SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FMI FUNDS, INC.
(Name of Registrant as Specified in its Charter)
FMI FUNDS, INC.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and date of
its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
FMI FUNDS, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD December 22, 1997
To the Shareholders of FMI FUNDS, INC.
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of
FMI FUNDS, INC. (the "Company") will be held at the Milwaukee Athletic
Club, 758 North Broadway, Milwaukee, Wisconsin, on Monday, the 22nd day of
December, 1997, at 10:00 A.M. for the following purposes:
1. To elect 6 directors to serve an indefinite term until
their respective successors are chosen and qualified (Proposal No.
1).
2. To consider and act upon a proposal to approve a new
investment advisory agreement between the Company and Fiduciary
Management, Inc. for the FMI Focus Fund.
3. To transact such other business with respect to the Company
as may properly come before the meeting or any adjournments thereof.
Only shareholders of record of the Company at the close of
business on November 28, 1997, the record date for this meeting, shall be
entitled to notice of and to vote at the meeting or any adjournments
thereof.
YOUR VOTE IS IMPORTANT AND ALL SHAREHOLDERS ARE ASKED TO BE
PRESENT IN PERSON OR BY PROXY. IF YOU ARE UNABLE TO ATTEND THE MEETING IN
PERSON, WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
AT YOUR EARLIEST CONVENIENCE USING THE STAMPED ENVELOPE PROVIDED. SENDING
IN YOUR PROXY WILL NOT PREVENT YOU FROM PERSONALLY VOTING YOUR SHARES AT
THE MEETING SINCE YOU MAY REVOKE YOUR PROXY BY ADVISING THE SECRETARY OF
THE COMPANY IN WRITING (BY SUBSEQUENT PROXY OR OTHERWISE) OF SUCH
REVOCATION AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors
DONALD S. WILSON
Secretary
Milwaukee, Wisconsin
December 9, 1997
<PAGE>
FMI FUNDS, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
PROXY STATEMENT
The enclosed proxy is being solicited by and on behalf of the
Board of Directors of FMI Funds, Inc. (the "Company") for use at the
Special Meeting of Shareholders to be held at the Milwaukee Athletic Club,
758 North Broadway, Milwaukee, Wisconsin, on Monday, the 22nd day of
December, 1997 at 10:00 A.M. and at any adjournments thereof (the
"Meeting"), for the purposes set forth in the attached Notice of Special
Meeting of Shareholders. The Meeting could be adjourned if a quorum does
not exist or the Meeting is disrupted by fire or other emergency. For
purposes of any adjournment, proxies will be voted "FOR" adjournment
unless otherwise directed. A shareholder may otherwise direct by writing
anywhere on the enclosed proxy that the shareholder will vote against any
adjournments.
Whether you expect to be personally present at the Meeting or
not, please complete, sign, date and return the accompanying form of
proxy. Timely executed proxies will be voted as you instruct. If no
choice is indicated, proxies will be voted for the election of the
nominees for the Board of Directors of the Company (Proposal No. 1), and
for the proposed investment advisory agreement (Proposal No. 2). Any
shareholder giving a proxy has the power to revoke it at any time before
it is exercised by giving notice thereof to the Company in writing (by
subsequent proxy or otherwise), but if not so revoked, the shares
represented by the proxy will be voted at the Meeting. Presence at the
Meeting of a shareholder who has signed a proxy does not in itself revoke
a proxy.
Proxies will be solicited by mail. In addition to solicitation
by mail, certain officers and employees of the Company may solicit by
telephone, telegraph and personally. Such officers and employees will not
be specifically paid for these services. The cost of solicitation
including preparing, assembling and mailing the proxy material will be
borne by the Company. The Notice of Special Meeting of Shareholders, this
Proxy Statement and the accompanying form of proxy are first being mailed
to shareholders of the Company beginning on or about December 9, 1997.
The Company consists of a single portfolio, the FMI Focus Fund
(the "Fund").
The following proposals will be presented to the shareholders at
the Meeting:
Proposal No. 1 Election of Directors
Proposal No. 2 Approval of New Investment Advisory
Agreement for the Fund
The record holder of each outstanding share of the Fund is
entitled to one vote on all matters submitted to shareholders of the Fund.
See "Vote Required" under each Proposal for information as to the required
vote on each Proposal.
Only shareholders of record of the Fund at the close of business
on November 28, 1997, will be entitled to notice of and to vote at the
Meeting. On that date, there were _____________ issued and outstanding
shares of the Fund.
As of November 28, 1997, the number of shares owned by (i) the
nominees for director and (ii) the only shareholders of the Company, who
to the Company's knowledge owned more than 5% of the outstanding
securities of the Fund were as set forth below:
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Name and Address of Beneficial
Owner Sole Power Shared Power Aggregate Percent of Class
<S> <C> <C> <C>
Ted D. Kellner
225 East Mason Street
Milwaukee, WI 53202 7,589 135,080* 142,669* 29.34%*
Donald S. Wilson
225 East Mason Street
Milwaukee, WI 53202 2,849 107,301* 110,150* 22.65%*
Peter Griffith Investments
57 Down Heath Circle
Litteton, CO 80127 -0- 87,769 87,769 18.05%
H.M. Baskerville, Jr.
c/o Riverway Co.
7703 Normandale Road
Minneapolis, MN 55435 32,895 9,868* 42,763* 8.80%*
Ronald F. Krantz
2315 Evergreen Road
Middleton, WI 53562 34,714 -0- 34,714 7.14%
Barry K. Allen
c/o Fiduciary Management, Inc.
225 East Mason Street
Milwaukee, WI 53202 -0- 1,580 1,580 **
George D. Dalton
255 Fiserve Drive
Brookfield, WI 53045 - 0- -0- -0- -0-
Patrick J. English
225 East Mason Street
Milwaukee, WI 53202 2,279 -0- 2,279 **
Thomas W. Mount
c/o Fiduciary Management, Inc.
225 East Mason Street
Milwaukee, WI 53202 -0- -0- -0 -0-
Directors (including nominees) and
Executive Officers as a Group (7
persons) 149,377 30.72%
__________________
* Includes 107,301 shares owned by Fiduciary Management, Inc., retirement plans of Fiduciary Management, Inc. and clients
of Fiduciary Management, Inc. (including H.M. Baskerville, Jr.) for whom Fiduciary Management, Inc. exercises investment
discretion. Messrs. Kellner and Wilson share the power to vote and dispose of the same 107,301 shares.
** Less than 1%
</TABLE>
By virtue of his stock ownership, Ted D. Kellner is deemed to "control,"
as that term is defined in the Investment Company Act of 1940 (the "1940
Act"), the Fund and the Company.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, ITS ANNUAL REPORT FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1997 TO ANY SHAREHOLDER UPON REQUEST.
REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO DONALD S. WILSON AT 225
EAST MASON STREET, MILWAUKEE, WISCONSIN 53202 OR BY CALLING 1-800-811-
5311.
1. PROPOSAL TO ELECT SIX DIRECTORS
Six directors are to be elected at the Meeting to serve an
indefinite term until their respective successors are chosen and
qualified. The table set forth below identifies the six nominees for
election as directors of the Company and provides information as to the
age, principal occupation and background for the last five years. Four of
the nominees, Messrs. Allen, Kellner, Mount and Wilson, are members of the
present Board of Directors and have been directors of the Company since
its incorporation on September 5, 1996.
Each nominee has consented to being named in this Proxy
Statement and to serve if elected. The Company has no reason to believe
that any of the nominees will be unable to serve as director. However, in
such event, the persons named as proxies will have discretionary authority
to select and vote for substituted nominees. It is the intention of the
persons named in the enclosed proxy to vote the shares represented by the
proxies FOR the election of the nominees named below, unless shareholders
specify that their vote be withheld as to all nominees or individual
nominees. The Company's Board of Directors recommends a vote FOR all
nominees.
Directors will be elected by a plurality of votes of the
shareholders (assuming a quorum is present). "Plurality" means that the
individuals receiving the largest number of votes are elected as
Directors, up to the maximum number of Directors to be chosen at the
Meeting. Consequently, any shares not voted at the Meeting, whether due
to abstentions, broker non-votes or otherwise, will have no impact on the
election of directors.
The table below sets forth information regarding the nominees
for the Board of Directors:
Name of Nominee Position with Principal Occupation
and Age the Company During Past 5 Years
Barry K. Allen Director Executive Vice President,
49 Consumer & Business
Services, Ameritech, since
1995; President and Chief
Operating Officer of
Marquette Electronics, Inc.
from September, 1993 to
August, 1995; President and
Chief Executive Officer of
Ameritech Illinois from
July, 1993 to September,
1993; President and Chief
Executive Officer of
Wisconsin Bell from July,
1989 to July, 1993.
George D. Dalton Nominee for Director Chairman of the Board and
69 Chief Executive Officer,
Fiserv, Inc., a provider of
financial data processing
services to financial
institutions, since 1984.
Patrick J. English* Nominee for Director Senior Vice President of
37 and Vice President Fiduciary Management, Inc.
since 1986.
Ted D. Kellner* Director, President Chairman of the Board and
51 and Treasurer Chief Executive Officer of
Fiduciary Management, Inc.,
an investment advisory firm,
since 1980.
Thomas W. Mount Director Retired Chairman and a
66 Director of Stokely USA,
Inc. where he served in
various capacities since
1957.
Donald S. Wilson* Director, Vice President and Treasurer of
54 President and Fiduciary Management, Inc.
Secretary since 1980.
_________________________
*Interested person as defined in the Investment Company Act of 1940.
Messrs. Kellner, English and Wilson are deemed to be "interested
persons" of the Company as that term is defined in the Investment Company
Act of 1940 because they are officers and/or directors of Fiduciary
Management, Inc., the current investment adviser of the Fund.
The officers of the Company are Mr. Ted D. Kellner, 51,
President and Treasurer, Mr. Donald S. Wilson, 54, Vice President and
Secretary, Mr. Gary G. Wagner, 54, Vice President and Assistant Secretary,
and Mr. Patrick J. English, 37, Vice President. All of such person serve
for an indefinite term and have served in such capacities since 1996.
Messrs. Allen, Kellner, Mount and Wilson are also members of the
Board of Directors of Fiduciary Capital Growth Fund, Inc., a registered
investment company advised by Fiduciary Management, Inc. Mr. Allen is
also a director of Harley-Davidson, Inc. Mr. Dalton is a director of
Fiserv, Inc., ARI Network Services, Inc. and APAC TeleServices, Inc.
The Company does not compensate any of its officers or directors
for their services to the Company, except those directors who are not
"interested persons" of the Company. The Company's standard method of
compensating the directors who are not "interested persons" of the Company
is to pay each such director a fee of $150 for each meeting of the Board
of Directors attended. The Company does not provide pension or retirement
benefits to its directors and officers.
<TABLE>
The table below sets forth the compensation paid to directors
during the fiscal year ended September 30, 1997:
<CAPTION>
Aggregate Pension or Retirement Total Compensation from
Compensation Benefits Accrued as Estimated Annual the Company and Fund
Name of Person, from the Part of the Benefits Upon Complex Paid to
Position Company Company's Expenses Retirement Directors(1)
<S> <C> <C> <C> <C>
Barry K. Allen, $0 $0 $0 $600
Director
Ted D. Kellner, 0 0 0 0
President, Treasurer
and Director
Thomas W. Mount, 0 0 0 600
Director
Donald S. Wilson, Vice 0 0 0 0
President, Secretary
and Director
(1) Fiduciary Capital Growth Fund, Inc. and the Company are the only
investment companies in the Fund Complex.
</TABLE>
The Board of Directors has no audit, nominating, compensation or
other similar committees. The Board of Directors met one time during the
fiscal year ended September 30, 1997. All of the nominees who were
directors of the Company during the fiscal year ended September 30, 1997
attended the meeting.
2. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT FOR THE FUND
Introduction
The Company presently has an investment advisory agreement (the
"Current Advisory Agreement") with Fiduciary Management, Inc., 225 East
Mason Street, Milwaukee, Wisconsin 53202 (the "Adviser"), with respect to
the Fund pursuant to which the Adviser furnishes continuous investment
advisory services to the Fund. In addition, the Company and the Adviser
have an administration agreement (the "Administration Agreement") with
respect to the Fund, pursuant to which the Adviser supervises all aspects
of the Fund's operations except those performed by it as investment
adviser. The Current Advisory Agreement and the Administration Agreement
initially were approved by the Company's Board of Directors, including a
majority of those Directors who were not "interested persons" of the
Company, on October 25, 1996. Proposal 2 asks the shareholders to approve
a new Advisory Agreement (the "Proposed Advisory Agreement") with the
Adviser. The Proposed Advisory Agreement was approved by the Company's
Board of Directors, including a majority of those Directors who were not
"interested persons" of the Company, at a meeting of the Board of
Directors held on December 9, 1997. The Proposed Advisory Agreement will
take effect on January 1, 1998 assuming it is approved by the shareholders
of the Fund at the Meeting.
Description of Current and Proposed Advisory Agreements and the
Administration Agreement
The terms of the Current Advisory Agreement and the Proposed
Advisory Agreement are identical except for the fees payable to the
Adviser. Under the Current Advisory Agreement, the Fund pays the Adviser
a monthly fee of 1/12 of 1% (1% per annum) on the average daily net assets
of the Fund. The Proposed Advisory Agreement provides for an increase in
the monthly advisory fee payable to the Adviser for the services it
provides to the Fund to 1/12 of 1.25% (1.25% per annum) of the average
daily net assets of the Fund.
Pursuant to the Current Advisory Agreement, the Adviser
supervises and manages the investment portfolio of the Fund and subject to
such policies as the Board of Directors of the Fund may determine, directs
the purchase or sale of investment securities in the day to day management
of the Fund's investment portfolio. Under the Current Advisory Agreement,
the Adviser, at its own expense and without reimbursement from the Fund,
furnishes office space, and all necessary office facilities, equipment and
executive personnel for managing the Fund's investments, and bears all
sales and promotional expenses of the Fund other than distribution
expenses paid by the Fund pursuant to the Service and Distribution Plan
and expenses incurred in complying with laws regulating the issue or sale
of securities.
Pursuant to the Administration Agreement, the Adviser supervises
all aspects of the Fund's operations except those performed by it pursuant
to the Current Advisory Agreement. Under the Administration Agreement,
the Adviser, at its own expense and without reimbursement from the Fund,
furnishes office space, and all necessary office facilities, equipment and
executive personnel for supervising the Fund's operations. For its
services, the Adviser receives a monthly fee of 1/12 of 0.2% (0.2% per
annum) of the first $30 Million of daily net assets of the Fund, 1/12 of
0.1% (0.1% per annum) on the next $70 Million of daily net assets of the
Fund and 1/12 of 0.5% (0.5% per annum) of the daily net assets of the
Fund over $100 Million. During the fiscal year ended September 30, 1997,
the Adviser received $3,718 pursuant to the Administration Agreement.
The Adviser has agreed to reimburse the Fund to the extent that
the aggregate annual operating expenses, including the investment advisory
fee and the administration fee but excluding interest (including dividends
on securities sold short), taxes, brokerage commissions and extraordinary
items, exceed 2.75% of the Fund's average daily net assets. The Fund
monitors its expense ratio on a monthly basis. If the accrued amount of
the expenses of the Fund exceeds the limitation, the Fund creates an
account receivable from the Adviser for the amount of such excess. In
such a situation the monthly payment of the Adviser's fee will be reduced
by the amount of such excess, subject to adjustment month by month during
the balance of the Fund's fiscal year if accrued expenses thereafter fall
below this limit. The Proposed Advisory Agreement contains an identical
expense reimbursement provision.
During the fiscal year ended September 30, 1997, the Adviser
received $10,941 in advisory fees. However pursuant to its expense
reimbursement obligation under the Current Advisory Agreement, the Adviser
reimbursed the Fund $39,748 for excess expenses. Had the Proposed
Advisory Agreement been in effect during that year, the Adviser would have
received $13,675 in fees (an increase of 25%) from the Fund but would have
reimbursed the Fund $42,482.
The Fund does not pay brokerage commissions to any broker
affiliated with the Fund, the Adviser or any affiliated person thereof.
The following table shows the actual operating expenses
expressed as a percentage of average net assets incurred by the Fund
during the period from December 16, 1996 (commencement of operations)
through September 30,1997, and the expenses expressed as a percentage of
average net assets that would have been incurred had the Proposed Advisory
Agreement been in effect for such period:
Actual Pro Forma
Management Fees 1.00% 1.25%
12b-1 Fees 0.00% 0.00%
Interest Expense and Dividends on
Securities Sold Short 0.17% 0.17%
Other Expenses (net of reimbursements) 1.75%* 1.50%*
Total Fund Operating Expenses 2.92%* 2.92%*
====== ======
______________
* Absent reimbursement, Other Expenses would have been 5.38% (actual
and pro forma) and Total Fund Operating Expenses would have been
6.55% (actual) and (6.80%) pro forma.
Example
The following example illustrates the expenses on a $1,000
investment in the Fund under both the Current Advisory Agreement and the
Proposed Advisory Agreement assuming (i) a 5% annual return and (ii)
redemption at the end of each time period:
1 Year 3 Years
Current Advisory Agreement $30 $90
Proposed Advisory Agreement $30 $90
The purpose of the above example and table is to assist you in
understanding how the various costs and expenses of the Fund will change
as a result of the Proposed Advisory Agreement. The Fund's actual
expenses and investment performance vary from year to year and will result
in expenses that may be higher or lower than those shown above.
If approved by the requisite shareholder vote, the Proposed
Advisory Agreement will become effective on January 1, 1998. The Proposed
Advisory Agreement provides that it will continue in effect for an initial
period beginning on January 1, 1998 and ending December 31, 2000 and
thereafter will remain in effect as long as its continuance is
specifically approved at least annually by (i) the Company's Board of
Directors, or by the vote of a majority (as defined in the 1940 Act) of
the outstanding shares of the Fund; and (ii) by the vote of a majority of
the directors of the Company who are not interested persons, cast in
person at a meeting called for the purpose of voting on such approval.
The Proposed Advisory Agreement provides that it may be terminated at any
time without the payment of any penalty by the Board of Directors of the
Company or by a vote of a majority of the outstanding shares of the Fund
on sixty days written notice to the Adviser, and by the Adviser on the
same notice to the Company, and that it shall be automatically terminated
if it is assigned.
Description of Fiduciary Management, Inc.
Fiduciary Management, Inc. (the "Adviser") is a registered
investment adviser organized in 1980. Its address is 225 East Mason
Street, Milwaukee, Wisconsin 53202. The Adviser is an investment adviser
to individuals and institutional clients (including investment companies)
with substantial investment portfolios. It is controlled by Ted D.
Kellner and Donald S. Wilson. Since 1980, Mr. Kellner has served as
Chairman of the Board and Chief Executive Officer and Mr. Wilson has
served as President and Treasurer. As of October 31, 1997, the Adviser
managed approximately $1.1 billion in assets.
Set forth below are the names and addresses of the principal
executive officers and directors of the Adviser. The principal occupation
of each such person is his or her position with the Adviser.
Name and Address Position with Fiduciary Management, Inc.
Ted D. Kellner Director, Chief Executive Officer and
225 East Mason Street Chairman of the Board
Milwaukee, WI 53202
Donald S. Wilson Director, President and Treasurer
225 East Mason Street
Milwaukee, WI 53202
Gary G. Wagner Executive Vice President
225 East Mason Street
Milwaukee, WI 53202
Patrick J. English Senior Vice President - Research
225 East Mason Street
Milwaukee, WI 53202
Maria Blanco Senior Vice President and Secretary
225 East Mason Street
Milwaukee, WI 53202
John Brandser Vice President - Fixed Income
225 East Mason Street
Milwaukee, WI 53202
Camille Wildes Vice President
225 East Mason Street
Milwaukee, WI 53202
Jody Reckard Vice President
225 East Mason Street
Milwaukee, WI 53202
The Adviser is the investment adviser to Fiduciary Capital
Growth Fund, Inc., a registered investment company having a primary
investment objective of producing long-term capital appreciation
principally through investing in common stocks. At September 30, 1997,
Fiduciary Capital Growth Fund, Inc. had net assets of $52,677,509 and the
Adviser receives an annual investment advisory fee from Fiduciary Capital
Growth Fund, Inc. equal to 0.92% of such Fund's average daily net assets,
none of which were waived or reduced during the fiscal year ended
September 30, 1997.
The Evaluation by the Board of Directors and Directors' Recommendation
The Company's Board of Directors has determined that approving
the Proposed Advisory Agreement with Fiduciary Management, Inc. will
enable the Fund to obtain services of high quality at costs deemed
appropriate, reasonable and in the best interests of the Fund and its
shareholders.
In making its determinations, the Company's Board of Directors
took into consideration the fact that the Adviser has demonstrated its
abilities as an investment adviser while serving as the investment adviser
to the Fund and that the terms of the Current Advisory Agreement are
identical to the terms of the Proposed Advisory Agreement except for the
fees payable to the Adviser. The total return of the Fund for the period
December 16, 1996 (commencement of operations) through September 30, 1997
was 68.0%. In considering the fee increase contemplated by the Proposed
Advisory Agreement, the Board of Directors considered that management of
the Fund is very labor intensive. The Fund is actively managed. Its
portfolio turnover rate for the fiscal period ended September 30, 1997 was
298.2% and is anticipated to be higher during the fiscal year ending
September 30, 1998 as a result of changes to the Internal Revenue Code of
1986 taking effect with respect to the Fund during such fiscal year.
Additionally the Fund invests in companies with modest capitalizations
which tend not to be widely followed by third party research analysts
requiring the Adviser to utilize its own resources in evaluating such
companies. The Adviser frequently meets with management of portfolio
companies, makes on-site tours and talks with competitors and suppliers.
The Board of Directors also considered that both the Current Advisory
Agreement and the Proposed Advisory Agreement permit the Adviser to
allocate the Fund's brokerage to brokers who provide research to the Fund.
During the fiscal period ended September 30, 1997, the Fund paid $12,156
in brokerage commissions to brokers which provided research to the
adviser.
Based upon its review, the Company's Board of Directors
concluded that the Proposed Advisory Agreement with the Adviser is
reasonable, fair and in the best interests of the Fund and its
shareholders, and the fees provided in the Proposed Advisory Agreement are
fair and reasonable. In the Board's view, retaining the Adviser to serve
as investment adviser of the Fund, under the terms of the Proposed
Advisory Agreement, is desirable and in the best interests of the Fund and
its shareholders. Accordingly, after consideration of the above factors,
and such other facts and information as it deemed relevant, the Company's
Board of Directors, including a majority of the directors who are not
parties to the Proposed Advisory Agreement or interested persons (as
defined in the 1940 Act) of any such party, approved the Proposed Advisory
Agreement with the Adviser and voted to recommend its approval by the
shareholders of the Fund.
Vote Required
The favorable vote of the holders of a "majority" (as defined in
the 1940 Act) of the outstanding shares of the Fund is required for the
approval of the Proposed Advisory Agreement for the Fund. Under the 1940
Act, the vote of the holders of a "majority" of the outstanding shares of
a Fund means the vote of the holders of the lesser of (a) 67% or more of
its shares present at the Meeting or represented by proxy if the holders
of 50% or more of its shares are so present or represented; or (b) more
than 50% of its outstanding shares. Abstentions and broker non-votes will
not be counted for or against the proposal but will be counted as votes
present for purposes of determining whether or not more than 50% of the
outstanding shares are present or represented at the Meeting. The failure
to vote (whether by broker non-vote, abstention or otherwise), assuming
more than 50% of the outstanding shares of the Fund are present, has no
effect if (a) above is applicable and has the same effect as a vote
against the proposal if (b) above is applicable. If the Proposed Advisory
Agreement is not approved at the Meeting, the Current Advisory Agreement
will continue until its scheduled termination date.
INVESTMENT ADVISER AND ADMINISTRATOR
The Company's investment adviser and administrator is Fiduciary
Management, Inc., 225 East Mason Street, Milwaukee, Wisconsin 53202. The
Company has no principal underwriter.
RECEIPT OF SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange Commission,
shareholder proposals meeting tests contained in those rules may, under
certain conditions, be included in the Company's proxy materials for a
particular meeting of shareholders. One of these conditions relates to
the timely receipt by the Company of any such proposal. Since the Company
does not have regular annual meetings of shareholders, under these rules,
proposals submitted for inclusion in the proxy materials for a particular
meeting must be received by the Company a reasonable time before the
solicitation of proxies for the meeting is made. The fact that the
Company receives a shareholder proposal in a timely manner does not insure
its inclusion in the Company's proxy materials since there are other
requirements in the proxy rules relating to such inclusion.
OTHER MATTERS
The Company's Board of Directors knows of no other matters that
may come before the Meeting. If any other matters properly come before
the Meeting, it is the intention of the persons acting pursuant to the
enclosed form of proxy to vote the shares represented by said proxies in
accordance with their best judgment with respect to such matters.
By Order of the Board of Directors
DONALD S. WILSON
Secretary
Milwaukee, Wisconsin
December 9, 1997
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
FMI FUNDS, INC.
December 22, 1997
The undersigned constitutes and appoints Ted D. Kellner and Donald S.
Wilson, and each of them singly, with power of substitution, attorneys and
proxies for and in the name and place of the undersigned to appear and
vote with the same effect as the undersigned at the Special Meeting of
Shareholders of FMI FUNDS, INC. (the "Fund"), to be held at the Milwaukee
Athletic Club on December 22, 1997, at 10:00 a.m. and at any adjournments
thereof, all shares of stock of the Fund which the undersigned is entitled
to vote as follows:
(1) In the election of directors
[_] FOR all nominees listed below (except as marked to the
contrary below).
[_] WITHHOLD authority to vote for all nominees listed below.
Barry K. Allen, George D. Dalton, Patrick J. English, Ted D. Kellner,
Thomas W. Mount, Donald S. Wilson
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
______________________________________________________________________
(2) To approve the Proposed Advisory Agreement.
FOR [_] AGAINST [_] ABSTAIN [_]
(3) Upon such other business as may properly come before the meeting
or any adjournment thereof.
This proxy will be voted as
specified. IF NO
SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE
PROPOSAL AND IN THE DISCRETION
OF THE PROXIES UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
The signature on this proxy
should correspond exactly with
the name of the shareholder as
it appears on the proxy. If
stock is issued in the name of
two or more persons, each
should sign the proxy. If a
proxy is signed by an
administrator, trustee,
guardian, attorney or other
fiduciary, please indicate
full title as such.
Dated ___________________,1997
Signed ______________________
Signed ______________________
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF FMI FUNDS,
INC.
[_] Please check here if you WILL be
attending the meeting.
