has the right to obtain, without payment of further
consideration, securities equivalent in kind and amount to those sold;
(3) Borrow money, except from banks and only as a temporary
measure for extraordinary or emergency purposes and not in excess of 5%
of its net assets;
(4) Mortgage, pledge, hypothecate, or in any manner transfer, as
security for indebtedness, any assets of the Fund;
(5) Make loans, except by purchase of bonds, debentures,
commercial paper, certificates of deposit, corporate notes and similar
evidences of indebtedness, which are a part of an issue to the public or
to financial institutions, and except loans of portfolio securities to
broker-dealers and financial institutions, determined by the Fund to
have sufficient financial responsibility, if such loans are secured at
all times by cash or securities issued or guaranteed by the United
States Government, its agencies or instrumentalities, in an amount at
all times equal to at least 100% of the market value of the portfolio
securities loaned and if, immediately after making such loan, the total
amount of portfolio securities loaned does not exceed 20% of the market
value of the Fund's total assets;
(6) Buy or sell oil, gas or other mineral leases, rights or
royalty contracts, real estate, real estate limited partnership
interests, or interests in real estate which are not readily marketable,
commodities or commodity contracts. (This does not prevent the Fund
from purchasing securities of companies investing in the foregoing.);
7
<PAGE>
(7) Act as an underwriter of securities, except to the extent the
Fund may be deemed to be an underwriter, under the federal securities
laws, in connection with the disposition of portfolio securities;
(8) Purchase or retain securities of any company if officers and
directors of the Fund or of its investment adviser who individually own
more than 1/2 of 1% of the shares or securities of that company,
together own more than 5%;
(9) Make investments for the purpose of exercising control or
management;
(10) Participate on a joint or joint and several basis in any
trading account in securities;
(11) Write put or call options, except covered call options which
are traded on national securities exchanges with respect to common
stocks in its portfolio, in an aggregate amount not greater than 15% of
its net assets; or purchase options, except call options in order to
close out a position;
(12) Invest in the securities of other investment companies with an
aggregate value in excess of 5% of the Funds total assets, except
securities acquired as a result of a merger, consolidation or
acquisition of assets;
(13) Purchase or sell any securities other than Fund shares from or
to its investment adviser or any officer or director of the Fund or its
investment adviser; or
(14) Invest more than a total of 10% of the Fund's net assets in
securities or other assets, including repurchase agreements with a
maturity of over seven days, which are illiquid or securities of
businesses (including predecessors) less than three years old; provided
that investments in securities of businesses (including predecessors)
less than three years old will in no event exceed in the aggregate more
than 5% of the Fund's net assets.
INDEX FUND (The investment restrictions numbered 1 through 7 below are
fundamental. Restrictions numbered 8 through 14 are not fundamental and may be
changed by the Fund's Board of Directors.)
Index Fund will NOT:
(1) Purchase any security if, as a result, 25% or more of the
Fund's total assets would be invested in the securities of issuers
conducting their principal business activities in a single industry;
(2) Purchase securities on margin , although it may obtain such
short-term credits as may be necessary for the clearance of purchases
and sales or securities (for purposes of this restriction, the deposit
or payment of initial or variation margin in connection with futures
contracts will not be deemed to be a purchase of securities on margin);
or make
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<PAGE>
short sales except short sales against the box where it owns the
securities sold or, by virtue of ownership of other securities, it has
the right to obtain, without payment of further consideration,
securities equivalent in kind and amount to those sold;
(3) Borrow money, except from banks and only as a temporary
measure for extraordinary or emergency purposes and not in excess of 5%
of its net assets;
(4) Mortgage, pledge, hypothecate, or in any manner transfer, as
security for indebtedness, any assets of the Fund;
(5) Make loans, except by purchase of bonds, debentures,
commercial paper, certificates of deposit, corporate notes and similar
evidences of indebtedness, which are a part of an issue to the public or
to financial institutions, and except loans of portfolio securities to
broker-dealers and financial institutions, determined by the Fund to
have sufficient financial responsibility, if such loans are secured at
all times by cash or securities issued or guaranteed by the United
States Government, its agencies or instrumentalities, in an amount at
all times equal to at least 100% of the market value of the portfolio
securities loaned and if, immediately after making such loan, the total
amount of portfolio securities loaned does not exceed 20% of the market
value of the Fund's total assets;
(6) Buy or sell oil, gas or other mineral leases, rights or
royalty contracts, real estate, real estate limited partnership
interests, or interests in real estate which are not readily marketable,
commodities or commodity contracts, except that it may invest in stock
index futures contracts. (This does not prevent the Fund from
purchasing securities of companies investing in the foregoing.);
(7) Act as an underwriter of securities, except to the extent the
Fund may be deemed to be an underwriter, under the federal securities
laws, in connection with the disposition of portfolio securities;
(8) Purchase or retain securities of any company if officers and
directors of the Fund or of its investment adviser who individually own
more than 1/2 of 1% of the shares or securities of that company,
together own more than 5%;
(9) Make investments for the purpose of exercising control or
management;
(10) Participate on a joint or joint and several basis in any
trading account in securities;
(11) Write or purchase put or call options, or combinations
thereof;
(12) Invest in the securities of other investment companies with an
aggregate value in excess of 5% of the Funds total assets, except
securities acquired as a result of a merger, consolidation or
acquisition of assets;
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(13) Purchase or sell any securities other than Fund shares from or
to its investment adviser or any officer or director of the Fund or its
investment adviser; or
(14) Invest more than a total of 10% of the Fund's net assets in
securities or other assets, including repurchase agreements with a
maturity of over seven days, which are illiquid or securities of
businesses (including predecessors) less than three years old; provided
that investments in securities of businesses (including predecessors)
less than three years old will in no event exceed in the aggregate more
than 5% of the Fund's net assets.
With respect to each of the Funds, any investment policy set forth under
"Investment Objectives, Policies and Risks" in the Prospectus, or any
restriction set forth above which involves a maximum percentage of securities or
assets shall not be considered to be violated unless an excess over the
percentage occurs immediately after an acquisition of securities or utilization
of assets and results therefrom, or unless the Investment Company Act of 1940
provides otherwise.
PORTFOLIO TURNOVER
Portfolio turnover is the ratio of the lesser of annual purchases or
sales of portfolio securities to the average monthly value of portfolio
securities, not including short-term securities. A 100% portfolio turnover rate
would occur, for example, if the lesser of the value of purchases or sales of
portfolio securities for a particular year were equal to the average monthly
value of the portfolio securities owned during such year.
Venture Fund makes changes in its portfolio securities which are
considered advisable in light of market conditions. Frequent changes may result
in higher brokerage and other costs for the Fund. Portfolio turnover rates may
vary greatly from year to year and within a particular year and may also be
affected by cash requirements for redemptions of Fund shares. Venture Fund does
not emphasize short-term trading profits.
Index Fund generally seeks to invest for the long term, but reserves the
right to sell securities irrespective of how long they have been held. However,
because of the "passive" investment management approach of the Fund, the Fund's
portfolio turnover rate is expected to be generally lower than the rate for most
other investment companies. Ordinarily, securities will be sold by Index Fund
only to reflect certain administrative changes in the S&P 500 (including mergers
or changes in its composition) or to accommodate cash flows into and out of the
Fund while maintaining the similarity of the Fund to the S&P 500.
DIRECTORS AND EXECUTIVE OFFICERS
The names, addresses, principal occupations, and other affiliations of
directors and executive officers of each of the Funds are given below:
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<TABLE>
<CAPTION>
Position with Principal Occupation and other
Name and Address the Funds Affiliations (past 5 years)
- ---------------- --------- ---------------------------
<S> <C> <C>
Paul H. Gooding* President Vice President and Treasurer of
Advantus Capital and Director Minnesota Mutual; President Director
Management, Inc. of Advantus Capital; President,
400 Robert Street North Treasurer and Director of MIMLIC
St. Paul, Minnesota 55101 Management
Frederick P. Feuerherm* Treasurer Second Vice President of Minnesota
The Minnesota Mutual and Director Mutual; Vice President and Assistant
Life Insurance Company Secretary of MIMLIC Management
400 Robert Street North
St. Paul, Minnesota 55101
Ralph D. Ebbott Director Retired, Vice President and Treasurer
409 Birchwood Avenue of Minnesota Mining and Manufacturing
White Bear Lake, Company (tape, adhesive, photographic,
Minnesota 55110 and electrical products) through June
1989
Charles E. Arner Director Retired, Vice Chairman of The First
E-1218 First National National Bank of Saint Paul from
Bank Building November 1983 through June 1984;
332 Minnesota Street Chairman and Chief Executive Officer
St. Paul, Minnesota 55101 of The First National Bank of Saint Paul
from October 1980 through November
1983
Ellen S. Berscheid Director Regents' Professor of Psychology at the
University of Minnesota University of Minnesota
N309 Elliott Hall
Minneapolis, Minnesota 55455
Michael J. Radmer Secretary Partner with the law firm of
Dorsey & Whitney LLP Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
</TABLE>
_________________________
* Denotes directors and officers of the Funds who are "interested persons" (as
defined under the Investment Company Act of 1940) of the Funds, Advantus Capital
Management, Inc. ("Advantus Capital"), MIMLIC Asset Management ("MIMLIC
Management") or MIMLIC Sales Corporation ("MIMLIC Sales").
_________________________
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Legal fees and expenses are paid to the law firm of which Michael J.
Radmer is a partner. No compensation is paid by any of the Advantus Funds to
any of its officers or directors who is affiliated with Advantus Capital or
MIMLIC Management. Each director of the Funds who is not affiliated with
Advantus Capital or MIMLIC Management is also a director of the other ten
investment companies of which Advantus Capital or MIMLIC Management is the
investment adviser (12 investment companies in total -- the "Fund Complex").
Such directors receive compensation in connection with all such investment
companies which, in the aggregate, is equal to $6,000 per year and $1,500 per
meeting attended (and reimbursement of travel expenses to attend directors'
meetings). The portion of such compensation borne by any Fund is a PRO RATA
portion based on the ratio that such Fund's total net assets bears to the total
net assets of the Fund Complex.
As of September 4, 1996, the directors and executive officers of the Funds
did not own any shares of the Funds.
DIRECTOR LIABILITY
Under Minnesota law, the Board of Directors of each Fund owes certain
fiduciary duties to the Fund 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 ordinarily 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 also authorizes corporations to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of the fiduciary duty of "care."
Minnesota law does not, however, permit a corporation to eliminate or limit the
liability of a director (i) for any breach of the directors' duty of "loyalty"
to the corporation or its shareholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) for authorizing a dividend, stock repurchase or redemption or other
distribution in violation of Minnesota law or for violation of certain
provisions of Minnesota securities laws, or (iv) for any transaction from which
the director derived an improper personal benefit. The Articles of
Incorporation of each Fund limit the liability of 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 of 1940 (which Act
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 officers). Minnesota law does not permit
elimination or limitation of the availability of equitable relief, such as
injunctive or rescissionary relief. Further, Minnesota law
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<PAGE>
does not permit elimination or limitation of a director's liability under the
Securities Act of 1933 or the Securities Exchange Act of 1934, and it is
uncertain whether and to what extent the elimination of monetary liability would
extend to violations of duties imposed on directors by the Investment Company
Act of 1940 and the rules and regulations adopted under such Act.
INVESTMENT ADVISORY AND OTHER SERVICES
GENERAL
Advantus Capital Management, Inc. ("Advantus Capital") has been the
investment adviser and manager of each of the Funds since its inception.
Advantus Capital is a wholly-owned subsidiary of MIMLIC Asset Management Company
("MIMLIC Management"). MIMLIC Sales acts as the Funds' underwriter. Both
Advantus Capital and MIMLIC Sales act as such pursuant to written agreements
that will be periodically considered for approval by the directors or
shareholders of the Fund. The address of both Advantus Capital and MIMLIC Sales
is 400 Robert Street North, St. Paul, Minnesota 55101.
CONTROL AND MANAGEMENT OF ADVANTUS CAPITAL AND MIMLIC SALES
Advantus Capital was incorporated in Minnesota in June, 1994, and is a
wholly-owned subsidiary of MIMLIC Management. MIMLIC Management is a subsidiary
of The Minnesota Mutual Life Insurance Company ("Minnesota Mutual"), which was
organized in 1880, and has assets of more than $9.8 billion. MIMLIC Sales is
also a subsidiary of MIMLIC Management. Paul H. Gooding, President and a
Director of each of the Funds, is President and Director of Advantus Capital,
and President, Treasurer, and a Director of MIMLIC Management. Frederick P.
Feuerherm, Treasurer and a Director of each of the Funds, is a Vice President
and Assistant Secretary of MIMLIC Management. James P. Tatera, Senior Vice
President and Director of Advantus Capital, is also Vice President of MIMLIC
Management.
INVESTMENT ADVISORY AGREEMENT
Advantus Capital acts as investment adviser and manager of the Funds under
Investment Advisory Agreements (the "Advisory Agreements") dated July 17, 1996
for each Fund, each of which became effective on September 4, 1996, when the
Funds' initial shareholder approved the Advisory Agreements. The Advisory
Agreements were last approved by the Board of Directors of each Fund (including
a majority of the directors who are not parties to the contract, or interested
persons of any such party) on July 17, 1996. The Advisory Agreements will
terminate automatically in the event of their assignment. In addition, each
Advisory Agreement is terminable at any time, without penalty, by the Board of
Directors of the respective Fund or by vote of a majority of the Fund's
outstanding voting securities on not more than 60 days' written notice to
Advantus Capital, and by Advantus Capital on 60 days' written notice to the
Fund. Unless sooner terminated, each Advisory Agreement shall continue in
effect for more than two years after its execution only so long as such
continuance is specifically approved at least annually by either the Board of
Directors of the respective Fund or by a vote of a majority of the outstanding
voting securities, provided that in either event such continuance is also
approved by the vote of a majority of the directors who are not parties to the
Advisory Agreement, or
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<PAGE>
interested persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval.
Pursuant to the Advisory Agreements each Fund pays Advantus Capital an
advisory fee equal on an annual basis to a percentage of that Fund's average
daily net assets as set forth in the following table:
Advisory Fee as Percentage
Fund of Average Net Assets
---- ---------------------
Venture Fund .80%
Index Fund .34%
For this fee, Advantus Capital acts as investment adviser and manager
for the Funds, and in the case of Venture Fund pays the Fund's transfer agent,
dividend disbursing agent and redemption agent expenses. Index Fund pays its
own transfer agent, dividend disbursing agent, and redemption agent expenses.
The Funds have engaged Minnesota Mutual to act as their transfer agent, dividend
disbursing agent, and redemption agent. While the advisory fees paid by Venture
Fund are higher than those paid by most mutual funds, they are partially offset
by Advantus Capital's payment of certain expenses, such as the transfer agent,
dividend disbursing agent and redemption agent expenses, which expenses are not
customarily paid for by a mutual fund's investment adviser. Subject to a
minimum annual fee of $12,000, Minnesota Mutual provides transfer agent services
to Index Fund at an annual cost of $25 per shareholder account. In addition,
separate from the investment advisory agreement, each of the Funds has entered
into an agreement with Minnesota Mutual under which Minnesota Mutual provides
accounting, legal and other administrative services to the Funds. Minnesota
Mutual currently provides such services to the Funds at a monthly cost of
$3,600.
Under the Advisory Agreements, Advantus Capital furnishes the Funds
office space and all necessary office facilities, equipment and personnel for
servicing the investments of the Funds, and pays the salaries and fees of all
officers and directors of the Funds who are affiliated with Advantus Capital.
In addition, except to the extent that MIMLIC Sales receives Rule 12b-1
distribution fees (see "Payment of Certain Distribution Expenses of the Funds"
below), MIMLIC Sales bears all promotional expenses in connection with the
distribution of the Funds' shares, including paying for prospectuses and
statements of additional information for new shareholders, and shareholder
reports for new shareholders, and the costs of sales literature. The Funds pay
all other expenses not so expressly assumed.
DISTRIBUTION AGREEMENT
The Board of Directors of each Fund, on July 17, 1996, including a
majority of the directors who are not parties to the contract, or interested
persons of any such party, last approved the respective Fund's Distribution
Agreement with MIMLIC Sales (the "Distribution Agreements"), each dated July 17,
1996.
14
<PAGE>
Each Distribution Agreement may be terminated by the respective Fund or
MIMLIC Sales at any time by the giving of 60 days' written notice, and
terminates automatically in the event of its assignment. Unless sooner
terminated, the Distribution Agreement for the respective Fund shall continue in
effect for more than two years after its execution only so long as such
continuance is specifically approved at least annually by either the Board of
Directors of the Fund or by a vote of a majority of the outstanding voting
securities, provided that in either event such continuance is also approved by
the vote of a majority of the directors who are not parties to the Distribution
Agreement, or interested persons of such parties, cast in person at a meeting
called for the purpose of voting on such approval.
The Distribution Agreements require MIMLIC Sales to pay all advertising
and promotional expenses in connection with the distribution of the Funds'
shares including paying for Prospectuses and Statements of Additional
Information (if any) for new shareholders, shareholder reports for new
shareholders, and the costs of sales literature.
In the Distribution Agreements, MIMLIC Sales undertakes to indemnify the
Funds against all costs of litigation and other legal proceedings, and against
any liability incurred by or imposed upon the Funds in any way arising out of or
in connection with the sale or distribution of the Funds' shares, except to the
extent that such liability is the result of information which was obtainable by
MIMLIC Sales only from persons affiliated with the Funds but not with MIMLIC
Sales.
PAYMENT OF CERTAIN DISTRIBUTION EXPENSES OF THE FUNDS
Each of the Funds has adopted separate Plans of Distribution applicable
to Class A shares, Class B shares and Class C shares, respectively, relating to
the payment of certain distribution expenses pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Each of the Funds, pursuant to its Plans of
Distribution, pays fees to MIMLIC Sales which equal, on an annual basis, a
percentage of the Fund's average daily net assets attributable to Class A
shares, Class B shares and Class C shares, respectively, as set forth in the
following table:
Rule 12b-1 Fee as Percentage
of Average Daily Net Assets Attributable to
Fund Class A Shares Class B Shares Class C Shares
- ---- -------------- -------------- --------------
Venture Fund .30% 1.00% 1.00%
Index Fund .30% 1.00% 1.00%
Such fees are also used for distribution-related services and for servicing of
shareholder accounts.
All of the Rule 12b-1 fees payable by the Funds and attributable to
Class A shares of the Funds, and a portion of the Rule 12b-1 fees payable with
respect to Class B and Class C shares equal to .75% of the average daily net
assets attributable to such Class B and Class C shares, constitute distribution
fees designed to compensate MIMLIC Sales for advertising, marketing and
distributing the shares of the Funds.
15
<PAGE>
The distribution fees may be used by MIMLIC Sales for the purpose of
financing any activity which is primarily intended to result in the sale of
shares of the particular Fund. For example, such distribution fee may be used
by MIMLIC Sales: (a) to compensate broker-dealers, including MIMLIC Sales and
its registered representatives, for their sale of a Fund's shares, including the
implementation of the programs described below with respect to broker-dealers,
banks, and other financial institutions; and (b) to pay other advertising and
promotional expenses in connection with the distribution of a Fund's shares.
These advertising and promotional expenses include, by way of example but not by
way of limitation, costs of prospectuses for other than current shareholders;
preparation and distribution of sales literature; advertising of any type;
expenses of branch offices provided jointly by MIMLIC Sales and any affiliate
thereof; and compensation paid to and expenses incurred by officers, employees
or representatives of MIMLIC Sales or of other broker-dealers, banks, or
financial institutions.
A portion of the Rule 12b-1 fee payable with respect to Class B and
Class C shares of each of the Funds, equal to .25% of the average daily net
assets attributable to such Class B and Class C shares, constitutes a
shareholder servicing fee designed to compensate MIMLIC Sales for the provision
of certain services to the holders of Class B and Class C shares.
Amounts expended by the Funds under the Plans are expected to be used
for the implementation by MIMLIC Sales of a dealer incentive program. Pursuant
to the program, MIMLIC Sales may provide compensation to investment dealers for
the provision of distribution assistance in connection with the sale of the
Funds' shares to such dealers' customers and for the provision of administrative
support services to customers who directly or beneficially own shares of the
Funds. The distribution assistance and administrative support services rendered
by dealers may include, but are not limited to, the following: distributing
sales literature; answering routine customer inquiries concerning the Funds;
assisting customers in changing dividend options, account designation and
addresses, and in enrolling into the pre-authorized check plan or systematic
withdrawal plan; assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions; investing dividends and any capital gains distributions
automatically in the Funds' shares and providing such other information and
services as the Funds or the customer may reasonably request. Such fees for
servicing customer accounts would be in addition to the portion of the sales
charge received or to be received by dealers which sell shares of the Funds.
MIMLIC Sales may also provide compensation to certain institutions such
as banks ("Service Organizations") which have purchased shares of the Funds for
the accounts of their clients, or which have made the Funds' shares available
for purchase by their clients, and/or which provide continuing service to such
clients. The Glass-Steagall Act and other applicable laws, among other things,
prohibit certain banks from engaging in the business of underwriting securities.
In such circumstances, MIMLIC Sales, if so requested, will engage such banks as
Service Organizations only to perform administrative and shareholder servicing
functions, but at the same fees and other terms applicable to dealers. State
law may, however, differ from the interpretation of the Glass-Steagall Act
expressed and banks and other financial institutions may therefore be required
to register as securities dealers pursuant to state law. If a bank were
prohibited from acting as a Service Organization, its shareholder clients would
be permitted to remain shareholders of the Funds and alternative means for
continuing servicing of such
16
<PAGE>
shareholders would be sought. In such event changes in the operation of the
Funds might occur and a shareholder serviced by such bank might no longer be
able to avail itself of any automatic investment or other services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
In addition, the Plan contains, among other things, provisions complying
with the requirements of Rule 12b-1 discussed below. Rule 12b-1(b) provides
that any payments made by an investment company in connection with the
distribution of its shares may only be made pursuant to a written plan
describing all material aspects of the proposed financing of distribution and
also requires that all agreements with any person relating to implementation of
the plan must be in writing. In addition, Rule 12b-1(b)(2) requires that such
plan, together with any related agreements, be approved by a vote of the board
of directors and of the directors who are not interested persons of the
investment company and have no direct or indirect financial interest in the
operation of the plan or in any agreements related to the plan, cast in person
at a meeting called for the purpose of voting on such plan or agreements. Rule
12b-1(b)(3) requires that the plan or agreement provide, in substance: (1) 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 paragraph (b)(2) of Rule
12b-1; (2) that any person authorized to direct the disposition of monies paid
or payable by the investment company pursuant to the plan or any related
agreement shall provide to the investment 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 (3) in the
case of a plan, that it may be terminated at any time by vote of a majority of
the members of the board of directors of the investment company who are not
interested persons of the investment company and have no direct or indirect
financial interest in the operation of the plan or in any agreements related to
the plan or by vote of a majority of the outstanding voting securities of the
investment company. Rule 12b-1(b)(4) requires that such plans may not be
amended to increase materially the amount to be spent for distribution without
shareholder approval and that all material amendments of the plan must be
approved in the manner described in paragraph (b)(2) of Rule 12b-1. Rule 12b-
1(c) provides that the investment company may rely upon Rule 12b-1(b) only if
selection and nomination of the investment company's disinterested directors are
committed to the discretion of such disinterested directors. Rule 12b-1(e)
provides that the investment company may implement or continue a plan pursuant
to Rule 12b-1(b) 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 of 1940, that there is a reasonable likelihood
that the plan will benefit the investment company and its shareholders. At the
Board of Directors meeting held July 17, 1996, the directors of the Funds so
concluded.
The Plans of Distribution could be construed as "compensation plans"
because MIMLIC Sales is paid a fixed fee and is given discretion concerning what
expenses are payable under the Plans. Under a compensation plan, the fee to the
distributor is not directly tied to distribution expenses actually incurred by
the distributor, thereby permitting the distributor to receive a profit if
amounts received exceed expenses. MIMLIC Sales may spend more or less for the
distribution and promotion of the Funds' shares than it receives as distribution
fees pursuant to the Plans.
17
<PAGE>
However, to the extent fees received exceed expenses, including indirect expense
such as overhead, MIMLIC Sales could be said to have received a profit.
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
In a number of security transactions, it is possible for the Funds to
deal in the over-the-counter security markets (including the so-called "third
market" which is the "over-the-counter" market for securities listed on the New
York Stock Exchange) without the payment of brokerage commissions but at net
prices including a spread or markup; the Funds trade in this manner whenever the
net price appears advantageous.
Advantus Capital selects and (where applicable) negotiates commissions
with the brokers who execute the transactions for the Funds.
The primary criteria for the selection of a broker is the ability of the
broker, in the opinion of Advantus Capital, to secure prompt execution of the
transactions on favorable terms, including the reasonableness of the commission
and considering the state of the market at the time. In selecting a broker,
Advantus Capital considers whether such broker provides brokerage and research
services (as defined in the Securities Exchange Act of 1934), and generally the
Funds pay higher than the lowest commission rates available. Advantus Capital
may direct Fund transactions to brokers who furnish research services to
Advantus Capital. Such research services include advice, both directly and in
writing, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities, as well as analyses and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy,
and the performance of accounts. By allocating brokerage business in order to
obtain research services for Advantus Capital, the Funds enable Advantus Capital
to supplement its own investment research activities and allows Advantus Capital
to obtain the views and information of individuals and research staffs of many
different securities research firms prior to making investment decisions for the
Funds. To the extent such commissions are directed to these other brokers who
furnish research services to Advantus Capital, Advantus Capital receives a
benefit, not capable of evaluation in dollar amounts, without providing any
direct monetary benefit to the Funds from these commissions.
There is no formula for the allocation by Advantus Capital of the Funds'
brokerage business to any broker-dealer for brokerage and research services.
However, Advantus Capital will authorize a Fund to pay an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker would have charged only if Advantus Capital determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker viewed in terms of
either that particular transaction or Advantus Capital's overall
responsibilities with respect to the accounts as to which it exercises
investment discretion.
No brokerage is allocated for the sale of Fund shares. Advantus Capital
believes that most research services obtained by it generally benefit one or
more of the investment companies which it manages and also benefit accounts
which it manages. Normally research services obtained through managed funds and
managed accounts investing in common stocks would primarily
18
<PAGE>
benefit such funds and accounts; similarly, services obtained from transactions
in fixed income securities would be of greater benefit to the managed funds and
managed accounts investing in debt securities.
The same security may be suitable for one or more of the Funds and the
other funds or private accounts managed by Advantus Capital or its affiliates.
If and when two or more funds or accounts simultaneously purchase or sell the
same security, the transactions will be allocated as to price and amount in
accordance with arrangements equitable to each fund or account. The
simultaneous purchase or sale of the same securities by one Fund and other Funds
or accounts may have a detrimental effect on that Fund, as this may affect the
price paid or received by the Fund or the size of the position obtainable by the
Fund.
The Funds will not execute portfolio transactions through any affiliate,
unless such transactions, including the frequency thereof, the receipt of
commissions payable in connection therewith and the selection of the affiliated
broker-dealer effecting such transactions are not unfair or unreasonable to the
shareholders of the Funds. In the event any transactions are executed on an
agency basis, Advantus Capital will authorize the Funds to pay an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker-dealer would have charged only if Advantus Capital
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of Advantus Capital with respect to the Funds as to
which it exercises investment discretion. If the Funds execute any transactions
on an agency basis, they will generally pay higher than the lowest commission
rates available.
In determining the commissions to be paid to an affiliated broker-
dealer, it is the policy of the Funds that such commissions will, in the
judgment of Advantus Capital, subject to review by the Fund's Board of
Directors, be both (a) at least as favorable as those which would be charged by
other qualified brokers in connection with comparable transactions involving
similar securities being purchased or sold on an exchange during a comparable
period of time, and (b) at least as favorable as commissions contemporaneously
charged by such affiliated broker-dealers on comparable transactions for their
most favored comparable unaffiliated customers. While the Funds do not deem it
practicable and in their best interest to solicit competitive bids for
commission rates on each transaction, consideration will regularly be given to
posted commission rates as well as to other information concerning the level of
commissions charged on comparable transactions by other qualified brokers.
CALCULATION OF PERFORMANCE DATA
Advertisements and other sales literature for the Funds may refer to
"yield," "average annual total return" and "cumulative total return."
Performance quotations are computed separately for each class of shares of the
Funds.
YIELD. Yield is computed by dividing the net investment income per
share (as defined under Securities and Exchange Commission rules and
regulations) earned during the computation
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<PAGE>
period by the maximum offering price per share on the last day of the period,
according to the following formula:
a-b
YIELD = 2[( ----- +1)6-1]
cd
Where: a = dividends and interest earned
during the period;
b = expenses accrued for the period
(net of reimbursements);
c = the average daily number of
shares outstanding during the
period that were entitled to
receive dividends; and
d = the maximum offering price per
share on the last day of the
period.
AVERAGE ANNUAL TOTAL RETURN. Average annual total return is computed by
finding the average annual compounded rates of return over the periods indicated
in the advertisement that would equate the initial amount invested to the ending
redeemable value, 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.
CUMULATIVE TOTAL RETURN. Cumulative total return figures are 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:
20
<PAGE>
ERV-P
CTR = ( ------- )100
P
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.
The calculations for both average annual total return and cumulative
total return deduct the maximum sales charge from the initial hypothetical
$1,000 investment, assume all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and include all recurring fees, such as investment advisory
and management fees, charged as expenses to all shareholder accounts.
Such average annual total return and cumulative total return figures may
also be accompanied by average annual total return and cumulative total return
figures, for the same or other periods, which do not reflect the deduction of
any sales charges.
CAPITAL STOCK AND OWNERSHIP OF SHARES
Each Fund's shares of common stock, and each class thereof, have a par
value $.01 per share, and have equal rights to share in dividends and assets.
The shares possess no preemptive or conversion rights. Cumulative voting is not
authorized. This means that the holders of more than 50% of the shares voting
for the election of directors can elect 100% of the directors if they choose to
do so, and in such event the holders of the remaining shares will be unable to
elect any directors.
Each of the Funds has 10 billion authorized shares of common stock and
has designated 2 billion authorized shares as Class A shares, 2 billion
authorized shares as Class B shares and 2 billion authorized shares as Class C
shares. The Funds have the following numbers of shares outstanding:
Shares Outstanding at September 4, 1996
----------------------------------------
Fund Class A Class B Class C
---- ------- ------- --------
Venture Fund 5,000 5,000 5,000
Index Fund 5,000 5,000 5,000
As of September 4, 1996, no person held of record, to the knowledge of
the respective Funds, or owned more than 5% of the outstanding shares of any of
the Funds, except as set forth in the following table:
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<PAGE>
Number of
Name and Address of Shareholder Shares Percentage
- ------------------------------- ------ ----------
Venture Fund
- ------------
Minnesota Mutual and affiliates* 15,000 100%
Index Fund
- ----------
Minnesota Mutual and affiliates* 15,000 100%
* 400 Robert Street North, St. Paul, Minnesota 55101.
HOW TO BUY SHARES
The procedures for purchasing shares of the funds are summarized in the
Prospectus following the caption "Purchase of Fund Shares."
In addition to purchases of shares through insurance agents and employees
of Minnesota Mutual who are registered representatives of MIMLIC Sales and who
are licensed under applicable state and federal laws, shares may also be
purchased in writing as described in the prospectus through firms which are
members of the National Association of Securities Dealers, Inc. and which have
selling agreements with MIMLIC Sales.
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The method for determining the public offering price and net asset value
per share is summarized in the prospectus in the text following the headings
"Purchase of Fund Shares" and "Sales Charges."
The portfolio securities in which the Funds invest fluctuate in value, and
hence the net asset value per share of each Fund also fluctuates.
On September 4, 1996, the net asset value and public offering price per
share for Class A, Class B and Class C shares of each of the Funds were
calculated as follows:
VENTURE FUND
CLASS A SHARES
Net Assets ($50,000) = Net Asset Value Per Share ($10.00)
- ----------------------------
Shares outstanding (5,000)
To obtain the maximum public offering price per share, the Fund's 5%
sales charge must be added to the net asset value obtained above:
22
<PAGE>
$10.00 = Public Offering Price Per Share ($10.53)
------
.95
CLASS B SHARES
Net Assets ($50,000) = Net Asset Value AND Public
- --------------------------
Shares outstanding (5,000) Offering Price Per Share ($10.00)
CLASS C SHARES
Net Assets ($50,000) = Net Asset Value AND Public
- --------------------------
Shares outstanding (5,000) Offering Price Per Share ($10.00)
INDEX FUND
CLASS A SHARES
Net Assets ($50,000) = Net Asset Value Per Share ($10.00)
- --------------------------
Shares outstanding (5,000)
To obtain the maximum public offering price per share, the Fund's
5% sales charge must be added to the net asset value obtained above:
$10.00 = Public Offering Price Per Share ($10.53)
------
.95
CLASS B SHARES
Net Assets ($50,000) = Net Asset Value AND Public
- ----------------------------
Shares outstanding (5,000) Offering Price Per Share ($10.00)
CLASS C SHARES
Net Assets ($50,000) = Net Asset Value AND Public
- ----------------------------
Shares outstanding (5,000) Offering Price Per Share ($10.00)
REDUCED SALES CHARGES
Special purchase plans are enumerated in the text of each Fund's
Prospectus immediately following the caption "Special Purchase Plans" and are
fully described below.
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<PAGE>
RIGHT OF ACCUMULATION-CUMULATIVE PURCHASE DISCOUNT
The front end sales charge and contingent deferred sales charge
applicable to each purchase of Class A shares and Class B shares, respectively,
of the Advantus Load Funds is based on the next computed net asset value of all
Class A, Class B and Class C shares of such Funds held by the shareholder
(including dividends reinvested and capital gains distributions accepted in
shares), plus the cost of all Class A, Class B and Class C shares of such Funds
currently being purchased. It is the obligation of each shareholder desiring
this discount in sales charge to notify MIMLIC Sales, through his or her dealer
or otherwise, that he or she is entitled to the discount.
LETTER OF INTENT
The applicable sales charge is based on total purchases over a 13-
month period where there is an initial purchase equal to or exceeding $250,
accompanied by filing with MIMLIC Sales a signed "Letter of Intent" form to
purchase, and by in fact purchasing not less than $50,000 of shares in one of
the Advantus Load Funds within that time. The 13-month period is measured from
the date the Letter of Intent is approved by MIMLIC Sales, or at the purchaser's
option, it may be made retroactive 90 days, in which case MIMLIC Sales will make
appropriate adjustments on purchases during the 90-day period.
In computing the total amount purchased for purposes of determining
the applicable sales charge, the net asset value of Class A, Class B and Class C
shares currently held in all Advantus Load Funds, on the date of the first
purchase under the Letter of Intent, may be used as a credit toward Fund shares
to be purchased under the Letter of Intent. Class A, Class B and Class C shares
of all the Advantus Load Funds may also be included in the purchases during the
13-month period.
The Letter of Intent includes a provision for payment of additional
applicable sales charges at the end of the period in the event the investor
fails to purchase the amount indicated. In the case of Class A shares, this is
accomplished by holding 5% of the investor's initial purchase in escrow. If the
investor's purchases equal those specified in the Letter of Intent, the escrow
is released. If the purchases do not equal those specified in the Letter of
Intent, he or she may remit to MIMLIC Sales an amount equal to the difference
between the dollar amount of sales charges actually paid and the amount of sales
charges that would have been paid on the aggregate purchases if the total of
such purchases had been made at a single time. If the purchaser does not remit
this sum to MIMLIC Sales on a timely basis, MIMLIC Sales will redeem the
appropriate number of shares, and then release or deliver any remaining shares
in the escrow account. In the case of Class B shares, if the investor fails to
purchase shares in the amount indicated, the contingent deferred sales charge
applicable to purchased Class B shares will be calculated without regard to the
Letter of Intent. The Letter of Intent is not a binding obligation on the part
of the investor to purchase, or the respective Fund to sell, the full amount
indicated. Nevertheless, the Letter of Intent should be read carefully before
it is signed.
COMBINING PURCHASES
With respect to each of the Advantus Load Funds, purchases of Class A,
Class B and Class C shares for any other account of the investor, or such
person's spouse or minor children, or
24
<PAGE>
purchases on behalf of participants in a tax-qualified retirement plan may be
treated as purchases by a single investor for purposes of determining the
availability of a reduced sales charge.
PURCHASES OF CLASS A SHARES BY CERTAIN PERSONS AFFILIATED WITH THE FUND,
ADVANTUS CAPITAL MIMLIC MANAGEMENT, MIMLIC SALES, MINNESOTA MUTUAL, OR ANY OF
MINNESOTA MUTUAL'S OTHER AFFILIATED COMPANIES
Directors and officers of Advantus Capital, MIMLIC Management, MIMLIC
Sales, the Funds, Minnesota Mutual, or any of Minnesota Mutual's other
affiliated companies, and their full-time and part-time employees, sales
representatives and retirees, any trust, pension, profit-sharing, or other
benefit plan for such persons, the spouses, siblings, direct ancestors or direct
descendants of such persons, Minnesota Mutual and its affiliates themselves,
advisory clients of Advantus Capital or MIMLIC Management, employees of sales
representatives employed in offices maintained by such sales representatives,
certain accounts as to which a bank or broker-dealer charges an account
management fee, provided the bank or broker-dealer has an agreement with MIMLIC
Sales, and certain accounts sold by registered investment advisers who charge
clients a fee for their services may purchase Class A shares of the Advantus
Load Funds at net asset value. These persons must give written assurance that
they have bought for investment purposes, and that the securities will not be
resold except through redemption or repurchase by, or on behalf of, the
respective Fund. These persons are not required to pay a sales charge because
of the reduced sales effort involved in their purchases.
SHAREHOLDER SERVICES
OPEN ACCOUNTS
A shareholder's investment is automatically credited to an open
account maintained for the shareholder by Minnesota Mutual. Stock certificates
are not currently issued. Following each transaction in the account, a
shareholder will receive a confirmation statement disclosing the current balance
of shares owned and the details of recent transactions in the account. After
the close of each year Minnesota Mutual sends to each shareholder a statement
providing federal tax information on dividends and distributions paid to the
shareholder during the year. This should be retained as a permanent record. A
fee may be charged for providing duplicate information.
The open account system provides for full and fractional shares
expressed to four decimal places and, by making the issuance and delivery of
stock certificates unnecessary, eliminates problems of handling and safekeeping,
and the cost and inconvenience of replacing lost, stolen, mutilated or destroyed
certificates.
The costs of maintaining the open account system are paid by Advantus
Capital in the case of the Venture Fund. The costs of maintaining the open
account system for Index Fund are paid by the Fund. No direct charges are made
to shareholders. Although the Funds have no present intention of making such
direct charges to shareholders, they reserve the right to do so. Shareholders
will receive prior notice before any such charges are made.
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<PAGE>
SYSTEMATIC INVESTMENT PLAN
Each Fund provides a convenient, voluntary method of purchasing shares
in the Fund through its "Systematic Investment Plan".
The principal purposes of the Plan are to encourage thrift by enabling
you to make regular purchases in amounts less than normally required, and, in
the case of the Advantus Load Funds, to employ the principle of dollar cost
averaging, described below.
By acquiring Fund shares on a regular basis pursuant to a Systematic
Investment Plan, or investing regularly on any other systematic plan, the
investor takes advantage of the principle of Dollar Cost Averaging. Under
Dollar Cost Averaging, if a constant amount is invested at regular intervals at
varying price levels, the average cost of all the shares will be lower than the
average of the price levels. This is because the same fixed number of dollars
buys more shares when price levels are low and fewer shares when price levels
are high. It is essential that the investor consider his or her financial
ability to continue this investment program during times of market decline as
well as market rise. The principle of Dollar Cost Averaging will not protect
against loss in a declining market, as a loss will result if the plan is
discontinued when the market value is less than cost.
A Plan may be opened by indicating your intention to invest $25 or
more monthly for at least one year. You will receive a confirmation showing the
number of shares purchased, purchase price, and subsequent new balance of shares
accumulated.
An investor has no obligation to invest regularly or to continue the
Plan, which may be terminated by the investor at any time without penalty.
Under the Plan, any distributions of income and realized capital gains will be
reinvested in additional shares at net asset value unless a shareholder
instructs MIMLIC Sales in writing to pay them in cash. MIMLIC Sales reserves
the right to increase or decrease the amount required to open and continue a
Plan, and to terminate any Plan after one year if the value of the amount
invested is less than $250.
GROUP SYSTEMATIC INVESTMENT PLAN
This Plan provides employers and employees with a convenient means for
purchasing shares of each Fund under various types of employee benefit and
thrift plans, including payroll withholding and bonus incentive plans. The Plan
may be started with an initial cash investment of $50 per participant for a
group consisting of five or more participants. The shares purchased by each
participant under the Plan will be held in a separate account in which all
dividends and capital gains will be reinvested in additional shares of the Fund
at net asset value. To keep his or her account open, subsequent payments
totaling $25 per month must be made into each participant's account. If the
group is reduced to less than five participants, the minimums set forth under
"Systematic Investment Plan" shall apply. The Plan may be terminated by MIMLIC
Sales or the shareholder at any time upon reasonable notice.
26
<PAGE>
AUTOMATIC INVESTMENT PLAN
Each Fund offers an Automatic Investment Plan, which allows you to
automatically invest a specified amount in the Fund each month.
Shares of the respective Fund may be purchased through pre-authorized
bank drafts. With the cooperation of your bank, you may authorize MIMLIC Sales
to make a withdrawal from your checking account on the 1st or 15th day of each
month in the amount you specify to purchase shares of the Fund at the public
offering price next determined after receipt of the proceeds from your bank
draft. A minimum initial investment of $25 is required, and the minimum
subsequent monthly investment under this plan is $25.
You may discontinue your Automatic Investment Plan at any time.
Further information about the plans is available from MIMLIC Sales or your
MIMLIC Sales representative.
GROUP PURCHASES
An individual who is a member of a qualified group may also purchase
shares of the Advantus Load Funds at the reduced sales charge applicable to the
group taken as a whole. The sales charge is calculated by taking into account
not only the dollar amount of the Class A, Class B and Class C shares of the
Funds being purchased by the individual member, but also the aggregate dollar
value of such Class A, Class B and Class C shares previously purchased and
currently held by other members of the group. Members of a qualified group may
not be eligible for a Letter of Intent.
A "qualified group" is one which (i) has been in existence for more
than six months, (ii) has a purpose other than acquiring Fund shares at a
discount, and (iii) satisfies uniform criteria which enable MIMLIC Sales to
realize economies of scale in distributing such shares. A qualified group must
have more than ten members, must be available to arrange for group meetings
between representatives of MIMLIC Sales, must agree to include sales and other
materials related to the Funds in its publications and mailings to members at
reduced or no cost to MIMLIC Sales, and must seek, upon request, to arrange for
payroll deduction or other bulk transmission of investments to the Funds.
RETIREMENT PLANS OFFERING TAX BENEFITS
The federal tax laws provide for a variety of retirement plans
offering tax benefits. These plans may be funded with shares of any of the
Funds. The plans include H.R. 10 (Keogh) plans for self-employed individuals
and partnerships, individual retirement accounts (IRA's), corporate pension
trust and profit sharing plans, including 401(k) plans, and retirement plans for
public school systems and certain tax exempt organizations, e.g. 403(b) plans.
The initial investment in each Fund by such a plan must be at least
$250 for each participant in a plan, and subsequent investments must be at least
$25 per month for each participant. Income dividends and capital gain
distributions must be reinvested. Plan documents and further information can be
obtained from MIMLIC Sales.
27
<PAGE>
An investor should consult a competent tax or other adviser as to the
suitability of Fund shares as a vehicle for funding a plan, in whole or in part,
under the Employee Retirement Income Security Act of 1974 and as to the
eligibility requirements for a specific plan and its state as well as federal
tax aspects, including changes made by the Tax Reform Act of 1986.
SYSTEMATIC WITHDRAWAL PLANS
An investor owning shares in any one of the Funds having a value of
$5,000 or more at the current public offering price may establish a Systematic
Withdrawal Plan providing for periodic payments of a fixed or variable amount.
The Plan is particularly convenient and useful for trustees in making periodic
distributions to retired employees. Through this Plan a trustee can arrange for
the retirement benefit to be paid directly to the employee by the respective
Fund and to continue the tax-free accumulation of income and capital gains prior
to their distribution to the employee. An investor may terminate the Plan at
any time. A form for use in establishing such a plan is available from MIMLIC
Sales.
A shareholder under a Systematic Withdrawal Plan may elect to receive
payments monthly, quarterly, semiannually, or annually for a fixed amount of not
less than $50 or a variable amount based on (1) the market value of a stated
number of shares, (2) a specified percentage of the account's market value or
(3) a specified number of years for liquidating the account (e.g., a 20-year
program of 240 monthly payments would be liquidated at a monthly rate of 1/240,
1/239, 1/238, etc.). The initial payment under a variable payment option may be
$50 or more.
All shares under the Plan must be left on deposit. Income dividends
and capital gain distributions will be reinvested without a sales charge at net
asset value determined on the record date.
Since withdrawal payments represent proceeds from the liquidation of
shares, withdrawals may reduce and possibly exhaust the initial investment,
particularly in the event of a decline in net asset value. In addition,
withdrawal payments attributable to the redemption of Class B shares may be
subject to a contingent deferred sales charge. Accordingly, the shareholder
should consider whether a Systematic Withdrawal Plan and the specified amounts
to be withdrawn are appropriate in the circumstances. The Funds and MIMLIC
Sales make no recommendations or representations in this regard. It may be
appropriate for the shareholder to consult a tax adviser before establishing
such a plan.
Under this Plan, any distributions of income and realized capital
gains must be reinvested in additional shares, and are reinvested at net asset
value. If a shareholder wishes to purchase additional shares of the respective
Fund under this Plan, except in the case of Money Market Fund, other than by
reinvestment of distributions, it should be understood that, in the case of
Class A shares, he or she would be paying a sales commission on such purchases,
while liquidations effected under the Plan would be at net asset value, and, in
the case of Class B shares, he or she would be purchasing such shares at net
asset value while liquidations effected under the Plan would involve the payment
of a contingent deferred sales charge. Purchases of additional shares
concurrent with withdrawals are ordinarily disadvantageous to the shareholder
because of sales charges and tax liabilities. Additions to a shareholder
account in which an election has been
28
<PAGE>
made to receive systematic withdrawals will be accepted only if each such
addition is equal to at least one year's scheduled withdrawals or $1,200,
whichever is greater. A shareholder may not have a "Systematic Withdrawal Plan"
and a "Systematic Investment Plan" in effect simultaneously as it is not, as
explained above, advantageous to do so.
EXCHANGE AND TELEPHONE TRANSFER PRIVILEGE
The exchange and telephone transfer privileges available in connection
with the Funds, the procedures for effecting such transactions and a description
of the applicable charges, are described in each Fund's Prospectus in the text
following the caption "Exchange and Telephone Transfer of Fund Shares."
Telephone transfers and other exchanges may be made only between
already open Fund accounts having identical registrations.
REDEMPTIONS
The procedures for redemption of Fund shares, and the charges
applicable to redemptions of Class B shares, are summarized in the Prospectus in
the text following the caption "Redemption of Fund Shares."
Class B shares are subject to a contingent deferred sales charge of up
to 5% if redeemed within six years of purchase. See "Sales Charges--Class B
Shares" and "Redemption of Fund Shares" in the Prospectus.
The obligation of each of the Funds to redeem its shares when called
upon to do so by the shareholder is mandatory with the following exceptions.
Each Fund will pay in cash all redemption requests by any shareholder
of record, limited in amount during any 90-day period to the lesser of $250,000
or 1% of the net asset value of the Fund at the beginning of such period. When
redemption requests exceed such amount, however, the Fund reserves the right to
make part or all of the payment in the form of securities or other assets of the
Fund. An example of when this might be done is in case of emergency, such as in
those situations enumerated in the following paragraph, or at any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. Any securities being so distributed would be valued in
the same manner as the portfolio of the Fund is valued. If the recipient sold
such securities, he or she probably would incur brokerage charges. The Fund has
filed with the Securities and Exchange Commission a notification of election
pursuant to Rule 18f-1 under the Investment Company Act of 1940 in order to make
such redemptions in kind.
Redemption of shares, or payment, may be suspended at times (a) when
the New York Stock Exchange is closed for other than customary weekend or
holiday closings, (b) when trading on said Exchange is restricted, (c) when an
emergency exists, as a result of which disposal by the Fund of securities owned
by it is not reasonably practicable, or it is not reasonably practicable for the
Fund fairly to determine the value of its net assets, or during any other period
when the Securities and Exchange Commission, by order, so permits; provided that
applicable rules and
29
<PAGE>
regulations of the Securities and Exchange Commission shall govern as to whether
the conditions prescribed in (b) or (c) exist.
REINSTATEMENT PRIVILEGE
The Prospectus for each of the Funds describes redeeming shareholders'
reinstatement privileges in the text following the caption "Reinstatement
Privilege." Written notice from persons wishing to exercise this reinstatement
privilege must be received by MIMLIC Sales within 90 days after the date of the
redemption. The reinstatement or exchange will be made at net asset value next
determined after receipt of the notice and will be limited to the amount of the
redemption proceeds or to the nearest full share if fractional shares are not
purchased. All shares issued as a result of the reinstatement privilege
applicable to redemptions of Class A and Class B shares will be issued only as
Class A shares. Any CDSC incurred in connection with the prior redemption
(within 90 days) of Class B shares will not be refunded or re-credited to the
shareholder's account. Shareholders who redeem Class C shares and exercise
their reinstatement privilege will be issued only Class C shares, which shares
will have a remaining holding period prior to conversion equal to the remaining
holding period applicable to the prior Class C shares at redemption.
See "Taxes" in the Prospectus for a discussion of the effect of
redeeming shares within 90 days after acquiring them and subsequently acquiring
new shares in any mutual fund at a reduced sales charge. Should an investor
utilize the reinstatement privilege following a redemption which resulted in a
loss, all or a portion of that loss might not be currently deductible for
Federal income tax purposes, for an investor which is not tax-exempt.
Exercising the reinstatement privilege would not alter any capital gains taxes
payable on a realized gain, for an investor which is not tax-exempt. See
discussion under "Taxes" in the Prospectus regarding the taxation of capital
gains.
DISTRIBUTIONS AND TAX STATUS
The tax status of the Funds and the distributions which they may make
are summarized in the text of the Prospectus following the caption "Taxes."
Each Fund intends to fulfill the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), as a regulated investment
company. If so qualified, the Funds will not be liable for federal income taxes
to the extent they distribute their taxable income to their shareholders.
Each Fund is subject to a non-deductible excise tax equal to 4 percent
of the excess, if any, of the amount required to be distributed pursuant to the
Code for each calendar year over the amount actually distributed. In order to
avoid the imposition of this excise tax, the Fund generally must declare
dividends by the end of a calendar year representing 98 percent of the Fund's
ordinary income for the calendar year and 98 percent of its capital gain net
income (both long-term and short-term capital gains) for the twelve-month period
ending October 31 of the calendar year.
The Code forbids a regulated investment company from earning 30% or
more of its gross income from the sale or other disposition of stock,
securities, options, futures, and certain foreign currencies held less than
three months. This restriction may limit the extent to which Index Fund
30
<PAGE>
may purchase stock index futures contracts. To the extent the Fund engages in
short-term trading and enters into futures transactions, the likelihood of
violating this 30% requirement is increased.
The Code also requires a regulated investment company to diversify its
holdings. The Internal Revenue Service has not made its position clear
regarding the treatment of futures contracts for purposes of the diversification
test, and the extent to which Index Fund could buy or sell futures contracts may
be limited by this requirement.
Gain or loss on futures contracts is taken into account when realized
by entering into a closing transaction. In addition, with respect to many types
of futures contracts held at the end of a Fund's taxable year, unrealized gain
or loss on such contracts is taken into account at the then current fair market
value thereof under a special "marked-to-market, 60/40 system," and such gain or
loss is recognized for tax purposes. The gain or loss from such futures
contracts is treated as 60% long-term and 40% short-term capital gain or loss,
regardless of their holding period. The amount of any capital gain or loss
actually realized by a Fund in a subsequent sale or other disposition of such
futures contracts will be adjusted to reflect any capital gain or loss taken
into account by such Fund in a prior year as a result of the constructive sale
under the "marked-to-market, 60/40 system." Notwithstanding the rules described
above, with respect to futures contract, Index Fund may make an election that
will have the effect of exempting all or a part of those identified futures
contracts from being treated for federal income tax purposes as sold on the last
business day of the Fund's taxable year. All or part of any loss realized by
the Fund on any closing of a futures contract may be deferred until all of the
Fund's offsetting positions with respect to the futures contract are closed. As
a result of trading in futures contracts, the Fund may realize net capital gains
which, when distributed to shareholders, would be taxable in the hands of the
shareholders.
The foregoing relates only to federal taxation. Prospective
shareholders should consult their tax advisers as to the possible application of
state and local income tax laws to Fund distributions.
FINANCIAL STATEMENTS
Financial statements for the Funds are presented in Appendix B. These
financial statements have been audited by KPMG Peat Marwick LLP, independent
auditors, whose report thereon appears in Appendix B and is included upon the
authority of said firm as experts in accounting and auditing.
31
<PAGE>
APPENDIX A
BOND AND COMMERCIAL PAPER RATINGS
BOND RATINGS
Moody's Investors Service, Inc. describes its five highest ratings for
corporate bonds and mortgage-related securities as follows:
Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment some time in the future.
Bonds which are rated Baa are considered medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact
have speculative characteristics as well.
Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often
the protection of interest and principal payments may be very
moderate, and thereby not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds
in this class.
Moody's Investors Service, Inc. also applies numerical modifiers,
1, 2, and 3, in each of these generic rating classifications. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
Standard & Poor's Corporation describes its five highest ratings
for corporate bonds and mortgage-related securities as follows:
AAA. Debt rated "AAA" has the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal is
extremely strong.
A-1
<PAGE>
AA. Debt rated "AA" has a very strong capacity to pay interest
and repay principal and differs from the higher rated issues only
in small degree.
A. Debt rated "A" has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions
than debt in higher rated categories.
BBB. Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in
this category than in higher rated categories.
BB. Debt rated "BB" has less near-term vulnerability to default
than other speculative grade debt. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or
economic conditions that could lead to inadequate capacity to meet
timely interest and principal payments.
Standard & Poor's Corporation applies indicators "+", no character,
and "-" to the above rating categories. The indicators show relative
standing within the major rating categories.
COMMERCIAL PAPER RATINGS
The rating Prime-1 is the highest commercial paper rating assigned
by Moody's Investors Service, Inc. Among the factors considered by Moody's
Investors Service, Inc. in assigning the ratings are the following: (1)
evaluation of the management of the issuer, (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks
which may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4) liquidity;
(5) amount and quality of long-term debt; (6) trend of earnings over a period
of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; an (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet such obligations.
The rating A-1 is the highest rating assigned by Standard & Poor's
Corporation to commercial paper which is considered by Standard & Poor's
Corporation to have the following characteristics:
Liquidity ratios of the issuer are adequate to meet cash
redemptions. Long-term senior debt is rated "A" or better. The
issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend
with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of
management are unquestioned.
A-2
<PAGE>
APPENDIX B - FINANCIAL STATEMENTS
B-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Advantus Venture Fund, Inc.:
We have audited the statement of assets and liabilities of Advantus Venture
Fund, Inc. as of September 4, 1996. This financial statement is the
responsibility of Fund's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash in bank by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Advantus
Index 500 Fund, Inc. at September 4, 1996, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 4, 1996
<PAGE>
ADVANTUS VENTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 4, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash in bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000
Organizational costs (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,735
-----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,735
-----------
LIABILITIES
Payable to Adviser (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,735
-----------
Net assets applicable to outstanding shares. . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000
-----------
-----------
Represented by:
Capital stock - authorized 10 billion shares (Class A - 2 billion shares, Class B -
2 billion shares, Class C - 2 billion shares and 4 billion shares unallocated) of
$.01 par value (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,850
-----------
Total - representing net assets applicable to outstanding capital stock. . . . . . . . . . . . $ 150,000
-----------
-----------
Net assets applicable to outstanding Class A shares. . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Net assets applicable to outstanding Class B shares. . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Net assets applicable to outstanding Class C shares. . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Shares outstanding and net asset value per share:
Class A - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
Class B - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
Class C - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
</TABLE>
See accompanying notes to statement of assets and liabilities.
<PAGE>
ADVANTUS VENTURE FUND, INC.
Notes to Statement of Assets and Liabilities
September 4, 1996
(1) ORGANIZATION
Advantus Venture Fund, Inc. (the Fund) was incorporated on July 3, 1996.
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee than
Class A shares. Both Class B and Class C shares automatically convert to Class
A shares at net asset value after a specified holding period. Such holding
periods decline as the amount of the purchase increases and range from 28 to 84
months after purchase for Class B shares and 40 to 96 months after purchase for
Class C shares. All three classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that the
level of distribution fees charged differs between Class A, Class B and Class C
shares. Income, expenses (other than distribution fees) and realized and
unrealized gains or losses are allocated to each class of shares based upon its
relative net assets.
The only transaction of the Fund since inception has been the initial sale
on September 4, 1996 of 5,000 shares of Class A, 5,000 shares of Class B and
5,000 shares of Class C to Advantus Capital Management, Inc.
(2) FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute taxable
income to the shareholders in amounts that will avoid federal income and excise
taxes.
(3) EXPENSES AND RELATED PARTY TRANSACTIONS
The Fund has entered into an investment advisory agreement with Advantus
Capital Management, Inc. (Advantus Capital or the Adviser) under which Advantus
Capital manages the Fund's assets and provides research, statistical and
advisory services and pays related office rental and executive expenses and
salaries. In addition, as part of the fee, Advantus Capital pays the expenses
of the Fund's transfer, dividend disbursing and redemption agent (The Minnesota
Mutual Life Insurance Company (Minnesota Mutual), the parent of MIMLIC Asset
Management Company who in turn is the parent of Advantus Capital). The fee for
investment management and advisory services is based on the average daily net
assets of the Fund at the annual rate of .80 percent.
<PAGE>
ADVANTUS VENTURE FUND, INC.
Notes to Statement of Assets and Liabilities - continued
(3) EXPENSES AND RELATED PARTY TRANSACTIONS - CONTINUED
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund and wholly-owned subsidiary of
MIMLIC Asset Management Company, to be used to pay certain expenses incurred in
the distribution, promotion and servicing of the Fund's shares. The Class A
Plan provides for a fee up to .30 percent of average daily net assets of Class A
shares. The Class B and Class C Plans provide for a fee up to 1.00 percent of
average daily net assets of Class B and Class C shares, respectively. The Class
B and Class C 1.00 percent fee is comprised of a .75 percent distribution fee
and a .25 percent service fee. MIMLIC Sales intends to waive that portion of
Class A distribution fees which exceeds, as a percentage of average daily net
assets, .10 percent during the current fiscal year.
The Fund has entered into an administrative services agreement with
Minnesota Mutual for accounting, auditing, legal and other administrative
services which Minnesota Mutual provides. The administrative service fee for
the Fund is $3,600 per month.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, organizational costs,
printing and shareholders reports, legal, auditing and accounting services and
other miscellaneous expenses.
Advantus Capital directly incurs and pays the above operating expenses
relating to the Fund and the Fund in turn reimburses Advantus Capital. Advantus
Capital intends to voluntarily absorb certain operating expenses, other than
investment advisory fees, which exceed, as a percentage of average daily net
assets, .45% during the current fiscal year.
Legal fees in the amount of $2,100, included as organizational costs, were
incurred for services provided by a law firm of which the Fund's secretary is a
partner.
(4) ORGANIZATIONAL COSTS
The Fund expects to incur organizational expenses in connection with the
start-up and initial registration. These costs will be amortized over 60 months
on a straight-line basis beginning with the commencement of operations. If any
or all of the shares held by Advantus Capital, or any other shareholder,
representing initial capital of the Fund are redeemed during the amortization
period, the redemption proceeds will be reduced by the pro rata portion (based
on the ratio that the number of initial shares redeemed bears to the total
number of outstanding initial shares of the Fund at the date of redemption) of
the unamortized organizational cost balance.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Advantus Index 500 Fund, Inc.:
We have audited the statement of assets and liabilities of Advantus Index
500 Fund, Inc. as of September 4, 1996. This financial statement is the
responsibility of Fund's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash in bank by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Advantus
Index 500 Fund, Inc. at September 4, 1996, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 4, 1996
<PAGE>
ADVANTUS INDEX 500 FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 4, 1996
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Cash in bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000
Organizational costs (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,735
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,735
-----------
LIABILITIES:
Payable to Adviser (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,735
-----------
Net assets applicable to outstanding shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000
-----------
-----------
Represented by:
Capital stock - authorized 10 billion shares (Class A - 2 billion shares, Class B -
2 billion shares, Class C - 2 billion shares and 4 billion shares unallocated) of
$.01 par value (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,850
-----------
Total - representing net assets applicable to outstanding capital stock. . . . . . . . . . . . . . . . . $ 150,000
-----------
-----------
Net assets applicable to outstanding Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Net assets applicable to outstanding Class B shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Net assets applicable to outstanding Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
-----------
-----------
Shares outstanding and net asset value per share:
Class A - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
Class B - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
Class C - Shares outstanding 5,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.00
-----------
-----------
</TABLE>
See accompanying notes to statement of assets and liabilities.
<PAGE>
ADVANTUS INDEX 500 FUND, INC.
Notes to Statement of Assets and Liabilities
September 4, 1996
(1) ORGANIZATION
Advantus Index 500 Fund, Inc. (the Fund) was incorporated on July 3, 1996.
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company.
The Fund currently issues three classes of shares: Class A, Class B
and Class C shares. Class A shares are sold subject to a front-end sales
charge. Class B shares are sold subject to a contingent deferred sales charge
payable upon redemption if redeemed within six years of purchase. Class C
shares are sold without either a front-end sales charge or a contingent deferred
sales charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee
than Class A shares. Both Class B and Class C shares automatically convert to
Class A shares at net asset value after a specified holding period. Such
holding periods decline as the amount of the purchase increases and range from
28 to 84 months after purchase for Class B shares and 40 to 96 months after
purchase for Class C shares. All three classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that the level of distribution fees charged differs between Class A, Class B and
Class C shares. Income, expenses (other than distribution fees) and realized
and unrealized gains or losses are allocated to each class of shares based upon
its relative net assets.
The only transaction of the Fund since inception has been the initial sale
on September 4, 1996 of 5,000 shares of Class A, 5,000 shares of Class B and
5,000 shares of Class C to Advantus Capital Management, Inc.
(2) FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute taxable
income to the shareholders in amounts that will avoid federal income and excise
taxes.
(3) EXPENSES AND RELATED PARTY TRANSACTIONS
The Fund has entered into an investment advisory agreement with Advantus
Capital Management, Inc. (Advantus Capital or the Adviser) under which Advantus
Capital manages the Fund's assets and provides research, statistical and
advisory services and pays related office rental and executive expenses and
salaries. The fee for investment management and advisory services is based on
the average daily net assets of the Fund at the annual rate of .34 percent.
The Fund has entered into a transfer agent agreement with The Minnesota
Mutual Life Insurance Company (Minnesota Mutual), the parent of MIMLIC Asset
Management Company who in turn is the parent of Advantus Capital. Minnesota
Mutual will act as the Fund's transfer agent, dividend disbursing agent and
redemption agent. For these services, the Fund pays Minnesota Mutual, subject
to a minimum annual fee of $12,000, an annual fee of $25 per shareholder
account.
<PAGE>
ADVANTUS INDEX 500 FUND, INC.
Notes to Statement of Assets and Liabilities - continued
(3) EXPENSES AND RELATED PARTIES - CONTINUED
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund and wholly-owned subsidiary of
MIMLIC Asset Management Company, to be used to pay certain expenses incurred in
the distribution, promotion and servicing of the Fund's shares. The Class A
Plan provides for a fee up to .30 percent of average daily net assets of Class A
shares. The Class B and Class C Plans provide for a fee up to 1.00 percent of
average daily net assets of Class B and Class C shares, respectively. The Class
B and Class C 1.00 percent fee is comprised of a .75 percent distribution fee
and a .25 percent service fee. MIMLIC Sales intends to waive that portion of
Class A distribution fees which exceeds, as a percentage of average daily net
assets, .10 percent during the current fiscal year.
The Fund has entered into an administrative services agreement with
Minnesota Mutual for accounting, auditing, legal and other administrative
services which Minnesota Mutual provides. The administrative service fee for
the Fund is $3,600 per month.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, organizational costs,
printing and shareholders reports, legal, auditing and accounting services and
other miscellaneous expenses.
Advantus Capital directly incurs and pays the above operating expenses
relating to the Fund and the Fund in turn reimburses Advantus Capital. Advantus
Capital intends to voluntarily absorb certain operating expenses, other than
investment advisory fees, which exceed, as a percentage of average daily net
assets, .26% during the current fiscal year.
Legal fees in the amount of $2,100, included as organizational costs, were
incurred for services provided by a law firm of which the Fund's secretary is a
partner.
(4) ORGANIZATIONAL COSTS
The Fund expects to incur organizational expenses in connection with the
start-up and initial registration. These costs will be amortized over 60 months
on a straight-line basis beginning with the commencement of operations. If any
or all of the shares held by Advantus Capital, or any other shareholder,
representing initial capital of the Fund are redeemed during the amortization
period, the redemption proceeds will be reduced by the pro rata portion (based
on the ratio that the number of initial shares redeemed bears to the total
number of outstanding initial shares of the Fund at the date of redemption) of
the unamortized organizational cost balance.
<PAGE>
PART C. OTHER INFORMATION
<PAGE>
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements: The financial statements of the Registrant
are included in Part B of the Registration Statement.
(b) Exhibits:
(1) Articles of Incorporation for the Registrant
(2) Bylaws of the Registrant
(5) Investment Advisory Agreement between Advantus Capital
Management, Inc. and the Registrant
(6)(A) Underwriting and Distribution Agreement between the
Registrant and MIMLIC Sales Corporation
(6)(B) Form of Dealer Sales Agreement between MIMLIC Sales
Corporation, principal underwriter for the Registrant,
and dealers
(8) Custodian Agreement between the Registrant and First
Trust National Association
(9) Administrative Service Agreement between the Registrant
and The Minnesota Mutual Life Insurance Company
(10) Opinion and Consent of Dorsey & Whitney
(11) Consent of KPMG Peat Marwick LLP
(13) Letter of Investment Intent regarding the Registrant's
initial capital from Advantus Capital Management, Inc.
(15)(A) Plan of Distribution for Class A shares of the
Registrant
(15)(B) Plan of Distribution for Class B shares of the
Registrant
(15)(C) Plan of Distribution for Class C shares of the
Registrant
(17)(A) Financial Data Schedule - Class A Shares
(17)(B) Financial Data Schedule - Class B Shares
(17)(C) Financial Data Schedule - Class C Shares
(19) Power of Attorney to sign Registration Statement
executed by Directors of Registrant
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Wholly-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
MIMLIC Asset Management Company
The Ministers Life Insurance Company
MIMLIC Corporation
Minnesota Fire and Casualty Company
Northstar Life Insurance Company (New York)
Robert Street Energy, Inc.
Open-end registered investment company offering shares solely to separate
accounts of The Minnesota Mutual Life Insurance Company:
MIMLIC Series Fund, Inc.
Wholly-owned subsidiaries of MIMLIC Asset Management Company:
MIMLIC Sales Corporation
Advantus Capital Management, Inc.
Wholly-owned subsidiaries of Advantus Capital Management, Inc.:
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
Wholly-owned subsidiaries of MIMLIC Corporation:
DataPlan Securities, Inc. (Ohio)
MIMLIC Imperial Corporation
MIMLIC Funding, Inc.
MIMLIC Venture Corporation
Personal Finance Company (Delaware)
Wedgewood Valley Golf, Inc.
Ministers Life Resources, Inc.
Enterprise Holding Corporation
HomePlus Agency, Inc.
Wholly-owned subsidiaries of Enterprise Holding Corporation:
Oakleaf Service Corporation
Lafayette Litho, Inc.
Financial Ink Corporation
Concepts in Marketing Research Corporation
Concepts in Marketing Services Corporation
National Association of Religious Professionals, Inc.
Wholly-owned subsidiary of Minnesota Fire and Casualty Company:
HomePlus Insurance Company
Majority-owned subsidiaries of MIMLIC Imperial Corporation:
J. H. Shoemaker Advisory Corporation
Consolidated Capital Advisors, Inc.
Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:
C.R.I. Securities, Inc.
<PAGE>
Majority-owned subsidiary of MIMLIC Sales Corporation:
MIMLIC Insurance Agency of Ohio, Inc.
Majority-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
MIMLIC Life Insurance Company (Arizona)
MIMLIC Cash Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Less than majority owned, but greater than 25% owned, subsidiaries of The
Minnesota Mutual Life Insurance Company:
Advantus Money Market Fund, Inc.
Less than 25% owned subsidiaries of The Minnesota Mutual Life Insurance Company:
Advantus Horizon Fund, Inc.
Advantus Bond Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Unless indicated otherwise parenthetically, each of the above
corporations is a Minnesota corporation.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of September 4, 1996, a date within 90 days of the date of filing
of this Registration Statement:
Title of Class Number of Record Holders
-------------- ------------------------
Class A Common Shares 1
Class B Common Shares 1
Class C Common Shares 1
ITEM 27. INDEMNIFICATION
The Articles of Incorporation and Bylaws of the Registrant provide
that the Registrant shall indemnify such persons, for such expenses and
liabilities, in such manner, under such circumstances, to the full extent
permitted by Section 302A.521, 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 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; acted in good faith; received no improper personal benefit and the
Minnesota Statute dealing with directors' conflicts of interest, if applicable,
has been satisfied; in the case of a criminal proceeding, had no reasonable
cause to believe the conduct was unlawful and reasonably believed that the
conduct was in the best interests of the
<PAGE>
corporation or, in certain circumstances, reasonably believed that the conduct
was not opposed to the best interests of the corporation.
Section 17(h) of the Investment Company Act of 1940 provides that
neither the charter, certificate of incorporation, articles of association,
indenture of trust, nor the by-laws of any registered investment company, nor
any other instrument pursuant to which such a company is organized or
administered, shall contain any provisions which protects or purports to protect
any director or officer of such company against any liability to the company or
to its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of duties
involved in the conduct of his office. The staff of the Securities and Exchange
Commission has stated that it is of the view that an indemnification provision
does not violate Section 17(h) if it precludes indemnification for any liability
arising by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties ("Disabling conduct") and sets forth reasonable and
fair means for determining whether indemnification shall be made. In the
staff's view, "reasonable and fair means" would include (1) a final decision on
the merits by a court or other body before whom the proceeding was brought that
the person to be indemnified ("indemnitee") was not liable by reason of
disabling conduct or, (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of disabling conduct, by (a) the vote of a majority of a quorum
of directors who are neither "interested persons" of the company as defined in
Section 2(a)(19) of the Investment Company Act of 1940 nor parties to the
proceeding ("disinterested, non-party directors") or (b) an independent legal
counsel in a written opinion. The dismissal of either a court action or
administrative proceeding against an indemnitee for insufficiency of evidence of
any disabling conduct with which he has been charged would, in the staff's view,
provide reasonable assurance that he was not liable by reason of disabling
conduct. The staff also believes that a determination by the vote of a majority
of a quorum of disinterested, non-party directors would provide reasonable
assurance that the indemnitee was not liable by reason of disabling conduct.
Insofar as indemnification for liability 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 the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Directors and Officers Office with
of Investment Adviser Investment Adviser Other Business Connections
- ---------------------- ------------------ --------------------------
Paul H. Gooding President and President, Treasurer and
Director Director, MIMLIC Asset
Management Company; President,
Secretary and Director, MIMLIC
<PAGE>
Corporation; Director, MIMLIC
Imperial Corporation;
Director, MIMLIC Venture
Corporation; Vice President
and Director, MIMLIC Funding,
Inc.; Vice President and
Director, Robert Street
Energy, Inc.; Chairman of the
Board and Director, Personal
Finance Company; Vice
President and Treasurer, The
Minnesota Mutual Life
Insurance Company
James P. Tatera Senior Vice President, Vice President and Chief
Treasurer and Director Equity Portfolio Manager,
MIMLIC Asset Management
Company; Vice President,
MIMLIC Funding, Inc.; Second
Vice President, The Minnesota
Mutual Life Insurance Company
Thomas A. Gunderson Vice President None
Kent R. Weber Vice President None
Wayne R. Schmidt Vice President Secretary and Treasurer,
MIMLIC Funding, Inc.;
Treasurer and Assistant
Secretary, Robert Street
Energy, Inc.; Vice President
and Secretary, MIMLIC Imperial
Corporation
Matthew D. Finn Vice President President, Unified Capital
Management, Inc.
Jeffrey R. Erickson Vice President None
Kevin J. Hiniker Secretary Associate General Counsel,
MIMLIC Asset Management
Company; Assistant Secretary,
Robert Street Energy, Inc.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) MIMLIC Sales currently acts as a principal underwriter for the
following investment companies:
Advantus Horizon Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Money Market Fund, Inc.
Advantus Bond Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
MIMLIC Cash Fund, Inc.
Minnesota Mutual Variable Fund D
Minnesota Mutual Variable Annuity Account
Minnesota Mutual Variable Life Account
Minnesota Mutual Group Variable Annuity Account
Minnesota Mutual Variable Universal Life Account
(b) The name and principal business address, positions and offices
with MIMLIC Sales, and positions and offices with Registrant of each director
and officer of MIMLIC Sales is as follows:
Positions and Positions and
Name and Principal Offices Offices
Business Address with Underwriter with Registrant
- ------------------ ---------------- ---------------
Robert E. Hunstad Chairman of the Board None
The Minnesota Mutual and Director
Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
George I. Connolly President, Chief None
MIMLIC Sales Corporation Executive Officer and
400 Robert Street North Director
St. Paul, Minnesota 55101
Margaret Milosevich Vice President, Chief None
MIMLIC Sales Corporation Operations Officer and
400 Robert Street North Treasurer
St. Paul, Minnesota 55101
Dennis E. Prohofsky Secretary and Director None
The Minnesota Mutual
Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Thomas L. Clark Assistant Treasurer None
MIMLIC Sales Corporation
400 Robert Street North
St. Paul, Minnesota 55101
(c) Not applicable.
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The physical possession of the accounts, books and other documents
required to be maintained by Section 3(a) of the Investment Company Act of 1940
and Rules 31a-1 to 31a-3 promulgated thereunder is maintained by Minnesota
Mutual, 400 Robert Street North, St. Paul, Minnesota 55101; except that the
physical possession of certain accounts, books and other documents related to
the custody of the Registrant's securities is maintained by the following
custodian:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) The Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be certified, within four
to six months from the effective date of Registrant's Registration Statement
under the Securities Act of 1933.
(c) The Registrant hereby undertakes to furnish, upon request and
without charge to each person to whom a prospectus is delivered, a copy of the
Registrant's latest annual report to shareholders containing the information
called for by Item 5A.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of St. Paul and the State of Minnesota on the 19th day
of September, 1996.
ADVANTUS VENTURE FUND, INC.
Registrant
By /s/ Paul H. Gooding
-------------------------------------
Paul H. Gooding, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
/s/ Paul H. Gooding President (principal September 19, 1996
- ------------------- executive officer)
Paul H. Gooding and Director
/s/ Frederick P. Feuerherm Director and Treasurer September 19, 1996
- -------------------------- (principal financial
Frederick P. Feuerherm and accounting officer)
Ralph D. Ebbott* Director)
- ------------------ ) By /s/ Paul H. Gooding
Ralph D. Ebbott ) --------------------
) Paul H. Gooding
) Attorney-in-Fact
Charles E. Arner* Director)
- ------------------- ) Dated: September 19, 1996
Charles E. Arner )
)
)
Ellen S. Berscheid* Director)
- --------------------- )
Ellen S. Berscheid )
- ---------------
*Registrant's director executing power of attorney dated July 31, 1996, a copy
of which is filed herewith.
<PAGE>
EXHIBIT INDEX
Exhibit Number and Description
- ------------------------------
(1) Articles of Incorporation for the Registrant
(2) Bylaws of the Registrant
(5) Investment Advisory Agreement between Advantus Capital Management,
Inc. and the Registrant
(6)(A) Underwriting and Distribution Agreement between the Registrant and
MIMLIC Sales Corporation
(6)(B) Form of Dealer Sales Agreement between MIMLIC Sales Corporation,
principal underwriter for the Registrant, and dealers
(8) Custodian Agreement between the Registrant and First Trust National
Association
(9) Administrative Service Agreement between the Registrant and The
Minnesota Mutual Life Insurance Company
(10) Opinion and Consent of Dorsey & Whitney
(11) Consent of KPMG Peat Marwick LLP
(13) Letter of Investment Intent regarding the Registrant's initial capital
from Advantus Capital Management, Inc.
(15)(A) Plan of Distribution for Class A shares of the Registrant
(15)(B) Plan of Distribution for Class B shares of the Registrant
(15)(C) Plan of Distribution for Class C shares of the Registrant
(17)(A) Financial Data Schedule - Class A shares
(17)(B) Financial Data Schedule - Class B shares
(17)(C) Financial Data Schedule - Class C shares
(19) Power of Attorney to sign Registration Statement executed by Directors
of Registrant
<PAGE>
ARTICLES OF INCORPORATION
OF
ADVANTUS VENTURE FUND, INC.
For the purpose of forming a corporation pursuant to the provisions of
Minnesota Statutes, Chapter 302A, the following Articles of Incorporation are
adopted:
1. The name of the corporation (the "Corporation") is Advantus
Venture Fund, Inc.
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.
(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, chooses 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.
(c) 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
<PAGE>
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 400 Robert Street North, St. Paul, Minnesota 55101-2098.
5. (a) The total authorized number of shares of the Corporation is
ten billion (10,000,000,000), 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.
(b) The Shares 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, 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
of the Corporation 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 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) as may be adopted from time
to time by the Board of Directors in accordance, to the extent
applicable, with the Investment Company Act of 1940, as amended
(together with the rules and regulations promulgated thereunder, the
"1940 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 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 1940 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.
6. The shareholders of each Class of common Shares of the
Corporation:
(a) shall not have the right to cumulate votes for the election
of directors; and
-2-
<PAGE>
(b) shall have no preemptive right to subscribe to any issue of
Shares of any Class of the Corporation now or hereafter created,
designated or classified.
7. A description of the relative rights and preferences of all
Classes of Shares 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 Classes:
(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 Class, shall be voted in the
aggregate and not by Class, except: (i) when otherwise required by
Minnesota Statutes, Chapter 302A, in which case Shares will be voted
by individual Class, as applicable; (ii) when otherwise required by
the 1940 Act or the rules adopted thereunder, in which case Shares
shall be voted by individual Class, as applicable; and (iii) when the
matter does not affect the interests of a particular Class thereof, in
which case only shareholders of the Class affected shall be entitled
to vote thereon and shall vote by individual Class.
(b) 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 Classes of Shares, the amount of such dividends
and the payment thereof being wholly in the discretion of the Board of
Directors.
(c) With the approval of a majority of the shareholders of each
of the affected Classes of Shares present in person or by proxy at a
meeting called for the following purpose (provided that a quorum of
the issued and outstanding Shares of each affected Class in present at
such meeting in person or by proxy), the Board of Directors may
transfer the assets of any Class to any other Class. Upon such a
transfer, the Corporation shall issue Shares representing interests in
the Class to which the assets were transferred in exchange for all
Shares representing interests in the Class 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, 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 Corporation, 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;
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(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 the Corporation 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;
(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 Class of the Corporation;
(vi) to accept or reject subscriptions for Shares of any
Class 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 Class 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;
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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 and the net
asset value of the Shares of each Class 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 Class
thereof.
(b) Except as provided in the next sentence of this paragraph
(b), Shares of any Class hereafter issued which are redeemed,
exchanged, or otherwise acquired by the Corporation shall return to
the status of authorized and unissued Shares of such Class. Upon the
redemption, exchange, or other acquisition by the Corporation of all
outstanding Shares of any Class hereafter issued, such Shares shall
return to the status of authorized and unissued Shares without
designation as to Class and all provisions of these Articles of
Incorporation relating to such Class (including, without limitation,
any statement establishing or fixing the rights and preferences of
such Class), shall cease to be of further effect and shall cease to be
a part of these articles. Upon the occurrence of such events, the
Board of Directors of the Corporation shall have the power, pursuant
to Minnesota Statutes Section 302A.135, Subd. 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 all such provisions relating to such
Class thereof.
(c) The determination as to any of the following matters made by
or pursuant to the direction of the Board of Directors consistent with
these Articles of Incorporation and in the absence of willful
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 of its capital stock: namely,
the amount of the obligations, liabilities and expenses of each Class
of the Corporation; the amount of the net income of each Class of the
Corporation for any period and the amount of assets at any time
legally available for the payment of dividends in each Class; the
amount of paid-in surplus, other surplus, annual or other net profits,
or net assets in excess of capital or undivided profits of each Class;
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 the Corporation; the fair value of any other asset owned by
the Corporation; the number of Shares of each Class of the Corporation
issued or issuable; any matter relating to the acquisition, holding
and disposition of securities and other assets by 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.
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(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 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 1940 Act, 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 1940 Act, as now
enacted or hereafter amended.
10. To the fullest extent permitted by the Minnesota Statutes,
Chapter 302A, as the same exists or may hereafter be amended (except as
prohibited by the 1940 Act, as the same exists or may hereafter be amended), 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 names of the first directors, who shall serve until the first
annual meeting of shareholders or until their successors are elected and
qualified, are:
Name
----
Paul H. Gooding
Frederick P. Feuerherm
Charles E. Arner
Ellen S. Berscheid
Ralph E. Ebbott
12. The name and address of the incorporator, who is a natural person
of full age, is:
Eric J. Bentley 400 Robert Street North
St. Paul, Minnesota 55101
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IN WITNESS WHEREOF, the undersigned sole incorporator has executed
these Articles of Incorporation on this 1st day of July, 1996.
-----------------------------------
Eric J. Bentley
STATE OF MINNESOTA )
) ss
COUNTY OF RAMSEY )
On July 1, 1996, before me, a Notary Public, personally appeared Eric
J. Bentley, to me known to be the person named as incorporator and who executed
the foregoing Articles of Incorporation, and he acknowledged that he executed
the same as his free act and deed.
-----------------------------------
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CERTIFICATE OF DESIGNATION
of
CLASS A, CLASS B AND CLASS C SHARES
of
ADVANTUS VENTURE FUND, INC.
The undersigned duly elected Secretary of Advantus Venture Fund, 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 the Board of Directors of the Corporation on July 17, 1996.
APPROVAL OF CREATION AND DESIGNATION OF
CLASS A, CLASS B AND CLASS C SHARES
WHEREAS, the total authorized number of shares of the Corporation is ten
billion (10,000,000,000), all of which are common shares, $.01 par value, as set
forth in the Articles of Incorporation of the Corporation; and
WHEREAS, the Articles set forth that the authorized shares may be issued in
such classes and 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 of common shares as may be adopted from time to time by the
Board of Directors;
NOW THEREFORE, BE IT RESOLVED, that of the authorized common shares of the
Corporation, two billion (2,000,000,000) are hereby designated as Class A Common
Shares, two billion (2,000,000,000) are hereby designated as Class B Common
Shares, and two billion (2,000,000,000) are hereby designated as Class C Common
Shares.
FURTHER RESOLVED, that the Class A, Class B and Class C Common Shares
designated by these resolutions shall have the relative rights and preferences
set forth in Articles 5, 6 and 7 of the Articles of Incorporation of the
Corporation. As provided in Article 5(b) of such Articles of Incorporation, any
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,
such front-end and deferred sales charges as may be permitted under the
Investment Company Act of 1940, as amended (the "1940 Act") and the rules of the
National Association of Securities Dealers, Inc., and expenses under Rule 12b-1
plans, administration plans, service plans, or other plans or arrangements,
however designated) as may be adopted form time to time by the Board of
Directors of the Corporation in accordance, to the extent applicable, with the
1940 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 liquidations of, such Class.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of Advantus Venture Fund, Inc. this 3rd day of September,
1996.
-----------------------------------
Michael J. Radmer, Secretary
<PAGE>
BYLAWS
OF
ADVANTUS VENTURE FUND, INC.
ARTICLE I.
OFFICES, CORPORATE SEAL
SECTION 1.01. NAME. The name of the corporation is Advantus Venture
Fund, Inc.
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. CORPORATE SEAL. The corporation shall have no seal.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
SECTION 2.01. PLACE AND TIME OF MEETINGS. 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 10:00 A.M.
SECTION 2.02. REGULAR MEETINGS.
(a) Annual meetings of shareholders are not required by these Bylaws.
Regular meetings of shareholders shall be held only with such frequency and at
such times and places as required by law.
(b) At each regular meeting, the shareholders, voting as provided in
the Articles of Incorporation and these Bylaws, shall designate the number of
directors to constitute the Board of Directors (subject to the authority of the
Board of Directors thereafter to increase the number of directors as permitted
by law), shall elect directors, and shall transact such other business as may
properly come before them.
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 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.
<PAGE>
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 meetings 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 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.
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 on 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 time and place of each regular meeting and each special meeting,
which notice shall be mailed at least ten (10) days prior thereto; except that
notice of a meeting at which an agreement of merger or consolidation is to be
considered shall be mailed to all shareholders of record, whether entitled to
vote or not, at least two (2) weeks prior thereto. 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
writing signed by each shareholder or
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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 meeting
is not lawfully called or convened, or objects before a vote on an item of
business because the item may not lawfully be considered at that meeting and
does not participate 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.
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 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 or 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 each 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.
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.
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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
according to their respective rights and interests.
(b) The Board of Directors may at any time declare and distribute pro
rata among the shareholders a "stock dividend" out of the corporation's
authorized but unissued shares of stock, including any shares previously
purchased by the corporation.
SECTION 3.05. BOARD MEETINGS. Meetings of the Board of Directors
shall 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 by giving five (5) 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
board meeting have been announced at a previous meeting of the board, 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 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 meeting is not lawfully called or convened and does not
participate thereafter in the 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 of 1940, as now enacted or hereafter amended, a
majority of directors who are not "interested persons" (as defined by the
Investment Company Act of 1940, as now enacted or hereafter amended) 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.
SECTION 3.10. CONFERENCE COMMUNICATIONS. Directors may participate
in any meeting of the Board of Directors, or of any duly constituted committee
thereof, by means of a
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conference telephone conversation or other comparable communication technique
whereby all persons participating in the meeting can hear and communicate to
each other. 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 or origination of the conference telephone conversation or other
comparable communication technique.
SECTION 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in
the Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by a majority of the remaining directors of the Board 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, who may make such election at their
next regular meeting or at any meeting duly called for that purpose; provided,
however, that no vacancy can be filled as provided above if prohibited by the
provisions of the Investment Company Act of 1940.
SECTION 3.12. REMOVAL. The entire Board of Directors or any
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 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 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, except as provided by Minnesota Statutes Section 302A.243.
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. 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 a majority of
the directors or committee members.
SECTION 3.15. COMPENSATION. Directors who are not salaried officers
of this corporation or affiliated with its investment adviser shall receive such
fixed sum per meeting
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attended or such fixed annual sum as shall be determined, from time to time, by
resolution of the Board of Directors. All such 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 preclude any
director from serving this corporation in any other capacity and receiving
proper compensation therefor.
SECTION 3.16. RESIGNATION. A director may resign by giving written
notice to the corporation, and the resignation is effective without acceptance
when given, unless a later effective time is specified in the notice.
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), the President, one
or more Vice Presidents (if desired by the Board), 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 of these Bylaws, 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 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 Board of Directors, the
President, the Secretary, or any Assistant Secretary. 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 whole 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
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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.
SECTION 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
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
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 moneys 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 whole 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 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 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.
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<PAGE>
ARTICLE V.
SHARES AND THEIR TRANSFER
SECTION 5.01. CERTIFICATES 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 Treasurer or 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 cancelled, and
no new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so cancelled, 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 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 of stock 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 XII hereunder.
SECTION 5.03. REDEMPTION OF SHARES. Upon the demand of any
shareholder, this corporation shall redeem any share of stock issued by it held
and owned by such shareholder at the net asset value thereof as determined
pursuant to Article XII hereunder. The Board of Directors may suspend the right
of redemption or postpone the date of payment during any period as may be
permitted by law.
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
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<PAGE>
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 unissued 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 of stock 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 Minnesota.
SECTION 5.06. TRANSFER 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 stock 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 of capital stock 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.
SECTION 5.07. TRANSFER REGULATIONS. The shares of stock 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
the shares of stock of the corporation.
SECTION 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES.
The holder of any stock 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 certificate or certificates of stock, 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
certificate or certificates of stock 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, SURPLUS, ETC.
SECTION 6.01. The corporation's net investment income will be
determined, and its dividends shall be declared and made payable at such time(s)
as the Board of Directors shall determine.
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<PAGE>
It shall be the policy of the corporation to qualify for and elect the
tax treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation 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:
(1) a share register not more than one year old, containing the names
and addresses of the shareholders and the number and classes of
shares held by each shareholder; and
(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 its principal executive office, or, if its principal
executive office is not in 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 for the last three years;
(3) its articles 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
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<PAGE>
(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 as its Accountant to examine the accounts
of the corporation and to sign and certify financial statements filed by the
corporation.
(c) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
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 of 1940, as now enacted or hereafter amended.
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 stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock 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 stock or other securities of any such corporation or
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<PAGE>
association and thereat vote or exercise any or all other powers of the
corporation as the holder of such stock 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
SECTION 10.01. The net asset value per share of the corporation shall
be determined in good faith by or under the 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 Securities and Exchange
Commission.
ARTICLE XI.
CUSTODY OF ASSETS
SECTION 11.01. All securities and cash owned by this 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").
This 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 this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this 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 this
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 make
or alter any Bylaw to increase their number.
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<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, Made this 17th day of July, 1996, by and between
Advantus Venture Fund, Inc., a Minnesota corporation (the "Fund") and Advantus
Capital Management, Inc., a Minnesota corporation ("Management").
WITNESSETH:
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Management, and Management 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 Articles of Incorporation, the Bylaws, the
Registration Statement, the current Prospectus and the Statement of Additional
Information, if any, of the Fund and shall conform to the investment objective
and policies of the Fund as set forth in such documents and as interpreted from
time to time by the Board of Directors of the Fund. Within the framework of the
objective and investment policies and restrictions of the Fund, Management shall
have the sole and exclusive responsibility for the management of the Fund's
portfolio and the making and execution of all investment decisions for the Fund.
Management shall report to the Board of Directors 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 Management to the
investment policies of the Fund.
Management shall, at its own expense, furnish the Fund office space
and all necessary office facilities, equipment, and personnel for servicing the
investments of the Fund. Management shall arrange for officers or employees of
Management to serve without compensation from the Fund as directors, officers,
or employees of the Fund if duly elected to such positions by the shareholders
or directors of the Fund.
<PAGE>
Management shall arrange for the services of a transfer agent,
dividend disbursing (including reinvestment) agent and redemption agent to be
provided to the Fund, which services shall be provided at the expense of
Management and without compensation from the Fund.
Management 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 Management
should ever occur, Management 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 the investment advisory and other services to be
rendered by Management hereunder, the Fund shall pay to Management a quarterly
fee, which fee shall be paid to Management not later than the fifth business day
following the end of each calendar quarter in which said services were rendered.
Said quarterly fee shall be based on the average of the net asset values of all
of the issued and outstanding shares of the Fund as determined as of the close
of each business day of the quarter pursuant to the Articles of Incorporation,
Bylaws and currently effective Prospectus and Statement of Additional
Information, if any, of the Fund and shall be equal to an annual rate of .8 of
1.0% of the Fund's average daily net assets. The fee shall be pro rated for any
fraction of a month at the commencement or termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund
shall pay all its costs and expenses which are not assumed by
Management. The Fund expenses include, by way of example, but
not by way of limitation, all expenses incurred in the operation
of the Fund and any public offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions,
fees of the directors who are not employees of Management or
MIMLIC Sales Corporation, underwriter of the Fund's shares (the
"Underwriter"), or any of their affiliates, expenses of
directors' and shareholders' meetings, including the cost of
printing and mailing proxies, expenses of insurance premiums for
fidelity
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<PAGE>
and other coverage, expenses of redemption of shares, expenses of
issue and sale of shares (to the extent not borne by the
Underwriter under its agreement with the Fund), expenses of
printing and mailing stock certificates representing shares of
the Fund, association membership dues, charges of custodians, and
bookkeeping, auditing, and legal expenses. The Fund will also
pay the fees and bear the expense of registering and maintaining
the registration of the Fund and its shares with the Securities
and Exchange Commission and registering or qualifying its shares
under state or other securities laws and the expense of preparing
and mailing Prospectuses and reports to shareholders.
(b) The Underwriter shall bear all advertising and promotional
expenses in connection with the distribution of the Fund's
shares, including paying for Prospectuses and Statements of
Additional Information (if any) for new shareholders, shareholder
reports for new shareholders, and the costs of sales literature.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Management 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 not become effective unless and until it is
approved by the Board of Directors of the Fund, including a majority of the
members who are not "interested persons" to parties to this Agreement, by a vote
cast in person at a meeting called for the purpose of voting such approval, and
by a majority of the outstanding voting securities of the Fund. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of the Fund shall mean the vote of 67% or
more of such securities if the holders of more than 50% of such securities are
present in person or by proxy or the vote of more than 50% of such securities,
whichever is the lesser.
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<PAGE>
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect until the next annual meeting of the Fund's shareholders and
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of Directors of the Fund,
including the specific approval of a majority of the directors who are not
interested persons of Management, the Underwriter, or the Fund, cast in person
at a meeting called for the purpose of voting on such approval, or by the vote
of the holders of a majority of the outstanding voting securities of the Fund.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by the vote of
the holders of a majority of the outstanding voting securities of the Fund, or
by Management, upon 60 days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment as such term is defined by the Investment Company Act of 1940, as
amended.
6. 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 voting
securities of the Fund.
7. 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.
IN WITNESS WHEREOF, The Fund and Management have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
Advantus Venture Fund, Inc.
By
------------------------------------
Paul H. Gooding
Its President
Advantus Capital Management, Inc.
By
------------------------------------
James P. Tatera
Its Senior Vice President
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<PAGE>
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, Made this ___ day of __________, 1996, by and between
Advantus Venture Fund, Inc., a Minnesota corporation (the "Fund") and MIMLIC
Sales Corporation (the "Underwriter").
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund hereby engages the Underwriter, and the Underwriter hereby
agrees to act, as principal underwriter for the Fund in the sale and
distribution of the shares of the Fund to the public, either through dealers or
otherwise. The Underwriter 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.
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
Underwriter of the rejection of such offer or sales prior to the computation of
the net asset value of the Fund's shares next following receipt by the Fund of
notice of such offer or sale.
(b) No share of the Fund shall be sold by the Underwriter (i) for any
consideration other than cash or, pursuant to an exchange privilege provided for
by the Fund's currently effective Prospectus, shares of any other investment
company for which the Underwriter acts as principal underwriter, or (ii), except
in instances otherwise provided for by the Fund's currently effective
Prospectus, for any amount less than the public offering price per share, which
shall be determined in accordance with the Fund's currently effective
Prospectus.
(c) In connection with certain sales of Fund shares, a contingent
deferred sales charge will be imposed in the event of a redemption transaction
occurring within a certain period of time following such a purchase, as
described in the Fund's currently effective Prospectus and Statement of
Additional Information.
(d) The front-end sales charge, if any, for the Fund may, at the
discretion of the Fund and the Underwriter, be reduced or eliminated as
permitted by the Investment Company Act of 1940, and the rules and regulations
thereunder, as they may be amended from time to time (the "1940 Act"), provided
that such reduction or elimination shall be set forth in the 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. In addition, any contingent
deferred sales charge for the Fund
<PAGE>
may, at the discretion of the Fund and the Underwriter, be reduced or eliminated
in accordance with the terms of an exemptive order received from the Securities
and Exchange Commission by the Fund, and any amendments thereto, provided that
such reduction or elimination shall be set forth in the Prospectus for the Fund.
3. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and
keep in effect, at its expense, the registration or qualification of its shares
for sale in such jurisdictions as the Fund may designate.
4. INFORMATION TO BE FURNISHED TO THE UNDERWRITER.
The Fund agrees that it will furnish the Underwriter with such
information with respect to the affairs and accounts of the Fund as the
Underwriter may from time to time reasonably require, and further agrees that
the Underwriter, at all reasonable times, shall be permitted to inspect the
books and records of the Fund.
5. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be
paid all expenses, costs, and fees incurred by the Fund which are not assumed by
the Underwriter or Advantus Capital Management, Inc., a Minnesota corporation
and the Fund's investment adviser. The Underwriter agrees to provide, and shall
pay costs which it incurs in connection with providing, administrative or
accounting services to shareholders of the Fund (such costs are referred to as
"Shareholder Servicing Costs"). The Underwriter shall also pay all costs of
distributing the shares of the Fund ("Distribution Expenses"). Distribution
Expenses include, but are not limited to, initial and ongoing sales compensation
(in addition to sales loads) paid to investment executives of the Underwriter
and to other broker-dealers and participating financial institutions; expenses
incurred in the printing of prospectuses, statements of additional information
and reports used for sales purposes; expenses of preparation and distribution of
sales literature; expenses of advertising of any type; an allocation of the
Underwriter's overhead; payments to and expenses of persons who provide support
services in connection with the distribution of Fund shares; and other
distribution-related expenses. Shareholder Servicing Costs include all expenses
of the Underwriter incurred in connection with providing administrative or
accounting services to shareholders of the Fund, including, but not limited to,
an allocation of the Underwriter's overhead and payments made to persons,
including employees of the Underwriter, who respond to inquiries of shareholders
regarding their ownership of Fund shares, or who provide other administrative or
accounting services not otherwise required to be provided by the Fund's
investment adviser or transfer agent.
6. COMPENSATION TO THE UNDERWRITER.
It is understood and agreed by the parties hereto that the Underwriter
will receive as compensation for services it performs hereunder:
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<PAGE>
(a) The Underwriter shall be entitled to receive or retain the front-
end sales charge imposed in connection with sales of Fund shares, as set forth
in Schedule A hereto. Up to the entire amount of the front-end sales charge
with respect to the Fund may be reallowed by the Underwriter to broker-dealers
and participating financial institutions in connection with their sale of Fund
shares. The amount of the front-end sales charge may be retained or deducted by
the Underwriter from any sums received by it in payment for shares so sold. If
such amount is not deducted by the Underwriter from such payments, such amount
shall be paid to the Underwriter by the Fund not later than five business days
after the close of any calendar quarter during which any such sales were made by
the Underwriter and payment received by the Fund.
(b) The Underwriter shall be entitled to receive or retain any
contingent deferred sales charge imposed in connection with any redemption of
Fund shares, as set forth in Schedule A hereto.
(c) Pursuant to the Fund's Plans of Distribution adopted by Class A,
Class B and Class C shareholders in accordance with Rule 12b-1 under the 1940
Act (the "Plans"), the Fund shall pay the Underwriter a total fee each month
equal to .30% per annum of the average daily net assets represented by Class A
shares of the Fund and 1.0% per annum of the average daily net assets
represented by Class B and Class C shares of the Fund to cover Distribution
Expenses and Shareholder Servicing Costs. As determined from time to time by
the Board of Directors of the Fund, a portion of such fee for each Class may be
designated as a "distribution fee" designed to cover Distribution Expenses, and
a portion may be designated as a "shareholder servicing fee" designed to cover
Shareholder Servicing Costs. Until further action by the Board of Directors,
all of such fees for Class A, Class B and Class C shall be designated as a
"distribution fee" designed to cover only Distribution Expenses, except that a
portion of such fee for both Class B and Class C, equal to .25% per annum of the
average daily net assets of Class B and Class C, shall be designated as a
"shareholder servicing fee" designed to cover only Shareholder Servicing Costs.
Average daily net assets shall be computed in accordance with the Prospectus of
the Fund. Amounts payable to the Underwriter under the Plans may exceed or be
less than the Underwriter's actual Distribution Expenses and Shareholder
Servicing Costs. In the event such Distribution Expenses and Shareholder
Servicing Costs exceed amounts payable to the Underwriter under the Plans, the
Underwriter shall not be entitled to reimbursement by the Fund.
(d) In each year during which this Agreement remains in effect, the
Underwriter will prepare and furnish to the Board of Directors of the Fund, and
the Board will review, on a quarterly basis, written reports complying with the
requirements of Rule 12b-1 under the 1940 Act that set forth the amounts
expended under this Agreement and the Plans and the purposes for which those
expenditures were made.
7. LIMITATION OF THE UNDERWRITER'S AUTHORITY.
The Underwriter shall be deemed to be an independent contractor and,
except as specifically provided or authorized herein, shall have no authority to
act for or represent the Fund.
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<PAGE>
8. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS.
The Underwriter 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 of the Fund is placed with the Underwriter by a customer or
dealer and subsequently cancelled, the Underwriter shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if the
Underwriter 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 Underwriter.
9. INDEMNIFICATION OF THE FUND.
The Underwriter agrees to indemnify 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 Underwriter. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, the Underwriter shall defend such action on behalf of 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, the Underwriter shall not be
required to pay or reimburse the Fund for any liability, judgment, cost, or
penalty incurred as a result of information supplied by, or as the result of the
omission to supply information by, the Fund to the Underwriter, or to the
Underwriter by a director, officer, or employee of the Fund who is not an
interested person of the Underwriter, unless the information so supplied or
omitted was available to the Underwriter or Management without recourse to the
Fund or any such person referred to above.
10. FREEDOM TO DEAL WITH THIRD PARTIES.
The Underwriter shall be free to render to others services of a nature
either similar to or different from those rendered under this contract, except
such as may impair its performance of the services and duties to be rendered by
it hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF
AGREEMENT.
The effective date of this Agreement is set forth in the first
paragraph of this Agreement. Wherever referred to in this Agreement, the vote
or approval of the holders of a majority of the outstanding voting securities of
the Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is the lesser.
-4-
<PAGE>
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or by the vote of the
holders of a majority of the outstanding voting securities of the Fund, and (b)
by a majority of the directors who are not interested persons of the Underwriter
or of the Fund cast in person at a meeting called for the purpose of voting on
such approval.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by the vote of
the holders of a majority of the outstanding voting securities of the Fund, or
by the Underwriter, upon 60 days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment (as defined by the provisions of the Investment Company Act of 1940,
as amended).
12. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by the Underwriter and by vote of majority of the Board of Directors of
the Fund who are not interested persons of the Underwriter.
13. 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.
IN WITNESS WHEREOF, The Fund and the Underwriter have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
Advantus Venture Fund, Inc.
By
----------------------------------------
Paul H. Gooding
Its President
MIMLIC Sales Corporation
By
----------------------------------------
Bardea C. Huppert
Its President
-5-
<PAGE>
SCHEDULE A
The Underwriter shall receive, as compensation for its services
pursuant to this Agreement, a sales charge for each investment in the Fund's
Class A shares, which shall be a percentage of the offering price of such Class
A shares, as determined in accordance with the Fund's currently effective
Prospectus, determined in accordance with the following table:
Sales Charge as a Percentage
Amount of Investment of Offering Price
-------------------- ----------------------------
Less than $50,000 5.0%
$50,000 but less than $100,000 4.5%
$100,000 but less than $250,000 3.5%
$250,000 but less than $500,000 2.5%
$500,000 but less than $1,000,000 1.5%
$1,000,000 or more -0-
The Underwriter shall also receive, as compensation for its services
pursuant to this Agreement, a contingent deferred sales charge imposed in
connection with certain redemptions of shares of the Fund designated as Class B
shares, determined in accordance with the following table:
Contingent Deferred Sales Charge
Shares Purchased Applicable Year
In an Amount 1 2 3 4 5 6
------------ ---------------------------------------
Less than $50,000 5.0% 4.5% 3.5% 2.5% 1.5% 1.5%
$50,000 but less than $100,000 4.5 3.5 2.5 1.5 1.5 -0-
$100,000 but less than $250,000 3.5 2.5 1.5 1.5 -0- -0-
$250,000 but less than $500,000 2.5 1.5 1.5 -0- -0- -0-
$500,000 but less than $1,000,000 1.5 1.5 -0- -0- -0- -0-
-6-
<PAGE>
ADVANTUS FUNDS
DEALER SALES AGREEMENT
THIS AGREEMENT, made this _____ day of ________________, 19___, by and
between MIMLIC Sales Corporation, a Minnesota corporation (the "Underwriter"),
having its principal office at 400 Robert Street North, St. Paul, Minnesota,
55101, and ________________ (the "Dealer") having its principal office at
___________________________________________.
WHEREAS, the Underwriter has entered into Distribution Agreements with
certain registered management investment companies (the "Funds"), as listed on
Schedule A hereto and made a part hereof, which Schedule A may be amended
without notice from time to time by the Underwriter, under which the Underwriter
has been engaged and agreed to act as principal underwriter for the Funds in the
sale and distribution of shares of the Funds to the public, either through
dealers or otherwise; and
WHEREAS, the parties hereto desire that the Dealer be a member of a selling
group to sell and distribute shares of the Funds to the public;
NOW, THEREFORE, the Dealer hereby offers to become a member in a selling
group to sell and distribute shares of the Funds to the public subject to the
following terms and conditions.
1. ACCEPTANCE OF SUBSCRIPTIONS; REGISTRATION STATEMENT; PROSPECTUS.
Subscriptions solicited by the Dealer will be accepted only in the amounts and
on the terms which are set forth in the then current Prospectus (and/or
Statement of Additional Information, if any) for the Funds. Underwriter
represents and warrants that the Prospectus (and/or Statement of Additional
Information, if any) for the Funds shown on Schedule A are or will be filed with
the Securities and Exchange Commission ("SEC"), that such filings conform in all
material respects with the requirements of the SEC and that, except as
Underwriter has given written notice to Dealer, there is an effective
Registration Statement relating to such Funds. Underwriter shall give written
notice to Dealer either (i) of specified states or jurisdiction in which the
Funds may be offered and sold by the Dealer or (ii) of all states or
jurisdictions where the Funds may not be offered or sold, but Underwriter does
not assume any responsibility as to the Dealer's right to sell the Funds in any
state or jurisdiction. Underwriter, during the term of this Agreement, shall
(i) notify Dealer in writing of the issuance by the SEC of any stop order with
respect to a Registration Statement or the initiation of any proceedings for
such purpose or any other purpose relating to the registration and/or offering
of the Funds, (ii) of any other action or circumstance known to them that may
prevent the lawful sale of the Funds in any state or jurisdiction, and (iii)
advise the Dealer in writing of any amendment to the Registration Statement or
supplement to any Prospectus. The
<PAGE>
Underwriter shall make available to Dealer such number of copies of the
Prospectus (as amended or supplemented) (and/or Statements of Additional
Information, if any) or any supplemental sales literature created by the
Underwriter as the Dealer may reasonably request.
2. DEALER DISCOUNT AND OTHER COMPENSATION. The dealer shall receive, for
sales of shares of the Funds' common stock, the applicable Dealer Discount or
other compensation as set forth in Schedule A attached hereto and made a part
hereof. Additionally, with respect to certain of the Funds, the Dealer may be
entitled to receive additional compensation upon such terms and conditions and
in such amounts as set forth in Schedule A hereto for providing to Fund
shareholders certain personal and account maintenance services (including, but
not limited to, responding to shareholder inquiries and providing information on
their investments) not otherwise required to be provided by the applicable
Funds' investment adviser or transfer agent ("Service Fees") or (in addition to
the aforementioned Dealer Discount) for sales of shares of the applicable Fund's
common stock ("Distribution Fees"). Schedule A may be amended in whole or in
part without notice from time to time by the Underwriter.
3. ORDERS. Orders to purchase shares of the Funds shall be placed as
described in the then current Prospectus (and/or Statement of Additional
Information, if any) of the Funds and as instructed from time to time by the
Underwriter. Orders shall be placed promptly upon receipt, and there shall be
no postponement of orders received so as to profit the Dealer by reason of such
postponement. Each order shall be confirmed by the Dealer to the Underwriter in
writing on the day such order was placed.
All monies or other settlements received by the Dealer for or on behalf of
the Underwriter shall be received by the Dealer in fiduciary capacity in trust
for the Underwriter and shall be immediately transmitted to the Underwriter,
and, in no event, shall the Dealer commingle such monies with other funds. The
Dealer shall keep correct accounts and records of all business transacted and
monies collected by him for the Underwriter to the extent required by the
Underwriter, which accounts and records shall be open at all times to inspection
and examination by the Underwriter's authorized representative. All accounts,
records and any supplies furnished to the Dealer by the Underwriter shall remain
the property of the Underwriter and shall be returned to the Underwriter upon
demand.
4. FAILURE OF ORDER. The Underwriter reserves the right at any time
to refuse to accept and approve any application for the purchase of shares of
the Funds obtained by the Dealer, and also reserves the right to settle any
claims against the Underwriter arising from the sale of shares of the Funds by
the Dealer and to refund to the investor payments made by him on his shares,
without the Dealer's consent. In the event any order for the purchase of shares
of the Funds is rejected by the Underwriter or any payment received for the
purchase of shares of the Funds cannot be collected or otherwise proves
insufficient or worthless, any compensation paid to the Dealer hereunder shall,
promptly upon notice to the Dealer, be returned by the Dealer to the Underwriter
either in cash or as a charge against the Dealer's account with the Underwriter,
as the
-2-
<PAGE>
Underwriter may elect, and the Dealer hereby agrees that until the Underwriter
receives full reimbursement in cash, the amount of compensation due and owing
the Underwriter shall constitute a debt to the Underwriter which the Underwriter
may collect by any lawful means, with interest thereon at the maximum rate
possible.
5. GENERAL. In soliciting purchases of shares of the Funds, the Dealer
shall act as an independent contractor and not on behalf or subject to the
control of the Underwriter. Nothing herein shall constitute the Dealer as a
partner of the Underwriter, any other broker-dealer, any registered
representative of the Underwriter or the Funds, or render any such entity liable
for obligations of the Dealer. The Dealer understands that Dealer has no
authority to incur any expenses or obligations in the name of the Underwriter,
and Dealer agrees to indemnify and save the Underwriter harmless from any and
all expenses, or obligations incurred by Dealer in the name of the Underwriter
for which Dealer is responsible. Dealer agrees to pay all expenses incurred by
Dealer in connection with Dealer's work. The Dealer's participation in the sale
and distribution of shares of the Funds as contemplated by this Agreement is not
exclusive and the Underwriter may engage other broker-dealers and/or its
registered representatives to participate in the sale and distribution of shares
of the Funds on terms and conditions which may differ from the terms and
conditions of this Agreement.
The Dealer understands and agrees that each shareholder account which
includes shares of any Fund subject to the Fund's contingent deferred sales
charge (as described in the applicable Fund's current Prospectus and Statement
of Additional Information) shall not be included in the Dealer's omnibus or
house account, if any, but shall be established as a separate shareholder
account in which purchase and redemption transactions are reported separately to
the Underwriter.
6. DEALER'S UNDERTAKINGS. No person is authorized to make any
representation concerning shares of the Funds except those contained in the then
current Prospectus (and/or Statement of Additional Information, if any). The
Dealer shall not sell shares of the Funds pursuant to this Agreement unless the
then current Prospectus is furnished to the purchaser prior to the offer and
sale. The Dealer shall not use any supplemental sales literature of any kind
without prior written approval of the Underwriter unless it is furnished by the
Underwriter for such purpose. In offering and selling shares of the Funds, the
Dealer shall rely solely on the representations contained in the then current
Prospectus (and/or Statement of Additional Information, if any). In offering
and selling shares of the Funds, the Dealer shall comply with all applicable
state and federal laws and regulations and all applicable rules of the National
Association of Securities Dealers, Inc. (the "NASD"). In the event of the
suspension, revocation, cancellation or other impairment of the Dealer's
membership in the NASD or the Dealer's registration, license or qualification to
sell shares of the Funds under any applicable state or federal law or
regulation, the Dealer shall give the Underwriter prompt notice of such
suspension, revocation, cancellation or other impairment, and the Dealer's
authority under this Agreement shall thereupon terminate as provided in
paragraph 12.
-3-
<PAGE>
With respect to any Fund offering multiple classes of shares, the Dealer
shall disclose to prospective investors the existence of all available classes
of such Fund and shall determine the suitability of each available class as an
investment for each such prospective investor.
7. REPRESENTATIONS AND AGREEMENTS OF THE DEALER. By accepting this
Agreement, the Dealer represents that it: (i) is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended; (ii) is qualified to act
as a dealer in each jurisdiction in which it will offer shares of the Funds;
(iii) is a member in good standing of the NASD; and (iv) will maintain such
registrations, qualifications and memberships throughout the term of this
Agreement.
8. DEALER'S EMPLOYEES. By accepting this Agreement, the Dealer assumes
full responsibility for the actions and course of conduct of its registered
representatives in the solicitation of purchases of shares of the Funds. The
Dealer shall provide thorough and prior training to its registered
representatives concerning the selling methods to be used in connection with the
offer and sale of shares of the Funds, giving special emphasis to the principles
of full and fair disclosure to prospective investors. The Dealer may solicit
sales of shares of the Funds only through properly licensed registered
representatives of the Dealer.
9. INDEMNIFICATION BY UNDERWRITER. The Underwriter hereby agrees to
indemnify and to hold harmless the Dealer and each person, if any, who controls
the Dealer within the meaning of Section 15 of the Securities Act of 1933 (the
"Act") and their respective successors and assigns (hereinafter in this
paragraph separately and collectively referred to as the "Defendants") from and
against any and all losses, claims, demands or liabilities (or actions in
respect thereof), joint or several, to which the Defendants may become subject
under the Act, at common law or otherwise (including any legal or other expense
reasonably incurred in connection therewith), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or allegedly untrue statement of a material fact contained in
the then current Prospectus (and/or Statement of Additional Information, if any)
of the Funds or arise out of or are based upon the omission or alleged omission
to state therein a material fact that is required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that this indemnity agreement is
subject to the condition that notice be given as provided below. Upon the
presentation in writing of any claim or the commencement of any suit against any
Defendant in respect of which indemnification may be sought from the Underwriter
on account of its agreement contained in the preceding sentence, such Defendant
shall with reasonable promptness give notice in writing of such suit to the
Underwriter, but failure so to give such notice shall not relieve the
Underwriter from any liability that it may have to the Defendants otherwise than
on account of said indemnity agreement. The Underwriter shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any such claim or suit, but if the Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Defendants who are parties to such suit or against whom such
claim is presented. If the Underwriter elects to assume the defense and retain
such counsel as herein provided, such Defendant shall bear the fees
-4-
<PAGE>
and expenses subsequently incurred of any additional counsel retained by them,
except the reasonable costs of investigation and such other costs as are
approved by the Underwriter; provided, that if counsel for an indemnified
Defendant determines in good faith that there is a conflict which requires
separate representation for the indemnified Defendant, the indemnified Defendant
shall be entitled to indemnification for the reasonable expenses of one
additional counsel and local counsel to the extent provided above. Such counsel
shall, to the fullest extent consistent with its professional responsibilities,
cooperate with the Underwriter and its counsel. The Underwriter agrees to
notify the Dealer promptly, as soon as it has knowledge thereof, of the
commencement of any litigation or proceedings against the Underwriter or the
Funds or any of their directors or officers, in connection with the offer or
sale of shares of the Funds to the public. The Underwriter's obligation under
this paragraph shall survive the termination of this Agreement.
10. FIDELITY BOND OF DEALER AND INDEMNIFICATION BY DEALER. Dealer
represents that all directors, officers, partners, employees or registered
representatives of Dealer who are authorized pursuant to this Agreement to sell
shares of the Funds or who have access to monies belonging to the Underwriter,
including but not limited to monies submitted with applications for purchase of
shares of the Funds or monies being returned to investors, are and shall be
covered by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall be
maintained by Dealer at Dealer's expense. Such bond shall be at least of the
form, type and amount required under the NASD Rules of Fair Practice. The
Underwriter may require evidence, satisfactory to it, that such coverage is in
force. Dealer shall give prompt written notice to the Underwriter of any notice
of cancellation or change of coverage with respect to such bond. Dealer hereby
assigns any proceeds received from the fidelity bonding company to the
Underwriter to the extent of the Underwriter's loss due to activities covered by
the bond. If there is any deficiency amount, whether due to a deductible or
otherwise, Dealer shall promptly pay to the Underwriter such amount on demand,
and Dealer hereby indemnifies and holds harmless the Underwriter from any such
deficiency and from the costs of collection thereof, including reasonable
attorneys fees.
Dealer also agrees to indemnify and hold harmless the Underwriter and its
officers, directors and employees and each person who controls them within the
meaning of Section 15 of the Securities Act of 1933 (hereinafter in this
paragraph referred to as Defendants) against any and all losses, claims, damages
or liabilities, including reasonable attorneys fees, to which they may become
subject under the Securities Act of 1933, the Securities Exchange Act of 1934,
or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any oral or written
misrepresentation, any unauthorized action or statement, or any other willful,
reckless or negligent violation of any law, regulation, contract or other
arrangement by Dealer or its officers, directors, employees or agents, or (ii)
the failure of Dealer or its officers, directors, employees or agents to comply
with any applicable provisions of this Agreement; provided, that this indemnity
agreement is subject to the condition that notice be given as provided below.
Upon the presentation in writing of any claim or the commencement of any suit
against any Defendant in respect of which indemnification may be sought from the
Dealer on account of its agreement contained in the preceding sentence, such
Defendant shall with
-5-
<PAGE>
reasonable promptness give notice in writing of such suit to the Dealer, but
failure to so give such notice shall not relieve the Dealer from any liability
that it may have to the Defendants otherwise than on account of this indemnity
agreement. The Dealer shall be entitled to participate at its own expense in
the defense, or, if it so elects, to assume the defense of any such claim or
suit with counsel chosen by it and satisfactory to the defendants who are
parties to such suit or against whom such claim is presented. If the Dealer
elects to assume the defense and retain such counsel as herein provided, such
Defendant shall bear the fees and expenses subsequently incurred of any
additional counsel retained by them, except the reasonable costs of
investigation and such other costs as are approved by the Dealer; provided, that
if counsel for an indemnified Defendant determines in good faith that there is a
conflict which requires separate representation for the indemnified Defendant,
the indemnified Defendant shall be entitled to indemnification for the
reasonable expenses of one additional counsel and local counsel to the extent
provided above. Such counsel shall, to the fullest extent consistent with its
professional responsibilities, cooperate with the Dealer and its counsel. The
Dealer's obligations under this paragraph shall survive the termination of this
Agreement.
11. ASSIGNMENT AND TERMINATION. This Agreement may not be assigned by the
Dealer without consent of the Underwriter.
12. TERMINATION. Either party may terminate this Agreement at any time
upon giving written notice to the other party hereto. This Agreement shall
terminate automatically in the event of the suspension, revocation, cancellation
or other impairment of the Dealer's membership in the NASD or the Dealer's
registration, license or qualification to sell shares of the Funds under any
applicable state or federal law or regulation.
13. FIRST CLAIM ON EARNINGS AND LEGAL PROCEEDINGS. Underwriter shall have
first claim on all of Dealer's earnings under this Agreement. This means that
Underwriter as and when it elects may keep all or any part of such earnings to
reduce any debt Dealer owes Underwriter. While Underwriter may release Dealer's
earnings while Dealer owes a debt to Underwriter, this does not mean Underwriter
has waived this right of first claim to Dealer's earnings. Underwriter's claim
also takes precedence over claims of Dealer's creditors. All Dealer's earnings
kept by Underwriter will be used to reduce debt owed to Underwriter. Dealer has
no right to start any legal proceedings on Underwriter's behalf or in its name.
14. NOTICE. Any notice to be given to a party hereto pursuant to this
Agreement shall be in writing, addressed to such party at the address of such
party set forth in the preamble hereof, or such other address as such other
party may from time to time designate in writing to the party hereto giving
notice. Any notice delivered by the mails, postage fully prepaid, shall be
deemed to have been given five (5) days after mailing or, if earlier, upon
receipt.
-6-
<PAGE>
15. WAIVER. No failure, neglect or forbearance on the part of the
Underwriter to require strict performance of this Agreement shall be construed
as a waiver of the rights or remedies of the Underwriter hereunder.
16. SUSPENDING SALES, AMENDING OR CANCELING THIS AGREEMENT. The
Underwriter may, at any time, without notice, suspend sales or withdraw any
offering of shares entirely. The Underwriter reserves the right to amend or
cancel this Agreement upon notice to Dealer. The Dealer agrees that any order
to purchase shares of Funds placed after notice of any amendment to this
Agreement has been sent to the Dealer shall constitute the Dealer's agreement to
any such amendment.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Minnesota.
-7-
<PAGE>
DEALER:
- ----------------------------------- -----------------------------------
(Name) (NSCC Clearing Number)
- ----------------------------------- -----------------------------------
(Tax Identification Number) (NSCC Executing Broker Symbol)
- ----------------------------------- -----------------------------------
(Street Address) (Telephone Number)
- -----------------------------------
(City) (State) (Zip)
Date of offer: , 19
---------------- ---
By
--------------------------------------------------------------------
(Signature)
Please Print Name
----------------------------------------------------
Its
------------------------------------------------------------------
(Title)
Accepted by
MIMLIC SALES CORPORATION
Date of acceptance: , 19
--------------------- ---
By
-------------------------------------------------------------------
(Signature)
Its
------------------------------------------------------------------
(Title)
-8-
<PAGE>
SCHEDULE A
Dealer Compensation Schedule
Effective March 1, 1995
I. Advantus Horizon Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Bond Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
(International Fund offers only Class A and Class C Shares.)
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
A. DEALER COMMISSIONS
Dealer Concession as Percentage of Offering Price
-------------------------------------------------
Class A Class B Class C
Amount of Sale Shares Shares Shares
-------------- ------ ------ ------
Less than $50,000 4.50% 3.75% -0-
$50,000 but less
than $100,000 4.05 3.38 -0-
$100,000 but less
than $250,000 3.15 2.63 -0-
$250,000 but less
than $500,000 2.25 1.88 -0-
$500,000 but less
than $1,000,000 1.35 1.13 -0-
$1,000,000 and over .9* n/a* n/a*
* Orders of $1,000,000 or more will be accepted only for Class A Shares. MIMLIC
does not receive a sales load on sales of Class A Shares of $1,000,000 or more.
The Dealer will receive
<PAGE>
the commission indicated on such sales; provided, however, that if the customer
redeems any portion of such investment within 18 months after purchase, the pro
rated commission paid on the portion redeemed shall be charged back against the
Dealer's compensation account in an amount determined as follows:
Percentage of Commission Month After Sale
Charged Back When Redemption Occurs
------------ ----------------------
100% 0-6
66 2/3 7-12
33 1/3 13-18
B. DISTRIBUTION AND SERVICE FEES
In addition to the Dealer Commissions, the Dealer shall receive
quarterly Distribution and/or Service Fees, equal to a percentage of
average daily net assets attributable to Shares held in accounts by
customers for whom the Dealer is the holder or agent of record or with
whom the Dealer maintains a servicing relationship in accordance with
the following table:
Distribution Fees Service Fees
----------------- ------------
Class A Class C Class B Class C
------- ------- ------- -------
1/4 of .25% 1/4 of .75% 1/4 of .25% 1/4 of .25%
II. Advantus Money Market Fund, Inc.
MIMLIC does not receive a sales load on sales of Advantus Money Market
Fund. Shares of Advantus Money Market Fund acquired in an exchange from
any of the other Advantus Funds may be exchanged at relative net asset
values for shares of any of the other Advantus Funds. Shares of Advantus
Money Market Fund not acquired in an exchange from any of the other
Advantus Funds may be exchanged at relative net asset values plus
applicable sales load for shares of any of the other Advantus Funds. In
the event Dealer's customer exchanges shares of Advantus Money Market Fund
for shares of another Advantus Fund and pays a sales load in connection
with such exchange, the Dealer shall receive a Dealer Discount as described
above.
-2-
<PAGE>
CUSTODIAN AGREEMENT
ADVANTUS VENTURE FUND, INC.
FIRST TRUST NATIONAL ASSOCIATION
THIS AGREEMENT, made in duplicate this ___ day of __________, 1996, by
and between Advantus Venture Fund, Inc., a Minnesota corporation (hereinafter
called the "Fund"), and First Trust National Association, a national banking
association organized and existing under the laws of the United States of
America with its principal place of business at St. Paul, Minnesota (hereinafter
called the "Custodian").
WITNESSETH:
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by the Custodian, pursuant to the terms of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Fund and Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "securities" as used herein shall be construed to include,
without being limited to, shares, stocks, treasury stocks, including any stocks
of the Fund, notes, bonds, debentures, evidences of indebtedness, certificates
of interest or participation in any profit-sharing agreements, collateral trust
certificates, reorganization certificates or subscriptions, transferable shares,
investment contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas, or other mineral
rights, or any certificates of interest or participation in, temporary or
interim certificates for, receipts for, guarantees of, or warrants or rights to
subscribe to or purchase any of the foregoing, acceptances and other
obligations, and any evidence of any right or interest in or to any property or
assets and any other interest or instrument commonly known as a security.
The words "written order from the Fund" shall mean a request or
direction or certification in writing, by wire, computer terminal, magnetic tape
or other mutually accepted means with or without a manual signature which the
Custodian in good faith believes to be genuine and to have been sent by the
Fund. Any such order in writing shall be signed in the name of the Fund by any
two of the individuals designated in the current certified list referred to in
Article 2.
<PAGE>
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles and
signatures of officers and other persons who are authorized to give written or
oral orders to the Custodian on behalf of the Fund. The Fund agrees that
whenever any change in such authorization occurs it will file with the Custodian
a new certified list of names, titles and signatures which shall be signed by at
least one officer previously certified to the Custodian if any such officer
still holds an office in the Fund. The Custodian is authorized to rely and act
upon the names, titles and signatures of the individuals as they appear in the
most recent such certified list which has been delivered to the Custodian as
hereinbefore provided.
ARTICLE 3. RECEIPT AND DISBURSING OF MONEY
SECTION (1)
The Fund shall from time to time cause cash held by the Fund to be
delivered or paid to the Custodian, but the Custodian shall not be under any
obligation or duty to determine whether all cash of the Fund is being so
deposited or to take any action or give any notice with respect to cash not so
deposited. The Custodian agrees to hold such cash, together with any other sum
collected or received by it for or on behalf of the Fund, for the account of the
Fund, in the name of "Advantus Venture Fund, Inc., Custodian Account," in
conformity with the terms of this Agreement. The Custodian shall make payments
of cash for the account of the Fund upon receipt of a written order from the
Fund.
SECTION (2)
The Custodian is hereby appointed the attorney-in-fact of the Fund to
enforce and collect all checks, drafts or other orders for the payment of money
received by the Custodian for the account of the Fund and drawn to or to the
order of the Fund and to deposit them in the Custodian Account of the Fund.
ARTICLE 4. RECEIPT OF SECURITIES
The Fund agrees to place all of its securities of the Fund in the
custody of the Custodian, but the Custodian shall not be under any obligation or
duty to determine whether all securities of the Fund are being so deposited or
to require that they be so deposited, or to take any action or give any notice
with respect to the securities not so deposited. The Custodian agrees to hold
such securities for the account of the Fund, in the name of the Fund or of
bearer or of a nominee of the Custodian, and in conformity with the terms of
this Agreement. The Custodian also agrees, upon written order from the Fund, to
receipt from persons other than the Fund and to hold for the account of the Fund
securities specified in said written order, and, if the same are in proper form,
to cause payment to be made therefor to the persons from whom such securities
were received, from the funds of the Fund held by it in the Custodian Account in
the amounts provided and in the manner directed by the written order from the
Fund. The Custodian
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<PAGE>
shall have no power, or authority to assign, hypothecate, pledge or otherwise
dispose of any such securities and investments, except pursuant to a written
order from the Fund and only for the account of the Fund as set forth in Article
5 of this Agreement.
The Custodian agrees that all securities of the Fund placed in its
custody shall be kept segregated in a separate account at all times from those
of any other person, firm or corporation, and shall be held by the Custodian
with all reasonable precautions for the safekeeping thereof, with safeguards
substantially equivalent to those maintained by the Custodian for its own
securities.
ARTICLE 5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
The Custodian agrees to transfer, exchange or deliver securities as
provided in Article 6, or on receipt by it of, and in accordance with, a written
order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby, provided that it shall not be the
responsibility of the Custodian to determine the propriety or legality of any
such order:
(a) In the case of deliveries of securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of a
confirmation from a broker or dealer with respect to the transaction;
(b) In the case of deliveries of securities which may mature or be
called, redeemed, retired or otherwise become payable, against receipt by the
Custodian of the sums payable thereon or against interim receipts or other
proper delivery receipts;
(c) In the case of deliveries of securities which are to be
transferred to and registered in the name of the Fund or of a nominee of the
Custodian and delivered to the Custodian for the account of the Fund, against
receipt by the Custodian of interim receipts or other proper delivery receipts;
(d) In the case of deliveries of securities to the issuer thereof,
its transfer agent or other proper agent, or to any committee or other
organization for exchange for other securities to be delivered to the Custodian
in connection with a reorganization or recapitalization of the issuer or any
split-up or similar transaction involving such securities, against receipt by
the Custodian of such other securities or against interim receipts or other
proper delivery receipts;
(e) In the case of deliveries of temporary certificates in exchange
for permanent certificates, against receipt by the Custodian of such permanent
certificates or against interim receipts or other proper delivery receipts;
(f) In the case of deliveries of securities upon conversion thereof
into other securities, against receipt by the Custodian of such other securities
or against interim receipts or other proper delivery receipts;
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<PAGE>
(g) In the case of deliveries of securities in exchange for other
securities (whether or not such transactions also involve the receipt or payment
of cash), against receipt by the Custodian of such other securities or against
interim receipts or other proper delivery receipts;
(h) In a case not covered by the preceding paragraphs of this
article, upon receipt of a resolution adopted by the Board of Directors of the
Fund, or any Executive Committee of such Board, signed by an officer of the Fund
and certified to by the Secretary, specifying the securities and assets to be
transferred, exchanged, or delivered, the purposes for which such delivery is
being made, declaring such purposes to be proper corporate purposes, and naming
a person or persons to whom such transfer, exchange or delivery is to be made;
and
(i) In the case of deliveries pursuant to paragraphs (a), (b), (c),
(d), (e), (f), and (g) above, the written order from the Fund shall direct that
the proceeds of any securities delivered, or securities or other assets
exchanged for or in lieu of securities so delivered, are to be delivered to the
Custodian.
ARTICLE 6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives contrary written orders from
the Fund, the Custodian shall without order from the Fund:
(a) Present for payment all bills, notes, checks, drafts and similar
items, and all coupons or other income items (except stock dividends), held or
received for the account of the Fund, and which require presentation in the
ordinary course of business, and credit such items to the Custodian Account of
the Fund conditionally, subject to final payment;
(b) Present for payment all securities which may mature or be called,
redeemed, retired, or otherwise become payable and credit such items to the
Custodian Account of the Fund conditionally, subject to final payment;
(c) Hold for and credit to the account of the Fund all shares of
stock and other securities received as stock dividends or as the result of a
stock split or otherwise from or on account of securities of the Fund, and
notify the Fund promptly of the receipt of such items;
(d) Deposit any cash received by it from, for or on behalf of the
Fund to the credit of the Fund in the Custodian Account of the Fund (without
liability for interest);
(e) Charge against the aforesaid Custodian Account for the Fund
disbursements authorized to be made by the Custodian hereunder and actually made
by it, and notify the Fund of such charges at least once a month;
(f) Deliver securities which are to be transferred to and reissued in
the name of the Fund, or of a nominee of the Custodian for the account of the
Fund, and temporary certificates which are to be exchanged for permanent
certificates, to a proper transfer agent for such purposes against interim
receipts or other proper delivery receipts; and
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<PAGE>
(g) Hold for disposition in accordance with written orders from the
Fund hereunder all options, rights and similar securities which may be received
by the Custodian and which are issued with respect to any securities held by it
hereunder, and notify the Fund promptly of the receipt of such items.
ARTICLE 7. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies, notices
and communications with relation to securities held by it which it may receive
from sources other than the Fund.
ARTICLE 8. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for transfer any
securities which it may hold for the account of the Fund. For the purpose of
facilitating the handling of securities, unless the Fund shall otherwise direct
by written order, the Custodian is authorized to hold securities deposited with
it under this Agreement in the name of its registered nominee or nominees (as
defined in the Internal Revenue Code and any Regulations of the United States
Treasury Department issued thereunder or in any provision of any subsequent
Federal tax law exempting such transaction from liability for stock transfer
taxes) and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or regulations or under the laws of
any state. In consideration of Custodian's registration of any securities or
other property in the name of Custodian or its nominee or agent, Customer agrees
to pay on demand to Custodian or to Custodian's nominee or agent the amount of
any loss or liability for stockholders assessments, or otherwise, claimed or
asserted against Custodian or Custodian's nominee or agent by reason of such
registration. Securities of the Fund which are held in nominee name shall be
identified as belonging to the Fund on the books and records of the Custodian.
ARTICLE 9. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse the Custodian for any transfer taxes
payable upon transfers of securities made hereunder, including transfers
incident to the termination of this Agreement, and for all other necessary and
proper disbursements and expenses made or incurred by the Custodian in the
performance or incident to the termination of this Agreement, and the Custodian
shall have a lien upon any cash or securities held by it for the account of the
Fund for all such items, enforceable, after thirty days' written notice by
registered mail to the Fund, by the sale of sufficient securities to satisfy
such lien. The Custodian may reimburse itself by deducting from the proceeds of
any sale of securities an amount sufficient to pay any transfer taxes payable
upon the transfer of securities sold. The Custodian shall execute such
certificates in connection with securities delivered to it under this Agreement
as may be required, under the provisions of any federal revenue act and any
Regulations of the Treasury Department issued thereunder or any
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<PAGE>
state laws, to exempt from taxation any transfers and/or deliveries of any such
securities as may qualify for such exemption.
ARTICLE 10. CUSTODIAN'S LIABILITY
If the mode of payment for securities to be delivered by the Custodian
is not specified in the written order from the Fund directing such delivery, the
Custodian shall make delivery of such securities against receipt by it of cash,
a postal money order or a check drawn by a bank, trust company, or other banking
institution, or by a broker named in such written order from the Fund, for the
amount the Custodian is directed to receive. The Custodian shall be liable for
the proceeds of any delivery of securities made pursuant to this Article, but
provided that it has complied with the provisions of this Article, only to the
extent that such proceeds are actually received.
ARTICLE 11. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund as of the close of business on
the last business day of each month a statement showing all cash transactions
and entries for the account of the Fund. The books and records of the Custodian
pertaining to its actions as Custodian under this Agreement shall be open to
inspection and audit, at reasonable times, by officers of, and auditors employed
by, the Fund. The Custodian shall furnish the Fund with a list of the
securities held by it in custody for the account of the Fund as of the close of
business on the last business day of each month.
ARTICLE 12. CUSTODIAN'S COMPENSATION
The Custodian shall be paid compensation at such rates and at such
times as may from time to time be agreed on in writing by the parties hereto,
and the Custodian shall have a lien for unpaid compensation, to the date of
termination of this Agreement, upon any cash or securities held by it for the
account of the Fund, enforceable in the manner specified in Article 9 hereof.
ARTICLE 13. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect, as it may from time to time be
amended, until it shall have been terminated as hereinafter provided, but no
such alteration or termination shall affect or impair any rights or liabilities
arising out of any acts or omissions to act occurring prior to such amendment or
termination.
The Custodian may terminate this Agreement by giving the Fund ninety
(90) days' written notice of such termination by registered mail addressed to
the Fund at its principal place of business.
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<PAGE>
The Fund may terminate this Agreement by giving ninety (90) days'
written notice thereof delivered, together with a copy of the resolution of the
Board of Directors authorizing such termination and certified by the Secretary
of the Fund, by registered mail to the Custodian at its principal place of
business.
Upon termination of this Agreement, the assets of the Fund held by the
Custodian shall be delivered by the Custodian to a successor custodian upon
receipt by the Custodian of a copy of the resolution of the Board of Directors
of the Fund, certified by the Secretary, designating the successor custodian.
Upon any termination of this Agreement, pending the appointment of a
successor custodian or a decision by the Fund to dissolve or to function without
a custodian of its cash, securities and other property, Custodian shall not
deliver the cash, securities and other property of the Fund to the Fund, but may
deliver them to a bank or trust company in the Cities of Minneapolis or St.
Paul, Minnesota, of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than five
hundred thousand dollars ($500,000.00) as a Custodian for the Fund to be held
under terms similar to those of this Agreement; provided, however, that
Custodian shall not be required to make any such delivery or payment until full
payment shall have been made by the Fund or Minnesota Mutual of all liabilities
constituting a charge on or against the properties then held by Custodian or on
or against Custodian, and until full payment shall have been made to Custodian
of all its fees, compensation, costs and expenses, subject to the provisions of
Section 12 of this Agreement.
This Agreement may be amended at any time by the mutual agreement of
the Fund and the Custodian.
This Agreement may not be assigned by the Custodian without the
consent of the Fund, authorized or approved by a resolution of its Board of
Directors.
ARTICLE 14. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any such successor custodian shall have all the power, duties and
obligations of the preceding custodian under this Agreement and any amendments
thereof and shall succeed to all the exemptions and privileges of the preceding
custodian under this Agreement and any amendments thereof.
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<PAGE>
ARTICLE 15. USE OF SUB-CUSTODIAN BANKS
Notwithstanding any provisions of this Agreement to the contrary, the
Custodian is authorized to make, from time to time, appropriate arrangements
with other banks selected by it for the custody by such banks of the Fund
securities in circumstances where direct custody of such securities by the
Custodian would be impracticable. Any bank so selected by the Custodian to act
as a sub-custodian shall have aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than five hundred thousand
dollars ($500,000.00). For the purposes of this Agreement, any bank selected by
the Custodian to act as a sub-custodian for the Fund shall be deemed to be an
agent of the Custodian, and receipt and possession by such sub-custodian bank of
securities for the Fund shall constitute receipt and possession of such
securities by the Custodian. The account holdings of the Customer at such an
entity shall not include any assets of the Custodian other than assets held as a
fiduciary, Custodian or otherwise for Customers, and securities of the Fund
which are maintained in such an entity shall be identified as belonging to the
Fund on the books and records of the Custodian. The Custodian shall indemnify
the Fund for any losses arising from the negligence of any sub-custodian bank
selected by it. The Custodian shall promptly notify the Fund of its selection
of a bank to act as sub-custodian hereunder.
ARTICLE 16. USE OF DEPOSITORY
The Custodian may deposit all or any part of the securities owned by
the Fund in a (a) clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository, or (b) the book-entry system as provided in Subpart
O of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR 350, and the
book-entry regulations of federal agencies substantially in the form of Subpart
O, (hereinafter referred to as "Depository") in accordance with the provisions
of Rule 17f-4 under the Investment Company Act of 1940, or the applicable
provisions of a comparable rule adopted by the Securities and Exchange
Commission, and this Agreement.
The Custodian shall establish, for the participation of the Fund, an
account at the Depository which shall not include any assets held by the
Custodian other than as a fiduciary, custodian or otherwise for customers. The
Custodian shall send the Fund confirmation of any transfers to or from the
account of the Fund including those where the transaction takes place by book
entry at the Depository and shall identify securities held by the Depository
belonging to the Fund. Upon request, the Custodian shall also provide the Fund
with any report obtained by the Custodian on the Depository's system of internal
accounting control and such reports on the Custodian's own system of internal
accounting control as the Fund may reasonably require. The Custodian shall
indemnify the Fund for any loss or damage resulting from the use of the
Depository arising by reason of any negligence, misfeasance or misconduct of the
Custodian or its employees or agents or from a failure of the Custodian to
enforce effectively such rights as it may have against the Depository.
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<PAGE>
ARTICLE 17. GENERAL
Nothing expressed or mentioned in or to be implied from any provisions
of this Agreement is intended to give or shall be construed to give any person
or corporation other than the parties hereto any legal or equitable right,
remedy or claim under or in respect of this Agreement or any covenant, condition
or provision herein contained, this Agreement and all of the covenants,
conditions and provisions hereof being intended to be, and being, for the sole
and exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund
shall retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisitions, and the sale, or other disposition, of all of its
securities, and that the duties and responsibilities of the Custodian hereunder
shall be limited to receiving and safeguarding the assets and securities of the
Fund and to delivering or disposing of them pursuant to the written order of the
Fund as aforesaid, and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
securities, except as hereinbefore specifically set forth.
The Custodian shall in no case or event permit the withdrawal of any
money or securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and securities for
disposition under the procedure herein set forth.
All notices and communications from the Custodian to the Fund shall be
addressed to Advantus Venture Fund, Inc., 400 Robert Street North, St. Paul,
Minnesota 55101, unless and until the Fund, in writing, directs the Custodian
otherwise, in which event the last such written direction shall be controlling.
All notices and other communications from the Fund to the Custodian shall be
addressed to First Trust National Association, 4th Floor - Custody Window, and
delivered to it at 180 East Fifth Street, St. Paul, Minnesota 55101, unless and
until the Custodian in writing directs the Fund otherwise in which event the
last such written direction shall be controlling.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including reasonable counsel fees) incurred or assessed against it or its
nominee in connection with the performance of this Agreement, except such as may
arise from its or its nominee's own negligent action, negligent failure to act
or willful misconduct; provided, however, that the Custodian will give the Fund
reasonable opportunity to defend against such claim in the name of the Fund or
Custodian, or both. The Custodian is authorized to charge any account of the
Fund for such items. In the event of any advance of cash for any purpose made
by the Custodian resulting from orders or instructions of the Fund, 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 Agreement, 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.
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<PAGE>
ARTICLE 18. LIABILITY OF CUSTODIAN
The Custodian shall not be liable for any action taken in good faith
upon oral or written instructions of the Fund or upon any written order herein
described or certified copy of any resolution of the Board of Directors and may
rely on the genuineness of any such document which it in good faith believes to
have been validly executed.
The Custodian shall be responsible for any loss of the physical
property of the Fund while deposited in the Fund account or accounts or
otherwise in the actual possession of Custodian, its officers, agents or
employees. The Custodian shall not be responsible to the Fund for any loss of
the Fund's securities caused by war, civil war, insurrection, military, naval or
usurped power, hurricane, cyclone, tornado, earthquake, volcanic eruption or
other similar disturbance of nature. Custodian shall not be responsible to the
Fund for any loss of the Fund's securities in time of peace or war, directly or
indirectly caused by or resulting from the effects of nuclear fission or fusion
or radioactivity.
No loss shall excuse Custodian from any of its responsibilities under
the terms of this Agreement.
The Custodian shall also be responsible for any loss of the physical
property of the Fund while such physical property is in transit between the
banking premises of Custodian and any other place in the custody of an officer,
employee or agent of Custodian, or an armored motor vehicle company employed by
Custodian, provided Custodian has selected the means of transportation or
delivery used. Unless instructed otherwise pursuant to this Agreement by the
Fund, Custodian shall be the only party entitled to select the means of
transportation or delivery used.
The Custodian is to maintain in its own name bankers' blanket bond
insurance. Upon request from the Fund, Custodian shall provide the Fund with a
letter executed by an authorized officer of Custodian describing the insurance
then in force. If, at any time, such insurance is not satisfactory to the Fund,
the Fund may terminate this Agreement in accordance with its provisions.
Custodian's responsibilities under this Agreement shall in no way be limited by
the coverage limits of insurance carried by Custodian.
ARTICLE 19. INSTRUCTIONS TO CUSTODIAN
The Custodian may, when it deems it expedient, apply to the Fund, or
to counsel for the Fund, or to its own counsel, for instructions and advice; and
the Custodian shall not be liable for any action taken by it in accordance with
the written instructions or advice of the Fund or of counsel for the Fund.
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ARTICLE 20. EFFECTIVE DATE
This Agreement shall become effective when it shall have been approved
by the Board of Directors of the Fund. The Fund shall transmit to the Custodian
promptly after such approval by said Board of Directors a copy of its resolution
embodying such approval, certified by the Secretary of the Fund.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this
Agreement to be executed in duplicate as of the date first above written by
their duly authorized officers.
ATTEST: ADVANTUS VENTURE FUND, INC.
By
- ----------------------------------- ------------------------------------
Assistant Secretary Its
-----------------------------------
ATTEST: FIRST TRUST NATIONAL ASSOCIATION
By
- ----------------------------------- -------------------------------------
Trust Officer Its
------------------------------------
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ADMINISTRATIVE SERVICE AGREEMENT
AGREEMENT made as of the 17th of July, 1996, by and between Advantus
Venture Fund, Inc., a Minnesota corporation, having its principal office and
place of business at 400 Robert Street North, St. Paul, Minnesota, 55101, (the
"Fund"), and The Minnesota Mutual Life Insurance Company, a Minnesota
corporation having its principal office and place of business at 400 Robert
Street North, St. Paul, Minnesota, 55101, ("Minnesota Mutual").
WHEREAS, the Fund desires to engage Minnesota Mutual to provide to
the Fund accounting, audit, legal and other administrative services, and
Minnesota Mutual desires to provide such services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 TERMS OF APPOINTMENT; DUTIES OF MINNESOTA MUTUAL
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints Minnesota Mutual, and Minnesota
Mutual hereby agrees to provide certain accounting, auditing, legal and other
administrative services to the Fund.
1.02 Minnesota Mutual agrees that it will perform such services as
are required by the Fund, including, without limitation, the following:
(a) register or qualify, and maintain the registrations or
qualifications, of the Fund and its Shares under state or other securities laws.
(b) calculate the Fund's net asset value per Share at such times
and in such manner as specified in the Fund's current prospectus and statement
of additional information and at such other times as the parties hereto may from
time to time agree upon;
(c) upon the Fund's distribution of dividends and capital gains,
calculate the amount of such dividends and capital gains to be received per
Share and calculate the number of additional Shares to be received by each
Shareholder, other than any shareholder who has elected to receive such
dividends and capital gains in cash;
(d) prepare and maintain all accounting records required by the
Fund, including a general ledger;
(e) prepare the Fund's annual and semi-annual financial
statements;
(f) prepare and file the Fund's income, excise and other tax
returns;
<PAGE>
(g) provide audit assistance in conjunction with the Fund's
independent auditors;
(h) provide such legal services as the parties hereto may from
time to time agree upon, including without limitation preparation and filing
with the Securities and Exchange Commission of the annual or more frequent post-
effective amendments to the Fund's registration statement and the Fund's proxy
materials; and
(i) provide such other administrative services as the parties
hereto may from time to time agree upon.
Procedures applicable to certain of these services may be
established from time to time by agreement between the Fund and Minnesota
Mutual.
Article 2 COMPENSATION FOR SERVICES
2.01 In payment for the administrative services to be performed by
Minnesota Mutual hereunder, the Fund shall pay to Minnesota Mutual a fee in
accordance with Schedule A hereto.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
will reimburse Minnesota Mutual for out-of-pocket expenses or advances incurred
by Minnesota Mutual in connection with Minnesota Mutual's performance of
services hereunder.
Article 3 REPRESENTATIONS AND WARRANTIES OF MINNESOTA MUTUAL
Minnesota Mutual represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Minnesota.
3.02 It is duly qualified to carry on its business in the State of
Minnesota.
3.03 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to Minnesota Mutual that:
4.01 It is a corporation duly organized and existing and in good
standing under the laws of Minnesota.
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<PAGE>
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of
Incorporation and Bylaws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is an open-end and diversified management investment
company registered under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 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.
Article 5 INDEMNIFICATION
5.01 Minnesota Mutual shall not be responsible for, and the Fund
shall indemnify and hold Minnesota Mutual harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of Minnesota Mutual or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by Minnesota Mutual or its agents or
subcontractors of information, records and documents which (i) are received by
Minnesota Mutual or its agents or subcontractors and furnished to it by or on
behalf of the Fund, and (ii) have been prepared and/or maintained by the Fund or
any other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by Minnesota Mutual or
its agents or subcontractors of any instructions or requests of the Fund.
5.02 Minnesota Mutual shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action or
failure or omission to act by Minnesota Mutual as a result of Minnesota Mutual's
lack of good faith, negligence or willful misconduct.
5.03 At any time Minnesota Mutual 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 Minnesota
Mutual under this Agreement, and Minnesota Mutual and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund
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<PAGE>
for any action taken or omitted by it in reliance upon such instructions or in
good faith reliance upon the opinion of such counsel. Minnesota Mutual, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably 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 Minnesota Mutual
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. Minnesota Mutual, 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 current or former
transfer agent or registrar, or of a co-transfer agent or co-registrar.
5.04 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.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
Article 6 COVENANTS OF THE FUND AND MINNESOTA MUTUAL
6.01 Minnesota Mutual 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, Minnesota Mutual agrees that all such records
prepared or maintained by Minnesota Mutual relating to the services to be
performed by Minnesota Mutual 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.
6.02 Minnesota Mutual and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanges or received pursuant to
-4-
<PAGE>
the negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required by law.
6.03 In the case of any requests or demands for the inspection of
the Shareholder records of the Fund, Minnesota Mutual will endeavor to notify
the Fund and to secure instructions from an authorized officer of the Fund as to
such inspection. Minnesota Mutual 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.
Article 7 EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
7.01 The effective date of this Agreement is set forth in the first
paragraph of this Agreement. Unless sooner terminated as hereinafter provided,
this Agreement shall continue in effect until the next annual meeting of the
Fund's shareholders and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of Directors
of the Fund, including the specific approval of a majority of the directors who
are not interested persons of the Fund, Advantus Capital Management, Inc.
("Advantus Capital"), investment adviser to the Fund, or MIMLIC Sales
Corporation ("MIMLIC Sales"), the underwriter of the Fund's Shares, cast in
person at a meeting called for the purpose of voting on such approval.
7.02 This Agreement may be terminated at any time without the
payment of any penalty by the vote of the Board of Directors of the Fund, or by
Minnesota Mutual, upon 60 days' written notice to the other party.
Article 8 ASSIGNMENT
8.01 This Agreement shall automatically terminate in the event of
its assignment as such term is defined by the Investment Company Act of 1940, as
amended.
Article 9 AMENDMENT
9.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund, including a majority of the directors who
are not interested persons of the Fund, Advantus Capital or MIMLIC Sales, cast
in person at a meeting called for the purpose of voting on such approval.
-5-
<PAGE>
Article 10 MINNESOTA LAW TO APPLY
10.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Minnesota.
Article 11 MERGER OF AGREEMENT
11.01 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.
Article 12 NOTICES
12.01 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ADVANTUS VENTURE FUND, INC.
By
------------------------------------------------
Paul H. Gooding, President
Attest
--------------------------------------------
Frederick P. Feuerherm, Treasurer
THE MINNESOTA MUTUAL LIFE
INSURANCE COMPANY
By
------------------------------------------------
Robert E. Hunstad, Executive Vice President
Attest
--------------------------------------------
Dennis E. Prohofsky, Senior Vice
President, General Counsel and Secretary
-6-
<PAGE>
ADVANTUS VENTURE FUND, INC.
SCHEDULE A
Minnesota Mutual shall receive, as compensation for its services
pursuant to this Agreement, a monthly fee determined in accordance with the
following table:
Monthly Administrative
Services Fee
----------------------
$3,600
Said monthly fees shall be paid to Minnesota Mutual not later than
five days following the end of each calendar quarter in which said services were
rendered.
-7-
<PAGE>
[Dorsey & Whitney LLP Letterhead]
Advantus Venture Fund, Inc.
400 Robert Street North
St. Paul, MN 55101
Dear Sir/Madam:
Reference is made to the Registration Statement on Form N-1A which you
are filing with the Securities and Exchange Commission pursuant to the
Securities Act of 1933 for the purpose of registering for sale by Advantus
Venture Fund, Inc. (the "Fund") an indefinite number of shares of the Fund's
Common Shares, comprised of Class A, Class B and Class C, par value $.01 per
share.
We are familiar with the proceedings to date with respect to the
proposed sale by the Fund, and have examined such records, documents and matters
of law and have satisfied ourselves as to such 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 Fund is a legally organized corporation under Minnesota law.
(b) The shares of Common Stock, Class A, Class B and Class C to be
sold by the Fund will be legally issued, fully paid and nonassessable when
issued and sold upon the terms and in the manner set forth in said Registration
Statement of the Fund.
We consent to the reference to this firm under the caption "Counsel
and Independent Auditors" in the Prospectus and to the use of this opinion as an
exhibit to the Registration Statement.
Dated: September 12, 1996
Very truly yours,
/s/ Dorsey & Whitney LLP
DORSEY & WHITNEY LLP
<PAGE>
[KPMG Peat Marwick LLP Letterhead]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Advantus Venture Fund, Inc.:
We consent to the use of our report included herein and the references to our
Firm under the headings "COUNSEL AND INDEPENDENT AUDITORS" in Part A and
"FINANCIAL STATEMENTS" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 19, 1996
<PAGE>
[LETTERHEAD]
[LOGO]
September 4, 1996
Advantus Venture Fund, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Dear Sir or Madam:
In connection with the purchase by Advantus Capital Management, Inc. (the
"Purchaser") of 5,000 initial Class A shares, 5,000 initial Class B shares and
5,000 initial Class C shares of common stock ("Stock") of Advantus Venture Fund,
Inc. (the "Fund"), the Purchaser hereby represents that it is acquiring such
Stock for investment with no intention of selling or otherwise disposing or
transferring it or any interest in it. The Purchase hereby further agrees that
any transfer of any such Stock or any interest in it shall be subject to the
following conditions:
1. The Purchaser shall furnish the Fund and counsel satisfactory to the Fund
prior to the time of transfer, a written description of the proposed
transfer specifying its nature and consequence and giving the name of the
proposed transferee.
2. The Fund shall have obtained from its counsel a written opinion stating
whether in the opinion of such counsel the proposed transfer may be
effected without registration under the Securities Act of 1933. If such
opinion states that such transfer may be so effected, the Purchaser shall
then be entitled to transfer its Stock in accordance with the terms
specified in its description of the transaction to the Fund. If such
opinion states that the proposed transfer may not be so effected, the
Purchaser will not be entitled to transfer its Stock unless such Stock is
registered.
3. The Purchaser understands that the Fund expects to incur organization
expenses in connection with the start-up and initial registration of the
Fund. These costs will be amortized over 60 months on a straight-line
basis beginning on the date the Fund first offers capital stock to the
public (commencement of operations). If the Purchaser redeems any or all
of the Stock representing initial capital prior to the end of the 60-month
amortization period, the redemption proceeds will be reduced by their pro
rata portion of the unamortized organization costs. Such proration shall
be calculated by dividing the number of shares of Stock to be redeemed by
the number of shares of Stock representing initial capital.
4. The Purchaser further agrees that all certificates, if any, representing
such Stock shall contain on the face thereof the following legend:
<PAGE>
Advantus Venture Fund, Inc.
September 4, 1996
Page 2
"The shares represented by this certificate may not be
transferred without (i) the opinion of counsel satisfactory
to Advantus Venture Fund, Inc. that the transfer may be
legally made without registration under the Federal
Securities Act of 1933; or (ii) such registration."
The Purchaser hereby authorizes the Fund to take such action as it shall
reasonably deem appropriate to prevent any violation of the Securities Act of
1933 in connection with the transfer of Stock, including the imposition of a
requirement that any transferee of the Stock sign a letter agreement similar to
this one.
Very truly yours,
Paul H. Gooding
President
<PAGE>
ADVANTUS VENTURE FUND, INC.
RULE 12b-1 PLAN OF DISTRIBUTION
APPLICABLE TO CLASS A SHARES
WHEREAS, Rule 12b-1 under the Investment Company Act of 1940, (the "Rule"),
provides that a registered open-end management investment company may act as a
distributor of securities of which it is the issuer, provided that any payments
made by such company in connection with such distribution are made pursuant to a
written plan describing all material aspects of the proposed financing of
distribution; and
WHEREAS, it is intended that shares of Advantus Venture Fund, Inc., (the
"Fund") designated as Class A shares will be sold to the public through the
distribution facilities of MIMLIC Sales Corporation ("MIMLIC Sales") pursuant to
an Underwriting and Distribution Agreement, dated July 17, 1996.
NOW THEREFORE, the following shall constitute the written plan pursuant to
which such distribution fee payable in connection with Class A shares of the
Fund shall be made.
The Underwriting and Distribution Agreement (the "Agreement") between the
Fund and MIMLIC Sales provides that MIMLIC Sales will receive, as compensation
for services it renders under the Agreement in connection with Class A shares of
the Fund, in addition to a sales charge, a monthly distribution fee from the
Fund as set forth below.
Monthly Distribution Fee
(as a percentage of the
Fund's average net assets
attributable to Class A Shares
------------------------------
1/12 x .30%
The distribution fee may be used by MIMLIC Sales for the purpose of
financing any activity which is primarily intended to result in the sale of
Class A shares of the Fund. For example, such distribution fee may be used by
MIMLIC Sales: (a) to compensate broker-dealers, including MIMLIC Sales and its
registered representatives, for their sale of Class A shares of the Fund,
including the implementation of various incentive programs with respect to
broker-dealers, banks, and other financial institutions, and (b) to pay other
advertising and promotional expenses in connection with the distribution of
Class A shares of the Fund. These advertising and promotional expenses include,
by way of example but not by way of limitation, costs of prospectuses for other
than current shareholders; preparation and distribution of sales literature;
advertising of any type; expenses of branch offices provided by MIMLIC Sales and
any affiliate thereof; and compensation paid to and expenses incurred by
officers, employees or representatives of MIMLIC Sales or of other broker-
dealers, banks, or other financial institutions, including travel,
entertainment, and telephone expenses.
<PAGE>
The Plan will not take effect with respect to the Fund, and no fee will be
payable in accordance with the Plan, until the Plan has been approved by a vote
of at least a majority of the outstanding voting securities of the Fund
designated as Class A shares.
This Plan shall continue in effect for a period of more than one year from
the date of its adoption only so long as such Plan, together with any related
agreements, has been approved by a vote of the Board of Directors of the Fund,
and the Directors who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Plan or in any agreements
related to the Plan, cast in person at a meeting called for the purpose of
voting on such Plan or agreements.
The Chairman of MIMLIC Sales, or such other person as he may designate
shall provide to the Board of Directors of the Fund, and the Directors shall
review, at least quarterly, a written report of the amounts received by MIMLIC
Sales pursuant to the Plan, the expenditures made by MIMLIC Sales out of such
proceeds, and the purpose for which such expenditures were made.
This Plan may be terminated at any time by vote of a majority of the
members of the Board of Directors of the Fund who are not interested persons of
the Fund and have no direct or indirect financial interest in the operation of
the Plan or in any agreements related to the Plan, or by vote of a majority of
the outstanding voting securities of the Fund designated as Class A shares.
This Plan may not be amended to increase materially the amount to be spent
by the Fund for distribution without Class A shareholder approval.
All material amendments to the Plan, together with any related agreements,
must be approved by a vote of the Board of Directors of the Fund, and of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan, cast in person at a meeting called for the purpose of
voting on such Plan or agreements.
-2-
<PAGE>
ADVANTUS VENTURE FUND, INC.
RULE 12b-1 PLAN OF DISTRIBUTION
APPLICABLE TO CLASS B SHARES
This Plan of Distribution (the "Plan") is adopted pursuant to Rule 12b-1
(the "Rule") under the Investment Company Act of 1940 (as amended, the "1940
Act") by Advantus Venture Fund, Inc., a Minnesota corporation (the "Fund"), for
and on behalf of the Fund's shares of common stock designated as Class B, on
July 17, 1996.
1. Compensation
The Fund is obligated to pay the principal underwriter of the Fund's Class
B shares (the "Underwriter") a total fee in connection with the servicing of
Class B shareholder accounts of the Fund and in connection with distribution
related services provided in respect of Class B shares of the Fund, calculated
and payable monthly, at the annual rate of 1.00% of the value of the Fund's
average daily net assets attributable to Class B shares.
All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, a portion of such
fee, equal to .25% per annum of the value of the Fund's average daily net assets
attributable to Class B shares, shall be designated and payable as a Shareholder
Servicing Fee, and the balance of such fee, equal to .75% per annum of the value
of the Fund's average daily net assets attributable to Class B shares, shall be
designated and payable as a Distribution Fee.
2. Expenses Covered by the Plan
(a) The Shareholder Servicing Fee may be used by the Underwriter to
provide compensation for ongoing servicing and/or maintenance of Class B
shareholder accounts with the Fund. Compensation may be paid by the Underwriter
to persons, including employees of the Underwriter, and institutions who respond
to inquiries of Class B shareholders of the Fund regarding their ownership of
shares or their accounts with the Fund or who provide other administrative or
accounting services not otherwise required to be provided by the Fund's
investment adviser, transfer agent or other agent of the Fund.
(b) The Distribution Fee may be used by the Underwriter to provide initial
and ongoing sales compensation to its investment executives and to other broker-
dealers in respect of sales of Class B shares of the Fund and to pay for other
advertising and promotional expenses in connection with the distribution of
Class B shares of the Fund. These advertising and promotional expenses include,
by way of example but not by way of limitation, costs of printing and mailing
prospectuses, statements of additional information and shareholder reports to
prospective investors in Class B shares of the Fund; preparation and
distribution of sales
<PAGE>
literature; advertising of any type; an allocation of overhead and other
expenses of the Underwriter related to the distribution of Class B shares of the
Fund; and payments to, and expenses of, officers, employees or representatives
of the Underwriter, of other broker-dealers, banks or other financial
institutions, and of any other persons who provide support services in
connection with the distribution of Class B shares of the Fund, including
travel, entertainment, and telephone expenses.
(c) Payments under the Plan are not tied exclusively to the expenses for
shareholder servicing and distribution related activities actually incurred by
the Underwriter in connection with Class B shares of the Fund, so that such
payments may exceed expenses actually incurred by the Underwriter. The Fund's
Board of Directors will evaluate the appropriateness of the Plan and its payment
terms on a continuing basis and in doing so will consider all relevant factors,
including expenses borne by the Underwriter and amounts it receives under the
Plan.
3. Additional Payments by Adviser and the Underwriter
The Fund's investment adviser and the Underwriter may, at their option and
in their sole discretion, make payments from their own resources to cover the
costs of additional distribution and shareholder servicing activities.
4. Approval by Shareholders
The Plan will not take effect with respect to the Fund, and no fee will be
payable in accordance with Section 1 of the Plan, until the Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of the Fund designated as Class B shares.
5. Approval by Directors
Neither the Plan nor any related agreements will take effect until approved
by a majority vote of both (a) the full Board of Directors of the Fund and (b)
those Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on the Plan and the related agreements.
6. Continuance of the Plan
The Plan will continue in effect from year to year so long as its
continuance is specifically approved annually by vote of the Fund's Board of
Directors in the manner described in Section 5 above.
7. Termination
The Plan may be terminated at any time with respect to the Fund, without
penalty, by vote of a majority of the Independent Directors or by a vote of a
majority of the outstanding voting securities of the Fund designated as Class B
shares.
-2-
<PAGE>
8. Amendments
The Plan may not be amended with respect to the Fund to increase materially
the amount of the fees payable pursuant to the Plan, as described in Section 1
above, unless the amendment is approved by a vote of at least a majority of the
outstanding voting securities of the Fund designated as Class B shares, and all
material amendments to the Plan must also be approved by the Fund's Board of
Directors in the manner described in Section 5 above.
9. Selection of Certain Directors
While the Plan is in effect, the selection and nomination of the Fund's
Directors who are not interested persons of the Fund will be committed to the
discretion of the Directors then in office who are not interested persons of the
Fund.
10. Written Reports
In each year during which the Plan remains in effect, the Underwriter and
any person authorized to direct the disposition of monies paid or payable by the
Fund pursuant to the Plan or any related agreement will prepare and furnish to
the Fund's Board of Directors, and the Board will review, at least quarterly,
written reports, complying with the requirements of the Rule, which set out the
amounts expended under the Plan and the purposes for which those expenditures
were made.
11. Preservation of Materials
The Fund will preserve copies of the Plan, any agreement relating to the
Plan and any report made pursuant to Section 10 above, for a period of not less
than six years (the first two years in an easily accessible place) from the date
of the Plan, agreement or report.
12. Meaning of Certain Terms
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act and the rules and regulations under the 1940
Act, subject to any exemption that may be granted to the Company under the 1940
Act by the Securities and Exchange Commission.
-3-
<PAGE>
ADVANTUS VENTURE FUND, INC.
RULE 12b-1 PLAN OF DISTRIBUTION
APPLICABLE TO CLASS C SHARES
This Plan of Distribution (the "Plan") is adopted pursuant to Rule 12b-1
(the "Rule") under the Investment Company Act of 1940 (as amended, the "1940
Act") by Advantus Venture Fund, Inc., a Minnesota corporation (the "Fund"), for
and on behalf of the Fund's shares of common stock designated as Class C, on
July 17, 1996.
1. Compensation
The Fund is obligated to pay the principal underwriter of the Fund's Class
C shares (the "Underwriter") a total fee in connection with the servicing of
Class C shareholder accounts of the Fund and in connection with distribution
related services provided in respect of Class C shares of the Fund, calculated
and payable monthly, at the annual rate of 1.00% of the value of the Fund's
average daily net assets attributable to Class C shares.
All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, a portion of such
fee, equal to .25% per annum of the value of the Fund's average daily net assets
attributable to Class C shares, shall be designated and payable as a Shareholder
Servicing Fee, and the balance of such fee, equal to .75% per annum of the value
of the Fund's average daily net assets attributable to Class C shares, shall be
designated and payable as a Distribution Fee.
2. Expenses Covered by the Plan
(a) The Shareholder Servicing Fee may be used by the Underwriter to
provide compensation for ongoing servicing and/or maintenance of Class C
shareholder accounts with the Fund. Compensation may be paid by the Underwriter
to persons, including employees of the Underwriter, and institutions who respond
to inquiries of Class C shareholders of the Fund regarding their ownership of
shares or their accounts with the Fund or who provide other administrative or
accounting services not otherwise required to be provided by the Fund's
investment adviser, transfer agent or other agent of the Fund.
(b) The Distribution Fee may be used by the Underwriter to provide initial
and ongoing sales compensation to its investment executives and to other broker-
dealers in respect of sales of Class C shares of the Fund and to pay for other
advertising and promotional expenses in connection with the distribution of
Class C shares of the Fund. These advertising and promotional expenses include,
by way of example but not by way of limitation, costs of printing and mailing
prospectuses, statements of additional information and shareholder reports to
prospective investors in Class C shares of the Fund; preparation and
distribution of sales
<PAGE>
literature; advertising of any type; an allocation of overhead and other
expenses of the Underwriter related to the distribution of Class C shares of the
Fund; and payments to, and expenses of, officers, employees or representatives
of the Underwriter, of other broker-dealers, banks or other financial
institutions, and of any other persons who provide support services in
connection with the distribution of Class C shares of the Fund, including
travel, entertainment, and telephone expenses.
(c) Payments under the Plan are not tied exclusively to the expenses for
shareholder servicing and distribution related activities actually incurred by
the Underwriter in connection with Class C shares of the Fund, so that such
payments may exceed expenses actually incurred by the Underwriter. The Fund's
Board of Directors will evaluate the appropriateness of the Plan and its payment
terms on a continuing basis and in doing so will consider all relevant factors,
including expenses borne by the Underwriter and amounts it receives under the
Plan.
3. Additional Payments by Adviser and the Underwriter
The Fund's investment adviser and the Underwriter may, at their option and
in their sole discretion, make payments from their own resources to cover the
costs of additional distribution and shareholder servicing activities.
4. Approval by Shareholders
The Plan will not take effect with respect to the Fund, and no fee will be
payable in accordance with Section 1 of the Plan, until the Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of the Fund designated as Class C shares.
5. Approval by Directors
Neither the Plan nor any related agreements will take effect until approved
by a majority vote of both (a) the full Board of Directors of the Fund and (b)
those Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on the Plan and the related agreements.
6. Continuance of the Plan
The Plan will continue in effect from year to year so long as its
continuance is specifically approved annually by vote of the Fund's Board of
Directors in the manner described in Section 5 above.
7. Termination
The Plan may be terminated at any time with respect to the Fund, without
penalty, by vote of a majority of the Independent Directors or by a vote of a
majority of the outstanding voting securities of the Fund designated as Class C
shares.
-2-
<PAGE>
8. Amendments
The Plan may not be amended with respect to the Fund to increase materially
the amount of the fees payable pursuant to the Plan, as described in Section 1
above, unless the amendment is approved by a vote of at least a majority of the
outstanding voting securities of the Fund designated as Class C shares, and all
material amendments to the Plan must also be approved by the Fund's Board of
Directors in the manner described in Section 5 above.
9. Selection of Certain Directors
While the Plan is in effect, the selection and nomination of the Fund's
Directors who are not interested persons of the Fund will be committed to the
discretion of the Directors then in office who are not interested persons of the
Fund.
10. Written Reports
In each year during which the Plan remains in effect, the Underwriter and
any person authorized to direct the disposition of monies paid or payable by the
Fund pursuant to the Plan or any related agreement will prepare and furnish to
the Fund's Board of Directors, and the Board will review, at least quarterly,
written reports, complying with the requirements of the Rule, which set out the
amounts expended under the Plan and the purposes for which those expenditures
were made.
11. Preservation of Materials
The Fund will preserve copies of the Plan, any agreement relating to the
Plan and any report made pursuant to Section 10 above, for a period of not less
than six years (the first two years in an easily accessible place) from the date
of the Plan, agreement or report.
12. Meaning of Certain Terms
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act and the rules and regulations under the 1940
Act, subject to any exemption that may be granted to the Company under the 1940
Act by the Securities and Exchange Commission.
-3-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001022330
<NAME> MULTI CLASS ADVANTUS VENTURE FUND, INC.
<SERIES>
<NUMBER> 100
<NAME> CLASS A
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-04-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 150
<INVESTMENTS-AT-VALUE> 150
<RECEIVABLES> 0
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 157
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7
<TOTAL-LIABILITIES> 7
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 150
<SHARES-COMMON-STOCK> 5
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 50
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001022330
<NAME> MULTI CLASS ADVANTUS VENTURE FUND, INC.
<SERIES>
<NUMBER> 101
<NAME> CLASS B
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-04-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 150
<INVESTMENTS-AT-VALUE> 150
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<TOTAL-ASSETS> 157
<PAYABLE-FOR-SECURITIES> 0
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 150
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<RESTATED>
<CIK> 0001022330
<NAME> MULTI CLASS ADVANTUS VENTURE FUND, INC.
<SERIES>
<NUMBER> 102
<NAME> CLASS C
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> SEP-04-1996
<PERIOD-END> SEP-04-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 150
<INVESTMENTS-AT-VALUE> 150
<RECEIVABLES> 0
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 157
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7
<TOTAL-LIABILITIES> 7
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 150
<SHARES-COMMON-STOCK> 5
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 50
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 0
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<PER-SHARE-NAV-BEGIN> 10.0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
ADVANTUS MUTUAL FUNDS
AND MIMLIC CASH FUND
POWER OF ATTORNEY
TO SIGN REGISTRATION STATEMENT
The undersigned, Directors of Advantus Horizon Fund, Inc., Advantus
Spectrum Fund, Inc., Advantus Mortgage Securities Fund, Inc., Advantus Money
Market Fund, Inc., Advantus Bond Fund, Inc., Advantus Cornerstone Fund, Inc.,
Advantus Enterprise Fund, Inc., Advantus International Balanced Fund, Inc.,
Advantus Venture Fund, Inc., Advantus Index 500 Fund, Inc., and MIMLIC Cash
Fund, Inc. (the "Funds"), appoint Paul H. Gooding, Eric J. Bentley and Michael
J. Radmer, and each of them individually, as attorney-in-fact for the purpose of
signing in their names and on their behalf as Directors of the Funds and filing
with the Securities and Exchange Commission Registration Statements on Form N-
1A, or any amendments thereto, for the purpose of registering shares of Common
Stock of the Funds for sale by the Funds and to register the Funds under the
Investment Company Act of 1940.
Dated: July 31, 1996 /s/ Charles E. Arner
-----------------------------------
Charles E. Arner
/s/ Ellen S. Berscheid
-----------------------------------
Ellen S. Berscheid
/s/ Ralph D. Ebbott
-----------------------------------
Ralph D. Ebbott
/s/ Frederick P. Feuerherm
-----------------------------------
Frederick P. Feuerherm
/s/ Paul H. Gooding
-----------------------------------
Paul H. Gooding
